Rinehart v Rinehart [2020] NSWSC 68

Medium Neutral Citation: Rinehart v Rinehart [2020] NSWSC 68
Hearing dates: 15-19, 23, 25 July 2019
Date of orders: 14 February 2020
Decision date: 14 February 2020
Jurisdiction: Equity
Before: Ward CJ in Eq
Decision: 1. Pursuant to s 8(1) of the Commercial Arbitration Act (NSW) and s 8(1) of the Commercial Arbitration Act (WA), refer the parties to arbitration of the disputes the subject of this proceeding other than the claim for relief pursuant to s 247A of the Corporations Act 2001 (Cth).
2.   Stay the balance of the proceeding pending determination of the arbitration of the disputes so referred to arbitration in accordance with order 1.
3.   Stay the following motions pending the determination of the said arbitration: notice of motion filed on 27 April 2017 by Bianca (referred to in these reasons as motion (ii)); notice of motion filed on 14 August 2018 by Gina (referred to in these reasons as motion (vii)); notice of motion filed on 11 June 2019 by Bianca (referred to in these reasons as motion (viii)); and notice of motion filed on 20 June 2019 by HPPL (referred to in these reasons as motion (ix)).
4.   By consent, adjourn sine die notice of motion filed on 12 May 2007 by Bianca (referred to in these reasons as motion (iv))
5.   Direct the parties to file brief written submissions as to costs within 14 days with a view to determining that issue on the papers.
6.   Direct the parties to file brief written submissions within 14 days as to whether (if that be the case) they oppose the referral of this matter (on the Court’s own motion) to mediation; and, in any event, as to the appropriate time frame within which any such mediation may expeditiously take place.
Catchwords: COMMERCIAL ARBITRATION – arbitration agreement – application for referral to arbitration pursuant to commercial arbitration legislation and for stay of proceeding – alternative applications for stay based on case management principles and as abuse of process – held proceeding involved matters under the arbitration agreement and parties must be referred to arbitration – whether application for access to books and records of company under s 247A Corporations Act was matter under arbitration agreement and was arbitrable – held s 247A application not a matter under arbitration agreement but should be stayed – stay of other motions including unconscionability motion in which anti-arbitration injunction sought – intention of Court to refer parties to mediation

 

JUDGMENT

    1. HER HONOUR: In mid-2017, referred to me from the duty list, was a dispute as to the order in which various interlocutory applications should be heard in proceedings which had been commenced by the plaintiff, Bianca Rinehart, in her capacity as trustee of the Hope Margaret Hancock Trust (the HMH Trust) following the receipt by her of judicial advice given by Rein J (see Bianca Hope Rinehart as trustee of The Hope Margaret Hancock Trust [2017] NSWSC 282, to which I will refer as the Judicial Advice Decision). As in other judgments involving these parties, I will generally refer to the Rinehart family members by their first names, without intending any disrespect.
    2. The interlocutory applications that were then before me were the following:
      (a) an application by Hancock Prospecting Pty Ltd (HPPL), the second defendant, by notice of motion filed on 21 April 2017, seeking referral of the parties to arbitration and/or a stay of the proceeding (HPPL’s referral/stay motion);
    3. (b) an application by Bianca, by notice of motion filed on 27 April 2017, for leave to bring a derivative proceeding in the name of HPPL (Bianca’s s 237 application) and to inspect its books (Bianca’s s 247A application) (together, Bianca’s leave motion);

 

    1. (c) an application by the first defendant (Gina Rinehart), by notice of motion filed on 11 May 2017, seeking essentially the same relief as sought in HPPL’s referral/stay motion, namely the referral of the parties to arbitration and/or a stay of the proceeding (Gina’s referral/stay motion); and

 

    (d) an application by Bianca, by notice of motion filed on 12 May 2017, seeking to restrain Gina (the Executive Chairman of HPPL) and the third and fourth defendants (respectively, a director and an executive director/chief financial officer of HPPL) from, in effect, controlling or influencing HPPL’s conduct of this proceeding (Bianca’s conflict motion).
  1. The dispute as to sequencing arose, in essence, on the basis of the defendants’ contention that the disputes the subject of the proceeding fell within the ambit of an arbitration agreement between the parties and were required to be referred to arbitration. For the reasons published in 2017 (see Rinehart atf The Hope Margaret Hancock Trust v Rinehart [2017] NSWSC 803), I concluded that the hearing of the various interlocutory applications should be deferred until the then awaited decision of the Full Court of the Federal Court (the Full Court) in an appeal from orders that had been made by Gleeson J (in Rinehart v Rinehart (No 3) (2016) 257 FCR 310; [2016] FCA 539; to which I will refer as the Gleeson Decision) in relation to a dispute involving the very same arbitration clause the subject of the respective referral/stay motions in this Court.
  2. I was of the view at that stage that, subject to anything that might emerge following the Full Court’s decision, it would be in the interests of the just, quick and cheap resolution of the issues arising in the four interlocutory applications for them all then to be listed for hearing at the same time (and that it would then be a matter for the judge hearing those applications to determine the order in which argument on the respective motions would most conveniently be addressed and, ultimately, the order in which the applications should be determined).
  3. What then transpired was that, after the Full Court handed down its decision in late 2017 from the appeal in relation to the Gleeson Decision (see Hancock Prospecting Pty Ltd v Rinehart (2017) 257 FCR 442; [2017] FCAFC 170, to which I will refer as the Full Court Decision), there was an application by Bianca (and her brother, John Hancock) for special leave to appeal to the High Court of Australia (the High Court) from that decision.
  4. On successive occasions when the matter came back before me for directions, I was of the view that the continued stay of the interlocutory applications was appropriate pending the outcome, first, of the special leave application and, then, of the appeal itself (special leave, limited in its scope, subsequently having been granted by the High Court – see further below). It was then anticipated that the High Court would resolve the conflict in approach as to the construction of the arbitration clause in question (being cl 20 of the confidential settlement deed referred to as the Hope Downs Deed) that had emerged as between the Full Court (in the Full Court Decision) and that of the Court of Appeal of this Court in an earlier decision (see Rinehart v Welker (2012) 95 NSWLR 221; [2012] NSWCA 95 to which I will refer as the Court of Appeal Decision).
  5. The High Court handed down its decision on the appeal from the Full Court Decision in May 2019 (see Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13; (2019) 93 ALJR 582 to which I will refer as the High Court Decision). The High Court Decision endorsed the approach to construction that had been adopted by the Full Court (and, on one view, went even further in relation to the ambit of the arbitration clause in question). Ironically, though perhaps not surprisingly given the history of this ongoing litigious saga, there is now a dispute between the parties as to whether the High Court has in fact resolved that conflict as to the construction of cl 20 of the Hope Downs Deed at least insofar as the issues in the present proceeding are concerned (and hence as to whether, as a matter of precedent, the construction of the arbitration clause that was adopted by the Court of Appeal remains binding on me notwithstanding the High Court Decision). I consider that issue in due course.
  6. Meanwhile, however, the interlocutory motions in this proceeding have multiplied. Some interlocutory disputes between the parties have been able to be determined in advance of the present motions (for example, those relating to disputes as to the production of documents on subpoena or otherwise pursuant to the compulsory processes of the court); as have other disputes in in other proceedings in this Court between the respective parties. So, for example, disputes as to the requirement for production to Bianca (in her capacity as the new trustee of the HMH Trust) by Gina (as the former trustee of the HMH Trust) of documents of the HMH Trust as ordered by Brereton J, as his Honour then was, in 2015 (see Hancock v Rinehart [2015] NSWSC 646; (2015) 106 ACSR 207, to which I will refer as the 2015 Decision) and as subsequently clarified and confirmed by his Honour in Hancock v Rinehart (Trust Documents) [2018] NSWSC 1684, to which I will refer as the 2018 Decision) have been dealt with during the period in which the extant notices of motion in the present proceeding were awaiting hearing and determination.
  7. It is not necessary to say much further here, by way of introduction as to the substantive dispute between the parties in the present proceeding (though in due course it will be necessary to consider the pleaded claims in some detail) other than to note that the substantive dispute is the claim by Bianca, as trustee of the HMH Trust, against Gina (and others) for declaratory and other relief in relation to alleged oppressive conduct, breach of directors’ duties and breach of contract in relation to matters occurring with respect to, among other things, the payment (or non-payment) of dividends by HPPL. Bianca says that the central aim of the statement of claim in the present proceeding is the recovery and protection of trust assets.
  8. This proceeding is but one of a number of curial and arbitral proceedings that have been commenced across the country over more than a decade involving one or more of the parties to the present proceeding; those other proceedings raising similar (though I accept not always the same) issues and being at various stages of completion. At least by reference to the plethora of judgments published to date in the various proceedings, it can be seen that the Rinehart disputes have occupied an inordinate amount of court time, both at first instance and in appellate courts, largely on interlocutory issues.
  9. In summary, those proceedings (excluding the present proceeding) include: (i) the proceeding brought by Bianca and John in this Court for the removal of Gina as trustee of the HMH Trust (the Removal Proceeding), there remaining a dispute in that proceeding as to issues in relation to the production by Gina (as the former trustee) of documents of the trust to Bianca (the present trustee); (ii) an arbitral proceeding commenced by Bianca and John in 2012 pursuant to cl 20 of the Hope Downs Deed (referred to in submissions, and in these reasons, as the French Arbitration since the Hon Robert French AC has now been approached to arbitrate that dispute but which was initially before the Hon Tony Fitzgerald QC as arbitrator) in which complaint was made as to the non-payment of dividends by HPPL; (iii) the arbitral proceeding which was the culmination of the referral/stay applications in the Federal Court proceeding, in which allegations of misconduct by Gina as trustee are made (those referral/stay applications being the subject of the Full Court Decision and High Court Decision) (this arbitral proceeding being referred to as the Martin Arbitration since the presiding arbitrator is the Hon Wayne Martin AC QC); and, (iv) two related proceedings in the Supreme Court of Western Australia (one or both of which being referred to in submissions as the Hope Downs Proceeding), involving a number of third parties, in which various of the parties have now been referred to arbitration on the counter-claim brought by Bianca and John (the balance of the proceedings not having been stayed) (see the decision of Le Miere J in Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd (No 10) [2018] WASC 407, to which I will refer as the Le Miere (No 10) Decision, which has been the subject of both an appeal and cross-appeal heard in November last year and on which the Court of Appeal of the Supreme Court of Western Australia is currently reserved).
  10. Senior Counsel for Bianca, Mr Thomas SC, has emphasised the differences in the allegations made in the present proceeding and those made in other proceedings (in particular, in the Federal Court proceeding that led to the Federal Court Decision and in the proceedings in the Supreme Court of Western Australia that have led to a number of decisions by Le Miere J including the Le Miere (No 10) Decision, which sets of proceedings have all now been referred, either in whole or in part, to arbitration). Mr Thomas argues that any relevant “interconnectedness” or commonality is between the Federal Court and the Western Australian proceedings; and not the present proceeding.
  11. There is, however, considerable force in my opinion to the complaint made by HPPL (see for example at T 172), if not also to the same extent to the similar complaint by Gina, that it has been vexed by a succession of proceedings across the country in which Bianca (albeit in different capacities – i.e., in her personal capacity in the other proceedings and as trustee in the present proceeding) has adopted inconsistent positions and has sought or is seeking inconsistent relief. That inconsistency is most glaring in relation to the question as to the beneficial ownership of the Hope Downs mining tenements (the claim in other proceedings being that these assets are held on constructive trust for Bianca and her siblings but, in the present proceeding, one or more of the claims being premised on HPPL having beneficial ownership of the mining tenements); that inconsistency being of no little significance when it comes to the exercise of any discretion to stay the present proceeding whether in whole or in part and, in particular, to the alternative bases on which the stay of the proceeding is presently sought. Bianca denies that there is any relevant inconsistency (as to which I say more in due course).
  12. There is an inescapable sense of déja vue in at least some of the arguments now raised by Bianca. This is particularly so in the context of Bianca’s latest (unconscionability) motion, having regard to the applications recently made by her (and John) in the proceedings in Western Australia. Bianca here emphasises that Le Miere J declined to hear that unconscionability application prior to the referral to arbitration and stay of the counter-claims ordered in those proceedings (see Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd (No 9) [2018] WASC 122, to which I will refer as the Le Miere (No 9) Decision). In that regard, Bianca says that Le Miere J did not approach her unconscionability application in the Western Australian proceeding as a “true anti-arbitration” application (see T 6) but, rather, assessed it as a submission as to why the application for referral to arbitration should be dismissed. Bianca argues that such an approach is on a “different plane” to the present unconscionability motion (having regard to the jurisprudential nature of an anti-arbitration injunction) and she disputes that there has been any issue estoppel or other determination affecting her ability here to pursue the unconscionability motion. That said, it is relevant to note that (however one characterises the way in which the issue was ultimately approached by Le Miere J) the submissions made for Bianca on that occasion (to which I was taken in the course of hearing the present applications) bear a marked similarity to the way in which the unconscionability motion is here sought to be put.
  13. By their respective amended referral/stay motions, Gina and HPPL relevantly seek: (i) a referral to arbitration and the dismissal or permanent stay of the proceeding in this Court pursuant to Commercial Arbitration Act 2010 (NSW), s 8(1) (the Commercial Arbitration Act) and/or Commercial Arbitration Act 2012 (WA), s 8(1) (the WA Commercial Arbitration Act) (referred to in submissions as the s 8 Stay Applications) or, alternatively, the referral of some of the matters in the proceeding to arbitration (and, if there is a referral of only some, but not all, of the proceeding then a stay of the balance of the proceeding pursuant to the said commercial arbitration legislation (referred to as the s 8 Case Management Stay Applications) (see prayers 1-3 of HPPL’s amended referral/stay motion; prayers 1-3 of Gina’s amended referral/stay motion); (ii) alternatively, a temporary stay of the proceeding pending the determination of the other “related” proceedings (referred to as the Case Management Stay Applications) (see prayers 4-6 of HPPL’s amended referral/stay motion; prayer 4 of Gina’s referral/stay motion); and (iii), further in the alternative, an application for a stay of the whole of the proceedings on the basis that the proceedings are an abuse of process (referred to as the Abuse of Process Stay Applications) (see prayer 8 of HPPL’s amended referral/stay motion; prayer 5 of Gina’s referral/stay motion).
  14. The claims for a stay of the proceeding on these alternative (case management and abuse of process) grounds are put on the basis of a fundamental inconsistency between the respective proceedings.

The panoply of interlocutory motions as at 15 July 2019

      1. By the time of the hearing of the respective referral/stay motions, which commenced on 15 July 2019, the full range of extant interlocutory motions in the present proceeding comprised:
        (i) HPPL’s referral/stay motion (referred to at [2(a)] above), HPPL moving on an amended notice of motion dated 15 July 2019 and filed on 16 July 2019 in that regard;
      2. (ii) Bianca’s leave motion (referred to at [2(b)] above);

      1. (iii) Gina’s referral/stay motion (referred to at [2(c)] above), Gina moving on an amended notice of motion dated 26 June 2019 in that regard;
      1. (iv) Bianca’s conflict motion (referred to at [2(d)] above);
      1. (v) Bianca (and John)’s application, by notice of motion filed 16 April 2018, to restrain Gina and HPPL from taking any steps to prosecute the French Arbitration commenced by Bianca and John pursuant to cl 20 of the Hope Downs Deed (Bianca’s anti-French Arbitration motion);
      1. (vi) Gina’s application, by notice of motion filed 12 June 2018, for,

    inter alia

      1. , the summary dismissal or stay of Bianca’s anti-French Arbitration motion or to refer that motion to arbitration or otherwise to restrain Bianca and John from taking or participating in any step to advance or prosecute that motion (Gina’s stay of anti-French Arbitration motion);
      1. (vii) Gina’s application, by notice of motion filed 14 August 2018, to refer the disputes between the parties to mediation (Gina’s mediation motion);
      1. (viii) Bianca’s application, by notice of motion filed 11 June 2019, to restrain Gina and HPPL from taking any steps, directly or indirectly, to obtain or request an order staying or referring these proceedings, or any part thereof, to arbitration in reliance on the Hope Downs Deed or upon any right or interest said to arise thereunder (Bianca’s unconscionability motion) (this has been described by Bianca, as adverted to above, as a “true” anti-arbitration injunction – see T 5.5; and described by Gina as Bianca’s “Unconscionability Motion” – see T 2.35, since it proceeds on the basis that it is unconscionable and/or an abuse of process for Gina and HPPL to seek to refer the disputes to arbitration (i.e., that Gina and HPPL are unconscientiously seeking to enforce an agreement entered into in breach of trust by Gina)). I have in these reasons adopted HPPL’s nomenclature simply to avoid confusion between the respective anti-arbitration motions;
      1. (ix) HPPL’s application, by notice of motion filed 20 June 2019, effectively amounting to an anti-anti-arbitration application to refer Bianca’s unconscionability motion to arbitration pursuant to

    Commercial Arbitration Act 

      1. s 8(1) and a stay of that motion in this Court or alternatively a stay on case management grounds of as an abuse of process (HPPL’s stay of Bianca’s unconscionability motion). Similar relief is sought by Gina in her amended referral/stay motion; and, finally,
      (x) Gina’s application, by notice of motion filed on 14 July 2019, seeking confidentiality orders in relation to certain parts of the evidence.
  1. True to form, at the outset of the hearing of the referral/stay motions, there was again debate between the parties as to the sequence in which the respective motions should be heard (and, indeed, as to whether all were ready at that stage to be heard). In this regard, Bianca goes so far as to complain of procedural unfairness (see below) were the referral/stay motions to be determined before Bianca’s unconscionability motion. It is therefore necessary, not least because of that complaint, here to explain the procedural course that I have followed in relation to the hearing of the respective motions.
  2. Gina’s position in that regard was that (adopting the numbering of the motions as listed at [17] above): motions (i) and (iii) were ready to be heard; there was an issue as to whether motion (ii) should now be heard; it was anticipated that motions (iv), (v) and (vi) could be dealt with by consent orders; it was accepted that motion (vii) could be dealt with at a later stage; motions (viii) and (ix) were before the Court only for directions (as had been my direction when the matter was before me for directions on 26 June 2019); and motion (x) would arise at some stage when affidavit evidence was read in the course of the hearing of motions (i) and (iii) (see T 1-3). It was submitted by Gina that the appropriate course would be to hear motions (i) and (iii) and, at the end of argument on those motions, to make a determination as to whether to proceed to hear Bianca’s s 247A application for access to books and records of HPPL (which was part of Bianca’s leave motion, i.e., motion (ii)). HPPL supported that position (see below).
  3. Bianca’s position, broadly, was as follows: there was no dispute as to motions (i) and (iii) then being ready to be heard; nor was there any dispute that Bianca’s s 237 application (part of motion (ii)) was not to be heard at that stage but that Bianca’s s 247A application should be heard during the week that had been set aside for this matter (as I had indicated at earlier directions hearings would be the case, albeit expressly subject to any further argument from Gina or HPPL that might later dissuade me from so proceeding); that it was appropriate that motion (iv) not be dealt with pending determination of the stay issue and Bianca’s s 247A application; that motions (v) and (vi) did not need to be subject of further argument at that point; and that motion (vii) (seeking an order for mediation) was premature (in advance of determination, in particular, of Bianca’s s 247A application and the outcome of the production of documents ordered following the 2015 Decision and 2018 Decision in light of the need for transparency at any mediation). Nothing was said in relation to the sequencing of motion (ix), which presumably is accepted to travel with motion (viii); and no issue was taken by Bianca as to motion (x) being dealt with in the course of argument during the hearing of the motions that were to be heard that week.
  4. Although Bianca accepted that motion (viii) had only been listed by me for directions on 15 July 2019 (and did not seek to cavil with the direction that had been made to that effect, after debate with Counsel, on 26 June 2019), Bianca emphasised that Bianca’s unconscionability motion was properly characterised as an anti-arbitration application, the jurisprudential basis for which being the court’s inherent jurisdiction to control its own processes. It was submitted that, even if (contrary to her contention) Bianca is bound by the Hope Downs Deed, it would be unconscionable and an abuse of process for HPPL and Gina to rely upon it to seek a stay or referral of the relevant application(s); and that therefore, logically, Bianca’s unconscionability motion should be heard before the hearing of the referral/stay motions (or at least before the determination of those motions). Further, Bianca’s position (with which the defendants cavil) was that, by definition, Bianca’s unconscionability motion could not be referred out to arbitration (see T 8.2).
  5. What was of concern to me was that four and a half days had (for some time) been set aside in the court’s diary for the hearing of the various interlocutory applications (that listing having been fixed before the latest of those motions – relevantly, Bianca’s unconscionability motion and HPPL’s stay of Bianca’s unconscionability motion – had been filed) and I did not consider it consistent with the just, quick and cheap resolution of the real issues in dispute (see Civil Procedure Act 2005 (NSW) (Civil Procedure Act), s 56) for those hearing dates to be vacated. As I saw it, the difficulty in proceeding at that stage with motion (viii) (even leaving aside the defendants’ arguments that it, too, is required to be referred to arbitration) was that: it had been filed only shortly before the dates which had been set aside for the hearing of the interlocutory motions; on 26 June 2019 I had made it clear that it would only be listed for directions on 15 July 2019; and the defendants had indicated that, if it were now to be heard, then they would wish to consider whether to file evidence in relation to that motion (which would have delayed matters yet again). Furthermore, Mr Thomas, in his opening written submissions on sequencing, had expressly acknowledged the likelihood that not all the motions might be able to be heard that week (even leaving aside the question of motion (viii)) (though pressing for there to be a hearing of motion (ii) insofar as it related to Bianca’s s 247A application).
  6. What I indicated that I was then contemplating was that I would proceed on the basis that I would hear motions (i) and (iii); and then, if I were not at that stage persuaded that I should not do so, I would proceed to hear Bianca’s s 247A application; and that I would leave Bianca’s unconscionability motion to be heard at some later period but before determination of the other motions so that if Bianca succeeded on what is said by her to be the anterior point then one would not reach the other motions (see T 10.35). Pausing here, I note that the argument of the defendants is that the effect of Commercial Arbitration Act, s 8 is that it is not open to me to hear and determine Bianca’s s 247A application at all and that there is no choice but that it, too, must be referred to arbitration.
  7. Senior Counsel for Gina, Mr Brereton SC, indicated that he would be in a position to make (and did in due course make) some responsive submissions in relation to the submissions made for Bianca in support of motion (viii), such that it could then be determined when substantively, if at all, Bianca’s unconscionability motion should be heard (see T 13.39). Thus it was proposed that the “sequencing debate” (as to the listing/determination of Bianca’s unconscionability motion and the motions responsive to that motion) should be dealt with once full argument had been heard on the referral/stay motions.
  8. Senior Counsel for HPPL, Mr Giles SC, supported Mr Brereton’s position in this regard, indicating that his client’s position was that directions as to Bianca’s unconscionability motion (motion (viii)) would best be dealt with after argument on motions (i) and (ii), submitting that: the issue on Bianca’s unconscionability motion had already been determined; that the challenge by Bianca was caught by the arbitration agreement; and that, as a matter of principle, the attack by Bianca was directed at the wrong point (namely, to the Hope Downs Deed rather than to the arbitration agreement itself) (see T 14.22ff).
  9. Bianca’s position as to sequencing of the motions nevertheless remained, as had been articulated in written submissions, that it would be procedurally unfair for the referral/stay motions to be determined prior to Bianca’s unconscionability motion as that would “defeat the very right that she seeks to vindicate by pursing the application”. I note at this point that I do not accept that this is the necessary consequence of such a determination, since it would remain open for an arbitrator to determine the issue of unconscientious reliance on the Hope Downs Deed at the outset of any arbitration, but I say more about this in due course.
  10. It was in that context that I then proceeded to commence hearing motions (i) and (iii). As it transpired, the hearing of those two referral/stay motions occupied more than the time that had been set aside in the first place with a further full day and a half being required in order to complete the hearing of those motions. This was not least in order to assuage Mr Thomas’ concern that there be close to an equivalent amount of time allowed for oral submissions on Bianca’s behalf (see T 159.35), given the considerable time that had been taken in submissions for the defendants (primarily, it must be said, Gina’s submissions, she taking the running of much of the argument). There was, therefore, ultimately no time for oral argument on the substance of Bianca’s s 247A application, let alone on Bianca’s unconscionability motion and HPPL’s stay of Bianca’s unconscionability motion, in any event.
  11. Hence, these reasons deal substantively only with motions (i) and (iii), which (as set out below) I consider should be determined now, notwithstanding that Bianca’s unconscionability motion has not yet been heard (beyond the making of the brief opening submissions advanced by the parties in relation thereto). Furthermore, the conclusion I have reached on motions (i) and (iii) points to the steps that I consider should now be taken in relation to the balance of the extant motions, as I will explain in due course.
  12. For completeness, I note that, during the course of the hearing of motions (i) and (iii), it was agreed between the parties that it would be appropriate for motions (v) and (vi) simply to be dismissed with no order as to costs (on the basis that it was understood that the dismissal would not give rise to any issue estoppel) since events have to some extent overtaken those applications; and orders were made accordingly (see T 48). Orders were also made pursuant to motion (x) pursuant to the Court Suppression and Non-publication Orders Act 2010 (NSW). Thus, those three motions have now effectively been disposed of. As to motion (iv) (Bianca’s conflict motion), Mr Thomas did not have instructions to consent to its dismissal but agreed that it would be appropriate for it to be adjourned sine die, which is the course that I will follow. There will thus remain yet to be disposed of (albeit now mostly to be stayed in accordance with these reasons) only motions (ii), (vii), (viii) and (ix).

Summary of my conclusions

  1. In summary, for the reasons set out below, I have concluded as follows:
    • that cl 20 is an apparently valid arbitration agreement binding on Bianca in her personal capacity and, on its face, binding on her in her representative capacity as successor to Gina as the trustee of the HMH Trust, noting also that the extended definition of “party” under s 2 of the Commercial Arbitration Agreement Act (and s 2 of the WA Commercial Arbitration Act) would arguably encompass a person, such as Bianca, through whom (in her capacity as trustee) claims are made for the benefit of beneficiaries of the HMH Trust who are themselves parties to that arbitration agreement;
    • that any challenge to the efficacy of the Hope Downs Deed to bind Bianca (as successor trustee of the HMH Trust) is one that should be left to the arbitrator to determine (having regard, first and foremost, to the common law principle of separability and the relevant provisions of the commercial arbitration legislation to which I refer in due course, but also, as a matter of discretion, given the overlap between the allegations on which that challenge is based and those raised in the other “related” proceedings);
    • that the High Court has, as a matter of necessary inconsistency, effectively overruled the construction placed by the Court of Appeal on cl 20 of the Hope Downs Deed, including insofar as it relates to substantive claims of the kind here made;
    • that on the High Court’s construction of that clause, which is binding on me, the present proceeding raises a number of matters which, pursuant to cl 20 of the Hope Downs Deed and s 8(1) of the Commercial Arbitration Act (or the equivalent provision of the its Western Australian), must now be referred to arbitration (being matters that are part of an interconnected dispute, viewed holistically and having regard to the context, on which the High Court placed emphasis, in which the arbitration agreement was entered into by the parties thereto);
    • that Bianca’s s 247A application, though arbitrable, is not per se a dispute caught by cl 20 of the Hope Downs Deed and thus is not required to be referred to arbitration; and
    • nevertheless, that Bianca’s s 247A application, raising as it will inevitably do (at least as presently put forward) factual matters the subject of disputes that do fall under the arbitration clause, should as a matter of discretion be stayed pending the outcome of the arbitration of the substantive disputes and, therefore, that it is not necessarily separately to determine the application for relief on the alternative bases (being the stay on the grounds of case management principles or, alternatively, as an abuse of process).
  2. As to that last point, had it been necessary to determine the alternative bases for the stay sought by the defendants, I would have concluded that, as a matter of case management, the striking overlap between the factual allegations in this and other proceedings and the inconsistent bases on which relief is sought in this and the other proceedings (particularly, as to who is the beneficial owner of the Hope Downs mining tenements) warrant the exercise of the discretion to stay the present proceeding pending the determination of the other related proceedings. In that regard, I consider that there would be much to commend the consolidation of the respective arbitral proceedings, such that all issues in relation to, say, the dispute as to the non-payment of dividends and the like could be dealt with in the same proceeding. I say this notwithstanding that the claims made by Bianca in the respective proceedings are made by her in different capacities (i.e., both for her own personal benefit and for the benefit of beneficiaries of the HMH Trust, of whom she is one). I also note that an observation to similar effect was made by Rein J in the Judicial Advice Decision at [40].
  3. As to the alleged abuse of process, it cannot be said (nor was it suggested) to have been an abuse of process for Bianca to have commenced the present proceeding in her capacity as trustee at the time that she did in circumstances where she did so after having obtained judicial advice (see the Judicial Advice Decision). However, I consider that the continuation of claims in at least two sets of proceedings, premised on inconsistent factual assumptions (as to the ownership of the Hope Downs mining tenements), does amount to an abuse of process and that this would have been a separate reason to warrant a discretionary stay of the present proceeding pending the determination of the other “related” proceedings.
  4. As to Bianca’s unconscionability motion, it is not appropriate at this stage (pending a hearing of the merits of the motion) to enter into the debate as to whether (as HPPL and Gina contend) it, too, is required to be referred to arbitration. However, in any event, it is not necessary to hear that motion because I consider that to proceed to do so at this stage would offend against the common law principle of separability (see Full Court Decision at [341]ff) and because, as a matter of discretion, I have concluded that Bianca’s unconscionability motion should be stayed pending the outcome of the arbitration of the disputes now to be referred to arbitration. The allegations sought to be made by Bianca as to why the matter should not be referred to arbitration can be put before the arbitrator or arbitral panel in the course of the arbitration (that is, as arguments as to why the arbitration should not proceed) and dealt with in that forum (with the bargained-for confidentiality provided for under the Hope Downs Deed, at least at first instance, without, in my opinion, any obvious or undue prejudice to the position of Bianca as trustee or of the beneficiaries of the HMH Trust). Whereas, were I to proceed now to hear Bianca’s unconscionability motion (based as it is on at least some of the very same allegations of misconduct as appear to underlie various of the substantive claims made in this proceeding) this would inevitably give rise to the very public hearing that the parties to the arbitration agreement in my opinion agreed to avoid. I accept that there is a public interest in the supervision by the court of the duties of a trustee and under the Corporations Act 2001 (Cth) of the duties of a director, but that public interest must be weighed against other interests including the public interest in the finality of litigation and in the due administration of justice.
  5. The consequence of the conclusions I have thus reached is that: on motions (i) and (iii), I will refer the parties to arbitration of all matters other than Bianca’s s 247A application and will stay the balance of the proceeding (i.e., the application for relief pursuant to Corporations Act 2001 (Cth), s 247A) pending determination of the arbitration; motion (ii) (Bianca’s leave motion) will thus be stayed pending determination of the arbitration (subject to one qualification, which I make below); motion (iv) will by consent be adjourned sine die; motions (v) and (vi) have already been disposed of, as noted earlier; motion (vii) will be stayed pending the determination of the arbitration (subject to the further qualification, which I make below); motions (viii) and (ix) will be stayed pending the determination of the arbitration; motion (x) has already been disposed of as noted already; and I will direct the parties to file brief written submissions as to the costs orders that should be made consequent upon the determination of the above motions.
  6. The two qualifications to which I have referred above are these.
  7. First, my conclusion that Bianca’s s 247A application should be stayed is because, as I understand it, the hearing of that application will or is likely to involve a public airing of the matters the subject of the bargained-for confidentiality and, to the extent that the documents sought are relevant to the matters to be referred to arbitration, it will be open to Bianca to seek production of documents in the context of the arbitration. If, however, there are particular, limited categories of documents required by Bianca for the purpose of her administration of the HMH Trust, as its trustee (other than for the purposes of the prosecution of the claims the subject of this proceeding), then it may be that this would not give rise to the same difficulty and hence I do not rule out the possibility of entertaining an isolated s 247A application were that to be unconnected to the disputes the subject of the matters now to be referred to arbitration (and were it unlikely to involve the airing of factual disputes of that kind).
  8. Second, while the defendants did not press for the hearing of Gina’s mediation motion, I am very much inclined at this stage to refer the parties to mediation of my own motion. That is in circumstances where: the arbitration process will no doubt take some time (not least if there is any appeal from my decision to refer the parties to arbitration); Bianca’s s 247A application is to be stayed; the production of trust documents (which should by now have been well under way following the 2015 Decision, the 2018 Decision and my subsequent decisions in relation thereto) is or may be at risk of being again deferred (if not effectively de-railed) as a consequence of what I understand to be Bianca’s intention to challenge at least some part of my recent decision in relation thereto (subject to her latest application for judicial advice in that regard, which is now listed for hearing in March this year); and it seems to me that it is overwhelmingly in the interests of the administration of justice (and of the just, quick and cheap resolution of the real issues in dispute) to force the parties to focus sooner rather than later on whether a sensible and acceptable resolution of their long-running disputes can be achieved.
  9. The ongoing drain on court time and resources (not just in this Court but elsewhere) can only be to the prejudice of other litigants. The spectre that well-funded litigants may be perceived as being able indefinitely to prolong a final determination of their litigious disputes (and I say this without confining or addressing my comments to any one or other side of the warring factions here before me) can only serve to bring the administration of justice into disrepute.
  10. Accordingly, I will direct that there be brief written submissions filed within 14 days as to why, if there be opposition to this course, I should not of my own motion refer the parties in this proceeding to mediation before a private mediator (to be agreed between the parties or, in the absence of agreement, nominated by me) and in any event as to the time frame within which this could sensibly occur (including, if relevant, by reference to the status of the regime for the production of trust documents that was put in place late last year) but noting that I would expect the referral to mediation to take place within the near future and not to be postponed to some indeterminate future time. It seems to me that this course is not inconsistent with the referral at the same time of the parties to arbitration, particularly if, as Bianca anticipates, there will presumably be some delay in the arbitral process.
  11. I note that the defendants were amenable to a referral to mediation, when I raised this in the course of oral submissions; and that the opposition by Bianca to such a referral was simply a timing issue by reference to her complaint that she is not privy to all of the documents in relation to the matter (and therefore that there is, to adopt the terminology previously used in this matter, an information asymmetry). As to that complaint, it seems to me that unfortunately the reality is that such an information asymmetry is likely to continue for no little time (since the estimated time frame within which Bianca’s previous demands as to the production of trust documents could realistically be met was one that extended for some years into the future, and at a considerable cost); and I am not persuaded that the mere existence of such an asymmetry would preclude fruitful discussions at mediation (at least if all parties participate in the mediation in good faith, as they would be obliged to do).

Context in which Bianca has commenced the present proceeding

  1. Before turning to the issues raised by the respective referral/stay motions, it is relevant to note the following as to the context in which the present proceeding is brought, having regard to the emphasis placed by Bianca on the fact that she brings this proceeding in her capacity as trustee of the HMH Trust. Bianca points out that it is only by reason of her appointment as trustee, and the consequential vesting of 24% of HPPL shares in her qua trustee, that she is able to claim the relief she here seeks by way of equitable compensation, account of profits and under the Corporations Act (each of those statutory remedies being relevantly confined to a member).
  2. Much weight is placed by Bianca on the recognition by Brooking J in Young v Murphy [1996] 1 VR 279 (Young v Murphy) at 281 that “a trustee who has committed a breach of trust may be sued in respect of that breach … [by a] successor trustee” and that this applies even if the successor trustee was party to the breach (see T 202). Bianca submits that she has “no choice” in that regard, saying that:

The standing of a trustee to take proceedings to have a breach of trust redressed against a trustee or former trustee or a stranger who has become liable to redress a breach of trust is well recognised. Not only may a trustee take such proceedings, but he runs the risk of himself committing a breach of trust if he fails to do so. His obligation to take the proceedings (unless they be futile) is part of his duty to get in the trust estate, which includes rights of action against co-trustees or former trustees and strangers for breach of trust. This is clear as a matter of both principle and authority.

  1. Bianca says that criticism made by the defendants of the fact that, in her personal capacity, she has adopted a different position or made different claims in other proceedings (for example, in the Federal Court proceeding) fails to recognise that fundamental principle. It is said, somewhat plaintively, that:

Put simply, Bianca has no choice to bring the current proceedings as trustee, whatever her own personal claims against Gina might be, because to do otherwise could place herself in breach of trust. That fact alone renders complaints about abuse of process both untenable and unfair.

  1. That submission (what might be termed the “no choice” submission) must, however, itself be put into context. Bianca sought and obtained judicial advice that she would be justified in commencing the present proceeding (see the Judicial Advice Decision). Leaving aside for the moment the abuse of process arguments now put by the defendants, it is by no means apparent from the reasons given by Rein J that the question of the applicability or potential applicability of the arbitration agreement, or Bianca’s resistance or likely resistance to any referral of the parties in this proceeding to arbitration, was something that was raised before Rein J in the context of that judicial advice application (let alone that there was any argument put to his Honour that, as trustee, Bianca was not bound by the Hope Downs Deed). In that vein, HPPL, in the course of its submissions, says that it does not appear that Bianca ever suggested either to Brereton J, as his Honour then was, (in the Removal Proceeding) or to Rein J (on the judicial advice application) that, in her capacity as trustee of the HMH Trust, she intended to disavow the Hope Downs Deed on behalf of the beneficiaries of that trust. Rather, it is said, Bianca suggested the opposite to Brereton J when contending (in the trust documents dispute) that she is entitled to documents in relation to the Hope Downs Deed on the basis that the deed is trust property. In that regard, Bianca here disputes that there is any inconsistency between seeking production of physical documents held by the former trustee and denying that she is bound by the Hope Downs Deed but it is not necessary at this stage to explore that contention.
  2. Suffice it at this point simply to note that, while Bianca here emphasises that she has “no choice” but to bring the present proceeding in her capacity as trustee, it is not clear to me that her resistance to the referral to arbitration in the present proceeding is something about which she could be said as trustee to have “no choice” nor that this is something about which judicial advice was obtained. That is not insignificant when one considers the (no doubt not inconsiderable) cost and the delay to date occasioned by such resistance. When that issue was raised in the course of oral argument, the response for Bianca was to the effect that, if Bianca as trustee is not bound by the Hope Downs Deed, then she could not be criticised for resisting an application to refer the matter to arbitration. In one sense that may be so; and indeed there may well be perceived forensic and other potential advantages of the course that has been adopted. However, that response does not on its face necessarily take into account the potential disadvantage to the beneficiaries of the trust of the continuing cost and delay, by reason of such resistance, to the final resolution of the disputes the subject of this proceeding. Nor does it in my view adequately meet the inconsistency argument relied upon by the defendants in support of a stay of the proceeding (on the alternative bases) even if the dispute(s) is, or are, not covered by the arbitration clause in question.
  3. Insofar as HPPL has made submissions (see at [13]-[21] of its closing submissions) as to the Judicial Advice Decision, Bianca maintains that: the characterisation by Rein J in that decision of the matters in issue in these proceedings is irrelevant; that the matters in issue in these proceedings are to be determined by the statement of claim “and, possibly, the foreshadowed defences”; and that it was no part of Rein J’s function to determine what the “matters” in these proceedings were for the purposes of the Commercial Arbitration Act (and that there is no indication that his Honour in fact did so). So much may readily be accepted. However, that does not address the concern I have as to whether there was consideration given, at the time of the judicial advice application, to whether Bianca, in her capacity as trustee, was or would be justified in resisting any application of the kind now made in the referral/stay motions (the inevitability of which might well be said to have been obvious having regard to the history of such applications in other proceedings to date).
  4. “No choice” but to litigate does not equate to a mandate to litigate at all cost (or ‘to the death’, so to speak). Nor does it give any imprimatur to particular steps or forensic decisions that might be taken in the course of such litigation. In any event, that is not an issue on which I am here called upon to make any finding. I simply note it in the context of the emphasis placed by Bianca on her “no choice” submission.

Background to the present dispute

  1. As to the relevant background to the present dispute, the circumstances surrounding the entry into the Hope Downs Deed (these being the context which both the Full Court and the High Court considered of importance in the construction of the relevant arbitration clause) are set out from [28]ff of the Full Court Decision. Bianca does not cavil with that summary of the factual matrix (though, as I note in due course, she points to other events as relevant by way of context).
  2. The context surrounding entry into the Hope Downs Deed includes that, from around 2003, John was investigating the possibility of commencing proceedings against Gina. It is said by Gina that this was seemingly with Bianca’s involvement, reference being made in this regard to an email from John to Bianca on 12 May 2004 in which John tells Bianca that he had finished his affidavit and that he wanted to “get the show on the road” (see T 24). Gina relies on this correspondence as giving rise to an inference that Bianca had a copy of John’s affidavit (to which reference is made in the Hope Downs Deed) prior to entry into the Hope Downs Deed (see T 25).
  3. On 24 May 2004, solicitors acting for John wrote to Gina about “a number of concerns” about the HMH Trust and suggesting that she step down as trustee. On 7 October 2004, John’s solicitors wrote to Gina’s solicitor indicating that he proposed to file proceedings seeking to replace Gina and stating that John was “cognisant of the unwelcome publicity that such action will attract”. Pausing here, the not so subtle threat of publicity was thus prominent in the events leading up to the Hope Downs Deed and, not surprisingly, was an important part of the context in which the Full Court and the High Court considered the construction of cl 20 of that deed. It paves the way for the submission here made by Gina that it is relevant to ask whether this is the kind of dispute that the parties would have contemplated being determined in open court or by the confidential arbitration for which provision was made in the Hope Downs Deed.
  4. On 27 October 2004, John’s solicitors sent a further letter which: outlined alleged wrongdoing of Gina; enclosed a draft affidavit of John in support of the foreshadowed proceeding; and stated that “in the meantime our client requests $300,000 which would ameliorate some of the concerns expressed by him in the draft affidavit”.
  5. On 20 November 2004, John sent an email to, among others, Gina and Bianca, with an extract from The West Australian newspaper, which detailed the allegations contained in his draft affidavit.
  6. Pausing here, I note that, in terms of context, HPPL emphasises that Gina’s exercise of control over HPPL and the failure to pay dividends were matters agitated prior to the entry into of the Hope Downs Deed. It is noted that John’s draft affidavit made specific complaints about Gina’s control of HPPL and her failure to pay dividends to the HMH Trust, including:
    • the reference to a letter dated 7 October 2004 from John’s solicitors, Butcher Pauli & Calder, in which it was said that “it also must be the case that the dividends paid to the Trust have been minimised”;
    • the statement (at [195]) that “I am advised by my solicitors that … changes in the law relating to oppression would likely have rendered a deliberate failure to declare dividends oppressive conduct”;
    • the statement (at [241]) that “[g]iven that my mother was in control of HPPL, she clearly determined whether dividends were paid or not”;
    • the statement (at [254]) that “by holding 76.6% of all voting shares, and all the shares in one particular class (B), my mother is now able to declare dividends on those shares to herself, to the exclusion of the Trust, and all other classes”;
    • the statement (at [255]ff) (under the heading “Failure to Declare Dividends”);
    • the statement (at [260]) that “[t]he fact that mother refuses to dividends other than as she is required to do by the Articles again indicates that her interests are in conflict with those of the Trust …”; and
  7. Reference is also made to the fact that Bianca’s advice from Freehills, prior to her entry into the Hope Downs Deed, refers to the non-payment of dividends as potentially oppressive conduct.
  8. On 1 April 2005, John, HPPL, Gina and each of her daughters (Bianca, Hope and Gina, being the other beneficiaries, with John, of the HMH Trust) and others entered into a confidential deed of obligation and release (the Deed of Obligation and Release). Gina submits that Recitals D to F to the Deed of Obligation and Release (which I do not here set out) make plain the importance of confidentiality to the parties. A deed of loan was also entered into between HPPL and John.
  9. The Deed of Obligation and Release provided for various benefits to John (including a $3m loan from HPPL repayable when the HMH Trust vested and the free use of two apartments) in exchange for certain releases; and the parties agreed that all “disputes hereunder” were to be resolved by confidential mediation and arbitration in Western Australia (cl 14) (and see the Full Court Decision at [64]-[71]; the High Court Decision at [28]-[33]).
  10. On 12 April 2005, John gave notice of his intention to be heard in proceedings involving Gina as trustee. On 28 June 2005, his solicitors wrote to Gina’s solicitor asserting that John was not bound by the Deed of Obligation and Release because it had been the product of undue influence.
  11. On 1 July 2005, HPPL entered into the Co-operation Agreement Hope Downs Project with Rio Tinto parties and announced that it had done so. Soon after, the existence of the dispute between John and Gina was released to the media.
  12. On 11 July 2005, John gave notice of his intention to be joined as a party to proceedings then in the Supreme Court of Western Australia involving Gina as trustee, on the basis of alleged breaches of trust.
  13. In late September 2005, John filed a supporting affidavit sworn 27 September 2005 in the Supreme Court of Western Australia proceeding, alleging that Gina had committed grave breaches of trust, including: the removal of the Hope Downs mining tenements from the control of the HMH Trust (and into HPPL’s control); the reduction in HMH Trust ownership or control of shareholding in HPPL; the increase of Gina’s shareholding in HPPL from 51% to 76%; and the refusal to provide any or sufficient financial support for John from the HMH Trust. There was reference to a more recent draft affidavit, which as I understand it was a later version of the draft affidavit which had been annexed to the letter of 27 October 2004, outlining alleged wrongdoing by Gina and HPPL, including allegations that there had been a failure to declare HPPL dividends by Gina. The affidavit included the following assertions:

The fact that my mother refuses to declare dividends other than as she is required to do by the Articles [concerning CSS Dividends] again indicates that her interests are in conflict with the Trust, as the beneficiaries provide greater assistance than the CS share dividends provide. Clearly HPPL, which has made an after tax profit over $9 million in 2003, is more than capable of declaring dividends in excess of the required CS share dividend.

My mother’s conduct as director and controller of the various Hancock group entities, as well as her performance as trustee of the Trust and the Zamoever Trust, demonstrates she has only acted in her own interest, to the detriment of the children, and their rightful entitlements, in breach of her director’s duties, and fiduciary duties as trustee.

  1. Reliance is placed by Gina (by way of the context to entry into the Hope Downs Deed) on a note dated 16 November 2005 made by Bianca, apparently recording a conversation with John on 29 October 2005 in which there is reference to an attempt to convince her to come to “his side” and the following appears:

John stated that I was not to assume his attack against GHR [Gina] was over. He said that Hope Downs ‘belongs to the children’ and that because he was aware GHR was under immense pressure to get the Hope Downs deal signed in time for Government deadline of 30 June 2005, that is why he decided to ‘hit her up’ for a “few mill” then, but that his ‘case’ against GHR was by no means over…he stated that he would fight for ownership of our company’s other assets (excluding Hope Downs) – ie Roy Hill, and that he would float these once he had control of them.

  1. In March 2006, Rio Tinto’s subsidiaries and HPPL’s subsidiary, Hope Downs Iron Ore Pty Ltd (HDIO), signed the Hope Downs Joint Venture Agreement (HDJVA). Gina and Bianca, then a director of HDIO, signed the HDJVA on behalf of HDIO. Relevantly, the HDJVA contained various provisions relating to the continued control of HPPL by Gina (this being the context in which it was later said to be in HPPL’s interest for the Hope Downs Deed to be entered into by the parties thereto).
  2. On 31 March 2006, John sent an email to HPPL (a copy of which was forwarded to Bianca), stating that it “seems there is little else to do but put this matter before the courts” and that “[i]f you cannot yet realise the immense conflict of my Mother acting as both Trustee and majority shareholder of HPPL then please seek further legal advice”.
  3. In the period from June to August 2006, John continued to correspond with HPPL in relation to his allegations. In that period (i.e., leading up to the execution of the Hope Downs Deed in August 2006), Gina points out that Bianca received legal advice from two firms of solicitors (Freehills and AJ Muscat & Co) and John also had the benefit of legal advice.
  4. In August 2006, the Hope Downs Deed was executed by, among others, Bianca. John, at that stage, did not sign the Hope Downs Deed; rather, he signed a further deed in 2007 (the 2007 HD Deed) by which he agreed to be bound by the obligations in the Hope Downs Deed.
  5. In summary, the Hope Downs Deed: contained acknowledgments concerning the ownership of Hope Downs (cll 3 and 4); provided the beneficiaries with an entitlement to dividends from the profits earned in respect of Hope Downs, unless a beneficiary breached his or her obligations under the deed (cl 5); provided broad releases (cl 6); provided undertakings including concerning a non-disparagement undertaking and undertakings not to challenge the right of HPPL to the mining tenements and not to challenge the right of Gina in relation to HPPL (cl 7); contained an acknowledgement of Gina’s continuing and ongoing control and management HPPL during her lifetime (cl 8); imposed strict obligations of confidentiality in respect of matters in relation to the subject matter of the deed and disputes under the deed (cll 10 and 20.8); contained acknowledgments that each party entered into the deed freely and voluntarily, and required each of the beneficiaries to obtain legal advice (cl 12); and contained the arbitration clause the subject of the present applications relating to “any dispute under this deed” (cl 20).
  6. HPPL argues that the terms of the Hope Downs Deed itself indicate that it was intended to operate retrospectively, in terms of quelling disputes as to title through the release of past claims, as well as prospectively, in terms of regulating the conduct of the affairs of HPPL by its legal and beneficial shareholders. It is noted that the Hope Downs Deed: required HPPL to pay dividends derived from profits from the Hope Downs mine to the A class shareholders in HPPL, as long as there was not a breach of the Hope Downs Deed (cl 5); required the parties not to do anything at any time that could have an adverse impact on the Hope Downs joint venture with Rio Tinto (cl 7(a)); required the parties not to challenge the right of any member of the Hancock Group to any of the Hancock Group Interests (as defined) at any time (cl 7(b)); required the parties not to take any steps at any time which would result in HPPL ceasing to be wholly owned and controlled by “Hancock Family Group Members” (as defined) (cl 7(c)); required the parties not to challenge the rights of any of Gina or her four children to their right, title or interest in any of the Hancock Group or any trust in which they are a beneficiary (cl 7(e)); and acknowledged that during her lifetime Gina would maintain full ongoing control and management of HPPL (cl 8). HPPL emphasises that a critical object of the Hope Downs Deed was the maintenance of confidentiality about the affairs of the Hancock Group, the trusts, the intra-family dispute and the provisions of the deed itself (see the High Court Decision at [45]).
  7. As noted above, Bianca does not dispute the factual matrix identified by the Federal Court and High Court in their respective decisions as to the circumstances surrounding entry into the Hope Downs Deed. Bianca does, however, submit that the following additional circumstances need to be taken into account.
  8. First, which is not disputed, that in 2005 and 2006, Gina was the trustee of the HMH Trust and, in that capacity, owed fiduciary duties to the beneficiaries of the HMH Trust (being her children) (see the 2015 Decision at [1]-[2]). Pausing here, insofar as reference is made to earlier judgments, Bianca has disavowed reliance on factual findings in those judgments as evidence in the present proceeding (see T 17; s 91 of the Evidence Act 1995 (NSW) (Evidence Act)).
  9. Second, that: the catalyst for the Hope Downs Deed was the application made by John seeking to replace Gina as trustee (to which I previously referred as the Removal Proceeding, which led to the 2015 Decision – see the 2015 Decision at [1]-[2]; [13]-[14]; Bianca referring also to cl 7(c) of the Hope Downs Deed); in response to John’s application, Gina sought legal advice as to whether she could remove him as a beneficiary (Bianca referring to the fourth brief (dated 10 July 2006) to Mr Myers QC; and that Gina received legal advice (the Myers advice) to the effect that Gina could not do so consistently with her duties as trustee).
  10. Third, that in August 2006, just before the Hope Downs Deed was signed, Bianca was sent a series of communications by in-house counsel at HPPL to the effect that her duties as director of HPPL obliged her to sign the Hope Downs Deed and that it was urgent to do so; and that, at the time those communications were sent to Bianca, Gina was in the process of obtaining (but had not yet obtained) legal advice as to whether she could, consistently with her duties as trustee, execute the Hope Downs Deed in her capacity as trustee. Bianca points out that the question posed for legal advice was “whether the Trustee may execute the Deed on behalf of beneficiaries in accord with similar advice given earlier in relation to the Trustee being able to bind the Trust”.
  11. Fourth, that on 22 August 2006, Gina was provided with written legal advice (the Sceales advice) to the effect, Bianca says, that Gina could not sign the Hope Downs Deed as trustee of the HMH Trust without breaching her duties as trustee. Pausing here, Gina’s position is that the Myers advice and the Sceales advice must be put in context and does not accept that they bear the significance Bianca attaches to them.
  12. Fifth, that, Bianca submits, it is to be inferred from the later claim by Gina for privilege over the advices on the basis that they were confidential communications and had been obtained “in her personal (not her trustee) capacity”(referring to another decision of Brereton J – namely, Hancock v Rinehart [2016] NSWSC 12 at [4], [8], [13]-[15]) that Gina did not disclose either of the Myers advice or the Sceales advice to Bianca or to John prior to each of them signing the Hope Downs Deed.
  13. Sixth, that the legal advice obtained by Gina was paid for out the assets of the HMH Trust but was never provided to the beneficiaries.
  14. Finally, that the Hope Downs Deed conferred very significant benefits on Gina personally (Bianca referring in this context to cll 5, 6, 7(c), (d), (e), 8 and 11 of the Hope Downs Deed – see in due course below).
  15. I note that in Bianca’s written submissions on the present applications, some of the contents of, and context to, the Myers advice and Sceales advice is set out. I do not consider it necessary here to set that out in any great detail. Suffice it to note that Bianca maintains that the effect of the Myers advice was that Gina’s purposes for seeking to cut John out of the benefits of the trust were improper and it is asserted that, if that were so, then any attempts by Gina to fulfil those purposes would be in breach of trust. It is said that, as Gina has adduced no evidence here to controvert the natural inference that her state of mind was no different a matter of weeks later when she purported to execute the Hope Downs Deed on behalf of the HMH Trust, then that is the natural inference (i.e., that she was there seeking to cut John out of the benefits of the trust) in circumstances where cl 5(c) of the Hope Downs Deed gave Gina (by a different mechanism to that which was the direct subject of the Myers advice) the power to deprive John of HPPL dividends and of the fruits of the HMH Trust. Reference is made in the Myers advice to the principle stated in In re Wright; Hegan v Bloor [1920] 1 Ch 108 by PO Lawrence J at 120, referring to Humphrey v Olver (1859) 28 LJ (Ch) 406, in the context of a trustee’s power of appointment, namely that “if a corrupt intention is shown to have ever been entertained the burden of showing that it was abandoned previously to the execution of the power lay upon those who supported the appointment”.
  16. As to the Sceales advice, Bianca submits that the intent of the advice that was initially sought was to obtain a view as to whether Gina was required to obtain consent from the beneficiaries prior to execution of the deed. It is submitted that it can be inferred (more confidently, in the absence of evidence from Gina to explain the intent of the question) that Gina was aware that she had failed to obtain prior consent from the beneficiaries for her self-dealing and wished to procure an advice ratifying that failure. It is noted that, by that time, Gina had already executed the Hope Downs Deed, both in her personal capacity and purportedly in her capacity as trustee. Insofar as an amended request for advice was made to Mr Sceales, it is submitted (Bianca here again emphasising the absence of evidence from Gina) that the intent of the question appears to have been to obtain a view as to whether Gina was required to obtain consent from the beneficiaries personally or whether she instead could furnish their consent by executing the Hope Downs Deed on their behalf.
  17. Bianca argues that the Sceales advice contained a number of matters of obvious relevance to the beneficiaries, including: matters that, if correct, meant that what is said to be the primary benefit given to the beneficiaries under the Hope Downs Deed would be meaningless or at risk; that the Hope Downs Deed created or could give rise to a substantial or potentially substantial CGT liability; and that the Hope Downs Deed was, or was arguably, entered into in breach of trust.
  18. It is submitted that there was an absence of full disclosure by Gina (in her capacity as trustee) to the beneficiaries of the HMH Trust prior to Gina’s entry into the Hope Downs Deed on behalf of the HMH Trust; and hence no fully informed consent from the beneficiaries to Gina’s conduct in entering into the Hope Downs Deed.
  19. The significance that Bianca here attaches to the Myers advice and Sceales advice is twofold: the advices are relied on in support of Bianca’s unconscionability motion (as unconscientious conduct in relation to the entry into of the Hope Downs Deed); and they are relied on for the proposition that Bianca, as trustee, is not bound by the Hope Downs Deed, on the basis that it is not “trust property” as it was entered into by Gina in breach of trust. Bianca submits that the Myers advice and subsequent advices were plainly relevant to the beneficiaries; that they were evidence that Gina’s purposes were improper; and that, if Gina’s purposes were improper, then rights and obligations assumed under the Hope Downs Deed would not form part of the trust property. It is submitted that the beneficiaries should have been informed of that.
  20. It is further submitted that, at all material times, HPPL was the “alter ego” of Gina (reference there being made to the 2015 Decision at [204], [224]).In support of this submission, Bianca points to Gina’s position as an Executive Chairman and 76% majority shareholder and that Gina “deployed HPPL employees” to obtain the Myers advice and Sceales advice. Pausing here, HPPL: takes issue with the submission that HPPL was the “alter ego” of Gina; says that there is no evidence to support this; says that reliance cannot be placed on observations to that effect by Brereton J in the 2015 Decision (noting Evidence Act, s 91 in this regard); and says that it is unclear what is meant by that term in any juridical sense
  21. Insofar as Bianca points to the above matters as additional matters to be taken into account as to the context in which the Hope Downs Deed was entered into, it is also relevant here to note that there was an application to adduce fresh evidence (of the Sceales advice) when the matter was before the Full Court. That application was dismissed (see below) and so the Sceales advice was not part of the context considered by the Full Court and High Court in those respective decisions. Meanwhile, it is in evidence on the present applications but the defendants say that it is not relevant.
  22. I note at the outset that Bianca cavils with HPPL’s characterisation of the Hope Downs Deed as a “shareholders agreement” (referring to HPPL’s submissions at [35]). Bianca says that such a description is “unhelpful and apt to mislead”, submitting that the fact that the “single extant legal shareholder” in HPPL (i.e., Gina) was a party to the Hope Downs Deed “does not make it a Shareholders Agreement in any relevant sense” and noting that there were parties to the Hope Downs Deed who were neither legal nor beneficial shareholders in HPPL. It is said that none of the Recitals to the Hope Downs Deed give any support to the contention that the deed was intended to be a shareholders’ agreement; that cl 5, which “purported to give A Class shareholders a qualified contractual right to payments described as ‘dividends’”, did not purport exhaustively to regulate the dividend arrangements of HPPL and was in terms described as the “consideration” for the matters “recited in and the subject of this deed” (and particularly “the undertakings and releases given” in the Hope Downs Deed); and so thus was not a standalone provision in the Hope Downs Deed.
  23. Leaving aside the argument as to whether it is properly to be characterised as a shareholders’ agreement (on which nothing relevantly here turns), the relevant provisions of the Hope Downs Deed are set out below.
  24. The named parties to the Hope Downs Deed include:

GEORGINA HOPE RINEHART as trustee of the Hope Margaret Hancock Trust (“the Trustee” and “HMH Trust”)

GEORGINA HOPE RINEHART in her own right or as a director of a Hancock Group Member (“GHR”)

BIANCA HOPE RINEHART (in her own right or in any representative capacity)

  1. Clause 1.1 defines “Proceedings” to mean “Supreme Court of Western Australia action numbered CIV 1327 of 2015 the parties to which are the HMH Trust and Gina and to which JLH [John] is seeking to be joined”. Clause 1.2(f) provides that a reference to a party includes that party’s successors and permitted assigns.
  2. Clause 5 provides that:

DISTRIBUTION COVENANT

5. In consideration of the matters recited in and the subject of this deed (including without limitation the undertakings and releases given herein) HPPL and the Trustee covenant and agree with each other and the other parties hereto that they will implement the following according to these terms:

(a) to the extent that it is lawfully permitted and subject to sub-clause (f), HPPL shall pay dividends to holders of A Class shares in HPPL, based upon a proportion of the Hope Downs Net Cash Flow After Tax commencing 6 September 2011 … calculated as follow:

(i) twenty-five per cent (25%) of the Hope Downs Net Cash Flow After Tax;

(ii) a further twenty-five per cent (25%) of the Hope Downs Net Cash Flow After Tax, less any amounts required to be retained for HPPL’s and the Hancock Group’s equity requirements in relation to additional developments of or associated with the Hope Downs Joint Venture and/or the development of the Hope Downs Tenements as determined by the Directors of HPPL and/or HDIO in accordance with the requirements of the HDJV, and subject to the further requirements of this Clause 5;

(b) subject to sub-clause (c), the Trustee shall pay any dividend received from HPPL in accordance with sub-clause (a) above to the Beneficiaries in equal shares of one-quarter each on the relevant dates as noted in sub-clause (a) above;

(c) if any one or more of the Beneficiaries commit a breach of this deed at any time then:

(i) HPPL’s obligation to pay further dividends on the A Class shares pursuant to sub-clause (a) shall immediately cease from and after a date fourteen days after the service by HPPL on all other executing parties to this deed of a notice in writing advising of the breach which has been committed and advising the notice recipients that HPPL’s said obligation will cease on the said fourteen days after service of the notice if the said breach has not by then been rectified; the parties each undertake to advise HPPL in writing if and when they or any of them first become aware that any party has or may have committed a breach of this deed;

(ii) subject to clause 5(c)(iii), HPPL shall pay any further dividends to holders of the B Class shares in HPPL on the same terms as to time and amount as set out in sub-clause (a);

(iii) upon the cessation of the default and the carrying out of payment by the defaulting party of any remedy or damages to be performed or paid pursuant to any judgment consequent upon the default or any settlement of the same, HPPL shall reinstate the arrangements referred to in clause 5(a) and any further declaration of dividend pursuant to clause 5(c)(ii) shall thereupon cease.

(d) any default by a Beneficiary under the Deed of Obligation and Release dated 1 April 2005 (or as such is amended in writing by mutual agreement of all parties thereto) shall be deemed to be a default by that Beneficiary under this deed for the purpose of this clause;

(e) within one hundred and twenty (120) days of the end of any financial year of HPPL in respect of which payments are made under sub-clause 5(a) any amount calculated under this Clause 5 shall be verified by an independent auditor appointed by HPPL, at the request of any Beneficiary. A copy of the audit certificate will be provided to each Beneficiary. Any adjustments to the amounts paid required as a consequence of the audit shall be made as soon as practicable after the date of the audit certificate. The cost of such audit will be borne by all Beneficiaries receiving any payment under Clause 5 for the relevant year, in equal proportions; and

(f) payments under this Clause 5 shall immediately cease upon the declaration of an Event of Force Majeure under the HDJV and shall resume upon such an event abating and being rectified.

  1. Clause 7, relevantly, provides that:

7. Each of the parties to this deed undertakes with each of the other parties to this deed

(a) that they will not at any time do, nor attempt to do nor encourage, nor assist in any way any other party or third party to do anything which could have an adverse impact on the Hancock Group’s rights under:

• the Services and Commingling Agreement entered into or which may subsequently be entered into between Hamersley Iron Pty Ltd and members of the Hancock Group;

• or any of the documents entered into by the Rio Tinto Group and the Hancock Group in respect of the Hope Downs Joint Venture;

• or under any of the financing arrangements entered into by members of the Hancock Group in respect of the Hope Downs Joint Venture …

(c) not to take any steps at any time which would result in HPPL ceasing to be wholly owned and controlled by Hancock Family Group Members, including without limitation any change to the Trustee in contravention of the provisions of this Deed … [“Hancock Family Group Member” is defined to mean Gina “and her lineal descendants”]

(e) subject to the rights of HPPL under the Deed of Loan not to challenge the rights of any of GHR, JLH, BHR, HGRW or GHFR who execute this Deed to any of their right title or interests in any of the Hancock Group or in any trust in which they or any member of the Hancock Group is a beneficiary …

  1. Clause 8 of the Hope Downs Deed provides that:

8. The parties hereto acknowledge that GHR by her direct ownership of the share capital of and voting power in HPPL, has control of HPPL and without limiting in any way the legal and other rights of GHR in that regard whether at law or in equity or pursuant to the Constitution of HPPL, the parties hereto acknowledge that during her lifetime GHR shall maintain full ongoing control and management of HPPL and that GHR shall accordingly have the continuing right during her lifetime at her election from time to time to maintain or relinquish or re-establish herself as the chairman on an executive or non executive basis as she in her sole discretion shall decide of HPPL.

  1. Clause 9.3 provides that:

9.3. Notwithstanding either of the provisions in clause 9.1 and 9.2, the Trustee and the beneficiaries agree that nothing in this Deed limits any of the powers of the Trustee of the HMH Trust.

  1. Clause 11 provides that:

PLEA IN BAR

On and from the Effective Date each party may plead this deed in bar to any Claim or proceeding the subject of a release in this deed PROVIDED HOWEVER that nothing in this clause shall prevent any party from enforcing the provisions of this deed, the Porteous Settlement Deed, the Deed of Obligation and Release or Deed of Loan.

  1. Clause 15.1 provides, relevantly, that:

15.1 This deed shall be of full force and effect upon execution by HPPL, Westraint, HM, HFMF, 150, and HMHTI, the Trustee, GHR, and subject to clause 15.2, at least two of JLH, BHR, HGRW and GHFR, in respect of those parties who have so executed … Until this deed is executed by a party, neither this deed nor any provision hereof shall enure to the benefit of that party.

  1. The relevant arbitration agreement is contained in cl 20 of the Hope Downs Deed which provides that:

20.1 … In the event that there is any dispute under this deed then any party to his [sic] deed who has a dispute with any other party to this deed shall forthwith notify the other party or parties with whom there is the dispute and all other parties to this deed (“Notification”) and the parties to this deed shall attempt to resolve such difference in the following manner …

20.2 Confidential Arbitration

Where the disputing parties are unable to agree to an appointment of a mediator for the purposes of this clause T within fourteen (14) days of the date of the Notification or in the event any mediation is abandoned then the dispute shall on that date be automatically referred to arbitration for resolution …

  1. Bianca points out that cl 20.9 expressly distinguishes between the mechanism for serving notices on Gina and the mechanism for serving notices on the “Trustee”.
  2. Clause 21 provides that:

21. This deed shall be governed by and be subject to and interpreted according to the laws of the State of Western Australia and (subject to the provisions hereof requiring all disputes hereunder to be resolved by confidential mediation and confidential arbitration) the parties agree to the submit to the exclusive jurisdiction of the Courts of Western Australia for all purposes in respect of this deed.

  1. The execution page for the Hope Downs Deed contains, inter alia, the following execution clause:

SIGNED BY

GEORGINA HOPE RINEHART

as trustee of the Hope Margaret

Hancock Trust in the presence of …

  1. As noted, John did not sign the Hope Downs Deed in August 2006 but later, in 2007, signed a document binding himself to the obligations contained in the Hope Downs Deed (the 2007 HD Deed).

Constituent documents

  1. Bianca also points to the two constituent documents that it is said form the foundation of the present proceeding: the HMH Trust Deed (as amended); and HPPL’s Articles of Association. Bianca places emphasis on the fact that neither document requires the arbitration of disputes arising under it. Bianca says that there was a similar disparity in the case that was before the High Court of Singapore in BTY v BUA [2018] SGHC 213 (BTY) (to which I refer later), pointing to what was there said at [143] and [113].
  2. As to the HMH Trust Deed, it is noted that cl 10 of the Schedule provides that:

(a) The Trustee may:

(2) refer any dispute affecting the assets of the Trust to arbitration, other than a dispute involving a Beneficiary

  1. Bianca says that the HMH Trust Deed has thus, since at least 1995, permitted the trustee of the HMH Trust from time to time to refer a dispute to arbitration but that it does not require it; and further says that such permission is negated where the dispute is one “involving” a beneficiary. It is submitted that, far from supporting a concern to have the affairs of the HMH Trust the subject of arbitration, this clause evidences a contrary desire (that is, to ensure that any dispute involving a beneficiary is not arbitrated). Pausing here, it is difficult to see how far this argument takes the matter, since it does not in terms prohibit the trustee from entering into an agreement with a beneficiary for a dispute to be referred to arbitration – it simply appears to limit the trustee’s power unilaterally to refer a dispute affecting the assets of the trust, where that dispute involves a beneficiary, to arbitration.
  2. Bianca also notes that HPPL’s Articles of Association similarly contain no clause requiring the arbitration of disputes (at the highest, it is said, making provision for HPPL to agree to arbitrate matters with other persons) (referring to Art 153); and that HPPL’s Articles of Association make no reference to the Hope Downs Deed, despite HPPL’s Articles of Association having been restated in 2012 (six years after the execution of the Hope Downs Deed).
  3. Bianca accepts that the HMH Trust Deed was in evidence before Gleeson J in the proceedings the subject of the Gleeson Decision but says that there were no submissions made in either the Full Court or the High Court as to the HMH Trust Deed and HPPL’s Articles of Association.
  4. Bianca argues that the absence of arbitration clauses in either the HMH Trust Deed or HPPL’s Articles of Association suggests that it is incorrect to view the Hope Downs Deed as an agreement intended to require the arbitration of all disputes in relation to the affairs of HPPL and the trusts (cf Gina’s submissions at [125]). Rather, it is submitted by Bianca that the Hope Downs Deed was intended to quell disputes as to title in relation to the Hope Down Tenements (a matter that it is said is not the subject of the statement of claim in the present proceeding – as to which see below).

Other proceedings

  1. As noted above, the array of other proceedings in which the parties are or relevantly have been involved include (and this is by no means an exhaustive list) the following.
  2. First, the French Arbitration (commenced by Bianca and John in 2012 expressly pursuant to cl 20 of the Hope Downs Deed). Bianca says that there is no admissible evidence: supporting Gina’s submission (at [19]) that the French Arbitration remains dormant “predominantly by reason that [Bianca] made claims in the Federal Court that the Hope Downs Deed was void and the High Court Decision was pending”; nor supporting Gina’s submission (at [20]) or the similar submission by HPPL (at [59]) that “given there is a dispute as to whether dividends are payable under clause 5 … HPPL has made provision for the payment of dividends payable under the clause, but has not paid them”. As to the latter, objection was taken by Bianca to the admission in evidence on the present applications of correspondence between HPPL and Bianca in which information was provided by HPPL as to the provision made for the dividends. It was only provisionally admitted (for the fact of the communication not its truth). It is not necessary here finally to rule on that objection, since I do not place any reliance on that correspondence when determining the issues arising in relation to the present referral/stay motions. Were it to have been necessary formally to do so I would simply have admitted the evidence subject to relevance. Pausing here, I observe that it is not the least ironic that Bianca, whose complaint elsewhere has been that her requests for information have not been met by HPPL, objects to evidence in which HPPL appears to be responding to her queries (however unsatisfactory she may consider that response to be).
  3. More relevant, in my opinion, is the inconsistency between a claim made by Bianca (in her personal capacity) to be entitled, with her siblings, to the benefit of the mining tenement assets (and to an account of profits or equitable compensation in relation thereto) and a claim made by Bianca (in her capacity as trustee) as to a breach of trust or other duty, or breach of contract, arising out of the failure of HPPL to declare or pay dividends out of income from assets that (on Bianca’s case in her personal proceeding) are held on trust for Bianca and the other beneficiaries of the alleged constructive trust. That is, in the Federal Court proceeding (now referred to the Martin Arbitration) Bianca says, in effect, that HPPL is not the beneficial owner of the mining tenement assets; meanwhile, in this Court, as already noted, Bianca’s case is that she accepts that HPPL beneficially owns those assets and her complaint is as to the inadequacy of dividends paid in respect of income derived from those assets.
  4. The fact that Bianca may ultimately have an election to make as to the remedies she seeks (in one or other of her capacities) does not remove that inconsistency. Moreover, although in oral submissions I was taken to accounting documents in support of the proposition that there was capacity for the payment of dividends even if the Hope Downs mining tenements are held on trust for Gina’s children, Bianca’s submissions elsewhere acknowledge that the HMH Trust’s shares in HPPL are its “most substantial and only income producing asset”. Thus the beneficial ownership of the Hope Downs mining tenements assumes no little significance in the proceeding (and is something in respect of which Bianca presently appears to adopt different positions). Hence HPPL’s complaint that questions as to the ownership of its assets must be determined before any question as to its failure to pay dividends.
  5. Second, the Federal Court proceeding (now referred to the Martin Arbitration). Bianca disputes the contention (see HPPL’s submissions at [36]-[62]; Gina’s submissions at [21]-[22]) to the effect that this proceeding is either inconsistent with or related to the matters in the present proceeding. However, as noted above, that proceeding is premised on a challenge to HPPL’s beneficial ownership of the mining tenements, that being something that is not disputed in the present proceeding.
  6. Third, the two proceedings in the Supreme Court of Western Australia, involving third parties not involved in the present proceeding, part of which (Bianca and John’s counter-claim) has now been referred to arbitration (the Hope Downs Proceeding). Bianca here accepts that in the Hope Downs Proceeding, she (in her personal capacity) and John have asserted that it is unconscionable for Gina and HPPL to rely on the Hope Downs Deed, and that the present proceeding is premised on an acceptance of the validity of the Hope Downs Deed. However, Bianca maintains that the fact that the HMH Trust’s shares in HPPL are its “most substantial and only income-producing asset” puts the present proceeding in a different class to the Federal Court and Western Australian proceedings. Further, emphasis is placed by Bianca on the fact that she was, and is, not a party to any of the above “related proceedings” in her capacity as trustee of the HMH Trust. There is thus said by Bianca to be no res judicata, issue estoppel or Anshun estoppel arising from those proceedings binding on Bianca “suing in her present capacity” as trustee (reliance being placed in this context on what was said in Tyne v UBS AG (No 3) (2016) 236 FCR 1; [2016] FCA 5 (Tyne v UBS) at [376]-[400] per Greenwood J).
  7. Bianca notes, in this regard, that in certain of the proceedings (referring to a proceeding commenced by HPPL in the Federal Court that was cross-vested to this Court in which HPPL sought declaratory relief as to the payment of royalties – to which I will subsequently refer to as the Article 3A Proceeding), there was no suggestion by the defendants that they were subject to the arbitration agreement. HPPL’s explanation for this is, in effect, that it was seeking declaratory relief on a discrete issue of construction of HPPL’s Articles of Association and that nothing turns on the fact that it did not invoke the arbitration clause at that stage.

The referral/stay motions (motions (i) and (iii)) – preliminary issues

  1. As noted earlier, the principal relief sought by Gina and HPPL is the referral (whether in whole or in part) of the whole of the proceeding to arbitration and the stay or dismissal of the present proceeding pursuant to s 8 of the Commercial Arbitration Act or the equivalent provision under the WA Commercial Arbitration Act (as also noted earlier, the alternative bases for such relief being the case management and abuse of process grounds). I therefore turn first to the applications based on the relevant provisions of the Commercial Arbitration Act (and equivalent in the WA Commercial Arbitration Act).

Relevant provisions of the Commercial Arbitration Act

  1. Section 5 of the Commercial Arbitration Act provides that “[i]n matters governed by this Act, no court must intervene except where so provided by this Act”.
  2. Section 8(1) of the Commercial Arbitration Act, which is also mandatory in its terms, provides that:

8. A court before which an action is brought in a matter which is the subject of an arbitration agreement must, if a party so requests not later than when submitting the party’s first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed.

  1. Section 16(1) of the Commercial Arbitration Act provides that the arbitral tribunal may rule on its own jurisdiction, including objections with respect to the existence or validity of the arbitration agreement. Section 16(2) provides that for those purposes an arbitration clause which forms part of a contract is to be treated as an agreement independent of the other terms of the contract. Those sections provide that:

16. Competence of arbitral tribunal to rule on its jurisdiction

(1) The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement.

(2) For that purpose, an arbitration clause which forms part of a contract is to be treated as an agreement independent of the other terms of the contract.

Relevant principles

  1. In the Gleeson Decision, her Honour noted that s 8(1) is engaged if there is an apparently valid arbitration agreement; that being established by the tender of an executed agreement containing a clause which, properly construed, is an arbitration agreement within the meaning of s 7(1) of the Commercial Arbitration Act (see at [86]; and see also the Full Court Decision at [108]).
  2. If the existence of an apparently valid arbitration agreement can be established, it has been said that it is not then appropriate, on a s 8(1) application, to consider the circumstances in which the underlying agreement was entered into (see the Gleeson Decision at [145]; the Full Court Decision at [108], [150], [240]; the Le Miere (No 9) Decision at [3], [45] per Le Miere J; the Le Miere J (No 10) Decision) at [153] per Le Miere J).
  3. In ACD Tridon Inc v Tridon Australia Pty Ltd [2002] NSWSC 896 (ACD Tridon), Austin J (at [99]) considered three issues as arising on an application under s 8(1) of the Commercial Arbitration Act: first, the identification of the matters for determination in the relevant proceeding(s); second, on the proper construction of the arbitration agreement, whether those matters “are capable of settlement by arbitration in pursuance of the agreement” (emphasis in original); and, third, whether those matters are arbitrable.
  4. In the Full Court Decision (to which I refer in more detail shortly) it was noted that how an application under s 8 of the Commercial Arbitration Act is dealt with will depend significantly upon the issues and the context (see the Full Court Decision at [145]).
  5. There was some debate on the present application as to whether it is invariably necessary only to show that there is a “sustainable argument” that the arbitrator has jurisdiction (see HPPL’s submissions at [73]; Gina’s submissions at [49]) or whether more might be required in a given case. Bianca points to the fact that in the Court of Appeal Decision, Bathurst CJ had regard (after, I note, the pleaded claims had been considered in isolation of the defences) to whether, by reason of certain defences Gina was raising, the matter fell within the arbitration agreement (see at Court of Appeal Decision at [131]-[148]) and that his Honour did not consider only whether there was a “sustainable argument” as to whether the disputes fell within the agreement. Reference is also made by Bianca to the approach of the High Court in the High Court Decision (see at [34]-[40] of the plurality’s reasons).
  6. Bianca points to the fact that, in the Court of Appeal Decision (at [135]), Bathurst CJ said that “the mere fact that … assertions were made does not mean that it automatically follows that the whole claim is a dispute under the Settlement Deed” and considered that Brereton J “was entitled to examine the claim to form a view as to whether he could properly conclude, in the light of the evidence available, that the assertion that the claim was barred by the Settlement Deed was sustainable” (citing Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] AC 334 at 356 per Lord Mustill).
  7. Bianca submits (and I do not understand this to be in contest by the defendants) that the “issues” and “context” relevant to how a judge deals with a s 8 application include: whether the issue is an issue of law involving the construction of documents that can readily be decided by the Court; whether the matter has been fully argued (referring to the Court of Appeal Decision at [135]); whether there is no genuine contention that further evidence might be relevant to the issue (see the Court of Appeal Decision at [135]); the strength of the contention that the arbitrator has jurisdiction (see the Court of Appeal Decision at [135]); whether, if the jurisdictional challenge were referred to the adjudicator, there would be duplication of argument and evidence; whether there is a contention that the matter is non-arbitrable and properly within the purview of the judiciary; whether referral to an arbitrator would or might cause delay in resolving an issue which could quickly and justly be decided by the Court; and whether third party interests would potentially be adversely affected by a referral to arbitration. Pausing here, what is in contest, of course, is what flows from this. Bianca submits that in the present case all these matters militate against the question only being as to whether there was a sustainable argument for jurisdiction; and, in particular, she maintains that “it would be most undesirable to compel a trustee, in that capacity, to participate in arbitration and thereby diminish trust assets if the trustee is not relevantly subject to the arbitration agreement”.
  8. Further, the Full Court made clear (and this was not the subject of the special leave granted by the High Court) that for the proviso to be invoked there must be a specific attack on the validity of the arbitration agreement – it is not sufficient, having regard to the common law principle of separability, to attack the validity of the contract of which an arbitration clause forms part (and see s 16 of the Commercial Arbitration Act set out above). As the Full Court said, the court is not a filter of matters suitable for arbitration; rather, arbitration is a consensual decision of the parties to the relevant agreement.
  9. Accordingly, on the s 8 Stay Applications, I proceed on the basis that it is necessary first to consider whether there is an apparently valid arbitration agreement; and, if there is (and subject to the submissions here made by Bianca as to whether, in her capacity as trustee, she is bound by the arbitration agreement), then to consider whether the action brought is a “matter” which is the subject of that arbitration agreement. The remaining issues: whether the party or parties seeking the referral to arbitration made the request no later than when submitting its or their first statement on the substance of the dispute; and whether the proviso arises (i.e. whether there should be a determination that the arbitration agreement is null and void, inoperative or incapable of being performed) do not arise in the present case (there is not a separate attack on the validity of the arbitration agreement per se; and there is no allegation that entry into the agreement to arbitrate was unconscionable). If there is an apparently valid arbitration agreement and an action has been brought in a matter the subject of that arbitration agreement, then referral to arbitration is mandatory pursuant to s 8(1) of the Commercial Arbitration Act (assuming that the matter is arbitrable) and the proceeding should be stayed (noting that the Full Court made clear that the court does not act as a filter as to the suitability of a matter to be referred to arbitration).

Apparently valid arbitration agreement – Bianca’s “threshold question”

  1. As to whether there is an “apparently valid arbitration agreement”, HPPL notes that the existence of an apparently valid arbitration agreement (namely, that comprised in cl 20 of the Hope Downs Deed) was described by the Full Court as being “beyond argument” (referring to the Full Court Decision at [151]). Bianca, however, raises a threshold issue, namely, as to whether she is bound by the Hope Downs Deed in her capacity as trustee of the HMH Trust arguing that, if she is not, then there is no relevant arbitration agreement in support of which the defendants can seek a mandatory or discretionary stay. In this context, Bianca also argues that the Hope Downs Deed is not “trust property”.

Bianca’s submissions

  1. Bianca accepts (as the defendants have emphasised in their respective submissions) that a trust has no legal personality separate from its trustee, and that a trustee does not have any additional or qualified legal personality (citing ALYK (HK) Limited v Caprock Commodities Trading Pty Ltd [2015] NSWSC 1006 (ALYK (HK)) at [22]-[25] per Black J, to which HPPL has also referred; Yarra Australia Pty Ltd v Oswal (No 2) [2013] WASCA 187 (Yarra Australia) at [259] per Pullin JA; and ACES Sogutlu Holdings Pty Ltd (in liq) v Commonwealth Bank of Australia (2014) 89 NSWLR 209; 2014 NSWCA 402 (ACES) at [16] per Leeming JA). Nevertheless, Bianca places emphasis on the fact that, in the Hope Downs Deed, careful distinctions are drawn between the capacities in which the deed is binding upon its signatories (noting that she did not execute the deed in her capacity as trustee). Meanwhile, the defendants contend that Bianca’s submissions are not consistent with an acceptance of the fundamental proposition that a trust has no separate legal personality (as I explain in due course.)
  2. Bianca further submits that it is incumbent on HPPL and Gina to demonstrate that the Hope Downs Deed was executed by Gina in the proper administration of the HMH Trust (and it is said that they have not met that burden). It is submitted that this is “especially problematic” given that: the Hope Downs Deed conferred, inter alia, valuable dividend rights on Gina personally and at the direct expense of the HMH Trust if any beneficiary breached the deed’s terms (said to be a stark example of a self-dealing transaction); and that there is material before the Court that suggests that Gina procured the execution of the Hope Downs Deed without obtaining the fully informed consent of the HMH Trust’s beneficiaries. It is submitted that, in the absence of evidence from HPPL and Gina explaining these matters, it could not be found that the Hope Downs Deed was executed by Gina in the proper administration of the HMH Trust.
  3. As to the question of construction of the Hope Downs Deed, Bianca submits that it is clear from the face of the deed that the parties intended to give some contractual significance to the institution that was the HMH Trust, relevantly by: distinguishing between Gina “as trustee” and Gina in her own right; and providing that the deed only came into existence once, inter alia, Gina in her capacity as trustee of the HMH Trust had executed it. It is said that, in light of the definition of “Proceedings”, the parties also contemplated that the HMH Trust might, so described, be a “party” to proceedings and that it was meaningful to distinguish between the HMH Trust in that capacity and Gina. It is submitted that the distinctions so drawn in the Hope Downs Deed, and the parties’ careful references to the HMH Trust, are of critical contractual significance.
  4. Bianca notes that the arbitration agreement in terms only applies where there is a dispute between two or more “parties” to the Hope Downs Deed and submits that, on its proper construction, a dispute is covered if and only if the dispute arises between parties to the Hope Downs Deed in one or more of the capacities in which they are parties to it. It is submitted that this construction is necessary and appropriate to avoid injustice and absurdity (referring to Horsell International Pty Ltd v Divetwo Pty Ltd [2013] NSWCA 368; (2013) ANZ Ins Cas 61-991 at [152] per McColl JA (Beazley P, as Her Excellency then was, agreeing at [1]) where it was said that “[w]herever possible, an absurd or manifestly unjust result will be avoided upon the hypothesis that such would not have been intended by the parties” (citing Johnson v American Home Assurance Co (1998) 192 CLR 266; [1998] HCA 14 at [19](1) per Kirby J).
  5. By way of example, Bianca postulates the situation where one of the parties to the arbitration agreement were to become the executor of the estate of a person who was not a party to the arbitration agreement. It is submitted that it is most unlikely that the parties could have intended that that party (in the capacity as executor) could thereafter be drawn into an arbitration under the Hope Downs Deed (even though that party, upon becoming executor, does not become two juristic persons). Pausing here, it seems to me that this example conflates the issue as to whether a party is bound by the arbitration agreement with whether a dispute is one that arises “under the deed”. A party to the deed who becomes the executor of the estate of a non-party to the deed would still be bound by the Hope Downs Deed, however, it seems unlikely in that event that any dispute involving the non-party’s estate would be a dispute under the deed for the purposes of the arbitration clause and, if not, then the fact that the executor (in his or her personal capacity) is bound by the Hope Downs Deed would be irrelevant. This does not seem to me to require the further test as to whether the dispute is one that has arisen between parties to the deed “in one or more of the capacities in which they are parties to the deed”.
  6. Bianca argues that the construction for which she contends (that a dispute is covered if and only if the dispute arises between parties to the deed in one or more of the capacities in which they are parties to the deed) is also consistent with general principle, noting that the effect of a contractual identification that a party contracts in a particular capacity turns on the construction of the contract and referring to the principle, as stated in Muir v City of Glasgow Bank [1879] 4 App Cas 337(Muir) at 355-356 by the Lord Chancellor, Earl Cairns LC, that:

… whether, in any particular case, the contract of an executor or trustee is one which binds himself personally, or is to be satisfied only out of the estate of which he is the representative, is, as it seems to me, a question of construction, to be decided with reference to all the circumstances of the case; the nature of the contract; the subject-matter on which it is to operate, and the capacity and duty of the parties to make the contract in the one form or in the other. I know of no reason why an executor, either under English or Scotch law, entering into a contract for payment of money with a person who is free to make the contract in any form he pleases, should not stipulate by apt words that he will make the payment, not personally, but out of the assets of the testator. If, for example, A.B., the executor of X, contracted to make a payment as executor of X, and as executor only, to C.D., it would be difficult to suppose that any obligation except an obligation to pay out of assets was intended, C.D. in the case supposed would have authority to accept a contract so limited, and the words used could have no meaning, and could be referred to no object other than that of limiting responsibility. … But the first question, whether in Scotland or in England, must be, What is the contract into which the parties have entered? And that must be accompanied by another question, What is the contract into which the parties were competent to enter? …

  1. It is said that this principle underpins the observations of Young CJ in Eq, as his Honour then was, in Provident Capital Ltd v Zone Developments Pty Ltd [2001] NSWSC 843 at [50]- [52] (noted by Pembroke J in AMP Capital Investors Pty Ltd v Parsons Brinckerhoff Australia Pty Ltd [2013] NSWSC 1633 (AMP Capital) at [16]-[17]) and that this analysis is supported by the conclusions of the Western Australian Court of Appeal in Paharpur Cooling Towers Ltd v Paramount (WA) Ltd [2008] WASCA 110 (Paharpur) at [45], where it was held that a reference to “a dispute or difference between the parties” did not refer to a dispute or difference involving a third party, the Court (at [45]) saying that:

45. In the present case, we do not think the parties could be taken to have contemplated such fragmentation. In our view, the reference in cl 2 of the contract to ‘a dispute or difference between the parties’ was intended to apply to a dispute between the parties to the contract only. It was not intended to apply to a dispute involving the parties and a stranger to the contract such as that which arose here, where the dispute involves the liability to one party to the contract (as the drawer/payee) of two acceptors of a bill of exchange, one of the acceptors being a party to the contract and the other a stranger to it.

  1. Thus it is submitted by Bianca that the arbitration agreement into which Gina and Bianca entered was an agreement under which a dispute was covered only so far as the dispute was between the parties in the capacity in which each party contracted.
  2. It is accepted by Bianca that the parties to the Hope Downs Deed did not “freeze in time” in those capacities (Bianca pointing to cl 1.2(f) which she accepts permits the arbitration agreement to extend to disputes between a party’s “successors”); and there noting what was said in Crossman v Sheahan (2016) 115 ACSR 130; [2016] NSWCA 200 (Crossman v Sheahan) at [181]. However, Bianca argues that the term “successor” does not have a fixed meaning; rather, it takes its meaning from its context (referring to Broadwater Hospitality Management Pty Ltd v Primewest (Lot 4 Davidson Street Kalgoorlie) Pty Ltd [2010] WASCA 174 at [58] per Pullin, Newnes and Murphy JJA).
  3. In the context of the Hope Downs Deed (and on the assumption that cl 1.2(f) applies to successors to the parties to the Hope Downs Deed including replacement trustees), Bianca submits that the term has the effect that a replacement trustee for the HMH Trust is only a “party” for the purposes of the arbitration agreement so far as the Hope Downs Deed forms part of the trust property such that the incoming trustee “succeeds” to the rights and obligations under the deed. It is submitted that this construction is consistent with the parties’ careful distinction between the capacities in which the parties to the deed contracted and is consistent with context (and hence that a person is not relevantly a “successor” if the person does not succeed to rights and obligations under the Hope Downs Deed). It is said that this construction avoids absurdity. Bianca argues that it is difficult to see why the parties would have intended that a deed which was not trust property would become trust property because of a change in trusteeship; and says that, if that were the parties’ intention, then the clearest language would be expected. By way of example, it is said that the parties could not sensibly have intended that, if the Hope Downs Deed were entered into in breach of trust such that it was not trust property, and that breach of trust was the occasion for the removal and replacement of the trustee, then the act of removing and replacing the trustee would achieve that which the former trustee did not (namely, to bind the trust to the deed).
  4. Bianca further submits that the assumption that cl 1.2(f) applies to successors to the parties to the Hope Downs Deed is unsound. It is submitted that cl 1.2(f) operates on “a reference to a party to a document”, noting that the deed describes itself as “this deed”, not a “document”; and says that the reference to “document” in cl 1.2(f) is a reference to documents referred to in the Hope Downs Deed other than the deed itself, such as the Porteous Settlement Deed and the Deed of Obligation and Release.
  5. Bianca also argues that the assumption that cl 1.2(f) was intended to apply to all successor trustees is unsound. It is submitted that the parties to the Hope Downs Deed cannot have contemplated that there would be any successor to Gina as trustee otherwise than pursuant to the regime in cl 9.2; but that the processes under that regime did not occur; and that the regime in cl 9.2 can no longer have any operation now that Gina has relinquished her trusteeship and left the selection of her successor to the court (contra Gina’s submissions at [115], [123]). Bianca says that Gina has previously put to the Court of Appeal that “if the new trustee was outside the parties to the deed it would be difficult to see how the contractual fetter would automatically flow over”. Thus, Bianca submits, Gina’s reliance on the clause is misplaced. Pausing here, it did not seem to me to be suggested that there was any admission against interest made by Gina by the making of what might be said to be inconsistent submissions in earlier proceedings. Hence the relevance of any such previous submissions on the present application is moot. Nor do I see a basis to conclude that the parties to the Hope Downs Deed cannot have contemplated that there would be any successor to Gina as trustee otherwise than pursuant to the regime in cl 9.2 simply by reason of the fact that cl 9.2 dealt with a particular circumstance in which Gina might be replaced as trustee.
  6. As to the suggestion by Gina (see below) that the parties could not have contemplated that disputes involving a successor trustee would fall outside the arbitration agreement, Bianca says that it is most unlikely that objectively the parties mutually contemplated that Gina would act in breach of trust in entering into the Hope Downs Deed (and that to suggest otherwise would be contrary to the presumption of regularity); and thus it is said that, objectively, there was no mutual consideration of what should occur if Gina ceased to be trustee and obligations under the Hope Downs Deed did not vest in the new trustee because of Gina’s default. To my mind, this elides two quite different questions: first, whether the parties would have contemplated that a dispute involving a successor trustee would be covered by the arbitration agreement and second, whether the parties would have contemplated that Gina would act in breach of trust when entering into the deed. As to the former, I do not see the basis on which it is suggested that parties entering into a deed which is expressed to include reference to a party’s successors should be taken not to have intended “successor” to include a successor trustee other than one appointed pursuant to the regime in cl 9.2, which seems to be the thrust of Bianca’s submission.
  7. Bianca says that it is not an answer (as Gina suggests) to point to the phrase “in any representative capacity” on the first page of the Hope Downs Deed as having been intended to operate in an anticipatory fashion to ensure that Bianca was bound if she were later to become the trustee. It is submitted that this involves the absurd proposition that Bianca was able to bind “the trust” to a deed by signing the deed prior to becoming trustee and otherwise than in the course of her duties as trustee. That, however, seems to me to miss the point: subject to the submissions made as to whether the Hope Downs Deed was entered into in breach of trust, the trustee of the HMH Trust, Gina at the time, was bound at the time the Hope Downs Deed was entered into; and the question is whether Bianca who was also a party to it can now say that, in her capacity now as trustee, she is not bound thereby – not whether she was able in some way prospectively to “bind the trust” to the deed at the time that she signed it.
  8. As to Gina’s contention that, if the Hope Downs Deed only bound parties in particular capacities, then various clauses of it would not “bite” against the parties in all of their capacities (and that this is a result that the parties could not have intended), Bianca submits that the parties could readily have intended that result and argues that this was why they went to some lengths to identify the various capacities in which the parties to the Hope Downs Deed were contracting. It is submitted that Gina’s contention is particularly weak when it is said that the parties could not have intended that successor trustees might not be bound by various obligations since the parties expressly agreed that nothing in the Hope Downs Deed limited any of the powers of the trustee (see cl 9.3). Clause 9.3, however, as extracted above, is clearly directed to dispelling any argument that the procedure set out in cll 9.1 and 9.2 might be construed as limiting the powers of the trustee. I do not see that it assists in determining whether “successor” to a party includes a successor to Gina in that person’s capacity as trustee.
  9. Bianca submits that the issue whether a person is a party to an arbitration agreement is one which can properly, and should, be determined as an incident of the determination of an application under s 8. It is noted that in the Gleeson Decision, Gleeson J determined for herself whether various persons were parties to the arbitration agreement (see at [515]-[544]) and that the High Court also decided for itself that certain persons were parties for the purposes of the Commercial Arbitration Act (see the High Court Decision at [74]).
  10. It is submitted that the question who is a party to an agreement is the kind of question that should commonly be resolved by a court before referring a matter; and that a person should not be subjected to arbitration if the person has not consented to the arbitrator’s jurisdiction. Bianca notes that the High Court has described the “consensual foundation of arbitration”, which it is said explains why an arbitrator’s power to determine matters arising under Commonwealth laws is non-judicial in character. Bianca says that the existence of the parties to an arbitration agreement constitutes a jurisdictional fact that must exist before the statutory compulsion contained in s 8 is engaged.
  11. Insofar as Gina has in her submissions (at [97]) quoted from G Born, International Commercial Arbitration (2009, Wolters Kluwer, Vol 1, pp1220-1) (see below), Bianca says that the full text makes it clear that disputes as to parties can and commonly are resolved by domestic courts:

Consistently with that regime, courts applying the Model Law have affirmed the power of arbitral tribunals to consider disputes over the identities of the parties to arbitration agreements, while also entertaining interlocutory litigation concerning this issue and reviewing arbitral awards addressing the subject.

  1. It is noted that Born refers to Fibreco Pulp Inc v The Star Dover (1998) 145 FTR 125, where the Federal Court of Canada held (at [28]) that it could not “force those who are not parties to the arbitration clause … to submit to arbitration” and to ABN Amro Bank Canada v Krupp MaK Maschinenbau GmhH (1994) 21 OR (3d) 511, where Haley J in the Ontario Court (General Division) said that, without consent, non-parties to an arbitration agreement should not be bound to arbitrate (reference there being made to the conclusions to that effect reached in Kaverit Steel & Crane Ltd v Kone Corp. (1992), 87 DLR (4th) 129, 85 Alta LR (2d) 287 (CA) and Boart Sweden AB v NYA Stromnes AB (1988), 41 BLR. 295 (Ont HCJ) at 304 per Campbell J).
  2. As to the question whether Bianca, as trustee, succeeded to Gina’s former rights and obligations under the Hope Downs Deed, Bianca says this question is not answered by pointing to order 2 made by Brereton J on 28 May 2015 in the 2015 Decision (at [383]) and ss 78 and 85 of the Trustees Act 1962 (WA) (cf Gina’s submissions at [51]). It is said that the effect of that order was to vest in Bianca the trust property (referring to the terms of the order and to general principle by reference to Young v Murphy at 291-2 per Brooking J); and that not every contract into which a person enters purportedly in the course of performing a trust is and becomes trust property (again citing Young v Murphy per Brooking J at 291). Relevantly, his Honour there said:

A contract was held in trust by the former trustee if it was made in the course of administering the trust. A contract made by a trustee because he is administering a trust is not necessarily made in the course of the administration. It may be made for his private purposes as trustee as opposed to being made in the management of the trust estate.

  1. Reference is also made by Bianca to the observation by Simmonds J in Conlan v The Executor or other Personal Representative as Executor of the Estate of Anthony John Croci [2009] WASC 266 at [31] that “simply because a contract was entered into as a result of a trustee’s administration of its trust does not necessarily make that contract trust property” (the contract there being held not to be trust property because it was entered into by the trustee for private purposes).
  2. Bianca says that this analysis echoes the approach taken to a trustee’s right of indemnity out of trust assets noting that, subject to variation by statute or the trust deed, that right exists “[i]f the trustee has incurred liabilities in the performance of the trust…” (Octavo Investments Pty Ltd v Knight [1979] HCA 61; (1979) 144 CLR 360 at 369 per Stephen, Mason, Aickin and Wilson JJ) and that this is commonly described as referring to liabilities “properly incurred by the trustee in the execution of the trust” (referring to Chief Commissioner of State Revenue v CCM Holdings Trust Pty Ltd [2014] NSWCA 42 at [62] per Gleeson JA).
  3. Bianca thus maintains that: a contract is not part of the “trust property” if it was made for the trustee’s private purposes or was not entered into in the course of the proper administration of the trust (the defendants submit that there is no authority to support the second of these two alternatives); and that in those circumstances where the trustee is replaced, the contract remains the property of the legal person who was the trustee and does not vest in the incoming trustee. It is submitted that the circumstances in which a contract is not entered into for private purposes and/or in the course of administering a trust include, but are not limited to, the case where the trustee is motivated by an improper purpose and necessarily includes the circumstance where the trustee was conflicted and failed to obtain informed consent. Bianca maintains that in such circumstances the property remains in the hands of the defaulting trustee but subject to a constructive trust in favour of the beneficiaries of the trust (citing Chan v Zacharia (1984) 154 CLR 178; [1984] HCA 36 at 198-199 per Deane J; Ancient Order of Foresters in Victoria Friendly Society Ltd v Lifeplan Friendly Society Ltd (2018) 92 ALJR 918; [2018] HCA 43 at [68] per Gageler J (Ancient Order v Lifeplan); Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 at [183] per Finn, Stone and Perram JJ; and Keith Henry & Co Pty Ltd v Stuart Walker & Co Pty Ltd (1958) 100 CLR 342; [1958] HCA 33 at 450 per Dixon CJ, McTiernan and Fullagar JJ).
  4. Bianca submits that it follows from this that she will not have “succeeded” to the Hope Downs Deed in her capacity as trustee if Gina did not enter into the Hope Downs Deed for the purposes of the trust and/or in the course of properly administering the trust; and that, if she did not succeed to the Hope Downs Deed in her capacity as trustee, then a dispute between Gina and HPPL, on the one hand, and Bianca in her capacity as trustee, on the other, is not within the four corners of the arbitration agreement.
  5. Bianca maintains that: the burden of establishing that the Hope Downs Deed was entered into in the proper administration of the HMH Trust rests upon the parties seeking to deploy it (here, HPPL and Gina); HPPL and Gina have failed to demonstrate that Gina entered into the Hope Downs Deed in the proper administration of the trust (and rather, in fact, did so for non-private purposes); and hence the Hope Downs Deed is not, and the rights and obligations given or imposed by it are not, trust property.
  6. As noted above, Bianca says that, on any view, the Hope Downs Deed is a stark example of a “self-dealing transaction” in that Gina both stood to gain personally from the Hope Downs Deed and stood to gain on the basis of unequal treatment between Gina and the beneficiaries of the HMH Trust.
  7. In that regard, Bianca points to: the provisions of the Hope Downs Deed pursuant to which, on a breach of the deed, all the dividends under cl 5 were “exclusively diverted” to Gina (the sole holder of Class B shares); the releases and discharges in cl 6 (which protected Gina personally as well as in her capacity as trustee); and the “right” of full ongoing control of HPPL given by cl 8 to Gina alone.
  8. Emphasis is placed on the strictness of the principle that the duty of trustee is one of “absolute and disinterested loyalty” (referring to Ancient Order v Lifeplan at [67] per Gageler J; Aberdeen Railway Co v Blaikie Bros (1854) 1 Macq 461 at 471; [1843-60] All ER Rep 249 per Lord Cranworth LC; and Gray v Hart [2012] NSWSC 1435 at [323] per White J, as his Honour then was). Bianca submits that Gina is not permitted to defend her actions on the basis that “substantial benefits” accrued to the HMH Trust from the Hope Downs Deed (contra Gina’s submissions at [134(a)]); that such an enquiry is not permitted to occur; and that Gina’s duties as trustee of the HMH Trust obliged her not to enter into the Hope Downs Deed unless she had obtained fully informed consent from the beneficiaries (referring to the principle as stated by Bathurst CJ in Duncan v Independent Commission Against Corruption [2016] NSWCA 143 at [438]). It is said that the onus of establishing that there was fully informed consent lies on Gina as the prima facie defaulting trustee (citing Birtchnell v Equity Trustees, Executors and Agency Co Ltd [1929] HCA 24; (1929) 42 CLR 384 at 398; [1929] HCA 24 per Isaacs J; Maguire v Makaronis [1997] HCA 23; (1997) 188 CLR 449 at 466; [1997] HCA 23 (Maguire v Makaronis) per Brennan CJ, Gaudron, McHugh and Gummow JJ; Hasler v Singtel Optus Pty Ltd (2014) 87 NSWLR 609; [2014] NSWCA 266 at [133] per Leeming JA (Gleeson JA agreeing at [6]; Papadopoulos v Hristofordis [2001] NSWCA 368 at [31] per Hodgson JA (Spigelman CJ agreeing at [39], Sheller JA agreeing at [40]), and Farrant v Blanchord (1863) 1 De G J & B 107 at 119-120).
  9. As to the notion of informed consent in this context, reference is made to what was said by the Privy Council in Clarke Boyce v Bouat [1994] 1 AC 428 at 435-6 and that what is needed is “full knowledge of all the material facts” (referring to Spellson v George (1992) 26 NSWLR 666 at 670; [1992] NSWCA 254 per Handley JA; Barescape Pty Ltd v Bacchus Holdings (No 9) [2012] NSWSC 984 at [154] per Black J; Anthony v Morton [2018] NSWSC 1884 at [592]; and P Finn, Fiduciary Obligations (2016, Federation Press) at 198 [429]); and to the onerous nature of the “task of explanation inherent in a request to be excused from a fiduciary requirement” (see Re McGrath & Anor (In their capacity as liquidators of HIH Insurance Limited) (2010) 78 ACSR 405; [2010] NSWSC 404 at [47] per Barrett J, as his Honour then was); and the insistence upon “full candour and appropriately complete disclosure” (see O’Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 at 208 per Kirby P, as his Honour then was).
  10. As to the non-disclosure of the Myers advice and Sceales advice, Bianca says: that it would be irrelevant if Gina were subsequently to have formed the view that the advice was erroneous and equally irrelevant that Gina may have subsequently obtained legal advice that permitted her to enter the transaction (cf Gina’s submissions at [134(b)]); and that whether the original advice was right or wrong was a decision for the beneficiaries to make (it being submitted that a duty of candour is not discharged by the disclosure only of that adverse material with which the person subject to the duty agrees). Bianca maintains that it was incumbent on Gina to disclose the Sceales advice when it was received, even though this was after the beneficiaries signed the Hope Downs Deed (as Gina notes in submissions at [134(c)]) and to seek ratification of her breach of duty, particularly when Gina procured Bianca and other beneficiaries to sign a further deed with a materially identical arbitration clause in 2007.
  11. As to any reliance on the subsequent advice from Mr Gilmour QC (the Gilmour advice) (to which Gina refers in her submissions at [134(b)]), Bianca says: first, that the Gilmour advice was furnished after Gina had executed the Hope Downs Deed and cannot bear on Gina’s state of mind at the time she executed the Hope Downs Deed; second, that the Gilmour advice did not advise on issues relating to informed consent (noting that on the face of the advice it appears that the potential for a conflict was appreciated); third, that the Gilmour advice was not disclosed to the beneficiaries at any material time nor was the fact that Mr Gilmour was requested to redact portions of his advice and re-issue it; and fourth, that there is no evidence that Mr Gilmour was briefed with the facts evidencing that Gina’s purposes were personal nor that he was briefed with the Sceales advice.
  12. Insofar as Gina asserts that the conflict was obvious on the face of the Hope Downs Deed and that Bianca obtained her own legal advice (referring to Gina’s submissions at [134](c)]), Bianca emphasises the strict standard required of informed consent and says that telling a beneficiary to get his or her own legal advice on the basis of the terms of the deed falls far short of obtaining informed consent.
  13. Bianca submits that: Gina has not demonstrated that she entered into the Hope Downs Deed for non-private purposes; the ready alternative inference is that her purpose for entering the Hope Downs Deed was to defeat John’s proceeding to remove her as trustee; and the inference that Gina entered into the Hope Downs Deed for private purposes is more readily drawn in circumstances where Gina obtained substantial benefits under the Hope Downs Deed by reason of cl 5(c), Gina potentially obtained the right to the whole of the dividend flow under cl 5(a) at the expense of the beneficiaries; Gina withheld the advices from the beneficiaries and Gina later ratified the Hope Downs Deed “despite holding advice that to do so was in breach of her duties as trustee”. Bianca invokes the principles in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 in this regard. In those circumstances, it is submitted that it has not been established the Hope Downs Deed was entered into by Gina in the proper course of administering the HMH Trust and for non-private purposes; and therefore that the “the Deed’s obligations did not (and do not) form part of the trust property”.
  14. Accordingly, it is submitted by Bianca that: the arbitration agreement is not enforceable against her acting in her capacity as trustee; and the covenants in cll 7 and 8 of the Hope Downs Deed are not relevantly covenants given by her (as trustee).
  15. Bianca says that no part of her submissions as to the Hope Downs Deed not forming part of trust property is inconsistent with the 2018 Decision and that Gina’s submissions to that effect conflate the effect of the vesting order over trust property made by his Honour and the separate order for the physical delivery up of trust documents. It is noted that the two orders were separately recorded (at [383(2) and [383(3)] of the 2015 Decision) and contained different terms and legal effect. It is said that, while the former vested the “assets and property of the Trust”, the latter required Gina to “deliver up” “all documents of the Trust in her possession custody or power”. Bianca says that it is self-evident that the latter order is concerned with physical documents, not with questions of succession to trust assets.
  16. Bianca argues that the fact that the 2018 Decision concerned only the latter (delivery up) order was recognised by Brereton J (at [1]) (and in Gina’s own submissions recorded at [2] of the 2018 Decision) pointing to [30], where his Honour noted that the “core of the dispute” concerned “the scope of the delivery up order” and in particular what is a “document of the Trust”, and his Honour’s reference (at [41]) to principles that require a predecessor trustee to “hand over to an incoming trustee all documents and information which relate to the administration of the trust so as to enable the incoming trustee to fulfil his duties”. Reference is made to his Honour’s observation (at [76]) that “[t]here is no doubt that documents maintained by the trustee in connection with the affairs of the trust are trust documents. These are, essentially, documents in the files kept by the trustee as trustee” and it is submitted that it was in this “quite different context” (of physical delivery of physical documents) that Brereton J held that original copies of the Hope Downs Deed and of the Sceales advice were “property of the trust” and therefore “within the scope of the delivery up order” (see at [111(5)(a)]). Bianca maintains that Brereton J did not thereby “authoritatively determine the extent to which the successor trustee is bound by a ‘self-evidently self-dealing transaction’”; noting that his Honour accepted (at [32] and [34]) that the expression “trust documents” included at least “documents relating to the trust property”, which includes documents relating to choses in action against the former trustee. Bianca argues that the Hope Downs Deed, which she says is the record of a self-dealing transaction, is such a document.

Defendants’ submissions

  1. I propose to summarise the defendants’ submissions as to the threshold question (which to a large extent overlap) collectively, rather than setting them out separately.
  2. Broadly, the defendants say that: the contention that Bianca is not bound by the Hope Downs Deed qua trustee raises matters that are for the arbitral tribunal, not the court, and hence there should be no exploration of the merits of those matters; it is Bianca, the “legal person”, who brings these proceedings (whatever the stated “capacity” in which she acts as plaintiff) and she is a person who is bound by the Hope Downs Deed; that, on its proper construction, the Hope Downs Deed, and in particular the arbitration agreement, applies to Bianca in her capacity as a replacement trustee; and Bianca is bound by the Hope Downs Deed by virtue of the vesting orders Brereton J made when she became trustee.
  3. As to the submission that this threshold question must be referred to arbitration, it is submitted that the tender of the apparently valid arbitration agreement is sufficient to establish the “parties” to that arbitration agreement for the purposes of the s 8 application (noting that “party” is defined in Commercial Arbitration Act, s 2(1) as meaning “a party to an arbitration agreement”, which includes “any person claiming through or under a party to the arbitration agreement”).
  4. It is submitted by the defendants that: given that there is no dispute that Bianca executed the arbitration agreement contained in cl 20 of the Hope Downs Deed, it is plainly arguable that Bianca (as trustee of the HMH Trust) is bound by the Hope Downs Deed, including cl 20; and therefore it is not appropriate here to entertain Bianca’s contention that she is not bound by the Hope Downs Deed in her capacity as trustee of the HMH Trust in circumstances where Bianca is undeniably bound in her personal capacity. It is submitted that Bianca’s contention that she is not bound involves a challenge to the efficacy of the Hope Downs Deed (emphasis being placed on the use by the High Court of the word “efficacy” rather than “validity”) and does not constitute a separate attack on the arbitration agreement; and that it does not appear to have been raised before either Brereton J or Rein J.
  5. Bianca’s submission that the Hope Downs Deed is not binding on her in her capacity as trustee is said of itself to demonstrate that there is a dispute under the Hope Downs Deed which must be determined by arbitration (it being noted that, by virtue of the competence-competence (or “kompetenz-kompetenz”) rule (see s 16(1) of the Commercial Arbitration Act and the High Court Decision at [13]), the arbitral tribunal has jurisdiction to determine whether it has jurisdiction to hear the dispute).
  6. Gina argues that, in circumstances where the threshold inquiry as to jurisdiction can involve questions as to the validity of the very agreement from which the arbitration arose, then, a fortiori, that threshold inquiry can also involve questions as to whether that agreement was binding on particular parties said to be bound by it. Reference is made by Gina to the explanation in G Born, International Commercial Arbitration (2009, Wolters Kluwer, Vol 1) at 1220-1 that:

Consistent with the more general approaches to the competence-competence doctrine, arbitral tribunals have almost uniformly concluded that they have authority to consider whether the parties’ arbitration agreement was binding on particular entities… The Model Law’s regime for competence-competence, in Articles 8 and 16, applies to disputes over the parties to an arbitration agreement. Consistently with that regime, courts applying the Model Law have affirmed the power of arbitral tribunals to consider disputes over the identities of parties to arbitration agreements.

  1. Gina thus submits, as does HPPL, that the question whether a party is bound by an arbitration agreement is for the arbitral tribunal to resolve, so long as it is arguable that the party is bound (citing Gulf Canada Res. Ltd v Arochem International Ltd., Arochem International, Inc (1992) 66 BCLR 2d 113 (BC Ct App); Trade Fortune Inc v Amalgamated Mill Supplies Limited [1995] ILPr 370 (Supreme Court of British Columbia), Borowski v Heinrich Fiedler Perforiertechnik GmbH and Another [1996] ILPr 373; Hancock v Rinehart [2013] NSWSC 1352 (to which I will refer as the 2013 Decision) at [87]-[88] per Bergin CJ in Eq); Robotunits Pty Ltd v Mennel (2015) 49 VR 323; [2015] VSC 268 (Robonunits) at [18] per Croft J); and that it is plainly arguable here that Bianca, as trustee of the HMH Trust, is bound by the Hope Downs Deed, including cl 20.
  2. As to the stated “capacity” in which the proceeding is brought, Gina argues that Bianca’s submissions are inconsistent with her stated acceptance (referring to Bianca’s submissions at [95]) of the proposition that a trust is not a separate entity from the trustee, and that a trustee does not have any additional or qualified legal personality. The defendants refer in this regard to the authorities already noted in relation to this proposition (ACESYarra at [409] per Murphy JA; and AMP Capital at [16] per Pembroke J. HPPL additionally refers in this context to Macarthur Cook Fund Management Limited v Zhaofeng Funds Limited [2012] NSWSC 911 at [117] per Hammerschlag J and Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth [2019] HCA 20 at [24] per Kiefel CJ, Bell and Edelman JJ.
  3. It is submitted that the words “as trustee for” are generally no more than “a convenient shorthand that assists third parties to see the link between a person’s actions and a trust obligation owed by that person” and do not change the legal character of the person in question; and that, whatever capacity a person acts in, they remain one and the same legal person noting that it is for this reason that a person acting as trustee cannot enter into a contract with himself or herself in his or her personal capacity (Gina citing Williams v Scott [1900] AC 499; Rye v Rye [1962] AC 496; Minister Administering National Parks & Wildlife Act 1974 v Halloran (2004) 12 BPR 22, 391).
  4. Gina further submits that Bianca seeks to invest too much significance in the “capacity” in which these proceedings are said to have been brought. It is submitted that there are no particular legal consequences that flow from the fact that the originating process in this proceeding describes the plaintiff as “Bianca Rinehart as trustee for the HMH Trust”; and that it would have made no difference had she had been named only as “Bianca Rinehart” (she being the one legal person, capable of suing and being sued in her own name) (reference is made in this regard to ALYK (HK) at [26] per Black J; AMP Capital at [15] per Pembroke J; and St George Bank Ltd v Federal Commissioner of Taxation (2009) 176 FCR 424; [2009] FCAFC 62 at [88] per Perram J).
  5. Gina submits that, for Bianca’s submission to succeed, she must establish that she can act in any way qua trustee regardless of what she has promised in another capacity (postulating by way of example, that if she had contracted personally not to disparage somebody, she would not be restrained from doing so as trustee) and says that this is contrary to the principles referred to above.
  6. Gina also notes that part of the ultimate relief sought by Bianca is in the nature of information-gathering to assist in the commencement of a derivative suit by HPPL. It is said that, should leave be granted for such a suit to be instituted, HPPL would be obliged to arbitrate any dispute within the purview of the arbitration agreement in cl 20 of the Hope Downs Deed. Thus, it is submitted, not only does Bianca seek to act in breach of her obligations under the arbitration agreement, but that “she does so with the avowed purpose of procuring another party to the agreement to breach it as well”.
  7. As to the proper construction of the Hope Downs Deed, it is submitted that Bianca’s argument cannot be reconciled with the express terms of the Hope Downs Deed. A number of arguments are raised in this context.
  8. First, it is submitted that the effect of Bianca’s argument is that the words “any party to this deed” in cl 20 of the Hope Downs Deed must be read down so as to exclude Bianca, notwithstanding that she is a party to the Hope Downs Deed, in circumstances where she has a dispute in her capacity as trustee of the HMH Trust.
  9. The defendants point out that the Hope Downs Deed contemplates that Bianca may one day be the trustee (referring to cl 9.2) and it is submitted that the deed contemplates that, if so, she would continue to be bound by it (noting that it was clearly intended that “the Trustee” would be bound by the deed; that the Trustee could be someone other than Gina as long as it was a “Hancock Family Group Member”; and that the deed was to bind a party’s successor). It is further noted that the Hope Downs Deed also contemplates that Gina might cease to be trustee and then become trustee again (see cl 9.2). Gina argues that in these circumstances it is nonsensical to suggest that the Hope Downs Deed is not binding on the trustee during the period when Gina is not the trustee, but will be binding on the trustee when Gina “reassume[s] the position of Trustee”.
  10. Gina argues that it is inconceivable that a person in the position of the parties to the Hope Downs Deed would have thought that a dispute under it that engaged Bianca in her capacity as trustee would be heard and determined publicly in open court and says that there is no basis to read the language of cl 20 narrowly (which, it is said, is precisely what Bianca seeks to do).
  11. Second, reference is made to the structure embodied in the list of named parties on page 1 of the Hope Downs Deed, there being four naming conventions used in that list: a number of parties listed by name only (HPPL, Hancock Minerals Pty Ltd, Hancock Family Memorial Foundation Limited, Mr Watroba, Bianca, HMHT Investments Pty Ltd and 150 Investments Pty Ltd); Gina, listed in her capacity as trustee of the HMH Trust (with the definitions “The Trustee” and “HMH Trust” then utilised throughout the operative provisions of the deed); Gina, listed separately “in her own right as a director of Hancock Group Member”; and Gina’s four children, each listed each “in [his or her] own right or in any representative capacity”.
  12. It is noted that Bianca is named as a party to the Hope Downs Deed “in her own right or in any representative capacity” (Bianca submits that the words “any representative capacity” do not include her subsequent representative capacity as trustee of the HMH Trust because the “expression obviously refers to the capacities which Bianca held at that time”.) While it is accepted that it is possible for a trustee to contract with limited recourse to the trustee’s personal assets (in this regard, Gina referring to Leeming JA’s explanation in ACES at [18]), it is said that clear words are required, and that a mere description of the capacity in which a party enters a contract is insufficient to exclude full liability (Gina referring to Helvetic Investment Corporation Pty Ltd v Knight (1984) 9 ACLR 773). Gina says that such clear words are lacking from the Hope Downs Deed; and that, to the contrary, the Hope Downs Deed made plain that Bianca was signing “in her own right or in any representative capacity”, which it is said is to be consistent with the usual rule that Bianca will be bound as a legal person, and recourse to her assets to enforce her obligations will not be limited in any way.
  13. Gina submits that the purpose of those words (“in any representative capacity”) may be explained by cl 9.2, which contemplates that the four people who are able to be appointed as a replacement trustee are Gina’s four children. Thus, it is said, it was contemplated that representative capacity would include “as trustee” (to the extent that it matters). Gina argues that the intent of page of the Hope Downs Deed titled “Parties” is that: to the extent that a party could only ever expect to be bound in his, her or its own personal capacity, it says so; to the extent that a party has a presently relevant representative capacity, it is named; and to the extent that a party is eligible to be subsequently appointed as trustee (being the beneficiaries, including Bianca), the deed ensures that that party will remain bound in “any representative capacity”.
  14. Third, the defendants refer to cl 1.2(f), which provides that “a reference to a party to a document includes that party’s successors and permitted assigns”. Gina submits that this is another mechanism that ensures that replacement trustees remain bound by the Hope Downs Deed.
  15. Insofar as Bianca argues that the Hope Downs Deed is not a “document” (referring to Bianca’s submissions at [107]), HPPL maintains that “any document” includes the Hope Downs Deed itself. Further, Gina says that this argument is premised upon an assumption that the term “document” has been deployed in deliberate contradistinction to “deed” throughout the Hope Downs Deed but that nowhere in the Hope Downs Deed is such a distinction imbued with any significance (rather, she submits, “document” in cl 1.2(f) has its ordinary meaning of “a piece of written, printed, or electronic matter that provides information or evidence or that serves as an official record”). Gina points out that a deed is a type of document; and that the two examples of “documents” on which Bianca relies are both deeds.
  16. As to the argument (contained in Bianca’s submissions at [106]) that “a replacement trustee for the Trust is only a ‘party’ for the purposes of the arbitration agreement so far as the Deed forms part of the trust property”, Gina says that there is nothing in the Hope Downs Deed itself to suggest that it is only binding on the trustee to the extent that the Hope Downs Deed forms part of the trust property (let alone the clear words required).
  17. As to Bianca’s argument (at [107]) that a replacement trustee is not a “successor”, the defendants argue that the term “successor” should be read naturally and in context so as to include a person who succeeds Gina as “Trustee”, such as pursuant to the Trustee Act 1962 (WA), at least where the person was expressly contemplated as a candidate to do so pursuant to cl 9.2. It is said that it is unnecessary to consider the position of replacement trustees not contemplated by that clause (cf Bianca’s submissions at [108]). In any event, it is noted that Bianca, albeit in a different context, has admitted that the Hope Downs Deed constitutes trust property.
  18. Fourth, it is submitted that the “narrowness and technicality” of the construction urged by Bianca flies in the face of the High Court Decision. In particular, it is noted that the High Court held at [46] that “a critical object of the Hope Downs Deed was the maintenance of confidentiality about the affairs of the Hancock Group, the trusts, the intra-family dispute and the provisions of the Deeds themselves” and that “[t]his object could not be clearer”. Gina submits that, as a matter of construction, in light of the High Court Decision, it is clear that the parties’ intention was that all disputes, including in relation to the affairs of HPPL and the trusts, be arbitrated away from the public spotlight; whereas, if Bianca’s construction were to be accepted, this would lead to consequences that are “clearly at odds with this intention”.
  19. By way of example, Gina argues that on Bianca’s construction she could breach the non-disparagement undertaking in cl 7(d) simply by asserting that any adverse public comments she makes are made not in her personal capacity but “in her capacity as trustee”; breach the confidentiality obligation in cl 10.1 by asserting that she has personally kept the information confidential, but has disclosed it only “in her capacity as trustee”; and breach the no assistance with prosecution of claims provision in cl 13 by claiming that in her personal capacity she has complied with that clause even if she has “entirely defeated the protection it was intended to secure” by assisting with the prosecution of claims in her capacity as trustee. Gina submits that this cannot be the way in which the Hope Downs Deed operates.
  20. Gina submits that the reference to “successors” in cl 1.2(f), as well as the references to “representative capacit[ies]” on the Parties page, was designed to ensure that the parties would be bound by the Hope Downs Deed in whatever guises they might ultimately come to assume. It is submitted that this is consistent with the usual result that a person must perform a promise in all capacities, rather than only in one.
  21. Gina submits that the significance of the careful distinction between Gina as trustee and Gina in her personal capacity (referred to in Bianca’s submissions at [93]- [94]) is that it demonstrates the clear intention of the parties that all parties involved would be bound by the agreement in relation to the affairs of HPPL and the affairs of the HMH Trust. It is said that that is consistent with the finding of the High Court, but “entirely inconsistent” with the position Bianca now seeks to advance.
  22. Further, it is said that, while a deliberate technique of differentiation is employed in setting out the obligations that apply to Bianca, the parties “critically” chose to refrain from using the same technique in the arbitration agreement (where the subject employed was as broad and inclusive as possible: “any party”). It is said that, in light of the approach taken to spelling out Gina’s obligations in the Hope Downs Deed on a role-by-role basis, the parties’ choice not to take a like approach elsewhere suggests that phrases such as “any party” should instead be construed with all the generality that the words admit.
  23. As to the significance of the vesting orders, the defendants submit that, even if Bianca was not bound by the Hope Downs Deed “as Trustee” by its terms (having been a party to the deed and also a successor to Gina as Trustee), she plainly became bound by virtue of the vesting order made by Brereton J on 28 May 2015 (relevantly, order 2), by which the “assets and trust property” of the HMH Trust were vested in Bianca as trustee pursuant to s 78 of the Trustees Act 1962 (WA). It is noted that, pursuant to s 85(1) of that Act, provision is made for vesting orders that are consequential on the appointment of a new trustee or the retirement of a trustee. The defendants submit that the effect of Brereton J’s vesting order is that trust property, including documents of the HMH Trust, vested in Bianca without the need for any conveyance, transfer or assignment from the outgoing trustee.
  24. As to whether the Hope Downs Deed is an asset of the HMH Trust (that is, “Trust property”), the defendants submit that it is. Gina accepts that the relevant test for trust property being whether the contract was made “in the course of administering the trust” (referring to Young v Murphy at 291 per Brooking J) but says, as does HPPL, that there is no authority to support the submission (made by Bianca at [113]-[131]) that the test is whether the contract was concluded in the “proper” course of administering the HMH Trust (as opposed to simply “in the course of administering the Trust”). It is submitted by Gina that if Bianca’s submission were accepted, it would have the “presumably unintended” effect that many of the documents which Bianca claims to be trust documents in the Removal Proceeding could not be documents of the HMH Trust, because there is an impugned transaction underlying them (such as the debt reconstruction) which Bianca alleges to have involved a breach of trust.
  25. Gina argues that the Hope Downs Deed is “Trust property” in that: it was expressly entered into by Gina in her trustee capacity; by cl 5 it conferred significant benefits on the HMH Trust which only the trustee, not the beneficiaries, has the right to enforce; Gina’s alleged non-disclosure was unrelated to any personal benefit she received; any benefits that Gina did receive were plain on the face of the Hope Downs Deed; and the beneficiaries who signed the Hope Downs Deed received independent legal advice (see cl 12.4). Thus, it is submitted, to the extent that fully-informed consent was required in relation to an alleged conflict, it was given.
  26. Gina says that the submission that the Hope Downs Deed was not executed in the “proper” administration of the HMH Trust (because it was a “self-dealing” transaction and fully informed consent was not obtained) should be rejected for the following reasons. First, because that submission ignores the substantial benefits to the HMH Trust that arise from the Hope Downs Deed, namely, a contractual entitlement to dividends in an amount disproportionate to the trust’s shareholding, and security of title to HPPL’s assets and thus security of the value of the trust’s shareholding in HPPL. Second, by reference to the Gilmour advice, that “[t]he trustee, in executing the agreement, as it seem to me is acting in the best interests of the Trust and its beneficiaries in seeking to protect its only substantial asset namely [its] shareholding in HPPL”. Third, that there was no non-disclosure in respect of Gina’s alleged conflict. Fourth, that the mere fact that a trustee obtains a personal benefit from entering into a deed with beneficiaries cannot, in and of itself, mean that the deed was not entered into in the proper administration of the trust.
  27. As to the third of those reasons, it is said that: all of the allegedly self-dealing aspects of the Hope Downs Deed were clear on its face and Bianca obtained her own legal advice in respect of those matters; the matters the subject of the Sceales advice went to an unrelated question of whether the trustee could fetter its discretion in relation to the distribution of dividends in future accounting periods, as well as various tax issues (noting that this advice was not received until after the Hope Downs Deed was executed); and the subject matter of the Sceales advice had nothing to do with any “self-dealing” aspects of the Hope Downs Deed (relating primarily to a benefit that the HMH Trust and the beneficiaries acquired under the Hope Downs Deed, pursuant to cl 5). Thus, it is submitted that, to the extent that there was any non-disclosure (which is not conceded), it was unrelated to any personal benefit to Gina, and there was no lack of informed consent in respect of Gina’s (alleged) position of conflict.
  28. As to the fourth of those reasons, it is said that this is particularly so when the benefits obtained by the trustee are clear on the face of the deed, and where the trust itself gains a material benefit from the deed. Gina says that if Bianca’s analysis were correct, then every settlement deed entered into between any trustee and the beneficiaries of a trust would suffer from the same “self-dealing” issue and would have the consequence that successor trustees were not bound.
  29. Gina further argues that Bianca has admitted that the Hope Downs Deed constitutes trust property (in the context of the proceedings in which orders were made for the delivery up documents of the HMH Trust, which documents Brereton J said were “trust property” – referring to the 2015 Decision at [365]). It is noted that: in September 2015, in her capacity as trustee, Bianca filed a notice of motion complaining that the documents of the HMH Trust had not been handed over, including the original copies of the Hope Downs Deed and related materials (category 5.1); and that Brereton J accepted these submissions determining in the 2018 Decision that the Hope Downs Deed was a document of the HMH Trust, and therefore trust property, referring to his Honour’s statement (at [111(5)(a)]):

111(5)(a). Any such documents relating to the [Hope Downs] Deed and the 2007 Confidential Settlement Deed. The first defendant entered into these two deeds, in her Trustee capacity, in 2006 and 2007. Contracts entered into by the Trustee in her Trustee capacity, and documents relating to them, would normally be documents of the Trust. The Hope Downs Deed and 2007 Confidential Settlement Deed involved a settlement of differences between the Trustee and the beneficiaries. As has been explained, advice obtained by a Trustee in connection with the defence of proceedings brought (or allegations made) by a beneficiary is prima facie personal to the Trustee and not a trust document. However, advice obtained by a Trustee to guide it in the performance of its duties is trust property. While I accept that communications relating to the defence of John’s allegations, and whether in her personal interest she should enter into the Deeds, are Mrs Rinehart’s personal documents and outside the scope of the delivery up order, I cannot accept that a deed entered into by her in her Trustee capacity is not a trust document… (Emphasis added.)

  1. Finally, HPPL submits that even if it were to be determined that it is not arguable that, as trustee, Bianca is bound by the Hope Downs Deed, there should still be a “s 8 stay”” because Bianca as trustee is claiming “through or under” parties to the arbitration agreement (i.e. on behalf of the beneficiaries of the HMH Trust), and therefore falls within the extended definition of “party” under Commercial Arbitration Act, s 2(1) (referring to the High Court Decision at [66]-[74]).

Determination as to threshold question

  1. Bianca does not dispute that she is a party to, and bound by, the Hope Downs Deed in her personal capacity. On the face of the Hope Downs Deed it is intended also to be binding on her in “any representative capacity”. As HPPL has noted, logically this cannot be a reference to Bianca’s then directorship of HPPL, as she separately executed the Hope Downs Deed in that capacity. There is nothing on the face of the Hope Downs Deed to suggest that the words “in any representative capacity” had a temporal limitation (i.e., that she was to be bound only in any representative capacity held by her at the time of its execution) and there is force to the argument that those words were intended to encompass the possibility of her becoming bound in a representative capacity at a later stage in circumstances where the parties to the deed clearly contemplated that any of the four beneficiaries might become a replacement trustee at some stage.
  2. The Hope Downs Deed is also clearly intended to be binding on any successor to a party to it. I see no reason not to accord to “successor” its ordinary meaning (see Crossman v Sheahan at [181]) and, where a party (here, Gina) is executing the deed expressly in her capacity as trustee, I see no reason why that expression would not include a successor trustee. Clearly, it was intended that whoever held the position of trustee from time to time should be bound by the provisions of the Hope Downs Deed.
  3. There is also force to the argument that, in any event, where Bianca is making claims in the proceeding in her stated capacity as trustee for or on behalf of the beneficiaries to the HMH Trust (who are themselves parties to the deed), then she is claiming through or under a party to the arbitration agreement in the sense considered by the High Court (as to which see further below).
  4. However, it is not necessary to come to a concluded decision on this issue (and indeed it is said for the defendants that it would be a clear error for me to do so – see T 134) because in my opinion there is, on the face of the Hope Downs Deed, an apparently valid arbitration agreement to which Bianca is bound in her own right and to which she is arguably also bound as trustee of the HMH Trust. I consider that the issues raised by Bianca as to whether the arbitration agreement binds her in her capacity as trustee are matters that fall within the scope of the arbitration agreement and must be referred to arbitration under Commercial Arbitration Act, s 8 or the equivalent WA Commercial Arbitration Act provision. The suggestion that there should be an exploration of factual disputes going to the alleged misconduct of the former trustee in entering into the agreement (in order to determine whether Bianca is bound by the deed in her capacity as trustee) is not consistent with the separability principle (see the Full Court Decision at [412], albeit in a different context). Moreover, the principle of competence-competence makes clear the abritrator’s ability to deal with such an issue.
  5. Similarly, the argument that the Hope Downs Deed is not “trust property” because it was not entered into in the proper administration of the trust, or was a self-dealing transaction for which fully informed consent from the beneficiaries was not obtained, goes to the efficacy of the arbitration agreement. Consistently with the construction of cl 20 of the Hope Downs Deed made clear by the High Court (as to which see below), and the above conclusion, this raises a dispute that must be referred to arbitration.

Section 8 Referral/Stay

  1. Turning then to the substance of the respective referral/stay motions, Bianca contends: first, that the matters in the present proceeding are not disputes under the Hope Downs Deed and are therefore not within the arbitration agreement; and second, that certain of the matters in the proceeding (and, in particular, Bianca’s s 247A application) are, in any event, non-arbitrable.
  2. It does not appear to be disputed by Bianca that determining whether an action has been brought in a matter that is the subject of an arbitration agreement involves the following: construing the relevant arbitration agreement; characterising the “matter”; determining whether the matter as characterised is the subject of the arbitration agreement as construed; and considering whether the said matter is arbitrable. I therefore turn first to the construction of the arbitration agreement (cl 20 of the Hope Downs Deed).

Construction of the arbitration agreement

The earlier decisions

  1. It is convenient at this stage to consider the earlier decisions in which the relevant arbitration clause (cl 20 of the Hope Downs Deed) has been considered, in particular to address the proposition put by Bianca, and contested by the defendants, that I am bound to follow the approach to construction of that clause that was adopted by the Court of Appeal in the Court of Appeal Decision notwithstanding the subsequent High Court Decision (on the basis that nothing in the High Court Decision expressly or implicitly overrules the Court of Appeal Decision or gives rise to a necessary inconsistency with that decision).
  2. As adverted to above, the defendants maintain that the High Court Decision provides the answer to the question now before me on the referral/stay motions and requires the grant of the relief that they seek; whereas Bianca maintains that the decision is of “very little assistance” in the determination of the referral/stay applications and says that I am bound, as a matter of precedent, to follow the Court of Appeal Decision (and to dismiss each of the referral/stay motions). Bianca further argues that, even if the construction adopted by the Full Court and confirmed as correct by the High Court is here applicable, then the same result should nevertheless follow as, even on that construction, the matters in dispute are not matters “under” the Hope Downs Deed. That latter contention I deal with when considering the characteristic of the “matters” raised by the pleadings.

Brereton J’s refusal of applications for stay of trustee removal proceeding (the Removal Proceeding)

  1. The litigious saga in relation to the referral/stay applications relevantly commences with the refusal of Brereton J (see Welker & Ors v Rinehart & Anor (No 2) [2011] NSWSC 1238 and Welker v Rinehart (No 4) [2011] NSWSC 1636) to order a stay of the proceeding brought against Gina in this Court by three of her children (Bianca, John and Hope). In that proceeding (which I have referred to previously as the Removal Proceeding), orders were sought for, inter alia, the removal of Gina as trustee of the HMH Trust.
  2. In the Removal Proceeding, by notices of motion dated 16 September 2011 and 7 October 2011 respectively, Gina and her other daughter, Ginia, brought applications for a stay of that proceeding pursuant to of the Civil Procedure Act, s 67. A similar application for a stay was brought by HPPL by notice of motion filed 15 November 2011 and amended on 22 December 2011.
  3. The basis on which a stay was sought was that the dispute was one arising under the Hope Downs Deed and that cl 20 of that deed required the parties to resolve their dispute by confidential mediation and arbitration. The first point to note, therefore, was that this was not an application pursuant to s 8(1) of the Commercial Arbitration Act (which was not then in force). Furthermore, as at the time the applications were before Brereton J, no pleadings had been filed.
  4. His Honour considered the application and, in an ex tempore judgment, refused the applications for a stay. As summarised at [34]ff of the subsequent Court of Appeal Decision, Brereton J identified three issues for resolution on the stay applications: first, whether the Hope Downs Deed (there referred to as the “Settlement Deed”) was binding on Hope and Bianca (Brereton J concluding that it was and his Honour’s conclusion not being contested on the subsequent appeal); second, whether a proceeding in the court’s equitable or statutory jurisdiction for removal of a trustee was susceptible to “private justice” by reference to arbitration (Brereton J concluding that there was no reason why such a dispute could not be referred to arbitration and a fortiori mediation and that conclusion being the subject of the notice of contention in the subsequent appeal proceeding); and, third, whether the subject proceeding was in respect of a dispute “under this deed”, so as to be covered by cl 20 of the Hope Downs Deed (Brereton J concluding that it was not and that conclusion being the principal issue on the subsequent appeal).
  5. Brereton J held (at [28]ff) that the words “under this deed” were of narrower scope than phrases such as “with respect to” or “in respect of” (relying in particular on the judgment of French J, sitting in the Federal Court as his Honour then was, in Paper Products Pty Limited v Tomlinsons (Rochdale) Ltd & Ors [1993] FCA 346; (1993) 43 FCR 439 (Paper Products) at 172) and therefore that the dispute must derive from or depend on the Hope Downs Deed, or involve enforcing or invoking some right created by the Hope Downs Deed. His Honour concluded on the construction issue that even if the clauses invoked by Gina involved a dispute under the Hope Downs Deed they were “but aspects of a larger dispute” which, as a whole, was not accurately characterised as a “dispute under this deed” (see at [49]).

Rinehart v Welker (2012) 95 NSWLR 221; [2012] NSWCA 95 (the Court of Appeal Decision)

  1. Separate appeals were brought (by leave) by Gina (and Ginia) on the one hand and by HPPL on the other against the refusal of the stay applications. The separate appeals were heard together. Bianca, and her siblings other than Gina, filed a notice of contention in the HPPL appeal, contending that HPPL lacked standing to seek a stay and that its motion constituted an abuse of process (that contention was to be heard separately from the appeals).
  2. It is not disputed that the question before the Court of Appeal did not relate to an application for a mandatory stay pursuant to s 8(1) of the Commercial Arbitration Act.
  3. By the time of the appeal hearing, statements of claim and defences had been filed in the proceeding. The Court of Appeal proceeded (without objection from the parties) on the basis that reference could be made thereto, even though they had not been before the primary judge (see Bathurst CJ’s judgment at [29]). At [130], Bathurst CJ (with whom McColl JA and, relevantly, Young JA agreed) noted that:

130. … The dispute in the present case was whether GHR [Gina] was entitled to engage in the conduct complained of and whether as a consequence the Trust should be split and/or GHR removed as trustee. Although at that time GHR had not formally responded to the claim, it could be reasonably anticipated she would deny the allegations and in that sense there was a dispute: AMEC Civil Engineering Ltd v Secretary of State for Transport [2005] EWCA Civ 291; [2005] 1 WLR 2339 at [30]- [31]; Collins (Contractors) Ltd v Baltic Quay Management (1994) Ltd [2004] EWCA Civ 1757 at [62]- [63].

  1. In summary, Bathurst CJ concluded (see at [2]) that: the respondents’ claim, viewed in isolation from the defences raised by the appellants, was not a dispute under cl 20 of the Hope Downs Deed (for the reasons set out at [114]-[127]); the fact that the appellants relied on various provisions of the Hope Downs Deed in their defences did not lead to the conclusion that the whole dispute, and in particular the respondents’ claims, was one arising under the Hope Downs Deed (for the reasons set out at [128]-[148]); claims such as those made by the respondents were arbitrable (for the reasons set out at [164]-[183]); as a matter of discretion, no part of the proceedings should be stayed (for the reasons set out at [184]-[192]); and the primary judge did not err in declining to refer the proceedings to mediation (for the reasons set out at [193]-[194]). McColl JA broadly agreed with the Chief Justice (see at [196]-[217]). Young JA agreed, other than in relation to the issue as to the arbitrability of the claim for the removal of the trustee (see at [225]ff).
  2. At [30]-[33], Bathurst CJ summarised briefly the allegations made in the pleadings. At [34]ff, Bathurst CJ summarised the reasoning of the primary judge. Bathurst CJ noted (at [44]) that the conclusion reached by the primary judge on the question of construction primarily depended upon the proposition that, for cl 20 to have effect, the dispute brought by the respondents must be a dispute under the Hope Downs Deed in the sense of “enforcing or invoking some right created by it” and that it was not enough that the Hope Downs Deed may in some way impact on the rights of the respondents to bring their claims or could constitute a defence to those claims. Significantly, it was this approach being challenged on the appeal.
  3. Bathurst CJ’s consideration of the proper construction and scope of cl 20 commenced (at [115]) with some general observations as to the correct approach to the construction of arbitration clauses generally. In summary, his Honour said:
    • (at [115]) that the approach to be adopted in relation to the construction of arbitration clauses is no different to the construction of any other contractual provision – namely, the clause is to be construed objectively (referring to the principles stated by the High Court in Toll (FGCT) Pty Limited v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52 (at [40]));
    • (at [116]) that this does not mean that the court is entitled to disregard clear and unambiguous language used by the parties to produce results which the surrounding circumstances may indicate are more commercial or business-like (referring to Western Export Services Inc v Jireh International Pty Limited [2011] HCA 45; (2011) 86 ALJR 1) and that resort may only be had to surrounding circumstance where the words in question exhibit uncertainty or ambiguity (referring to Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 352; [1982] HCA 24);
    • (at [117]-[119]) that it has frequently been stated that arbitration clauses should not be construed narrowly (referring to remarks made by Gleeson CJ in Francis Travel Marketing Pty Limited v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160 (Francis Travel) at 165; by Allsop J, as his Honour then was, in Comandate Marine Corp v Pan Australian Shipping Pty Limited (2006) 157 FCR 45; [2006] FCAFC 192 (Comandate) at [164] (Finn and Finklestein JJ agreeing); and referring also to Walter Rau Neusser Oel und Fett AG v Cross Pacific Trading Ltd [2005] FCA 1102 (Walter Rau) at [41]-[42]; Global Partners Fund Limited v Babcock & Brown Limited (In liq) [2010] NSWCA 196; (2010) 79 ACSR 383 (Global Partners) at [60]-[65] per Spigelman CJ (Giles and Tobias JJA agreeing); Lipman Pty Limited v Emergency Services Superannuation Board [2011] NSWCA 163 (Lipman) at [6]-[8]); and
    • (at [120]) that the words of the clause cannot be given a meaning they do not have to satisfy a perceived commercial purpose (referring to Paper Products at 444 per French J (as his Honour then was), Walter Rau at [41], Comandate at [164] and Lipman at [6]-[8]); noting that “the words of an arbitration clause should be, to the extent possible, consistent with the ordinary meaning of the words, liberally construed”.
  4. At [121], his Honour turned to the approach of Lord Hoffman in Fiona Trust & Holding Corporation v Privalov [2007] UKHL 40; [2007] 4 All ER 951 (Fiona Trust). This was in the context of a submission by Gina (by reference to Fiona Trust; and to Lipman at [6]) that the distinction between the expression “under this deed” and expressions such as “with respect to” or “in respect of” had been expressly abandoned by the House of Lords in the context of arbitration clauses (see at [66]).
  5. Having set out the general observations as to the construction of arbitration clauses, his Honour said (at [121]-[122]):

121. It follows that it is not appropriate for this court to adopt what Lord Hoffman described in Fiona Corporation [supra] at [12] as a “fresh start” and construe clauses irrespective of the language in accordance with the presumption that the parties are likely to have intended any dispute arising out of the relationship into which they have entered to be decided by the same tribunal unless the language makes it clear certain questions were intended to be excluded: Fiona Corporation [supra] at [13]. Whilst the presumption that parties intended the same tribunal to resolve all their disputes may justify a liberal approach consistent with the plain meaning of the words in question, the approach suggested by Lord Hoffman is contrary, in my opinion, to the approach laid down by the High Court as to the construction of commercial contracts.

122. In reaching this conclusion I am conscious that the Court of Appeal in Western Australia in Paharpur Cooling Towers Ltd v Paramount (WA) Ltd [2008] WASCA 110, cited the speech of Lord Hoffman in Fiona Corporation supra with approval, stating at [39] that it was consistent with “the approach that has been taken in Australia”. To the extent their Honours were stating that the approach was reflective of the liberal approach to which I have referred above, that is uncontroversial. However, to the extent their Honours were suggesting a particular rule of construction be applied irrespective of the plain meaning of the words, I am unable to agree.

  1. His Honour then turned to the construction of the phrase “under this deed” noting: (at [123]) that that phrase had consistently been given a narrower construction than phrases such as “arising out of the deed” or “in connection with the deed” (citing Samick Lines Co Ltd v Owners of the Antonis P Lemos [1985] AC 711 at 727 per Lord Brandon(with whom the other of their Lordships agreed); and (at [124]) the observations of French J in Paper Products at 448 as to the meaning of the phrase “any dispute between the parties hereto arising under this agreement”.
  2. At [125], his Honour then considered the meaning given by Warren J, as her Honour then was, in BTR Engineering (Australia) Ltd v Dana Corporation [2000] VSC 246, to the word “under” as “governed, controlled or bound by; in accordance with” (see at [27]) and to the similar construction given to the word by Hargrave J in TCL Airconditioner (Zhongshan) Co Ltd v Castel Electronics Pty Limited [2009] VSC 553 (see at [34]). Bathurst CJ then said:

125. … As I indicated earlier (at [36] above) the primary judge took the view that the words “under this deed” in the present case involved enforcing or invoking some right created by the Settlement Deed. It seems to me that consistent with the authorities to which I have referred, if the outcome of the dispute was governed or controlled by the Settlement Deed, then there would be a dispute under the Settlement Deed irrespective of whether the claimant was invoking or enforcing some right created by the Settlement Deed. It may be that that was what the primary judge was referring to when he said the dispute must derive from or depend on the Settlement Deed.

  1. Having regard to the relief sought in the respective statements of claim in the case there before him (see at [126]), Bathurst CJ said (at [127]) that:

127. None of these matters, viewed in isolation from the defences, involve invoking or enforcing any rights created by the Settlement Deed nor is their outcome generated or controlled by the Settlement Deed. As GHR [Gina] submitted (see par [64] above), a court does not remove a trustee without looking at the whole of the circumstances; that would include the Settlement Deed but it would not lead to the conclusion that the outcome was governed or controlled by the Settlement Deed. Similarly, whilst it may be that it would be open to GHR to argue that what was done was reasonable in the context of the regime established by the Settlement Deed, this would not of itself lead to the conclusion that the outcome was governed or controlled by the Settlement Deed as distinct from the proper application of the statutory and inherent jurisdiction of the court. (Emphasis added.)

  1. Pausing here, it is clear that his Honour was there adopting a test as to whether there was a matter “under this deed” by reference to whether the matters involved “invoking or enforcing” any rights created by the Hope Downs Deed or, alternatively, whether the outcome of those matters was “governed or controlled” by the Hope Downs Deed (although in the consideration of the pleadings it appears that the latter assumed more prominence in his Honour’s reasoning).
  2. His Honour then considered the defences that had been filed (see at [128]ff) and Gina’s contention that, once it was contended that it was not legally open for the respondents to pursue the claims made by virtue of the provisions of the Hope Downs Deed, then the whole dispute was a dispute under the deed; in other words that once reliance was placed on any provision of the deed, then the whole dispute was governed by the deed. His Honour did not consider that the analogy Gina had sought to draw with the expressions “under this Constitution” or “under any laws made by the Parliament” was of any particular assistance (see at [129]); and was of the opinion that although the defences raised disputes under the deed (as they relied on provisions of the deed in answer to the respondents’ claims) those defences would not necessarily determine the outcome of the proceedings (see at [132]). Thus, but for the adoption of the “governed or controlled” test, it would seem that his Honour’s conclusion would have been that there were matters there involving disputes under the Hope Downs Deed.
  3. At [135], his Honour said:

135. If the Settlement Deed had the effect of barring the claims of the respondents, then it would follow that the dispute in question was governed or controlled by the Settlement Deed as the outcome would be regulated by its terms. However, the mere fact that these assertions were made does not mean that it automatically follows that the whole claim is a dispute under the Settlement Deed. The primary judge, in my opinion, was entitled to examine the claim to form a view as to whether he could properly conclude, in the light of the evidence available, that the assertion that the claim was barred by the Settlement Deed was sustainable: see Channel Tunnel Group Limited v Balfour Beatty Construction Ltd [1993] AC 334 at 356. This was particularly the case when each party made extensive submissions on the issue and none suggested there was any further material which may become available which would be of assistance to the Court on the issue of construction of the clause in question. It was also relevant, in my opinion, to look at the strength of the assertion to determine whether, as a matter of discretion, a stay of the whole or any part of the proceedings should be granted.

  1. As adverted to above, the adoption of a test by reference to whether there was a “sustainable argument” was the subject of debate on the present applications.
  2. Having considered various provisions of the Hope Downs Deed, his Honour said (at [145]):

145. It follows that the provisions of cll 6, 7(c), 11 and 13 of the Settlement Deed do not lead to the conclusion that the claims of the respondents are governed or controlled by the Settlement Deed in the sense that their outcome will be determined by its provisions.

  1. Similarly, his Honour considered (at [146]) that the other provisions of the Hope Downs Deed raised in answer to the claims of the respondents, whilst relevant to the outcome of the proceedings, did not of themselves govern or control the outcome of those claims and would not necessarily be determinative of the outcome.
  2. Accepting that the primary judge was correct to the extent that his Honour had found that the defences raised under the Hope Downs Deed were part of a larger dispute, Bathurst CJ then considered whether, those defences having been made, the proceedings should be stayed in whole or in part as a matter of discretion and concluded that there had been no error on the part of the primary judge in relation thereto (see at [148], [184]ff). It was noted (at [184]) that the parties agreed that the grant of a stay, whether sought under Civil Procedure Act, s 67 or under Commercial Arbitration Act was discretionary. Bathurst CJ also noted that it was therefore necessary for the appellants to demonstrate error in the sense referred to in House v The King (1936) 55 CLR 499; [1936] HCA 40.
  3. It was noted that the primary judge had indicated in obiter that, even if the prospective defences under cll 7(e) and (8) were disputes under the Hope Downs Deed, he would not have stayed the proceedings, primarily for the reason that those defences were “but aspects of a larger dispute not properly characterised as one ‘under this deed’” (see at [49]-[50] and the Court of Appeal Decision at [185]). Pausing here, there is no such discretion if s 8 of the Commercial Arbitration Act here applies.
  4. At [186], Bathurst CJ said that, in circumstances where he had concluded that the respondents’ claim was not a dispute under the Hope Downs Deed, the deed “did not have the effect of barring any claim for removal of the trustee and that the other defences, although arising under the [Hope Downs Deed], did not necessarily bar a claim for removal of [Gina] as trustee … [and] the manner in which the primary judge concluded he would have exercised his discretion had the occasion arisen would not have involved error in a House v The King sense.” Further, at [187], his Honour said that, to the extent that it was necessary for the Court to re-exercise the discretion, having regard to the comment of the primary judge that it did not directly arise, he would have reached the same conclusion. His Honour noted that “[o]nce it is established that the claim for removal of the trustee did not arise under the [Hope Downs Deed], this [C]ourt has no power to refer that claim to arbitration. There are therefore two alternatives; stay the proceedings pending determination of the issues raised by the defence or refuse the stay.”
  5. His Honour considered (at [188]) that it would not be appropriate to stay the proceedings pending determination of the defences, noting that the releases in cl 6 and the provisions of cll 7, 11 and 13 of the Hope Downs Deed did not bar the claim and would not be relevant to a claim for removal of the trustee arising out of misconduct subsequent to the date of the deed. His Honour said that “[w]hether the other defences raised will result in a refusal of the relief could only be determined in the context of a consideration of the allegations of the respondents and whether, even taking into account the provisions of the [Hope Downs Deed], the conduct complained of, if made out, would render [Gina] unfit to remain as trustee.”
  6. At [189]-[190], his Honour said:

189. The approach which I have suggested is appropriate. It is consistent with the approach commonly taken by courts to avoid multiplicity of proceedings and the possibility of inconsistent findings: Paharpur Cooling Towers [supra] at [43]-[44]; Savcor Pty Limited v State of New South Wales (2001) 52 NSWLR 587; [2001] NSWSC 596 at [47]- [50]; Taunton-Collins v Cromie [1964] WLR 633; [1964] 2 All ER 332 at 334; McGrath v O’Sullivan [1964] NSWR 436 at 437.

190. The position may be different in circumstances where that part of the claim which cannot be referred to arbitration is only a small part of the dispute: Bristol Corporation v John Aird [1913] AC 241 at 249-250; Radio Publicity (Universal) Ltd v Compagnie Luxembourgeoise de Radiodifusion [1936] 2 All ER 721 at 728. That is not the present case.

  1. His Honour went on to say (at [191]):

191. In my opinion it is also relevant in considering this issue, that the respondents’ claim relates to the proper conduct of a trustee, a matter warranting close public scrutiny: Rinehart v Welker [supra] at [52]. Whilst I have expressed the view that that factor would not render the dispute incapable of arbitration, it would not be a proper exercise of discretion to deny a beneficiary the right to approach the court in respect of alleged misconduct of a trustee where the issue in question was not covered by the arbitration clause.

  1. As to the dispute as to whether the claims were arbitrable, Bathurst CJ said (from [164]):

164. There do not seem to be any firm principles that determine whether a particular dispute is capable of being resolved by arbitration. The position was stated in Mustill and Boyd supra in the following terms (at 149-150):

“In practice therefore, the question has not been whether a particular dispute is capable of settlement by arbitration, but whether it ought to be referred to arbitration or whether it has given rise to an enforceable award. No doubt for this reason, English law has never arrived at a general theory for distinguishing those disputes which may be settled by arbitration from those which may not. The general principle is, we submit, that any dispute or claim concerning legal rights which can be the subject of an enforceable award, is capable of being settled by arbitration. This principle must be understood, however, subject to certain reservations.

First, certain types of dispute are resolved by methods which are not properly called arbitration. These are discussed in Chapter 2, ante.

Second, the types of remedies which the arbitrator can award are limited by considerations of public policy and by the fact that he is appointed by the parties and not by the state. For example, he cannot impose a fine or a term of imprisonment, commit a person for contempt or issue a writ of subpoena; nor can he make an award which is binding on third parties or affects the public at large, such as a judgment in rem against a ship, an assessment of the rateable value of land, a divorce decree, a winding-up order or a decision that an agreement is exempt from the competition rules of the EEC under Article 85(3) of the Treaty of Rome. It would be wrong, however, to draw from this any general rule that criminal, admiralty, family or company matters cannot be referred to arbitration: indeed, examples of each of these types of dispute being referred to arbitration are to be found in the reported cases. Nor should one conclude that an arbitrator cannot effectively rule on a claim or defence raised under Articles 85 or 86 of the Treaty of Rome. Unless the nature of the question is such as to render the arbitration agreement itself void, or the European Commission has itself initiated proceedings on the question, the arbitrator can and should rule on it.” (Footnotes omitted.)

  1. His Honour noted (at [165]) that G Born, in International Commercial Arbitration (2009, Wolters Kluwer, Vol 1), stated (at 768) the position as follows:

Although the better view is that the Convention imposes limits on Contracting States’ applications of the non-arbitrability doctrine, the types of claims that are non-arbitrable differ from nation to nation. Among other things, classic examples of non-arbitrable subjects include certain disputes concerning consumer claims; criminal offences; labour or employment grievances; intellectual property; and domestic relations.

The types of disputes which are non-arbitrable nonetheless almost always arise from a common set of considerations. The non-arbitrability doctrine rests on the notion that some matters so pervasively involve public rights, or interests of third parties, which are the subjects of uniquely governmental authority, that agreements to resolve such disputes by ‘private’ arbitration should not be given effect. (Footnotes omitted.)

  1. His Honour referred (at [166]) to Comandate where Allsop J, as his Honour then was, in discussing the issue in the context of international commercial arbitration had said (at [200]):

First, the common element to the notion of non-arbitrability was that there was a sufficient element of legitimate public interest in these subject matters making the enforceable private resolution of disputes concerning them outside the national court system inappropriate. Secondly, the identification and control of these subjects was the legitimate domain of national legislatures and courts. Thirdly, in none of the travaux préparatoires was there discussion that the notion of a matter not being capable of settlement by arbitration was to be understood by reference to whether an otherwise arbitrable type of dispute or claim will be ventilated fully in the arbitral forum applying the laws chosen by the parties to govern the dispute in the same way and to the same extent as it would be ventilated in a national court applying national laws.

  1. At [167], Bathurst CJ observed that the above approach suggested that it was only in extremely limited circumstances that a dispute which the parties had agreed to refer to arbitration would be held to be non-arbitrable; and noted that this “expansive view” had generally been accepted by the courts (referring to the remarks of Mason J, as his Honour then was, in Government Insurance Office (NSW) v Atkinson-Leighton Joint Venture [1981] HCA 9; (1981) 146 CLR 206 at 246-247; [1981] HCA 9) and commenting (at [168]) that this approach was also reflected “in the fact that it has been held that parties can submit to arbitration issues involving rights conferred under statute and claims where the power to grant statutory remedies has been conferred on the court.” His Honour referred again (at [169]) to the decision of the Court of Appeal in Francis Travel and to passages from the judgment of Gleeson CJ in that case. His Honour noted (at [170]) that the “fact that an arbitrator cannot grant all the relief a court is empowered to grant does not mean the dispute is incapable of arbitration” (referring to IBM Australia Ltd v National Distribution Services Ltd (1991) 22 NSWLR 466 at 486 per Clarke JA (with whom Handley JA agreed); and to the similar approach taken by the Court of Appeal of England and Wales, in Fulham Football Club (1987) Ltd v Richards [2011] EWCA Civ 855; [2012] 1 All ER 414 (Fulham Football Club) at [103] per Longmore LJ (with whom Rix LJ agreed and from which permission to appeal to the Supreme Court of the United Kingdom was refused)).
  2. His Honour said (at [172]):

172. Thus it has been held that although an arbitrator would not have power to order the winding-up of a company (see A Best Floor Sanding Pty Ltd v Skyer Australia Pty Ltd [1999] VSC 170 at [13]- [19]) claims for relief under s 232 of the Corporations Act and its United Kingdom equivalent s 994 of the Companies Act have been held to be capable of being resolved by arbitration: ACD Tridon [supra] at [191]-[194]; Fulham Football Club [supra] at [76]-[79], [83], [101]-[103]. Similarly, the Supreme Court of Canada has concluded that disputes between parties as to the ownership of copyright are capable of settlement by arbitration: Desputeaux v Editions Chouette [supra] at [38], while Hammerschlag J in Larkden Pty Ltd [supra] held that a dispute as to entitlements to a patent application was capable of resolution by arbitration.

  1. His Honour then turned (at [173]ff) to the question whether a claim to remove a trustee is capable of settlement by arbitration. His Honour noted that: a trust is a creature of equity and the courts maintain an inherent supervisory jurisdiction over the administration of trusts (referring to McLean v Burns Philp Trustee Co Pty Ltd (1985) 2 NSWLR 623 at 633, 637); in Rinehart v Welker (2011) 93 NSWLR 311; [2011] NSWCA 403, this Court had expressed the view (at [52]) the proper conduct of trustees was said to be a matter which required close public scrutiny; and the approach of a court in evaluating all relevant circumstances in considering whether it is in the interests of the beneficiaries to remove a trustee (see Miller v Cameron [1936] HCA 13; (1936) 54 CLR 572 at 580–581; [1936] HCA 13) was “a matter which tends against such disputes being arbitrable” (see at [173]). His Honour referred to academic commentary (see T Cohen QC and M Staff, “The Arbitration of Trust Disputes” (1999) 7 Journal of International Trust and Corporate Planning 1) that suggested that the statutory jurisdiction of the court to appoint a new trustee could not be ousted by an arbitration provision (and citing Czarnikow v Roth, Schmidt and Company [1922] 2 KB 478 at 491 per Atkin LJ, as his Lordship then was). Bathurst CJ concluded at ([175]-[177]):

175. Notwithstanding these matters, it is my opinion that at least in circumstances where the trustee and each beneficiary have expressly agreed to their disputes being referred to arbitration, a court should give effect to that agreement. The supervisory jurisdiction of the court is not ousted. It continues to have the supervisory role conferred upon it by the relevant legislation, in this case the Commercial Arbitration Act. There may be powerful commercial or domestic reasons for parties to have disputes between a trustee and beneficiary settled privately. It does not seem to me that the matters to which I have referred above should preclude a court from giving effect to such an agreement provided the jurisdiction of the court is not ousted entirely.

176. The fact that an arbitrator may not have power to remove a trustee or make a vesting order does not alter this position. An arbitrator could give effect to a claim for removal by ordering the trustee to resign, to appoint a new trustee and to convey the trust property to that person. Such an award could be enforced as a judgment under, in this case, the Commercial Arbitration Act s 33.

177. In these circumstances it does not seem to me to be contrary to public policy for the beneficiaries under the Trust and the trustee to agree to resolve their disputes by arbitration, provided the supervisory jurisdiction of the court contained in the relevant legislation is maintained. It is not necessary in the present case to deal with a more difficult question which would arise if the arbitration clause was contained in the Trust Deed and purported to bind all persons beneficially entitled under the Trust, including infants and unborn beneficiaries.

  1. His Honour then also: rejected the contention that the fact that a dispute is not a “commercial” dispute and involves breaches of fiduciary duty meant that it is incapable of arbitration (at [178]) noting that “there may be sound reasons for the parties desiring that a family or domestic dispute be resolved privately”. said (at [179]) that, so far as the suggestion that third party rights are affected, the only third party identified was HPPL which supported the reference to arbitration; said further (at [180]):

180. Nor does it matter in my view that the claim involves an allegation of serious misconduct. The fact that serious misconduct found by the court is a ground for the removal of a trustee does not, in my opinion, lead to the conclusion that a claim for serious misconduct is not capable of settlement by arbitration. It has been held that in cases of alleged fraud a stay will be refused as a matter of course where the stay is opposed by the party against whom the fraud is alleged, not where the stay is opposed by the defrauded party: Russell v Russell (1880) 14 Ch 471 at 476-477; Camilla Cotton Oil Co v Granadex SA [1976] 2 Lloyd’s Rep 10 at 16; Cunningham-Reid v Buchanan-Jardine [1988] 1 WLR 678 at 685-686, 690, 691; [1988] 2 All ER 438. Consistent with that reasoning, where the allegations of serious misconduct are made against the party seeking the stay the fact that the allegations involve serious misconduct is relevant in the exercise of the discretion, but does not mean that a court as a matter of course would refuse a stay.

  1. At [181], his Honour said that the fact that the claim involved the status of Gina did not in his view affect the position. His Honour said that:

181. The removal and replacement of a trustee does not destroy the substratum of the Trust. In that regard the position may be contrasted with the winding-up of a company which, as Warren J (as her Honour then was) pointed out in A Best Floor Sanding Pty Limited v Skyer Australia Pty Limited [supra] at [18], strikes at the very heart of the corporate structure enshrined in the Corporations Act. In a case of removal of a trustee neither the trust property nor the rights of beneficiaries are affected. In these circumstances the fact that the claim involves the so-called status of the trustee does not alter the position.

  1. Thus his Honour concluded (at [183]) that, “if the parties had in fact agreed that the claim for the removal of [Gina] as trustee should be submitted to arbitration such a dispute would be arbitrable.”
  2. As noted, McColl JA and Young JA relevantly agreed with the conclusion reached by the Chief Justice as to the meaning of the expression “under this Deed” in the context of the Hope Downs Deed.

Hancock v Rinehart [2013] NSWSC 1352 (the 2013 Decision)

  1. The matter came back before this Court, before Bergin CJ in Eq, in September 2013, when there were further applications for a stay of the Removal Proceeding, and the referral to mediation, in circumstances where there had been a recent amendment to the pleadings and there was “now a new litigious environment” that required consideration in the determination of the applications (see at [1]), including the enactment of the WA Commercial Arbitration Act that had come into force on 7 August 2013 (see at [38]). Her Honour accepted that the WA Commercial Arbitration Act was the applicable statute in respect of the applications then before her (see at [82]).
  2. Her Honour referred to the need to promote uniformity between the application of the Act to domestic commercial arbitrations and the application of provisions of the UNCITRAL Model Law on International Commercial Arbitration (the Model Law) (see at [84]) and gave consideration to similar provisions in other jurisdictions (see from [85]), including reference (at [87]ff) to the proposition by Hinkson JA (with whom Cumming JA concurred) in Gulf Canada Resources Ltd v Arochem International Ltd (1992) 66 BCLR (2d) 113 in the Court of Appeal of British Columbia, considering the provisions of International Commercial Arbitration Act 1986 (BC), s 8, that :

Where it is arguable that the dispute falls within the terms of the arbitration agreement or where it is arguable that a party to the legal proceedings is a party to the arbitration agreement then, in my view, the stay should be granted and those matters left to be determined by the arbitral tribunal.

  1. Her Honour then: noted (at [98]ff) that all parties had proceeded in the applications before her on the basis that, in determining whether there was a dispute under the deed, it was necessary to determine whether the assertions that the claims were barred were “sustainable” (referring to the Court of Appeal Decision at [135] per Bathurst CJ); and proceeded to consider whether there were reasonable prospects of a finding that any of the new claims as pleaded by the third statement of claim had been released by the Hope Downs Deed (her Honour not being satisfied that there were).

Rinehart v Hancock [2013] NSWCA 326 – leave application (the Leave Decision)

  1. An application for leave to appeal from Bergin CJ in Eq’s 2013 decision was subsequently dismissed (Rinehart v Hancock [2013] NSWCA 326, to which I will refer to as the Leave Decision). Reliance is placed by Bianca in resisting the present referral/stay motions on this judgment in that it is said that the Court (Macfarlan and Meagher JJA) there applied the concept of whether the outcome of the claims was “governed or controlled” by the Hope Downs Deed in the sense referred to in the Court of Appeal Decision at [125]. At [2], their Honours said that, to succeed on the application, the applicants needed to demonstrate that at least one of two contentions was correct, the first of those contentions being that the claims in question were “at least reasonably arguably foreclosed by the releases contained in clause 6 of the [Hope Downs] Deed, with the result that the outcome of the claims was ’governed or controlled‘ by the [Hope Downs] Deed in the sense referred to in [the Court of Appeal Decision]”.
  2. Pausing here, the defendants in the present proceeding contend that there is no precedential value to be accorded to the Leave Decision (see T 260; citing, inter aliaMaguire v Makaronis).

Rinehart v Rinehart (No 3) (2016) 257 FCR 310; [2016] FCA 539(the Gleeson Decision)

  1. The next chapter of the litigious saga, relevantly, commenced with the bringing of proceedings in the Federal Court by Bianca and John against Gina and HPPL in 2014 (at a time when the Removal Proceeding in this Court had not yet been finally determined).
  2. The allegations made in the statement of claim in the Federal Court proceeding included allegations that Gina, having assumed a position of control in respect of the entities in “the Hancock Group” (including the trusts which owned shares in HPPL and the Hancock Family Memorial Foundation Limited (HFMF)), had used that position in breach of her duties as a fiduciary and as a trustee, with the knowing assistance of HPPL, to take certain steps (removing all of the valuable mining assets from HFMF and transferring them to HPPL and “engineering a situation” in which she held a 76.55% shareholding in HPPL and her children a 23.45% shareholding) instead of the 49% it is said that she had agreed with her father (Lang Hancock) that the children would have after Lang Hancock’s death, thus “reneg[ing] upon and circumvent[ing]” an agreement reached in 1988 about the ownership of the Hancock Group (see Full Court Decision at [2]).
  3. The HPPL respondents brought an interlocutory application under s 8(1) of the Commercial Arbitration Act (and the equivalent provision under the WA Commercial Arbitration Act) seeking, among others, an order that the parties to the proceeding be referred to arbitration in respect of the matters the subject of the various arbitration agreements contained in the deeds pleaded in the statement of claim (the Hope Downs Deed and the 2007 HD Deed, by which John had bound himself to the provisions of the Hope Downs Deed (see Full Court Decision [82]ff)) and a stay of the proceeding.
  4. Gleeson J held that the Commercial Arbitration Act applied to the dispute because any arbitration of the dispute would be a “commercial arbitration” within the meaning of the Act. Her Honour held that some of the disputes in the proceeding were the subject of an arbitration agreement, and others (including, in particular, issues concerning the enforceability of the releases and arbitration clauses in the Hope Downs Deed) were not (see at [597]-[661]). Her Honour did not order that the parties be referred to arbitration by staying the proceedings but instead directed that the Court try the question whether the relevant arbitration agreements were “null and void, inoperative or incapable of being performed” within the meaning of s 8(1)(see at [669]).

Hancock Prospecting Pty Ltd v Rinehart (2017) 257 FCR 442; [2017] FCAFC 170 (the Full Court Decision)

  1. The HPPL respondents, and Gina, sought and obtained leave to appeal against the orders of Gleeson J. Bianca and John sought and obtained leave to cross-appeal and also relied upon a notice of contention. The applications for leave to appeal and cross-appeal were heard concurrently with the appeal and cross-appeal (the Full Court comprised by Allsop CJ, Besanko and O’Callaghan JJ).
  2. The case on appeal proceeded, as it had before Gleeson J, on the assumption that the respondents or at least those of the respondents that had appeared in the proceeding, who were then yet to file a defence to the pleading, denied every material allegation of wrongdoing (see at [4]).
  3. Their Honours considered in detail the surrounding facts and allegations in the statement of claim, having first identified their approach to the issues in controversy as follows (from [16]-[22]):

16. The first issue is whether the CA Act applies at all. This has a number of sub-issues. The first sub-issue, which is related to the Constitutional challenge by the applicants to the validity of s 8(1) of the CA Act, is whether the CA Act, and relevantly s 8(1), is picked up by s 79 of the Judiciary Act 1903 (Cth). It is convenient to deal with this question towards the end of these reasons, apart from saying here that our view is that s 8(1) of the CA Act is relevantly picked up by s 79, that s 8(1) is Constitutionally valid, and that these reasons proceed on that basis.

17. The second sub-issue to the question whether the CA Act applies is whether, assuming the disputes are matters which are the subject of the relevant arbitration agreements, the arbitration contemplated by the agreements is “commercial” for the purposes of the CA Act. As part of this sub-issue, it will be necessary to consider whether (as the applicants submitted) the parties to the dispute must also be, or have at relevant times been in “a commercial relationship”.

18. We are of the view that the CA Act is engaged. Should we be wrong in that conclusion, it would be necessary to consider whether the Court has power or discretion to stay the proceedings and refer the parties to arbitration in any event, and if it does, whether and how that power or discretion should be exercised. Given our views as to the engagement of the CA Act, it is unnecessary to address these questions save in one respect.

19. The second issue is the extent to which the various arbitration clauses cover the matters in dispute, or, to put the matter in the words of s 8(1), the extent to which the matters are the subject of an arbitration agreement. Closely related to this is the proper approach of the Court to deciding that question. This issue relates, in particular, to the Hope Downs Deed.

20. The third issue or group of issues concerns the operation of the principles of separability and competence. The separability principle requires the arbitration agreement (as an agreement distinct from the main substantive agreement in which it is found as a provision or clause) to be directly impugned or attacked as “null and void, inoperative or incapable of being performed”. In the light of this principle and the competence principle, the question arises whether the applicants by their pleading, or by their articulation of the controversy in argument (if the latter be a legitimate way to address the question), have attacked the arbitration agreement itself, and if they have, what the limits of that attack are. Related to this is the question whether any such articulated attack can be said to be that the arbitration agreement is “null and void, inoperative or incapable of being performed”. In this respect, the HPPL parties, Mrs Rinehart and the eighth respondent contend that the attack must be that the arbitration agreements were invalid ab initio, or at least at the time of the stay application.

21. The fourth issue, assuming there is a sufficiently articulated attack on the arbitration agreements such that the proviso to s 8(1) is engaged, is whether the power to refer that attack on the arbitration agreement to arbitration is mandatory or discretionary, and if the latter, how that discretion is to be exercised.

22. The fifth issue is whether any of the parties to the proceeding, who are not parties to any deed or arbitration agreement, should nonetheless be referred to arbitration because they claim “through or under” entities who are parties to the relevant deed or agreement for the purpose of the definition of the word “party” in s 2(1) of the CA Act.

  1. In the course of considering the relevant documents, their Honours said of the Hope Downs Deed (the proper construction of which was central to the application, the appeals and the ultimate resolution of the disputes between the parties) that it was plain from the recitals and terms that its purpose was “to quell disputes as to title concerning the mining tenements, especially Hope Downs” (a finding emphasised here by Bianca) and that the Hope Downs Deed involved releases of claims in terms that “were drawn widely” (see at [77]).
  2. From [107], the Full Court summarised the conclusions that the primary judge had reached and its position in relation to those conclusions. Relevantly, their Honours:
    • (at [107]) agreed that the Commercial Arbitration Act applied;
    • (at ([108]) agreed that the existence of any relevant arbitration agreement was satisfied by finding an apparently valid agreement and that it was not appropriate to make findings on the stay application as to whether the deeds were entered into in the circumstances alleged by Bianca and John;
    • (at [109]) agreed, with some qualification as to the expression of principle, with the approach that determining whether a matter is the subject of an arbitration agreement will generally involve a process of characterisation of the matter without going into the merits of the dispute (though it may be necessary to examine the merits to some degree to ascertain whether there is a relevant matter or matter);
    • (at [110]) agreed with the general approach that the relevant arbitration clause should be construed as to its proper scope and meaning, against which the matters in dispute should be assessed and characterised to see whether they were the subject of the arbitration agreement;
    • (at [111]) agreed in principle that, once it was concluded that the proceedings raised a matter the subject of an apparently valid arbitration agreement, the Court had a discretion whether to hear itself or to send to the arbitrator the question as to validity of the arbitration agreement in the proviso thereby rejecting the submission that the Court had an obligation to hear that challenge (though being of the view that the primary judge had erred in the exercise of the discretion);
    • (at [112]) agreed that most of the “so-called” substantive claims fell within valid arbitration agreements, with the exception of claims against companies that were not parties to any arbitration agreement;
    • (at [113]) disagreed with the conclusion that the “so-called” validity claims propounded by Bianca were not the subject of the arbitration agreements but, with some exceptions, that those of John were, but broadly agreed that the “so-called” miscellaneous clauses were ; and
    • (at [114]) disagreed with the primary judge’s conclusion as to relief, saying that they “would stay the proceedings in Court, permitting the arbitrator to deal with all issues including the attack on the arbitration agreements.”
  3. As to the proper approach to an application under s 8, their Honours (at [141]-[142]) noted the two broad approaches being: the prima facie approach, namely, that if there appears to be a valid arbitration agreement which prima facie covers the matters in dispute, the matter should be referred to the arbitrator to deal with questions of jurisdiction including the scope of the arbitration agreement; and the merits approach, namely, that a full merits hearing will be undertaken as to the existence and scope of an arbitration agreement and that the disputes fall within it. Pausing here, I note that Bianca accepts that the Full Court’s decision as to the approach that a court should take in relation to s 8 is one to which, as a matter of comity, I should have regard.
  4. At [145]-[147], their Honours said:

145. We think that any rigid taxonomy of approach is unhelpful, as are the labels “prima facie” and “merits” approach. How a judge deals with an application under s 8 of the CA Act will depend significantly upon the issues and the context. Broadly speaking, however, and with some qualification, aspects of the prima facie approach have much to commend them as an approach that gives support to the jurisdiction of the arbitrator and his or her competence, as recognised by the common law and by s 16 of the CA Act, whilst preserving the role of the Court as the ultimate arbiter on questions of jurisdiction conferred by ss 16(9) and (10), 34(2)(a)(iii) and 36(1)(a)(iii) of the CA Act. Broadly, the approach is consonant with the structure of the CA Act and the Model Law. However, it is difficult to see how the Court can exercise its power under s 8 without forming a view as to the meaning of the arbitration agreement. Further, it may be that if there is a question of law otherwise affecting the answer to the question of jurisdiction, especially one that is confined, which might be dispositive, it might be less than useful for the Court not to deal with it…

146. To understand whether a body of disputes being the “matter”, assessed and characterised (at the necessarily early stage of the proceeding), is the subject of an arbitration agreement, will generally require the Court to form a view as to the legal meaning of the arbitration agreement. Section 8 is an important power the purpose of which is to protect the practical legitimacy and authority of the arbitration process as reflected in the words of s 1C of the CA Act. It involves the referral to arbitration, by a stay of court proceedings. However, it will often not be possible fully to delineate the metes and bounds of a dispute without fully hearing the dispute. To do so, that is to hear the facts to decide the width of the dispute, would undermine the practical and effective operation of s 8. The application must be brought early (not later than when submitting the party’s first statement on the substance of the dispute). The boundaries of the dispute may be unclear, but it will have to be characterised on the material available to be assessed as to whether it can be seen to be the “subject of” the arbitration agreement. That latter assessment will require some stability or clarity as to the meaning of the arbitration agreement. The Court is then required to construe the clause, at least to the point of being satisfied that the disputes forming the matter are the subject of the agreement, or not as the case may be. That said, and it is relevant to the arguments here, not every legal question need be, or should be, decided by the Court about the rights and obligations of the parties. That too would tend to undermine the practice and effective operation of s 8.

147. … Section 8 should be read with s 16(1) and thus, the word “finds” should not be read as requiring that the matters in the proviso cannot be part of the reference to the arbitrator.

  1. Their Honours discerned a difficulty insofar as the approach adopted by the primary judge had proceeded beyond a characterisation of the nature of the matter and whether it fell within the arbitration agreement, saying (at [149]):

149. … The requirement of an assessment as to whether there was a “sustainable argument” that the matter falls within the arbitration agreement has its dangers. Of course, if there is no sustainable argument that a matter or dispute can be characterised as falling within the agreement, it should not be referred to arbitration. But difficulties arise if this enquiry becomes one directed to the strength of the case raised by the issue or matter.  it would generally be wrong for the Court to examine an argument in a form of summary disposal application, and, if it were thought that an asserted case, in terms otherwise falling within the scope of the agreement, was sufficiently weak not to be “sustainable”, not to refer the matter to arbitration. That would be to usurp the role of the arbitrator. The Court’s role in s 8 is not to act as a court of summary disposal filtering the matters that are suitable for arbitration. (Emphasis added.)

  1. The Full Court expressly agreed, when deciding whether there is an apparently valid arbitration agreement against which one undertakes a process of characterisation of the matters in dispute, with the approach of “not deciding on a final basis the wide ranging factual matters said to give rise to a right to set aside the deeds in question and the particular issues of the interpretation of releases, covenants and acknowledgements which make up the rights of the parties from the deeds, and precisely how these questions affect the wide-ranging facts in dispute” (see at [150]) (i.e., in effect giving imprimatur to the so-called “prima facie” approach although having expressed the view as to the unhelpfulness of a rigid taxonomical distinction in that regard).
  2. At [151], their Honours said:

151. It is also important to recognise the different issues that may arise on an application under s 8. The proof of an apparently valid arbitration agreement, as here, may be beyond argument. The substantial issue in contest between the parties is whether by reason of the matters pleaded the terms of the deed apply, and from the matters pleaded whether such agreements are “null and void etc”. That the first question (the existence of an apparently valid arbitration agreement) should be proved to the required level to satisfy a court that it has authority to engage the power in s 8 does not mean that the Court should or must embark upon detailed consideration as to the operation of the deeds or as to the attack on the deeds or the arbitration agreement. The need for the existence of an arbitration agreement does not mean that the Court should not take a broad view characterising the disputes to assess whether they are the subject of an arbitration agreement such enquiry not engaging substantially in the merits of the case.

  1. Their Honours also said (at [152]) that the correct focus of generality or particularity with which to examine the “matter” the subject of the arbitration agreement will be affected by the proper construction of that agreement.
  2. At [156], their Honours said that the width or narrowness of the scope of the agreement was central to the ascertainment of the matter the subject of it. At [157], their Honours said that:

157 … any overly fine dissection of different “disputes” within a wide-ranging and interlocking controversy may lead to overly refined categorisation or classification of disputes falling within and without the arbitration agreement in question. When looked at holistically, the substance of a dispute in its interconnected character may well fall within the arbitration agreement. It is fundamental to recall, however, that the proper construction of the arbitration agreement is relevant to the focus one applies to the meaning of the word “matter” in any given circumstance. If the proper construction of the agreement requires a focus on individual disputes or requires a certain connection between the necessary resolution of an issue with the operation of an operative document, then close attention will be required to each individual issue or dispute to identify that connection, and so to identify the “matter”. If, on the other hand, the proper construction of the agreement requires a broader focus on the overall dispute more generally characterised, then the “matter” will likewise be broader. This is the significance of what was said in Comandate Marine Corporation v Pan Australia Shipping Pty Ltd [2006] FCAFC 192; (2006) 157 FCR 45 at [235] …

  1. Pausing here, as I have already noted, Bianca contends that the proper construction of the arbitration agreement the subject of the present applications has been authoritatively decided by the Court of Appeal Decision and that I am obliged to apply that construction (and not the approach of the Full Court) when considering the application of s 8.
  2. The overall dispute was described by the Full Court (at [158]) as being an accusation of “wholesale breaches of equitable and contractual duties in wrongfully transferring hugely valuable commercial assets from the control of entities that owned the assets significantly for the benefit of the children to entities and ownership structures controlled by [Gina]”; and in which wrongs the companies controlled by Gina were said to have been legally complicit. Meanwhile, Bianca here says that the dispute the subject of the present proceeding raises different allegations.
  3. Their Honours then set out (from [163]-[167]) the approach to the proper construction and interpretation of arbitration agreements, in which context they said (at [167]):

167. The existence of a “correct general approach to problems of this kind” [the expression used by Gleeson CJ in Francis Travel] does not imply some legal rule outside the orthodox process of construction; nor does it deny the necessity to construe the words of any particular agreement. But part of the assumed legal context is this correct general approach which is to give expression to the rational assumption of reasonable people by giving liberal width and flexibility where possible to elastic and general words of the contractual submission to arbitration, unless the words in their context should be read more narrowly. One aspect of this is not to approach relational prepositions with fine shades of difference in the legal character of issues, or by ingenuity in legal argument (Gleeson CJ in Francis Travel at 165); another is not to choose or be constrained by narrow metaphor when giving meaning to words of relationship, such as “under” or “arising out of” or “arising from”. … Thus, where one has relational phrases capable of liberal width, it is a mistake to ascribe to such words a narrow meaning, unless some aspect of the constructional process, such as context, requires it.

  1. Their Honours disagreed with the proposition that there was little or no elasticity in the phrase “any dispute … arising under the agreement” or that they are “a restricted form of words”; saying that they may in terms be less widely framed than other words but they are not restricted (see at [172]).
  2. It was against that background that their Honours then turned to consider the decision of Fiona Trust and, in doing so, made clear that they did not consider the arguments about that case to be critical to the resolution of the appeals (see at [173]).
  3. At [182], their Honours said that they did not see how the approach expressed by Lord Hoffman in Fiona Trust (at [13]) departed from the approach of Gleeson CJ in Francis Travel; rather, their Honours considered it to be reflective of it, noting that the assumption to be made (that rational business persons are likely to have intended any dispute arising out of the relationship to be decided by the same tribunal) was identical; and saying that “[t]he assumption of an appropriate common sense contextual framework is not foreign to, but part of, an orthodox approach to construction.”
  4. Turning then to the Court of Appeal Decision, their Honours (at [193]) did not agree that Fiona Trust “says that arbitration clauses should be construed irrespective of the language used or that it says anything different in substance from Francis Travel and Comandate” (referring to what had been said by Bathurst CJ at [121]-[122]; and expressing their agreement with what had been said by Martin CJ in Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66; (2013) 298 ALR 666). Their Honours went on to say (at [193]):

193. Lord Hoffman and Lord Hope were refusing (just as Longmore LJ preferred to approach the matter) to engage in semantic debates about relational prepositional phrases capable of throwing up fine distinctions, often based on the temporal or visual metaphor from the language “under”, “arising under”, “out of “, “arising out of”, “in relation to” and “in connection with”. Context will almost always tell one more about the objectively intended reach of such phrases than textual comparison of words of a general relational character. None of the phrases is linguistically stable or fixed. … Far more important, however, is the correct general approach referred to by Gleeson CJ in Francis Travel – that sensible parties do not intend to have possible disputes that may arise heard in two places. Effect is given to that assumption by interpreting words liberally when they permit that to be done. As some of the cases discussed in Fiona Trust (in the Court of Appeal and the House of Lords) reveal, the phrase “under this agreement” is amply able to encompass a dispute concerned with a claim to rescission of the agreement. Seeking to give the phrase some amplitude one would construe the phrase as including a dispute that contained a substantial issue that concerned the exercise of rights or obligations in the agreement, or a dispute that concerned the existence, validity or operation of the agreement as a substantial issue, or a dispute the resolution of which was governed or controlled by the agreement. That is not meant to be a prescriptive definition, but rather an illustration of a liberal reading of an arbitration clause using the correct general approach as an aspect of context in conventional contractual construction that can be found in Francis Travel, Comandate, United Group Rail, Global Partners, Lipman and Cape Lambert, and, in our respectful view, Fiona Trust. Disputes governed or controlled by the deed and its operation can be seen as part of the meaning of the phrase, but it is difficult to see why the meaning should be so limited. (my emphasis)

  1. Their Honours (at [194]) emphasised that the dispute as to Fiona Trust did not matter, noting that Bathurst CJ in terms applied the liberal approach. Having considered the basis on which the Chief Justice had reached his conclusion as to the limited meaning of “under this deed”, the Full Court made clear (at [199]) their disagreement with that construction, saying that:

199. … the limitation of disputes that are (necessarily) governed or controlled by the deed is narrow, not liberal. It is a construction that does not take account of the breadth of possible meaning of the phrase revealed by either dictionaries or by its context, or by judgments such as the Court of Appeal in Mackender v Feldia and Viscount Dilhorne and Lord Salmon in the Evje, and it is a construction which does not give meaning to a liberal approach to words that are capable of a broader construction. That it is a phrase that may be narrower in meaning than other phrases does not mean that its meaning is narrow.

  1. Their Honours drew attention to the fact that the phrase to be construed was “any dispute under the deed” (not “under the deed”) (see at [201]) and said that there was every reason not to confine the “dispute” narrowly to issues or parts of a dispute or of a controversy. Rather, their Honours considered that: the better way was to construe the phrase in an undivided way; and that doing so recognised that if a whole dispute involves not only the defence to a claim but also the attack on the availability of the defence then that part of the expression “under the deed” could not be limited to disputes (or “really parts of the dispute”) governed or controlled by the operation of the deed itself. Their Honours then said (at [202]):

202. The meaning of “any dispute under this deed” may be narrower than the meaning of other phrases, such as “a dispute in connection with this deed”. So much can be accepted. Nothing in Francis Travel, Comandate, or Fiona Trust required the meaning of words to be set to one side for a rule. What these cases say is that the correct general approach is to give liberal amplitude to available meaning. That one phrase has a narrower meaning than another, does not mean that the first has a narrow meaning.

  1. As to context, their Honours considered that the context of the deeds was one that tended to widen, not narrow, the likely operation of the deeds, noting (at [203]) that:

203. … One of the fundamental purposes of the Hope Downs Deed was the quelling of disputes about the title to the assets in a context where at least one sibling had expressed the view that he was not bound by an earlier deed, and where such quelling was of great commercial importance to the prospective arrangements with Rio Tinto. The context of the 2007 HD Deed was the same … Objectively, the Hope Downs Deed and the 2007 HD Deed had the purpose of quieting disputes about title, as did, on its face, the Deed of Obligation and Release.

  1. It was said that the deeds. in their operation if valid and by reason of their invalidity if not, lay at the heart of the dispute; and that “at this level of abstraction, there is little difficulty in concluding that all the substantive and validity claims fall within any clause framed ‘any dispute under this deed’” (at [204]).
  2. At [205], their Honours expressly recognised that their views differed from those in the Court of Appeal Decision but were persuaded, to the necessary degree of clarity, that the construction there adopted was not correct on the bases: first, that those earlier cases (in which different phrases were construed) were applied in a manner which, it was said, revealed “an overly narrow, dictionary-based meaning to an elastic relational phrase”; second, that the whole phrase “any dispute under this deed” was not the subject of focus, and that “were it to have been, a liberal construction of ’any dispute’ as ‘controversy’ would have militated against any narrow relationship between the operation of the deed and the dispute”; and third, that the objective context of the execution of the deed reinforced the “objectively wide meaning to the extent it can be given to the phrase ‘any dispute under the deed’”.
  3. The Full Court then turned in detail to the specifics of the deeds, the findings of the primary judge and the parties’ submissions, which I do not propose here to summarise save to note that: the Full Court reiterated (at [247]-[249]) its reasons for the conclusion that all the “validity claims” fell within cll 20.2 and 9 of the Hope Downs Deed and the 2007 HD Deed, including that a construction of “under the deed” as limited to “governed and controlled by the deed itself” was “overly narrow and the product of an incorrect interpretation of the phrase”; and that their Honours (at [266]) made clear that they considered that “all substantive and validity claims” by both Bianca and John were part of the matter or matters variously the subject of the arbitration agreements. Pausing here, the finding that all substantive and validity claims were the subject of the arbitration agreements is relevant insofar as Bianca here argues that the subsequent conclusions by the High Court are to be understood as limited to the validity claims.
  4. As to the issues raised in relation to whether the proviso to s 8(1) had been engaged by a relevant attack on the arbitration agreements, whether the power to refer such an attack is mandatory or discretionary and how any such discretion should be exercised (issues on which special leave was not granted by the High Court), the Full Court considered (from [341]) the doctrine of separability (setting out Commercial Arbitration Act, ss 16(1)-(3) and referring to the common law separability principle) and the principle of competence-competence.
  5. At [367], their Honours noted that of the Model Law art 8 and Commercial Arbitration Act, s 8 must be read with Art 16 and s 16, respectively; and reiterated that, as a matter of construction, the word “finds” in Art 8 and s 8 does not mandate that the Court hear the question whether the arbitration agreement is “null and void, inoperative or incapable of being performed” (referring to their reasons at [147]-[148]). At [372], their Honours said that:

372. It can be seen both as a practical mistake and as contrary to the statute (s 16(1)) to conclude that, if the question is (by the framing of a separate attack on the arbitration agreement) whether the arbitration agreement is in existence or is invalid or is void, the arbitral tribunal in the agreement attacked cannot (as opposed to should not in the circumstances) hear the challenge.

  1. At [377]-[378], their Honours said:

377. The real issue in any case is whether the Court should hear the separate attack or permit the arbitral tribunal to hear it, by staying its own proceeding. The proper answer to this question will depend on the nature of the attack and all the circumstances.

378. Thus, the words of Art 8 and s 8 should be read and given content against the background, first, that the Court is not required to decide the matters in the proviso; secondly, that the competence principle is wide enough to permit the arbitral tribunal to decide any question of jurisdiction, including whether the arbitration agreement came into existence; and, thirdly, that that decision by the arbitral tribunal is not final, the Court having the final say on the question. A further consideration is that s 8 should, conformably with its language, be construed to facilitate, not impede, the process of arbitration: s 1C(1) of the CA Act.

  1. Rejecting the proposition that there was a relevant distinction between “void” and “voidable” in this context, their Honours said (at [380]):

380. There is as good reason not to refer a dispute to an arbitrator if the arbitration agreement was brought about by deception as there is if the execution of the agreement was a forgery or made utterly without authority. The relevant question is whether the Court should embark on that hearing.

  1. The Full Court considered it doubtful whether there could be said to be any independent attack on the arbitration agreement; but proceeded on the basis that there was such an attack; and concluded that it was preferable to allow the proviso question to be permitted to be determined by the arbitrator (and observing that such an approach conformed to the significant legal policy reflected in Commercial Arbitration Act, s 1C). At [391]ff, the Full Court said:

391. We have come to views different in important respects from the views of the primary judge. As is clear from what we have said earlier, we disagree with her Honour’s construction of the arbitration clauses. That is because, with the utmost respect, we are persuaded (to the relevant extent of departing from his view about the same clause) that the construction given by Bathurst CJ to the relevant clauses was wrong. The conclusion to which the primary judge came as to the meaning of the clauses in question meant that the nature of the “matters” the subject of the clauses using the words “under” or “hereunder” was narrow. This led to a significant division of issue falling within and outside the arbitration agreements, and considerable complexity in the judgment and in the submissions on appeal. In such circumstances there is a much greater likelihood that a court will retain the hearing of issues that concern the validity of the arbitration agreement given the extent of issues that will, in any event, have to be heard in the Court.

392. A further disagreement that we have with the primary judge is the extent to which her Honour found that there was an independent impeachment of the arbitration agreements. At [126]-[127] of her Honour’s reasons, the primary judge set out the correct approach from the separability principle of needing to identify an identifiably separate attack on the arbitration agreement. However, at [662]-[663], the primary judge concluded that the arbitration agreements had been impeached on all bases of the validity claims. For the reasons we have given we cannot agree. With the exception of the two matters to which we have referred, all the complaints that found the validity claims are wholly directed to the validity of the deeds and are, to use Lord Hope’s phrase, parasitical to that and are not specific or distinctive to the arbitration agreements.

393. This means that it is unnecessary to deal with the primary judge’s exercise of discretion to the effect that the Court should hear the proviso application about the arbitration agreements. Thus, we must consider the question afresh. In our view the relevant considerations are in short compass. The separate attack is ill-formulated, resting on the narrow foundation identified above. As such it has an inherent lack of apparent strength given that the two features are well-understood characteristics of commercial arbitration. Further it may conceivably in argument (though we do not think it validly should) become entangled in matters of complaint against the substance and validity of the deeds, or at least the context of these matters. The parties to the litigation have displayed an intensity of application to every matter in dispute that makes us consider that the prospect of holding the parties to a short hearing centred upon these two issues is unlikely.

Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13; (2019) 93 ALJR 582 (the High Court Decision)

  1. Bianca and John sought and obtained special leave to appeal from the Full Court Decision; that leave being confined to whether the validity claims fell within the scope of cl 20 of the Hope Downs Deed (see the High Court Decision at [54]). Special leave was refused in relation to the question of the separability principle. The appeal was subsequently dismissed. The third party companies’ application for special leave to cross-appeal was allowed and that cross-appeal itself was allowed.
  2. At the outset, I note that Bianca here emphasises that the matters the subject of the Federal Court proceeding (as summarised in the High Court Decision at [2]-[3]) are not matters the subject of the present proceeding (reference there being made to the 1988 Agreement said to have been made between Mr Lang Hancock and Gina in 1988); and that the substantive claims in the present proceeding were not before the High Court. Bianca says that the key passage in this regard is at [9], noting that no claim made in the present proceeding relates to this:

9. The Deeds came into existence against the background of and were addressed to claims and threats of litigation made publicly by Mr Hancock about wrongdoing on the part of Mrs Rinehart, HPPL and others which are reiterated in the substantive claims in the proceedings. The Deeds contain releases or abandonment of claims, expressed in wide terms, and promises not to make further claims. They contain assurances that they were entered into without undue influence or duress.

  1. At [12], the plurality in the High Court (Kiefel CJ, Gageler, Nettle and Gordon JJ) said:

12. The appellants’ “validity claims” are not discrete from the appellants’ “substantive claims”. The validity claims incorporate and rely upon the substantive claims. An example serves to illustrate the point. Paragraph 288.5 of the appellants’ statement of claim attacks the validity of the arbitral clause in the Hope Downs Deed, including on the basis that the purpose of the arbitral clause was to prevent public disclosure of the facts pleaded at sections 8-16 of the statement of claim; however, sections 8-16 of the statement of claim contain the substantive claims made by the appellants.

  1. Pausing here, Bianca submits that this passage is key to how the High Court viewed those claims — the validity claims being closely connected and intertwined with the substantive claims. That said, I do not read this passage as suggesting that a different stance should be taken to substantive claims when considered in isolation, which is the thrust of Bianca’s argument on the present applications.
  2. At [14]-[17], the plurality said:

14. The question before the primary judge which is relevant to these appeals is whether the validity claims are subject to the arbitral clauses.

15. The primary judge held that they were not. Central to her Honour’s reasoning was a perceived limitation on the scope of the clause resulting from the words “under this deed”. Accordingly, whilst the substantive claims may be the subject of arbitration, the validity claims are to be determined by the court under the proviso to s 8(1) of the NSW Act.

16. The Full Court (Allsop CJ, Besanko and O’Callaghan JJ) disagreed with the primary judge’s construction of cl 20 of the Hope Downs Deed, holding that it should be given a liberal, not a narrow, interpretation. The Full Court stayed the proceedings, permitting the arbitrator to deal with all issues, including validity.

17. When regard is had to the context of the Deeds, including the circumstances in which they were made as reflected in the text of the Deeds, it is apparent that the conclusion reached by the Full Court that the validity claims fell within the scope of the arbitral clauses is correct.

  1. For Bianca, it is here said that this was a narrow disposition of the appeal, and not an endorsement of the reasoning of the Full Court, though it is noted that emphasis was placed on context. For Gina, on the other hand, it is said that the reference to “perceived limitation” (at [15]) indicates that their Honours considered this aspect of the primary judge’s reasoning (which adopted the reasoning of the Court of Appeal) to be wrong.
  2. At [18], the plurality noted that a significant part of the Full Court’s reasons was taken up with arguments as to the approach taken by the House of Lords to the construction of arbitral clauses in Fiona Trust; and observed that this was understandable (given the way in which the matter had been dealt with by the primary judge) but that the appeals could be resolved “in the application of orthodox principles of interpretation, which require consideration of the context and purpose of the Deeds, without reference to Fiona Trust”.
  3. In circumstances where it was accepted that Fiona Trust was not critical to disposing of the appeals, the plurality said it was unnecessary to consider or rely upon Fiona Trust or the observations of Bathurst CJ in the Court of Appeal Decision concerning Fiona Trust (see at [25]). That, however, left open room for the argument that has now been the focus of much of the submissions in this Court, namely as to whether the High Court implicitly overruled the construction of the relevant arbitration clause that had been placed on it by the Court of Appeal (that construction having been noted at [23] of the plurality’s reasons, and its application noted at [24]).
  4. The plurality (from [26]) then addressed the question as to the background to and purpose of the relevant deeds, as follows:

26. As the Full Court concluded: “[c]ontext will almost always tell one more about the objectively intended reach of such phrases than textual comparison of words of a general relational character”. There may be cases which have to be resolved largely, if not entirely, by reference to the language of the arbitral clause in question. But this is not such a case. The background to and the purposes of the Deeds, as reflected in their terms, point clearly to arbitral clauses of wide coverage with respect to what was to be the subject of confidential processes of dispute resolution. (Emphasis added) (Footnotes omitted.)

  1. Pausing here, the prefatory words, emphasised in the above passage, make clear in my opinion that the plurality was here agreeing with the observation of the Full Court as to the comparative weight of context and text.
  2. Their Honours went on to say (at [27]):

27. The Full Court treated the context and purposes for which the Deeds were made as important to their construction. Their Honours identified the context for the making of the Deeds as the growing number of claims being made. One of the fundamental purposes of the Deeds, their Honours said, was the quelling of disputes about the title to assets, which was of great commercial importance to the prospective arrangements with a joint venturer. We respectfully agree. It is necessary to consider each of the Deeds in further detail.

  1. From [28], the plurality set out the background to the separate Deed of Obligation and Release (one of the three deeds there being considered), namely: the investigations undertaken by John around 2003 (or perhaps earlier) and the possibility he had raised of commencing litigation against Gina; and the sending in October 2004 of John’s unsworn affidavit “which contained many of the allegations concerning wrongful conduct on the part of Mrs Rinehart as trustee which now form part of the substantive claims”.
  2. The plurality considered that it was to be inferred from the recitals to the Deed of Obligation and Release (as the Full Court had observed), that it was considered necessary by the parties to stabilise the question of claims to ownership of tenements in order to provide a safe foundation for what was to be a long‑term commercial venture, noting that the parties to the deed acknowledged that “‘the primary nature of the HPPL business, is very long‑term, complex, large‑scale mining projects … necessitat[ing] long term consistent business plans, and many dealings with third parties on a strictly confidential basis’” (see at [31]). At [32], the plurality noted that confidentiality was plainly a serious concern at that point and that the recitals bore out the primary judge’s findings that the deed was intended to address the risk of commercial damage to HPPL and the Hancock Group by public statements which might be made by John along with the risk of disclosure of confidential information. Pausing here, in my opinion this goes beyond simply the purpose of quelling disputes in relation to the mining tenements alone – there being an emphasis on the need for confidentiality more generally by reference to the risk of commercial damage to HPPL and the Hancock Group.
  3. At [33], the plurality said:

33. These are circumstances which bespeak the object of cl 14 in providing for confidential mediation and arbitration of “all disputes hereunder”. The resolution of them was to be non-public and confidential. In this respect it is to be observed that whilst the Deeds were commercial arrangements and concerned claims concerning commercial dealings, the disputes also involved members of a family. That, too, is consistent with the need for confidentiality. It is also of relevance to the background to and provisions made in the Hope Downs Deed that, by cl 11 of the Deed of Obligation and Release, Mr Hancock acknowledged that he had received independent advice “on all matters relating to or which are the subject of this Deed” and that he acted wholly without duress – notwithstanding that he was to assert the contrary soon thereafter.

  1. The plurality considered the Hope Downs Deed from [34] and the “April 2007 Deed” from [41]. As to the meaning of cl 20 of the Hope Downs Deed, the plurality said that (at [43]ff) :

43. Even on an approach which focuses only on the language of cl 20 it might be argued that the validity claims are disputes “under” the deed. The question whether the substantive claims are the subject of releases and covenants may be seen to depend upon the question whether the validity claims are available and if so whether they are made out. And the challenges to validity may depend upon the effect given to the acknowledgment in the Deeds concerning duress, undue influence and the receipt of legal advice. This is a further example of how the substantive claims and the validity claims are intertwined in these appeals.

44. It is well established that a commercial contract should be construed by reference to the language used by the parties, the surrounding circumstances, and the purposes and objects to be secured by the contract. It could not have been understood by the parties to these Deeds that any challenge to the efficacy of the Deeds was to be determined in the public spotlight. Especially is this so with respect to the Hope Downs Deed.

45. The Hope Downs Deed was an attempt to put to rest the issues regarding ownership of property which had motivated Mr Hancock in the first place. Although the Joint Venture Agreement had been signed by this time, the Hancock Group of companies were undertaking negotiations for financing it in accordance with their contractual obligations. The need for commercial confidence remained.

46. Accordingly, a critical object of the Hope Downs Deed was the maintenance of confidentiality about the affairs of the Hancock Group, the trusts, the intra-family dispute and the provisions of the Deeds themselves. This object could not be clearer. Contrary to the submissions for the appellants, the parties were indeed agreeing to avoid public scrutiny. The fact that the claims made by Mr Hancock involve the administration of trusts does not affect the meaning persons in the parties’ position must have understood the arbitral clause to have.

47. By the time the Hope Downs Deed was executed, Mr Hancock had shown that he was intent on pursuing claims respecting the trusts. It was more than possible that he might challenge the Hope Downs Deed as he had done with respect to the Deed of Obligation and Release. This in large part explains the requirements of cl 12, including that as to lawyers’ assurances, which were addressed to the possibility of a dispute about the validity of the deed.

48. A person in the position of the parties to the Hope Downs Deed would have appreciated that disputes might once again arise, not only with respect to the claims made by Mr Hancock concerning the trusts but also concerning the validity of the deed. It is inconceivable that such a person would have thought that claims of the latter kind, raising allegations such as undue influence, were not to be the subject of confidential dispute resolution but rather were to be heard and determined publicly, in open court. (Emphasis added.)

  1. As to cl 14 of the Deed of Obligation and Release, the plurality said (at [49]):

49. The same may be said of the Deed of Obligation and Release. The Deed of Obligation and Release was brought about by Mr Hancock’s public statements, which were considered to have the potential to cause damage to the commercial interests of the Hancock Group. The need to avoid this and to ensure the confidentiality of information was critical because of the Joint Venture which was then being negotiated, which would have long-term implications for the Hancock Group. The evident object of the deed was to ensure that there was no further public airing of the claims made by Mr Hancock. It is inconceivable that a party to the deed could have thought that any challenge to it would be determined publicly, in court.

  1. As to the cross-appeal by the third party companies, they claiming to be persons claiming “through or under” a party to the Hope Downs Deed and hence within the definition of “party” in Commercial Arbitration Act, s 2(1), the plurality rejected the Full Court’s reasoning on the issue as to the meaning of “through or under” in its application to Commercial Arbitration Act, s 8 (which had proceeded on the Full Court’s analysis of the High Court’s decision in Tanning Research Laboratories Inc v O’Brien (1990) 169 CLR 332; [1990] HCA 8 (Tanning Research)).
  2. As to that reasoning, the plurality (see at [61]ff) addressed each of the four steps that the Full Court had identified, being: first, to identify the “critical passage” in the joint judgment of Brennan and Dawson JJ in Tanning Research at 342 (see the Full Court Decision at [309]); second, to consider the submission that the liability of a knowing assistant or knowing recipient is “not indirect or derivative” (the Full Court concluding that the third party companies did not have a derivative defence “in the ordinary sense of that term” – see at [317]); third, , though the notion of claiming through or under a party is not limited to cases of assignment or transfer, to note that the only relationship between the companies and the party to the Hope Downs Deed under or through whom those companies purported to claim was not a legal relationship but “purely factual” (see the Full Court Decision at [317]); and, fourth, to reject the proposition that the covenants and releases in the Hope Downs Deed were an essential element in the third party companies’ defences, on the basis that the third party companies were not bound to raise those releases and covenants as a defence (see the Full Court Decision at [317]).
  3. The plurality emphasised (at [66]) that Brennan and Dawson JJ’s ultimate formulation of the test was, relevantly, whether “an essential element of the defence was or is vested in or exercisable by the party to the arbitration agreement” with the meaning of the phrase “through or under” to be “ascertained not by reference to authority but by reference to the text and context of” the provision in which it appeared. Thus, it was said by the plurality, that the statutory conception of “claiming through or under” applies to an alleged knowing recipient of trust property who invokes as an essential element of its defence that the alleged trustee was beneficially entitled to the subject property. Reference was made by the plurality (see the High Court Decision at [67]) to the reasoning of Deane and Gaudron JJ that “whether a party to proceedings is advancing a defence through or under a party to an arbitration agreement is necessarily to be answered by reference to the subject matter in controversy rather than the formal nature of the proceedings or the precise legal character of the person initiating or defending the proceedings”.
  4. The plurality noted (at [68]) that “it is unnecessary that the issues that the defence puts in controversy in the proceedings be limited to the matter capable of settlement by arbitration” – the two not needing to be co-extensive and it being sufficient that the defence puts in issue, among other things, “some right or liability which is susceptible of settlement under the arbitration agreement as a discrete controversy” (citing Tanning Research at 351).
  5. The plurality considered it beside the point that the third party companies were not privy to the arbitration agreement (see at [69]). Instead, it being sufficient that there was a discrete matter of controversy capable of settlement by arbitration under the arbitration agreement and one which, as between the appellants and HPPL, had been referred to arbitration in accordance with the Hope Downs Deed.
  6. Finally, as to the fourth step of the Full Court’s reasoning, the plurality noted that: this was not a case of the third party companies being “highly likely” to raise the defences – they had done so (albeit not at that stage by filing and serving a defence); and, if there were any doubt about it (which their Honours considered there was not), “the order for stay could have been conditioned on the issue being referred to arbitration and the third party companies undertaking to use all reasonable endeavours to prosecute the matter” (see at [71]).
  7. At [73], their Honours said:

73. … where an assignee of mining tenements is alleged to have taken the assignment with knowledge that the tenements were held by the assignor upon trust for the claimant and assigned to the assignee in breach of trust, and the assignee contests the claim on the ground that there was no breach of trust or if there were that, by reason of a deed of settlement, the assignor was absolved of responsibility for the breach of trust, the assignee takes its stand upon a ground which is available to the assignor and stands in the same position vis-à-vis the claimant as the assignor. Accordingly, since the assignor and the claimant are bound by an arbitration agreement applicable to the claim of breach of trust, there is no good reason why this claim should not be determined as between the claimant and the assignee in the same way as it will be determined between the claimant and the assignor. To exclude from the scope of the arbitration agreement binding on the assignor matters between the other party to that agreement and the assignee would give the arbitration agreement an uncertain operation. It would jeopardise orderly arrangements, potentially lead to duplication of proceedings and potentially increase uncertainty as to which matters of controversy are to be determined by litigation and which by arbitration. And ultimately it would frustrate the evident purpose of the statutory definition.

  1. The plurality concluded (at [74]) that “the third party companies are persons claiming through or under HPPL or HRL and, therefore, are parties within the meaning of s 8 of the [Commercial Arbitration Act].” It is said, in the present proceedings, that the same is true of Mr Newby, who is claiming “through” Gina and would be relying on cl 8.
  2. Edelman J agreed with the reasons in the joint judgment for refusing the applications for leave to intervene and for dismissing the appeals. His Honour emphasised (at [83]) that “[e]very clause in a contract, no less arbitration clauses, must be construed in context. No meaningful words, whether in a contract, a statute, a will, a trust, or a conversation, are ever a contextual.” His Honour went on to say:

83. … As the joint judgment in this Court explains, the Full Court of the Federal Court of Australia was correct to treat a fundamental purpose of the Deeds as the quelling of disputes about the title to important commercial assets. That purpose is plain from the context of the Deeds. The context of the Deeds also reveals the importance to the parties of confidential resolution of such disputes, including validity disputes similar to those which the appellants submitted lay outside the scope of the arbitration agreements. This context requires that the words “any dispute under this deed” and “all disputes hereunder” be construed broadly to include the validity claims. For that reason, it is unnecessary in this case to consider the amount of additional weight that should be placed upon the usual consideration of context that reasonable persons in the position of the parties would wish to minimise the fragmentation across different tribunals of their future disputes by establishing “one‑stop adjudication” as far as possible. (Footnotes omitted.)

  1. His Honour, however, reached a different conclusion from that of the plurality in relation to the cross-appeal (see [84]ff).

Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd (No 9) [2018] WASC 122 (the Le Miere (No 9) Decision)

  1. That brings me to the proceedings in Western Australia. By 2018, what was there before Le Miere J (not unlike the position that has now transpired in this Court), in the context of applications that had been made by Gina, HPPL and other parties for referral to arbitration pursuant to s 8(1) of the WA Commercial Arbitration Act and a stay of the proceedings pending the outcome of any arbitration, was an application brought by Bianca and John, shortly in advance of the date when the hearing of the applications was listed to commence (that being 30 May 2018), by chamber summons, seeking orders that Gina and others be restrained from relying upon, invoking or otherwise taking steps in furtherance of the arbitration agreement in the Hope Downs Deed in the proceedings and that Gina be restrained from causing any party to the Hope Downs Deed from relying upon, invoking or otherwise taking steps in furtherance of the arbitration agreement in the Hope Downs Deed in the proceedings. Gina and HPPL (and another of the companies there involved, HDIO) then sought orders that those interlocutory claims by Bianca and John be referred to arbitration and their interlocutory application to the Supreme Court of Western Australia be stayed pending the outcome of any arbitration.
  2. In determining those preliminary interlocutory stoushes, Le Miere J (at [3]) indicated that at the hearing of the referral/stay applications his Honour would follow the reasoning of the Full Court in the Full Court Decision and would not determine issues of undue influence, duress, fraudulent concealment or any other matter which is said to go to the voidness or voidability of any of the arbitration agreements in question nor would his Honour make any findings of fact in relation to those issues.
  3. His Honour refused to hear, at the hearing commencing on 30 May 2018, the applications by Bianca and John by their chamber summons for interlocutory relief and said that those applications would be heard after determination of the referral/stay applications.
  4. The basis on which Bianca and John appear to have sought to prosecute the application in their chamber summons (see at [46]) was that the evidence they would adduce at the hearing commencing on 30 May 2018 would show that Gina and the HPPL parties had engaged in unconscionable conduct, that the Court had power to restrain it and that the Court should exercise its power to restrain those parties from seeking that the parties be referred to arbitration.
  5. Le Miere J said (at [47]):

47. I will not hear the application of Bianca and John at the hearing commencing on 30 May. It has been brought too late. There is no injustice to Bianca and John from not hearing their application at the hearing commencing on 30 May. The reasoning of the Full Federal Court leads to the conclusion that if the substantive claims made by John and Bianca fall within the arbitration agreements then so will their claims directed towards preventing the respondents from relying on releases, bars, covenants not to sue and arbitration clauses contained in Hope Downs deed and the other deeds. John and Bianca’s application will not be listed for hearing at the hearing commencing on 30 May 2018.

Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd (No 10) [2018] WASC 407 (the Le Miere (No 10) Decision)

  1. In December 2018, Le Miere J ruled on the referral/stay applications. His Honour stayed the proceedings pursuant to s 8(1) of the WA Commercial Arbitration Act and stayed certain counterclaims pursuant to the general power of the court to control its proceedings (see the Le Miere (No 10) Decision at [1]). An appeal and cross-appeal from that decision was heard late last year and on which the Court of Appeal of the Supreme Court of Western Australia is presently reserved.
  2. His Honour noted that Bianca and John, in opposing the referral to arbitration or stay of the proceeding, had submitted that the stays were premised on the validity of the cl 7(b) undertaking and cl 20 of the Hope Downs Deed which were improperly obtained as the Hope Downs Deed was procured by the unconscionable conduct of HPPL and Gina; and hence that HPPL and Gina’s reliance on those rights to justify a stay of the proceedings was unconscionable and not be sanctioned by the court acceding to the stay application (see at [97]).
  3. Following the reasoning of the Full Court in the Full Court Decision, Le Miere J found that all the substantive claims and validity claims brought by Bianca and Gina in their counterclaims fell within the arbitration agreement in cl 20.2 (see at [147]-[148]) and therefore must be referred for arbitration. His Honour then considered the arguments advanced by Bianca and John for the dismissal of the stay applications – in essence that the Hope Downs Deed was procured by unconscionable conduct (as adverted to above) (relevantly, these are arguments that Bianca in the present case says were not there predicated on a true anti-injunction application thereby seeking to distinguish between the two applications).
  4. His Honour rejected the submission that the stay applications should be dismissed for unconscionability for two reasons: first, because they depended on the Court making findings of fact in support of their claims that they entered into the document and other deeds as a result of various forms of wrongdoing by Gina (a matter addressed in the reasons for the Le Miere (No 9) Decision – see at [45]); second, on the basis (at [154]) that:

154. … Framing their argument as a contention that it is unconscionable for HPPL and Mrs Rinehart to seek a referral to arbitration and a stay in reliance upon the provisions of the Hope Downs Deed adds nothing of substance to the contention that the Hope Downs Deed, and the arbitration agreement within it, is void and should not be enforced because of undue influence, duress, fraudulent concealment, unconscionable conduct or any other matter which is said to go to the deed and the arbitration agreement being void or unenforceable. Ms Rinehart’s and Mr Hancock’s contentions are but another way of putting their validity claims advanced in the Federal Court proceeding and again in the counterclaims in these proceedings. The Full Court found, and I have found, that those claims fall within the arbitration agreement and should be referred to arbitration, not determined by this court.

  1. Pausing here, HPPL submits that both of those reasons go to the first three issues raised by Bianca and John in their submissions (as set out at [151] of his Honour’s reasons), namely: the alleged non-disclosures of the Myers advice and Sceales advice and the subsequent Gilmour advice and PwC advice constituting unconscionable conduct; the alleged unconscientious reliance on legal rights improperly obtained; and that Gina and HPPL’s stance was vexatious and oppressive (placing Bianca and John in a “straightjacket” in their defence of other claims in the related proceedings before his Honour). Gina further submits that there is no reason why this should not give rise to an issue estoppel binding the parties.
  2. At [155], his Honour turned to a fourth reason that had been raised by Bianca and John for not referring their claims to arbitration and not staying their claims in those proceedings: that being that the court “may refuse to refer [Bianca and John’s] claims to arbitration and stay their claims in these proceedings without adjudicating upon the voidness or voidability of any of the arbitration agreements but because of the unconscionable circumstances under which the arbitration agreements were procured.” The submission being made that their attack on the arbitration agreements did not offend the separability principle and was clearly articulated and that the hearing would be confined. His Honour rejected the contention that the attack did not offend the separability principle (see at [156]).
  3. Having referred to the consideration by the Full Court of the issue, his Honour said at [159]:

159. [Bianca and John] allege that the Hope Downs Deed is void or voidable because of, amongst other things, unconscionable behaviour. However, that is not a distinct and separate attack on the arbitration agreement. Nor is the allegation that to seek a stay based upon the arbitration agreement in the Hope Downs deed which was procured by unconscionable behaviour is itself unconscionable a separate and distinct attack upon the arbitration agreement in any relevant sense.

  1. Thus his Honour rejected the arguments advanced by Bianca and John opposing the referral/stay applications in relation to their counterclaims.
  2. His Honour did not stay the whole of the proceedings (see from [192]), notwithstanding his Honour’s recognition as to the risk that this may give rise to inconsistent decisions and result in unnecessary duplication and expense. A significant factor in this regard was that the court proceedings involved other parties not party to the Hope Downs Deed and whose disputes could not be resolved in the arbitration (see at [204]). For the reasons given at [205]ff, his Honour considered that it was not in the interests of justice to stay the whole of the proceedings pending the outcome of the arbitral proceedings.

Bianca’s submissions as to the question of precedent

  1. Bianca submits that the High Court Decision does not point against the construction for which she contends. It is submitted that the High Court expressly did not consider the observations of Bathurst CJ in the Court of Appeal Decision in relation to a critical matter that underpinned his Honour’s analysis (namely, the relevance under Australian law of the approach in Fiona Trust) (see the High Court Decision at [25]). It is said that no criticism at all was levelled at his Honour’s construction of cl 20.2 as requiring that a dispute be governed or controlled by the Hope Downs Deed (referring to the High Court Decision at [23]).
  2. Bianca argues that the reasoning in the High Court Decision does not lead to the conclusion that the matters in this proceeding are under the Hope Downs Deed. In that regard Bianca points to the following.
  3. First, that the High Court’s analysis was confined to whether the parties to the Hope Downs Deed intended certain specific disputes as to the validity of the Hope Downs Deed to be covered by the arbitration agreement. It is noted that the High Court: repeatedly referred to disputes about or concerning the “validity” of the Hope Downs Deed (see at [43], [47], [48]); and held that, having regard to the context in which the Hope Downs Deed was entered into, the parties to the Hope Downs Deed intended the arbitration agreement to cover disputes concerning the deed’s validity (see at [43], [47]-[49]).
  4. Second, that the High Court was not asked to consider whether the matters in the present proceeding were covered by the arbitration agreement. It is said that the matters in the present proceeding are substantially different in their nature and scope when compared to those before the High Court.
  5. Third, that Bianca was not a party to the High Court proceeding in her capacity as trustee (and it is said that nothing in the High Court Decision indicates whether or not Bianca is, in that capacity, bound by the arbitration agreement).
  6. Fourth, that no part of Bianca’s pleaded case in the present proceeding challenges the validity of the Hope Downs Deed. As a result, it is submitted that one of the critical aspects of the High Court’s reasoning (namely, the intertwining of substantive and validity claims; Bianca referring by way of example to the High Court Decision at [12], [43]) does not here arise.
  7. Fifth, that the High Court’s reference to a “challenge to the efficacy of the Deeds” (see at [44]) (contrary to the weight placed by the defendants on the use of the word “efficacy”) cannot be read as anything other than a reference to the validity claims. It is said that no other issue was before the High Court and that Gina’s oral submissions to the contrary impermissibly involve reading the judgment as if it were a statute (cf Comcare v PVYW (2013) 250 CLR 246; [2013] HCA 41 at [15]- [16] per French CJ, Hayne, Crennan and Kiefel JJ).
  8. Sixth, insofar as Bianca separately contends by Bianca’s unconscionability (anti-arbitration) motion that as trustee she has an equitable right which is being infringed by the maintenance of the s 8 Stay Applications, Bianca says that that is not a challenge to the validity of the Hope Downs Deed. She says that she does not contend that the Hope Downs Deed, or the arbitration agreement, should be set aside nor does she contend that the Hope Downs Deed, or the arbitration agreement is unenforceable. It is said that Bianca, as trustee, could not pursue the anti-arbitration application against a party to the Hope Downs Deed who was not a party to the breach of trust, which indicates that the injunction does not impugn the validity or enforceability of the Hope Downs Deed, and that the right asserted in the unconscionability motion is an in personam right held by the beneficiaries of the HMH Trust as against Gina and her accessory (being HPPL). In this way, it is said that the application is a challenge to the right of Gina and HPPL to maintain an application for a stay (contra Gina’s submissions at [53] and Le Miere (No 10) Decision at [154]-[156], noting that that was a proceeding to which Bianca was not a party in her capacity as trustee).
  9. Bianca says that the proposition that the unconscionability motion does not give rise to a dispute under the Hope Downs Deed can be tested by reference to the example of a situation where what was sought was to restrain a breach of an injunction preventing Gina and HPPL from relying on the arbitration agreement. It is submitted that it is inconceivable that such a dispute would be characterised as being under the Hope Downs Deed (because it is not a challenge to the Hope Downs Deed’s validity nor would it be governed or controlled by the Hope Downs Deed).
  10. Bianca argues that the High Court Decision did not operate as an “implied overruling” of the Court of Appeal Decision. It is submitted that it is most unlikely that the High Court intended to overrule the Court of Appeal Decision but “failed to mention it” (noting that the Court of Appeal Decision was brought to the High Court’s attention and referred to in the High Court Decision). Bianca says that this is not like the example referred to by Campbell J, as his Honour then was, in Re French Caledonia Travel Service Pty Ltd (in liq) (2003) 59 NSWLR 361; [2003] NSWSC 1008 (Re French) (to which Gina/HPPL refers) at [57] where a prior authority was not mentioned (and appears not to have been brought to the Court of Appeal’s attention).
  11. Further, Bianca maintains that it is an error to assert (as the defendants do) that the High Court’s conclusion could not have been reached under a “governed or controlled test”. Bianca maintains that this is so for the following three reasons.
  12. First, it is said that the foundation of the High Court’s reasoning was that the “validity claims” were “not discrete from the appellants’ ‘substantive claims’” (see the High Court Decision at [12]), which in turn, reflected the Full Court’s finding in the Full Court Decision at [157]-[158] that there was one holistic dispute. It is said that a consequence of that was that, once one of the substantive claims was within the four corners of the arbitration agreement, then the whole of the matter was; and that the substantive claims considered in the High Court Decision fell within the arbitration agreement at least because of the release in cl 6, which governed or controlled some of the substantive claims (referring to the Gleeson Decision at [622]-[624], [634]-[636]). It is said that it followed necessarily that the Hope Downs Deed contemplated that the validity claims (which were not discrete from the substantive claims) were within the four corners of the arbitration agreement.
  13. Second, Bianca argues that the same result follows even if focus is only on the validity claims. It is noted that the “validity claims” included an allegation that the Hope Downs Deed had been procured by undue influence and that that was the only specific validity claim that the High Court mentioned in its judgment (see the High Court Decision at [48]). It is said that the focus on undue influence was understandable, since the High Court repeatedly pointed out that the Hope Downs Deed itself contained assurances that it had been entered into without undue influence and on the basis of legal advice (which could refute any presumption of undue influence) (referring to the High Court Decision at [9], [40], [43]); and that the High Court said (at [43]) that “the challenges to validity may depend upon the effect given to the acknowledgement in the Deeds concerning duress, undue influence and the receipt of legal advice.” Bianca argues that the determination of the validity claims might be governed or controlled by the effect given to cl 12, which contained the assurances against undue influence and in respect of legal advice.
  14. Third, it is submitted that, properly analysed, the High Court accepted the Full Court’s conclusion (at [248] of the Full Court Decision) that there was only one dispute, and thus did not need to decide whether or not the Full Court’s conclusion at [247] (rejecting the Court of Appeal Decision) was correct.
  15. It is submitted that these matters indicate that the High Court could have reached the conclusion it did applying the “governed or controlled” test and that, in that context, it is most unlikely that the High Court intended sub silentio to overrule a decision of the Court of Appeal which was squarely drawn to its attention and fully argued before it.
  16. Accordingly, Bianca submits that (if it is concluded, contrary to her argument on the threshold question, that the Hope Downs Deed binds her qua trustee), the correct approach to determining whether the current proceedings fall within the arbitration agreement in the Hope Downs Deed is that which was established by the Court of Appeal Decision (as subsequently applied by the Court of Appeal in the Leave Decision); namely, to consider whether the various matters the subject of the proceedings are “governed or controlled” by the Hope Downs Deed, in the sense that the Deed will necessarily determine the outcome of the claims made by the trustee.
  17. Bianca submits that, while comity “may be shown” to the Full Court Decision, it is the approach of Bathurst CJ in the Court of Appeal Decision that remains binding. It is submitted that nothing in the High Court Decision relevantly impacts on the Court of Appeal Decision. Bianca says that the High Court declined to choose which of the approaches identified by the Court of Appeal and Full Court ought be preferred (referring to the High Court Decision at [25]); and that, rather, the High Court simply determined that the “validity claims” pleaded in the Federal Court proceedings fell within the arbitration agreement. Again, emphasis is placed on the fact that no such claims are made in the pleadings before this Court; rather, it is said, these proceedings attack conduct of HPPL and Gina that post-dates entry into the Hope Downs Deed.
  18. Further, it is submitted that if there be any doubt about the standing of the Court of Appeal Decision, that doubt is properly resolved elsewhere in the judicial hierarchy than at the base of the judicial apex, pointing to what was said by Lander J in WorkCover Corporation v Jakas (2003) 86 SASR 20; [2003] SASC 155 at [49], namely that:

49. There might be some cases where the court or tribunal at the base of the apex can decide for itself that the first court of appeal decision has been overruled: Ratcliffe v Watters … at 505. However, the inferior tribunal or court would not decline to follow the first court of appeal if there was any doubt about whether the decision of that court had been overruled. If there is any doubt then the matter must be left to one or other of the courts of appeal.

  1. It is submitted that, a fortiori, a first instance judge may not “disregard a binding decision of an appellate court on some view based on the reasoning of judges in a decision of an ultimate appellate court which does not overrule the binding decision” (citing Proctor v Jetway Aviation Pty Ltd [1984] 1 NSWLR 166 at 177 per Moffitt P and Glass JA agreeing at 180).
  2. Thus Bianca (respectfully) submits that it is not for me, sitting at first instance, where there is doubt as to whether the High Court has overruled the Court of Appeal’s construction of the relevant arbitration clause, to depart from the Court of Appeal’s construction (that, it is said, being a matter for the Court of Appeal to determine); and hence that, except to the extent of any necessary inconsistency with the conclusion in the High Court Decision, the ratio in the Court of Appeal Decision survives unimpeached and must be followed, even if it be assumed that some aspects of the High Court Decision “do not sit well” with the Court of Appeal Decision. Reference is made in that context to Jacob v Utah Construction & Engineering Pty Ltd (1966) 116 CLR 200; [1966] HCA 67 (Jacob v Utah), where it was said (at 207 per Barwick CJ) that:

207. It is not, in my opinion, for a Supreme Court of a State to decide that a decision of this Court precisely in point ought now to be decided differently because it appears to the Supreme Court to be inconsistent with reasoning of the Judicial Committee in a subsequent case. If the decision of this Court is to be overruled, it must be by the Judicial Committee, or by this Court itself. It cannot be treated by a Supreme Court as if it were overruled.

Defendants’ submissions

  1. In summary, the defendants maintain that the High Court Decision requires a different construction to cl 20 of the Hope Downs Deed than was reached in the Court of Appeal Decision, on the basis that the result of the High Court Decision is “entirely incompatible” with the “governed or controlled” test because the High Court found that certain claims which were not “governed or controlled” by the Hope Downs Deed raised disputes “‘under’ the deed”; and that Bianca’s approach (based on the “governed or controlled” test) is inconsistent with the High Court Decision. It is also submitted that even if the “governed or controlled” test is applicable, a number of aspects of this proceeding satisfy that test.
  2. Gina notes that, at first instance, Gleeson J applied the Court of Appeal Decision when determining that the “validity claims” were not subject to cl 20.2 of the Hope Downs Deed, because those claims were not governed or controlled by the Hope Downs Deed; that, on appeal, the Full Court reversed this decision, holding that the validity claims were part of a dispute under the Hope Downs Deed and that the “governed or controlled” test should not be applied (see the Full Court Decision at [161], [199] and [246]-[250]); and that the High Court dismissed the appeal concerning the referral of the validity claims.
  3. Gina submits that the High Court’s determination that the “validity claims” involved a dispute under the Hope Downs Deed involved interpreting the agreement in its context, rather than applying a substitute to the words used by the parties (i.e. “governed or controlled”) (referring to the plurality decision at [44]-[48]); and argues that it is of significance that the High Court did not determine that the validity claims were “governed and controlled” by the Hope Downs Deed (i.e, the approach taken in the Court of Appeal Decision) but, rather, affirmed the commercial construction approach adopted by the Full Court. It is submitted that the reason for this is obvious: namely, that the validity claims were not governed or controlled by the Hope Downs Deed (hence, it is said, the High Court’s determination is necessarily inconsistent with the Court of Appeal Decision). It is submitted that for me now to apply the governed or controlled test to cl 20 would be inconsistent with the High Court’s binding judgment.
  4. In this sense, it is submitted that the High Court Decision impliedly overruled the Court of Appeal Decision as to the proper construction of cl 20, being a question of law (see Bowes v Chaleyer [1923] HCA 15; (1923) 32 CLR 159 at 172; [1923] HCA 15 per Isaac and Rich JJ). Gina notes that a similar issue was addressed by Campbell J, as his Honour then was, in Re French at [57]:

57. The decision of the majority in the Court of Appeal in Hallett was inconsistent with Pennell v Deffell in the most direct way – Hallett came to a different conclusion to the conclusion which would have been arrived at if Pennell v Deffell remained good law. When Pennell v Deffell was expressly considered by Sir George Jessel MR and Baggallay LJ, and they came to a different conclusion to that which Pennell v Deffell dictated, Pennell v Deffell must be regarded as overruled. Though Brown v Adams was not expressly referred to, it should be regarded as impliedly overruled. In In Re Oatway; Hertslet v Oatway [1903] 2 Ch 356 at 360, Joyce J said that Brown v Adams ought not be followed since the decision in In Re Hallett’s Estate.

  1. Reference is also made to Ratcliffe v Watters (1969) 89 WN (Pt 1) (NSW) 497 at 505 and EKU17 v Minister for Immigration and Border Protection [2019] FCA 782 at [23] per Davies J.
  2. Gina submits that the above rationale applies directly to the present circumstances, namely that: the High Court considered the Court of Appeal Decision (see at [22]-[25]), noted that the primary judge came to the conclusion that the validity claims were not “under this deed” on the basis of the “governed or controlled” test (see at [14]-[15] and [22]-[24]), and then reached a conclusion which could not have been arrived at (emphasis added) if the Court of Appeal Decision remained good law as to the proper construction of cl 20 of the Hope Downs Deed.
  3. As to the fact that the High Court did not find it necessary to consider the observations of Bathurst CJ in the Court of Appeal Decision, it is noted that this was in relation to his Honour’s observations concerning Fiona Trust. HPPL says, and I accept, that the High Court did not refuse to decide whether the approach of the Full Court or that of the Court of Appeal was to be preferred (cf Bianca’s submissions at [61]); rather, the High Court found it unnecessary to determine whether Fiona Trust should not be followed since (at [18], [25]) the plurality accepted that Fiona Trust was not critical to the resolution of the appeals. Similarly, Gina says that the High Court did not need to determine whether, in accordance with Fiona Trust, there was a presumption to be applied that arbitration agreements were to be construed broadly nor whether Fiona Trust was contrary to the Australian approach (as was held in the Court of Appeal Decision), because the context demonstrated that the clause had wide coverage irrespective of any presumption to be applied (as the Full Court held).
  4. Gina submits that it is notable that the proceedings in the Court of Appeal did not involve an application under Commercial Arbitration Act, s 8; rather, the applications were made under Civil Procedure Act, s 67and in the Court’s inherent jurisdiction. It is submitted that the Court of Appeal in the Court of Appeal Decision therefore did not address the proper approach to determining what the “matter” in the proceeding is and how it should be characterised for the purpose of s 8. Gina maintains that the significance of the distinction is that, even if the construction of cl 20 in the Court of Appeal Decision remains binding upon this Court (despite the High Court Decision), it will only answer whether some part of the proceeding raises “a dispute under [the] deed” for the purpose of cl 20. It is said that if some part of the proceeding does raise such a dispute, then there will be a need to determine what the “matter” is that must be referred in accordance with s 8. In this respect, it is submitted that the Court should follow the Full Court Decision (in accordance with Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 (Farah v Say-Dee) (see at [135]), pointing to what was said by the Full Court at [157] and [158] (and at [141] and [145]).

Determination

  1. I do not understand there to be any dispute as between the parties as to the proposition that, as a matter of precedent, I am bound to follow applicable High Court authority and that (in the absence of applicable High Court authority) where there is a conflict between Court of Appeal authority and that of the Full Court of the Federal Court (or any other intermediate appellate court) I would be bound to follow the Court of Appeal authority. As Bianca succinctly put it, it is not for me, sitting as a single judge of this Court, to choose which, of competing approaches of the Court of Appeal and the Full Court of the Federal Court, should be followed (see at T 248.46). There can be no quarrel with such a proposition. Nor can there be quarrel with the proposition that, in the absence of binding Court of Appeal (and High Court) authority, I would as a matter of comity be bound to follow other intermediate appellate authority (such as that of the Full Court) unless convinced it was plainly wrong (a principle that the defendants invoke when arguing that I am bound to follow the Full Court’s approach to the question of the separability principle insofar as that applies in relation to the issues sought to be raised on Bianca’s unconscionability motion).
  2. For Bianca, as adverted to already, it is submitted that the High Court Decision, though useful as to context, does not provide a great deal of assistance on the construction of s 8 of the Hope Downs Deed in the present case because the High Court (only having granted special leave in relation to the validity claims – not in relation to the substantive claims) was not concerned with the substantive claims. It is said that the High Court was dealing with “a different bucket of claims with a different nature” and, in effect, that its reasoning is authoritative only as to how it was that those claims, because of the way they were pleaded, were intertwined with and premised on the substantive claims (and because of that connection and context therefore fell under the Hope Downs Deed for the purposes of cl 20 of that deed) (see at T 248.20ff). It is submitted that there was no necessary inconsistency between the approach of Bathurst CJ in the Court of Appeal Decision and the “very contextual approach taken by the High Court in respect of quite different claims being the so-called validity claims in issue in that Court” (see T 292.25).
  3. Acceptance of that submission would seem to have the necessary consequence that there would be a different treatment accorded (at least at first instance in this Court) to “substantive claims” to that to be accorded to “validity claims” (in that, for the former, the “governed or controlled” test of the Court of Appeal would apply in order to determine whether those claims amounted to a dispute “under” the Hope Downs Deed; and, for the latter, the holistic contextual test, or the “interconnectivity” test, applied by the Full Court and approved by the High Court would apply).
  4. I am acutely conscious of the importance to the rule of law of adherence to the doctrine of precedent. I did not need reminding from Bianca (but have nevertheless duly taken to heart the admonitions that have here been made) as to my place, and that of the Court of Appeal, and the High Court at the apex of the appellate hierarchy above this Court (Bianca referring in that regard to what was said by Brennan J, as his Honour then was, in Trident General Insurance Co Ltd v McNiece Bros Pty Ltd [1988] HCA 44; (1988) 165 CLR 107 at 129-130; [1988] HCA 44); nor need I be reminded as to the observation of Stephen J in Viro v R (1978) 141 CLR 88 at 129; [1978] HCA 9 as to the existence of an appeal being “inherent in and essential to the doctrine” of precedent.
  5. One possibility, to which I referred in the course of oral argument, would have been to remit the matter to the Court of Appeal for determination as to whether, in light of the High Court Decision, a different approach should be adopted to substantive claims. However, no such application had been made by any of the parties prior to the hearing of the present applications and, some days into the hearing of those applications, it is fair to describe the response by Counsel to that proposition as lukewarm at best. Moreover, the difficulty as to the competing approaches to construction at the intermediate appellate level does not arise if (as I have, after careful consideration, concluded) the High Court has impliedly overruled the approach adopted by the Court of Appeal. The High Court’s acceptance that the validity claims fell within the arbitration agreement necessarily involved a rejection of the “governed or controlled” test (as this was the basis upon which Gleeson J had held that the validity claims were not the subject of a s 8 stay).
  6. In that regard, I note that in Farah v Say-Dee, the High Court (at [134]), in the context of reiterating the position stated in Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485 at 492; [1993] HCA 15, also emphasised the need for regard to be had to “long-established authority and seriously considered dicta of a majority of this Court”. While noting that in his Honour’s dissent in Pape v Commissioner of Taxation (2009) 238 CLR 1; [2009] HCA 23 at [473], Heydon J indicated that the reference in Farah v Say-Dee to the weight to be attributed to “seriously considered dicta” needs to be seen alongside the reference of the Court to “long-established authority”, I consider that the reasoning of a unanimous High Court bench (at least in relation to this point) as to the approach to construction to be taken in the context of validity claims that are intertwined with substantive claims, and the importance of context in that regard, must at the very least be seen to be “seriously considered dicta” applicable to construction of the clause in relation to substantive claims per se.
  7. As adverted to above, the High Court placed emphasis on the context in which the Hope Downs Deed was entered into and, in particular, the parties’ concern for confidentiality (about many issues, not just the mining tenements disputes). That concern is equally relevant in the context of the dispute here as to Bianca’s substantive claims as it is in relation to the so-called “validity” claims there being considered. The High Court also accepted the interconnectedness (or “interconnectivity”, as it was put in submissions in this Court) between the substantive and validity claims. It is difficult to compartmentalise the High Court’s reasoning as being applicable only to the operation or construction of cl 20 in its application to validity claims. This is not in my opinion a case where the subsequent High Court Decision simply “does not sit well” with the Court of Appeal’s construction (as meaning “governed or controlled”) of the words “under this Deed”. It is a case where the High Court’s reasoning, though not in terms expressly overruling that of the Court of Appeal, is in my opinion necessarily inconsistent with that decision.
  8. Insofar as it is said that it is most unlikely that the High Court would have overruled the Court of Appeal decision sub silentio, it seems to me equally likely (if not perhaps more likely, having regard to principles of comity) that the High Court considered that it was not there necessary to spell this out. In any event, speculation on this is not helpful. If, as I consider it is, the High Court Decision is necessarily inconsistent with the Court of Appeal’s construction of cl 20 of the Hope Downs Deed, then I am bound to apply the holistic contextual construction of cl 20 in the present case. The fact that the High Court did not expressly overrule the “governed or controlled” test in the context of substantive claims does not mean that that test can now stand consistently with the High Court’s approval of the holistic contextual approach of the Full Court.
  9. If the matter were to have been resolved by reference solely to the language or text of the Hope Downs Deed (and without reference to the High Court Decision) then there would be considerable force to the submissions here put for Bianca that “under this Deed” is a narrower expression than expressions such as “in connection with” (in that regard, see the authorities referred to in Bianca’s submissions), particularly where the approach urged by the defendants means that there is no relevant distinction between the phrase “under this Deed” and, say, the phrase “arising out of or in connection with this Deed” (see T 81); and, in any event, the Court of Appeal Decision (which is, with respect, uncontroversial in that context) would be binding on me. However, the High Court Decision does not accommodate such a textual approach. The High Court has made clear (not least by reference to its emphasis on context) that one cannot focus on the language of the clause alone (i.e., this is not a case that can be largely resolved solely by reference to textual considerations) and thus has not left untouched the reasoning of the Court of Appeal. I find it impossible to read the High Court Decision as other than rejecting the “governed and controlled” test in the context of the meaning of cl 20 of the Hope Downs Deed and I do not accept that this reasoning can be confined (as Bianca’s argument would have it do) to “validity claims” per se, or even to “validity claims” that are intertwined with substantive claims. Rather, the High Court has made clear that the context leading up to entry into the Hope Downs Deed, including the threat of unwelcome publicity, is central to the construction of the relevant clause.
  10. Invidious as the position in which I am here placed is (insofar as the submissions put by Bianca contemplate that there remains a divergence between the Court of Appeal and the High Court) and I here adopt the terminology used by McLelland J, as his Honour then was, in Appleton Papers Inc v Tomasetti Paper Pty Ltd [1983] 3 NSWLR 208 at 218, when referring to one’s judicial duty “invidious task as that may be”, I consider it my duty to apply the law as I understand the High Court has determined it to be on the question of the proper approach to, and construction of, the very arbitration agreement the subject of the present applications.
  11. Accordingly, whatever view I might have taken had the issue come before me as to the construction of cl 20 without the benefit of the various appellate decisions to which I have referred above, and notwithstanding that (but for the High Court Decision) I would otherwise have been bound to follow the Court of Appeal Decision, it is not now open for me to do so.
  12. I thus accept the defendants’ submission that the arbitration agreement in cl 20 of the Hope Downs Deed cannot here be construed so as to be limited to disputes the outcome of which is “governed or controlled” by the Hope Downs Deed itself (cf Bianca’s submissions at [58]). The Full Court considered this construction to be overly narrow (Full Court Decision at [187]-[205], [247]) and, in dismissing Bianca’s ultimate appeal on the basis that the narrower “governed or controlled” test ought to have been adopted by the Full Court (see Ground 1(a) of Bianca’s notice of appeal [Ex 8]), I consider that the High Court accepted that the proper construction of the arbitration agreement was as stated by the Full Court.
  13. In those circumstances, it is not necessary to summarise the submissions made by the respective parties as to the proper textual construction of cl 20 (Bianca, in particular, set out in detail the textual considerations and additional contextual matters said to support the “governed or controlled” test applied by the Court of Appeal).
  14. I should add that, had I been left in doubt as to this issue, I would at this stage have remitted the matter of my own motion to the Court of Appeal for determination (conscious of the admonition in Jacob v Utah to which my attention was drawn), albeit with a statement of the views I have reached on this issue, as I consider that would be the most efficient way to proceed having regard to the statutory mandate in Civil Procedure Act, s 56. As it is, I am not left in a position of doubt. Relevantly, too, the parties urged me to proceed to determine the matter without themselves seeking a referral to the Court of Appeal. No doubt (given the litigious history of the matter) the opportunity for appellate review will arise soon enough albeit that I was cautioned by Bianca not to make any assumptions as to the inevitability of appeal. Be that as it may, in light of the conclusion which I have reached, I proceed on the basis that what I understand to be the High Court’s construction of cl 20 must be applied to the claims in the present case.

Requirements of s 8

  1. At the outset, two of the requirements of s 8(1) of the relevant legislation can be quickly disposed of: the requirement that the request for referral to arbitration be no later than the first statement on the substance of the dispute (since it is not suggested that this is not satisfied in the present case); and inapplicability of the proviso (since there was no suggestion on the hearing of the s 8 Stay Applications that the arbitration agreement is null and void, inoperative or incapable of being performed. As to the latter, the proviso to s 8(1) is engaged only if there is a separate and distinct attack on the arbitration agreement – see the Full Court Decision at [20], [343], [359]). I note that were there to have been such an attack, there would still be a discretion as to whether to embark on the inquiry as to whether the arbitration agreement is null and void, inoperative or incapable of being performed (see the Full Court Decision at [111], [147]-[148], [338], [367], [371]).
  2. I have already considered the threshold question as to whether there is an apparently valid arbitration agreement. That leaves the question as to whether the present proceeding raises any dispute under the Hope Downs Deed applying the High Court’s construction of cl 20 (i.e., whether the disputes as to oppressive conduct, breach of trust, breach of directors’ duties and the like, in the context of the defences that have been foreshadowed to some of those claims, at least insofar as they relate to the non-payment of dividends and to the relief sought in respect of the control of HPPL, are caught by cl 20 of the Hope Downs Deed).

Characterisation of the “matter”

  1. Gina submits that the approach to determining whether a matter is the subject of an arbitration agreement is as follows: first, to ascertain the legal meaning or scope of the arbitration agreement (see the Full Court Decision at [146]) (which it is said has in large part already been determined by the Full Court Decision and the High Court Decision); and second, then to characterise the “matter”, with an eye to the type of “matters” to which the arbitration agreement relates (referring to the Full Court Decision at [156]-[158]). I have already outlined above the meaning of cl 20 of the Hope Downs Deed (the first of those steps). I now turn to a consideration as to the “matter” the subject of the present proceeding.
  2. Bianca accepts that s 8(1) calls for an identification of the “matters” in issue in the court proceedings and points to the authorities on the identification of the “matter” that were collated in the Gleeson Decision (see at [93]-[97] of the Gleeson Decision) (in a passage cited generally with approval in the Full Court Decision at [156]-[157]).
  3. Bianca says that the authorities establish: first, that “[a] ‘matter’ for the purposes of s 8(1) means some right or liability in dispute which is susceptible of settlement as a discrete controversy” (see the Gleeson Decision at [94]); second, that “[a] ‘matter’ is something more than a mere issue that falls for decision” (at [95]); third, that what is a matter is to be understood “by reference to the arbitration agreement” (at [96] (quoting Comandate at [235] per Allsop J as his Honour then was); and see the Full Court Decision at [157]); fourth, that “[a] ‘matter’ for the purposes of s 8(1) may or may not comprise the whole dispute in any given court proceeding” (at [97]) (noting that the task is “made difficult” where, as here, there is no defence (nor any draft defence in any proposed arbitration) cf ACD Tridon at [109] per Austin J); fifth, that the Court should not draw inferences favourable to an applicant who has elected not to furnish a draft points of defence and who instead relies on non-specific assertions as to proposed defences (otherwise, there is a risk that the “matter” will, by reason of the defendant’s election not to adduce material it is within the defendant’s control to adduce, be mischaracterised); and, sixth, that while a matter raised in defence might affect the characterisation of the matter, that will (in part) be subject to the terms of the particular arbitration agreement, to which it is appropriate to turn.
  4. Bianca notes that in Recyclers of Australia Pty Ltd v Hettinga Equipment Inc (2000) 100 FCR 420; [2002] FCA 547 (Recyclers), Merkel J said (at [18]-[19]):

18. … The scope of the matter is to be ascertained from the pleadings and from the underlying subject matter upon which the pleadings, including the defence, are based …

19. The manner in which a claim or a defence is pleaded is of importance to, but is not determinative of, the characterisation of the “matter” …

and that in the Full Court Decision, it was said (at [157]) that:

157. … If the proper construction of the agreement requires a focus on individual disputes or requires a certain connection between the necessary resolution of an issue with the operation of an operative document, then close attention will be required to each individual issue or dispute to identify that connection, and so to identify the “matter”…

  1. In summary, Bianca submits that none of the matters the subject of the present proceeding is governed or controlled by the Hope Downs Deed; and that, although HPPL and Gina foreshadow reliance on several clauses of the Hope Downs Deed in defending the proceeding, that fact is insufficient to trigger the arbitration agreement (pointing to the reasoning of Bathurst CJ in the Court of Appeal Decision as recognition of this). It is said that the reliance placed by HPPL and Gina on the Hope Downs Deed is not tenable, as a matter of construction, even if regard is had only to the approaches adopted by the Full Court and High Court to the construction of the arbitration agreement; and that neither approach supports the conclusion that the “very different” matters raised in the statement of claim in this proceeding fall under the Hope Downs Deed. Further, although it is said that this is not necessary to decide, Bianca’s position is that a number of the matters should properly be characterised as non-arbitrable (including the s 247A relief sought by Bianca in the present case).
  2. Insofar as the arbitration agreement captures “any dispute” under the Hope Downs Deed, HPPL submits (and I accept) that there is every reason in this context not to confine “dispute” narrowly to issues or parts of a dispute or of a controversy (referring to the High Court Decision at [43]; the Full Court Decision at [201]); and that the arbitration agreement in cl 20 of the Hope Downs Deed should be construed broadly to include a dispute that contains a substantial issue concerning the exercise of rights or obligations in the Hope Downs Deed, or a dispute that concerned the existence, validity or operation of the Hope Downs Deed as a substantial issue or a dispute the resolution of which was governed or controlled by the Hope Downs Deed (referring to the Full Court Decision at [193], [204]).
  3. It is noted by HPPL that Bianca accepts (at [41] of her submissions) that the characterisation of the “matter” depends on the scope of the arbitration agreement. That is, it is submitted that if the arbitration agreement is to be construed broadly, then the “matter” ought also to be characterised broadly (see the Full Court Decision at [110], [152], [156]-[157]; Le Miere J (No 10) Decision at [121]). HPPL submits that, looked at holistically, the substance of a dispute in its inter-connected character may well fall within the arbitration agreement (see the Full Court Decision at [157]; Le Miere J (No 10) Decision at [121]). Given the breadth of the construction of the arbitration agreement adopted by the Full Court and High Court it is submitted that a similarly broad view must here be taken of the relevant “matter”.
  4. Furthermore, HPPL says that it is not necessary here finally to determine whether the matter falls within the scope of the arbitration agreement – rather, that it may be sufficient for this to be satisfied to the standard of a prima facie case (referring to the Full Court Decision at [145]-[146]; Le Miere (No 10) Decision at [114]). It is said that that is consistent with the Commercial Arbitration Act itself, as s 8(1) only requires the matter to be the “subject of the arbitration agreement” and s 16(1) accords the arbitral tribunal the ability to rule on its own jurisdiction. It is submitted that Bianca’s reliance on the Court of Appeal Decision to contend that the question as to whether the matter is the subject of an arbitration agreement should be determined finally (referring to Bianca’s submissions at [33], [35]) is misplaced because the Court of Appeal Decision did not involve an application under Commercial Arbitration Act, s 8.
  5. It is relevant, then, to turn to the pleadings as they presently stand. The four broad causes of action advanced by Bianca are: claims for breaches of trust ([568]-[621], [662]-[668] of the statement of claim), claims for breaches of directors’ duties ([622]-[633], [669]-[671] of the statement of claim), oppression claims ([634]-[660], [672]-[681] of the statement of claim) and breach of contract claims ([661], [682] of the statement of claim). HPPL says that these claims all “quintessentially” concern Gina’s exercise of control over HPPL and, in particular, the failure of HPPL to pay dividends. It is said that this was the basis upon which Bianca sought and obtained judicial advice to commence this proceeding (referring to the Judicial Advice Decision at [6]-[8]); and it is submitted that this is consistent with the interconnected way Bianca has pleaded her claims (HPPL referring by way of example to the statement of claim at [681]). Bianca, as I explain below, cavils with the characterisation of the claims made in the proceeding as a single interconnected matter; and argues that the submission as to the dividends being at the heart of the dispute ignores the different ways in which the dividend claims in the present proceeding are made compared to the other proceedings.

Statement of claim

  1. The statement of claim was filed on 21 March 2017. Bianca argues that there is no relevant commonality, similarity or connectedness between the claims made in the Federal Court proceeding or the proceedings in the Supreme Court of Western Australia to which reference is made in the Hope Downs Deed (or, for that matter, in the “unsworn draft” affidavit of John) and those made in the present proceeding.
  2. As to the allegations of breach by Gina of her duties as trustee at all times during FY10-FY15 (see the declarations sought at [662]; [663]; [664]), these are pleaded: first, by reference to the matters alleged at [572]-[581] on the basis of a failure to avoid conflicts of interest; second, by reference to the matters alleged at [582]-[591], [594]-[603] and [608]-[617], being matters relating to the passing of resolutions, the alleged failure to pursue HPPL and its directors concerning the underpayment of dividends and misuse of corporate funds; and third, by reference to the particular breaches alleged at [592]-[593], [604]-[607], [618], [619] and [620].
  3. As to the alleged breaches by reference to a failure to avoid conflicts of interest, it is alleged:
    • (at [572]) that at all times, prior to 28 May 2015, there was a real and possible conflict between the duties owed by Gina to HPPL (the “GHR HPPL Duties”) (see at [393]) and Gina’s general duties as trustee (the “GHR General Trustee Duties”) (see at [568]-[569]), or further and alternatively, specific duties owed by Gina as trustee (the “GHR Specific Trustee Duties”) (see at [570]-[571]) (the “GHR Specific Trustee Duties” including the duty to consider whether there was any claim against HPPL involving “HPPL’s failure to pay dividends or underpayment of dividends” where such conduct was oppressive (see at [570.3]), to consider whether to demand payment from HPPL of such amounts (see at [570.4]), so to demand (see at [570.5]) and to commence oppression and derivative proceedings concerning the same (see at [570.6])); particulars of the alleged conflict refer back to the matters alleged at [582]; [594]; and [608]; and, at [573], that Gina took no, or no sufficient, steps to avoid those conflicts;
    • (at [574]) that, in the alternative, there was a real and sensible possibility of conflict between Gina’s duty to HPPL and her duty to the beneficiaries of the HMH Trust, by reason of the matters alleged at [572]; and (at [575]), that Gina took no, or no sufficient, steps to avoid that conflict;
    • (at [576]) that, by reason of the matters alleged at [572] and [573] or alternatively [574] and [575], Gina breached her fiduciary duty to the beneficiaries to avoid conflicts;
    • (at [577]) that at all relevant times, prior to 28 May 2015, there was a real and sensible conflict between “GHR’s Personal Interest” (defined at [392]) and the “GHR General Trustee Duties” (as defined), or further and alternatively the “GHR Specific Trustee Duties” (again, as defined); that conflict particularised by reference to the matters at [587], [594], [608]; and at [578] that Gina took no, or no sufficient, steps to avoid that conflict;
    • (at [579]-[580]) that there was a real or sensible possibility of conflict between “GHR’s Personal Interests” and her duty to the beneficiaries of the HMH Trust, and that she took no, or no sufficient, steps to avoid that conflict; and
    • (at [581]) that by reason of the matters alleged at [577] and [578] or alternatively [579] and [580], Gina breached her fiduciary duty to the beneficiaries to avoid conflicts.
  4. At [582]-[591], there are allegations concerning Gina’s voting (and abstaining from voting) at general meetings of HPPL held on 12 October 2011, 31 October 2011 and 27 April 2012 on resolutions allegedly in accordance with her duty to HPPL and “GHR’s Personal Interests” but allegedly contrary to the best interests of the beneficiaries (see the meetings and resolutions pleaded at [225]-[230]; [231]-[235]; and [294]-[304], referred to above). In respect of each of these resolutions, it is alleged that Gina (who used her personal shares to vote in favour of the motions, thereby carrying them, and abstained from voting as trustee) was in a position of conflict, which she failed to take steps to resolve, including because as trustee she was required to vote against the resolutions (and, if they passed, consider whether to commence oppression proceedings or derivative proceedings for breach of directors duties) (see at [582]-[591]). It is alleged that Gina breached her duties as trustee by, inter alia, failing to vote against the resolutions and failing to pursue such proceedings against HPPL and its directors (see at [592]-[593]).
  5. At [594] to [603], it is alleged that Gina breached her obligations as trustee by failing to pursue HPPL and its directors concerning the alleged underpayment of dividends on the basis that she was in a position of potential or actual conflict because her duties as trustee required her to consider instituting, and institute, oppression proceedings and derivative proceedings for breach of directors duties in response to the alleged underpayment of dividends, but that this was in conflict with: her duties to HPPL (see at [594] and [596]) (including, her duty to be involved in decisions about dividends) which she took no steps, or no sufficient steps, to resolve (see at [595] and [597]); and “GHR’s Personal Interests” (see at [599] and [601]) which, again, it is alleged that she took no steps, or no sufficient steps, to resolve (see at [600] and [602]).
  6. At [608] to [617], it is alleged that Gina breached her duties to the beneficiaries by being in a position of actual or potential conflict in relation to the alleged misuse of corporate funds (see at [605]) by reference to the matters alleged at [217]-[219], [349]-[354], [355]-[360], [361]-[369] and [370]-[380]; that conflict being between her duties as trustee (which it is alleged required her to consider whether to institute, and institute, oppression proceedings and derivative proceedings for breach of directors duties in relation to the alleged misuse of corporate funds), on the one hand, and on the other hand, her duty to HPPL (see at [608] and [610]), which conflict it is said she took no steps, or no sufficient steps, to alleviate (see at [609] and [611]) and “GHR’s Personal Interests”, including to maintain control over HPPL ([613] and [615]), and again which it is said she took no steps, or no sufficient steps, to alleviate ([614] and [616]).
  7. The particular breaches of trust that are alleged relate to: failing to vote as trustee against the resolutions put at the general meetings referred to above (see at [592]-[593]); failing to take action against HPPL in response to the alleged underpayment of dividends (see at [604]) and misuse of corporate funds (see at [605]-[607]); failing to maintain trust accounts (see at [618]) by reason of the matters alleged at [110]-[115] (alleged failure to audit the accounts for the purpose of concealing from the beneficiaries the true value of the HMH Trust’s interest in HPPL); effecting amendments to the HMH Trust accounting requirements (by reason of the matters alleged at [110], [115]-[120]) (it being alleged that the amendments were made to conceal from the beneficiaries the true value of the HMH Trust’s interest in HPPL (see at [619]); and breach of duties as trustee in respect of the April 2012 vesting amendments alleged at [305]-[308] (see at [620])).
  8. As to the alleged breach by Gina of her duties as a director of HPPL, this is pleaded by reference to the matters alleged at [628]-[631] of the statement of claim. Those paragraphs plead the following conduct as amounting to breaches of directors’ duties owed to HPPL:
    • (at [628]) not causing HPPL to declare any discretionary dividends in FY10 to FY14 (see at [486]-[495]); and causing HPPL to make provision for discretionary dividends in FY14 to FY16 but not to pay those dividends (see at [501]-[509]), for the alleged purpose of ensuring that the beneficiaries of the HMH Trust did not receive the benefit of any dividends from HPPL (see at [496], [497]; [510]) (defined as the “Minimise Dividend Purpose”);
    • (at [629]) the under-calculation of Mandatory CSS Dividends payable (by reason of the matters pleaded in [511]-[514]) for the “Minimise Dividends Purpose”);
    • (at [630]) causing HPPL to enter into contracts and to pay out its corporate funds: otherwise than in good faith in the best interests of HPPL as a whole; improperly to gain an advantage for herself; improperly to cause a detriment to HPPL; other than for a proper purpose; and without the degree of care and diligence that a reasonable person would exercise if he or she was a director or officer of HPPL in HPPL’s circumstances and held the offices and had the responsibilities that Gina had (based on the conduct pleaded at [217]-[219], [349]-[354], [355]-[360], [361]-[369]; [370]-[380]); and
    • (at [631]) calling general meetings on 12 October 2011, 31 October 2011 and 27 April 2012 and putting the resolutions passed at those meetings (see at [255]-[230]), being the resolutions passed at the 12 October 2011 general meeting concerning a change to HPPL’s Articles of Association to require each director not to engage in conduct which would bring the company into disrepute or otherwise adversely affect its commercial interests, not to misuse confidential information(see at [231]-[235]) being the resolutions passed at the 31 October 2011 general meeting concerning a resolution to remove Bianca as a director of HPPL; and (see at [294]-[304]) being the resolutions passed at the 27 April 2011 general meeting concerning a resolution to alter HPPL’s Articles of Association to amend rights associated with CS Shares and D Class preference shares;
  9. Mr Watroba is alleged to have been involved in Gina’s alleged breaches in not declaring and paying sufficient discretionary dividends in FY10 to FY14 and providing for but not paying discretionary dividends in FY14 to FY16 (see at [628]) and in under-calculating CS Dividends (see at [629]); the allegation being that Mr Watroba considered and acted on the basis that Gina had complete control of HPPL including the decisions as to whether or not to declare and pay a dividend (see at [632]).
  10. Mr Newby is alleged to have been involved in Gina’s alleged breaches (see at [630]) in making payments the payments alleged at [217]-[219], ([349]-[354]; [355]-[360], [361]-[369] and [370]-[380]; on the basis that it is alleged that Mr Newby knew that those expenses were incurred and not taken steps to prevent such payments (see at [632]).
  11. As to the claim of oppression (see [634]-[649] of the statement of claim), reliance is placed on the entirety of the conduct of, inter alia, Gina and HPPL that is alleged in the pleading (see at [681]). Pausing here, this is an allegation on which the defendants place much emphasis in support of, inter alia, their primary position that this proceeding concerns a single “matter” or dispute because the underlying factual controversies are relied upon for each of the causes of action advanced by Bianca. I return to this point in due course.
  12. At [634]-[640], it is alleged that HPPL did not pay discretionary dividends in FY10 to FY14. At [641] it is alleged that this was contrary to the interests of members of HPPL as a whole by reference to [81] (which alleges that distribution of HPPL dividends was the only means of beneficiaries receiving economic benefit from the HMH Trust’s principal asset, in turn referring to the allegations at [78] and [79], concerning restraints on sale of HPPL shares) and [420] (which alleges that during FY08 to FY16 HPPL had sufficient profits, by reference to its large profits and the personal expenditure, to declare and pay very large discretionary dividends because it made a series of other payments (as pleaded in numerous paragraphs of the pleading, namely, key management payments ([395.12], [399.12], [401.12], [404.17], [406.20], [409.19], [411.19], [414.18], [416.16]); a B Class dividend in FY 08 ([421]-[423]); a loan to John ([518]-[521]); Gina’s legal fees in the Removal Proceeding ([349]-[354]); Ginia’s legal fees and other expenses ([355]-[360]); PwC expenses ([217]-[219]); Hope’s Settlement Advances ([361]-[369]); payment of HPPL trustee costs ([370]-[380]); HMF Foundation Advances ([527]-[533]); various property expenses and costs ([522]-[526]; [534]-[537]; [538]-[541]; [542]-[545]; [546]-[549]; [550]-[553]); payment for other investments; provision for additional dividends in FY14 to FY16 ([458]; [466]; [478]; and the capacity to pay double “Mandatory CSS Dividends” shares ([335]-[348])).
  13. Pausing here, HPPL maintains that the above allegation demonstrates: the relationship between the payment of dividends and the HMH Trust; the connection between the corporate expenditure and the alleged non-payment of dividends; and the reliance on dividends provided for but not paid (which HPPL claims was in accordance with the Hope Downs Deed).
  14. At [642], it is alleged that this conduct was oppressive (repeating the particulars to [641]) and that Gina stood to benefit from “as little as possible dividends being paid” including because: that would deplete funds available for HPPL to pay her salary, bonus and other benefits; that would provide funds to the HMH Trust and the beneficiaries to take legal action against her; and that would diminish the effectiveness of threats Gina had made in relation to the “September 2011 Breaches” (referring to the allegations at [211]-[213]; and see [133]). It is alleged that Gina did not require dividends because she was able to use her control of HPPL to pay herself a significant salary, bonuses and other compensation as well as having HPPL use its corporate funds for her benefit. Again, HPPL says this allegation demonstrates the interconnected nature between the allegations of breach of trust and the alleged underpayment of dividends.
  15. At [643]-[647], it is alleged that HPPL did not declare or pay all the dividends it provided for in FY14 to FY16 (which HPPL claims was in accordance with the Hope Downs Deed). At [648] it is alleged that the said conduct was contrary to the interests of the members of HPPL as a whole and at [649] that the conduct was oppressive.
  16. Apart from the declaratory relief sought as to the alleged breaches of duty as trustee, Bianca seeks a variety of other relief, including: pursuant to s 1317H of the Corporations Act, or equitable compensation or an account of profits, an order requiring Gina to pay HPPL the amounts alleged to have been paid in misuse of corporate funds (see at [671]); by way of relief for the alleged oppressive conduct, an order (see at [672]) for the payment by HPPL to Bianca of a dividend of not less than $2.2b, orders under s 233 regulating the affairs of HPPL so that Mr Watroba and Mr Newby cannot be involved in the management of HPPL or its related bodies corporate (see at [673]; [674]) and other management orders in relation to HPPL (see at [675]). Declaratory and other relief is sought as to the 2012 amendments of HPPL’s Articles of Association (see at [676]-[677]). An order is also sought for Gina to pay to HPPL the amounts identified at [671] (on the basis of relief against oppression, those being the payments the making of which is alleged to have amounted to oppression) (see at [678]); and an order is sought pursuant to s 241 of the Corporations Act for the appointment of an independent person to investigate the financial affairs of HPPL (see at [679]).
  17. As part of the relief claimed in the statement of claim (at [680]), an order is sought that Gina swear or affirm an affidavit setting out the matters listed at [680.6]-[680.21]. That relief is claimed by reason of the matters pleaded at [680.1]-[680.5], including: (at [680.1]) Gina causing HPPL to misuse its corporate funds (as alleged at [630]); (at [680.2]) the oppressive conduct of HPPL’s affairs in relation to that misuse of funds (as alleged at [658]-[660]); and (at [680.4]-[680.5]) that Bianca has sought information that would enable her to determine whether “such costs” (seemingly referring to the costs referred to at [680.3]) and other information as to the expenses of HPPL and has not received substantive responses to all of those requests.
  18. At [666] and [667], equitable compensation or an account of profits is sought from Gina or HPPL in respect of discretionary and CSS dividends that it is alleged HPPL would have declared if Gina had properly discharged her duties as trustee. That relief is also sought on the basis of the allegations made in [621], to the effect that HPPL is liable to Bianca as an accessory to Gina’s alleged breaches of trust, including by reason of all matters referred to in Chapter III of the pleading (defined as GHR’s Control of HPPL) (see at [38]-[66]).
  19. At [668] an account is sought of the affairs of the trust, including giving Bianca the liberty to cross-examine Gina; that relief being sought on the basis of the alleged failure of Gina to pursue HPPL for the alleged underpayment of dividends (as alleged at [594]-[604]).
  20. As to the claim in contract, at [682] damages are sought from HPPL for breach of contract for the alleged underpayment of CSS Dividends (as alleged at [661], which incorporates the matters alleged at [287], [298], [436], [448], [455], [461], [467] and [480]).

Defences under the Hope Downs Deed

  1. No defences have yet been filed but, in their submissions, Gina and HPPL have identified the matters that they say will be raised by way of defence.
  2. In response to the proceedings, Gina says that she relies on the Hope Downs Deed in five respects. Gina submits that the raising of these defences demonstrates that the proceedings concerns disputes “under the Deed”.
  3. First, in respect of the allegations that HPPL underpaid discretionary dividends, Gina will raise cl 5 of the Hope Downs Deed. It is said that, by this clause, the beneficiaries of the HMH Trust secured a right to receive the economic benefit of dividend payments that exceeded, and potentially significantly exceeded, their entitlements that otherwise existed; and that this provision was of significant economic benefit to Bianca and her siblings.
  4. In this regard, Gina refers to the dispute that arose (now the subject of the French Arbitration) following the issue of a notice of breach on 1 December 2011 by HPPL to Bianca, John and Hope pursuant to cl 5(c)(i) of the Hope Downs Deed , alleging a breach of the Hope Downs Deed (that it is said would in accordance with clause 5(c)(iii) have disentitled Bianca, John and Hope from dividends under cl 5 until that breach had ceased and was remedied). It is noted that: the breach was disputed by Bianca, John and Hope; a notice of a dispute under cl 20 of the Hope Downs Deed was given by HPPL and Mr Fitzgerald was appointed as arbitrator; and the parties, including Bianca, John and Hope filed pleadings, in the form of points of claim, defence, reply and cross-claim. Gina submits that (other than as set out in her submissions) the arbitration has remained dormant “predominantly by reason that Bianca made claims in the Federal Court that the Hope Downs Deed was void and the High Court Decision was pending”.
  5. Gina further says (and places emphasis on this) that there is a dispute as to whether dividends are payable under cl 5 to A Class shareholders (Gina and Bianca) or the B Class shareholder (Gina only); and that HPPL has made provision for the payment of dividends payable under the clause, but has not paid them. In this regard, Gina refers to correspondence from Bianca to HPPL and the response from HPPL (objection to the admission of which evidence was made by Bianca).
  6. It is submitted by Gina that any determination as to whether or not there has been an underpayment of dividends, as alleged in this proceeding, must be contingent upon a determination of the proper dividends payable under cl 5 of the agreement, including whether there has been a breach of the Hope Downs Deed. It is said that that dispute is obviously “under” the Hope Downs Deed and that it is already before an arbitrator.
  7. Further, it is noted that particular complaint is made in this proceeding in respect of the dividends that were “provided for” but not paid in FY14 to FY16 (see at [643]-[647]). It is alleged that HPPL made provision for dividends of $99m in FY14 (see statement of claim at [458.1]), $261m in FY15 (see statement of claim at [465.1]) and $400m in FY16 (see statement of claim at [478.1]). It is noted that Bianca alleges that those provisions: constituted a breach of directors’ duty by Gina (see at [628], [501]-[510]) and Mr Watroba (see at [632], [628], [501]-[510]) which was in turn oppressive (see at [673], [675], both referring to [628]); and thus demonstrates that HPPL’s conduct in not paying greater dividends was oppressive (because the provisions demonstrated that HPPL had the capacity prudently to pay the amount of dividends it had provided for and that “HPPL considered that it could prudently declare and pay those dividends and that it would be appropriate and in the best interest of HPPL as a whole to declare and pay those dividends”) (see [420] and [648] of the statement of claim, particulars 6 and 7); and are part of the justification for an order under Corporations Act, s 233 that HPPL pay Bianca a dividend of not less than $2.2b (see at [672]). Gina submits in this regard that the Hope Downs Deed “may provide a complete answer to these claims”, so that they are disputes which (she says) must be “under” the Hope Downs Deed, even on the narrowest test.
  8. Second, it is said by Gina that she, and Messrs Watroba and Newby, will raise cl 8 in their defence in this proceeding in various ways. These are as follows.
      <li “=””>(i) that Bianca seeks relief in this proceeding which is inconsistent with her acknowledgement in cl 8 of the Hope Downs Deed that Gina may continue to be involved in the management of HPPL (namely that Bianca seeks to prohibit Gina “from personally being a director (including a shadow director), officer or employee of [HPPL] or any of its related bodies corporate” (see prayer 10.2)). It is said that whether Bianca is entitled to seek, or entitled to, that relief will depend upon the proper construction of cl 8 of the Hope Downs Deed;
  9. <li “=””>(ii) that Bianca seeks relief which would inhibit Gina’s control of HPPL in the form of voting at general meetings of HPPL by seeking relief such as: removing Messrs Watroba and Newby as directors (see prayers 8 and 9), without Gina’s consent as the majority shareholder; that HPPL’s Articles of Association may not be altered other than by “the written, unanimous consent of shareholders” (see prayer 10.1), thereby taking away the control Gina enjoys as the majority shareholder in respect of HPPL’s Articles of Association; prohibiting Gina from using “her direct or indirect voting power to appoint more than one director” of HPPL and providing her with the power to appoint a director, thereby taking away the control that Gina enjoys as the majority shareholder in respect of the board (and giving some of that control to herself) (see prayers 10.3 and 10.4); and restricting HPPL to paying two types of dividends (see prayer 10.10); and<li “=””>(iii) that the fact that Bianca, and each of the other beneficiaries as parties to the Hope Downs Deed, acknowledged that Gina would “maintain full ongoing control and management of HPPL” including as an executive or non-executive chairman, may be a defence to the allegations that Gina breached trust by having a conflict or potential conflict between her duties to HPPL and duties to the beneficiaries (see at [572]-[576], [582]-[586], [594]-[598], [608]-[612]) (to some of which HPPL is said to have been an accessory, see at [621]). Gina’s defence, it is said, will be that cl 8 demonstrates that, from the time that the Hope Downs Deed was entered into (which precedes those alleged breaches), the beneficiaries had provided their consent for Gina continuing to act as a director of HPPL whilst being the trustee (noting that in the period prior to entry into the Hope Downs Deed, John had complained about the alleged conflict in Gina’s conduct as director and controller of HPPL and in her performance as trustee of the HMH Trust).

  10. Third, it is said that reliance will be placed on cl 7(e) of the Hope Downs Deed and, in particular, that Gina will contend that the prohibition in cl 7(e) has been breached by Bianca seeking relief concerning the composition of the HPPL’s board; and that Bianca ought to be restrained from continuing to breach her undertaking by seeking that relief. Similarly, Gina says that she will raise defences under cll 7(a) and (c) of the Hope Downs Deed. It is said that the present proceeding “could have an adverse impact on” HPPL’s rights under the HDJVA, because it “could” give the Rio Tinto parties the right to purchase HPPL’s share in Hope Downs because: the relief sought by Bianca: restricts the majority shareholder’s rights (see prayers 10.1 and 10.3); prohibits Gina from being involved in the management of HPPL (see prayer 10.2); and mandates the appointment of a non-family member to the board of HPPL as chairman (thereby giving them the deciding vote in the event Bianca’s and Gina’s nominee disagree) (see prayers 10.8 and 10.9), which it is said may result in HPPL ceasing to be controlled by “Hancock Family Group Members”.
  11. For Gina, it is said that she will contend that these undertakings have been breached by Bianca in seeking relief concerning the composition of the HPPL’s board, and that Bianca ought to be restrained from continuing to breach her undertaking by seeking that relief. It is further said that Messrs Watroba and Newby, each of whom is alleged to have been involved in Gina’s alleged breach of director’s duties (see statement of claim at [670]), will also raise those defences (noting Mr Watroba is a party to the Hope Downs Deed; and that even though Mr Newby is not a party to the deed he would fall within the definition of “party” in Commercial Arbitration Act, s 8 as a person “claiming through or under a party to the arbitration agreement”, by force of s 2(1)) (see the High Court Decision at [66]-[76]).
  12. HPPL similarly says that it will invoke cll 5, 7(a), 7(c), 7(e) and 8 of the Hope Downs Deed in answer to the claims made against it, on the basis that these provisions: preclude Bianca from bringing the claims; necessarily inform the question whether Gina has breached any duty or is acting oppressively; and determine the scope of the relief, if any, to be ordered.
  13. In particular, as to cl 5 (which requires HPPL to pay minimum dividends to its shareholders), it is said that this will be relied upon in respect of Bianca’s claims concerning the failure to pay dividends and that disputes concerning cl 5 are unarguably disputes under the Hope Downs Deed (noting that Bianca commenced her own claim in what is now referred to as the French Arbitration under cl 20 of the Hope Downs Deed seeking the payment of the minimum dividends under cl 5; and submitting that there is no reason in principle to treat a claim based on cl 5 any differently from a defence based on cl 5).
  14. As to cll 7(a) and 7(c), it is said by HPPL that these clauses are both directed towards ensuring that HPPL (and its subsidiary, HDIO) remain wholly owned and controlled by Hancock Family Group Members (because under the HDJVA with Rio Tinto, Rio Tinto has a right to acquire HDIO’s interest in the Hope Downs joint venture in the event that HDIO “ceases to be an entity wholly owned and controlled by Hancock Family Group Members and/or entities wholly owned and controlled by them” – see cl 13.3 of the HDJVA; referring to the 2015 Decision at [164]-[167]). It is noted that amendments were made to HPPL’s Constitution at about the same time which had the effect of restricting the transferability of its shares to “Hancock Family Group Members” (referring to the 2015 Decision at [55]). HPPL says that cll 7(a) and (c) can be relied upon in defence of Bianca’s claims regarding Gina’s control of HPPL.
  15. As to cl 7(e) (which precludes Bianca from challenging the rights of Gina to her right, title or interest in HPPL), the cognate provision to cl 7(b) (which precludes Bianca from challenging the right of any Hancock Group Member to any of the “Hancock Group Interests”), HPPL notes that cll 7(b) and 7(e) were construed by the Full Court as covenants not to sue, which could be set up as a complete defence as a plea in bar (referring to the Full Court Decision at [233]-[243]; and to McDermott v Black [1940] HCA 4; (1940) 63 CLR 161 at 186-188; [1940] HCA 4 per Dixon J, as his Honour then was). HPPL says that it will be argued that cl 7(e) precludes Bianca’s claims about Gina’s control of HPPL. Further, it is submitted that, to the extent that the “governed or controlled” test remains relevant, there is clearly a sustainable argument that cl 7(e) would “govern or control” Bianca’s claims (referring to the Gleeson Decision at [632]-[633]).
  16. As to cl 8 (which contains an acknowledgment that Gina, during her lifetime, would maintain full ongoing control and management of HPPL), HPPL says that the same reasoning applies as that which was applied by the Full Court to cl 4 (that being the cognate provision which contains an acknowledgment that the “Hancock Group Interests” have been and remain beneficially owned by the Hancock Group Member that purports to own them) should be applied – the Full Court construing cl 4 on the basis that there was a sustainable argument that it gave rise to an estoppel by deed (see the Full Court Decision at [216]-[217]). It is said that cl 8 will also be relied upon in defence to Bianca’s claims.
  17. Bianca submits (at [160]) that only “low” weight is to be given to the issues to be raised by way of defence, citing the Court of Appeal Decision at [130]. Gina submits that this is inconsistent with the approach taken by the High Court (referring to the plurality decision at [43]). It is submitted that this makes plain that the High Court considered the nature of the defences to be raised in considering the nature of the dispute.

Gina’s submissions as to “matter”

  1. Gina submits that, in accordance with the High Court’s approach, it is appropriate to ask whether a reasonable person in the position of the parties would have considered the present dispute would be subject to confidential arbitration or heard and determined publicly in open court (see High Court Decision at [48]). It is submitted that the liberal construction required of cl 20 would extend at least to:

… a dispute that contained a substantial issue that concerned the exercise of rights or obligations in the agreement, or a dispute that concerned the existence, validity or operation of the agreement as a substantial issue, or a dispute the resolution of which was governed or controlled by the agreement. [in the words of the Full Court Decision at [193]].

  1. Gina’s primary position is that, as in the Federal Court proceeding, this proceeding concerns a single “matter” or dispute, rather than a number of discrete matters or dispute, because the underlying factual controversies are relied upon for each of the causes of action advanced by Bianca “and, as such, the causes of action are intermingled”. Gina’s argument in this regard is as follows.
  2. First, that almost every allegation made in the pleading is relied upon in support of the oppression remedies sought (see [681] of the statement of claim), by which Bianca relies on all the matters pleaded in the statement of claim in support of the relief she seeks under Corporations Act, s 233 (consistent, it is said, and referring to Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672 at [6] per Spigelman CJ, with the authorities that oppression must be assessed in light of all of the circumstances .
  3. Second, that (even leaving aside [681]) the oppression suit encompasses the entire breach of contract and breach of directors’ duties claims because: first, the alleged underpayment of “Mandatory CSS Dividends” (which is said to constitute the breach of contract) is alleged to constitute a breach of directors’ duty by Gina (see [629]); and second, all of the alleged breaches of directors’ duty; and Messrs Watroba and Newby’s alleged involvement in the same, are relied upon as part of the alleged oppressive conduct (see [675] which relevantly adopts [628] to [633], being the alleged breaches of trust and involvement; see too [673] and [674]).
  4. Third, that a core focus of the pleading is that of dividends (noting that reliance is placed on this issue for each of the three main causes of action, albeit that the breach of contract claim is only concerned with the “Mandatory CSS Dividends”).
  5. Reference is made, in particular, to: the allegation that the alleged underpayment of dividends gave rise to breaches of directors’ duty by Gina (see at [628]), in which Mr Watroba is alleged to have been involved (see at [632]); the allegation that the alleged underpayment of dividends is oppressive (see at [672], [634]-[649]), as are the alleged breaches of directors’ duty associated with the alleged underpayment (see [675], which relevantly adopts [628]), and that an order is sought that HPPL pay Bianca a dividend of not less than $2.2b (see at [672]); decisions concerning whether or not to pay discretionary dividends are alleged to have resulted in Gina breaching trust due to a conflict between her duties to the beneficiaries, on the one hand, and her duties to HPPL and alleged “Personal Interest” inter alia in maintaining control over HPPL, including as to whether it would pay dividends (see e.g. [662] which relevantly relies upon [572], which in turn relies upon [582], [594] and [601]; [577] and the definition of Gina’s “Personal Interest” in [392]); the allegation that, by failing to take action against HPPL due to the alleged failure to pay discretionary dividends, Gina breached trust (see at [594] to [603]) and equitable compensation or an account of profits is sought from Gina or HPPL in respect of discretionary dividends that would have been paid had Gina properly discharged her duties as trustee (see at [666]). Similarly, it is noted that in respect of the alleged underpayment of “Mandatory CSS Dividends” (which is the basis of the breach of contract claim), equitable compensation is sought on the basis that Gina breached trust duties concerning the “Mandatory CSS Dividends”, by being in a position of conflict (see at [667], [572]-[581]) and failing to pursue HPPL in respect of the alleged underpayment, including by instituting oppression proceedings (see at [667], [594]-[604]).
  6. Fourth, that another core focus of the allegations in the statement of claim is that Gina has, and has misused, a position of control over HPPL including concerning dividends and the use of corporate funds (see at [61] in particular). It is noted that Gina’s control over HPPL is addressed in Chapter III ([38]-[66]), and is not relevantly disputed, that Gina’s former control over the HMH Trust (the primary asset of which is 23.45% shareholding in HPPL) is addressed in Chapter IV ([67]-[94]); and Gina’s alleged objectives in using her control are outlined in Chapter V ([95]-[383]). Gina is alleged to have used this control to pass various resolutions at HPPL’s general meetings (see [225]-[230]; [231]-[235] and [294]-[304]) by which she is said to have breached her duties as trustee (see at [582]-[591] and [592]-[593]), breached her directors’ duties (see at [631]) and engaged in oppressive conduct (see [675], which adopts [631]; see too [650]-[657]). Gina is also alleged to have used this control in committing, and involving officers’ of HPPL in, alleged breaches of trust in September 2011, concerning the vesting of the HMH Trust (defined in [209] by reference to [125]-[157], [172]-[178] and [185]-[208]). That allegation is relied upon as justifying the relief that is sought under s 233 (in [675]) (by reference to [214], which refers to the “September 2011 Breaches”).
  7. Fifth, that another focus of the proceeding is upon HPPL’s corporate spending. It is said that this, too, is intimately connected with the core focuses of control and dividends and with the various causes of actions pleaded. By way of example, reference is made to the allegation that HPPL not paying dividends was oppressive including because: it had sufficient profits as demonstrated by the corporate expenditure on various matters pleaded (see [641] and [420]); Gina stood to benefit from “as little as possible dividends being paid”, including because that would deplete the funds available for corporate expenditure on her salary, bonus and other matters (see [642], particular 3); Gina did not require dividends to be paid to her as shareholder because she caused HPPL to pay her “significant salaries, bonuses and other compensation” and caused HPPL to use its corporate funds for her benefit (see [642], particulars 4 and 5). It is noted that the pleading alleges that Gina breached trust by being in a position of conflict regarding that corporate expenditure (see e.g. [572], with reference to [608]) and by failing to pursue HPPL concerning the corporate expenditure, including by instituting oppression proceedings (see at [605]-[617]).
  8. Alternatively, Gina argues that the proceeding involves the following “matters” which must be referred to arbitration: the relief claimed by Bianca in each of the following parts of the statement of claim – Part A of Chapter IX (“Remedies: Breaches of Trust”) (save for [665]); Part B of Chapter IX (“Remedies: Breach of Directors’ and Officers’ Duties”); and Part C of Chapter IX (“Remedies: Oppression”), and the paragraphs of the statement of claim relied upon directly or indirectly in support of that relief; as well as Bianca’s unconscionability motion (i.e., motion (iii), which was filed on 11 June 2019).
  9. Gina says that if these matters must be referred to arbitration then it will be appropriate to stay the balance of the proceeding pending the arbitral determination (reference being made in the Full Court Decision at [334] in this regard).

HPPL’s submissions as to “matter”

  1. HPPL notes that the “matter”: is the relevant dispute or controversy between the parties; can arise by claim or defence; and is more than a mere issue that falls for decision (citing the Gleeson Decision J at [93]-[97]; the Full Court Decision at [155]-[156]; Le Miere (No 10) Decision at [118]-[119]). It is submitted that, even in the absence of pleaded defences, this Court should proceed on the same basis as Gleeson J and the Full Court (namely, that all of Bianca’s contentions will be in dispute) (referring to the Gleeson Decision at [169]; the Full Court Decision at [4]).
  2. HPPL argues that the present dispute is a matter the subject of the arbitration agreement, in that it is a dispute that contains a substantial issue concerning the exercise of rights or obligations under the Hope Downs Deed, or a dispute that concerns the existence, validity or operation of the Hope Downs Deed as a substantial issue, or a dispute the resolution of which may be governed or controlled by the Hope Downs Deed.
  3. HPPL’s alternative position is that if, contrary to its primary position, it were to be found that there are a multitude of separate “matters”, and that some but not all are the subject of the arbitration agreement, then there should be a stay of any such matters that are not the subject of the arbitration agreement. This is put on the basis that they are not the principal claims and that a stay would avoid the risk of inconsistent findings and the incurrence of unnecessary expense (reference being made to the Full Court Decision at [332]-[336]).
  4. In particular, it is submitted that even if Bianca’s s 247A application (which I consider separately in due course) is not considered to be part of the wider “matter” the subject of the arbitration agreement, the Court should still refuse to determine it. It is noted that, in an analogous context, courts have stayed applications for preliminary discovery on the basis that it would be “counterintuitive to determine it in circumstances where the Court has found that the matters raised by it are subject to a commercial arbitration agreement” (referring to Amcor Packaging (Australia) Pty Ltd v Baulderstone Pty Ltd [2013] FCA 253 (Amcor Packaging) at [48] per Marshall J).

Bianca’s submissions as to “matter”

  1. Bianca submits that this is not a case where the arbitration agreement requires a broader focus on the overall dispute; rather, that it is a case where the agreement requires a careful identification of the connection between each particular dispute and the Hope Downs Deed. She argues that what the Court of Appeal meant in the Court of Appeal Decision by a dispute that was “controlled or governed” by the Hope Downs Deed can be identified by the manner in which the Court of Appeal reasoned at [146]:

146 The other provisions of the Settlement Deed raised in answer to the claims of the respondents, whilst relevant to the outcome of the proceedings, do not of themselves govern or control the outcome of those claims. As HPPL correctly submitted, if established, they amount to breaches of various undertakings under the Settlement Deed. Such breaches may be relevant to a tribunal determining whether to grant the relief sought, but would not necessarily be determinative of the outcome. …

  1. It is noted that the Court of Appeal then proceeded to identify how the various clauses of the Hope Downs Deed relied on in defence of the application for removal of Gina as trustee would not preclude a court from granting the relief sought. Bianca argues that a dispute is not governed or controlled by the Hope Downs Deed merely because the Hope Downs Deed is relevant to the determination of the dispute (and that it is different if the Hope Downs Deed were determinative of the outcome).
  2. It is submitted that, in determining the scope of the arbitration agreement, it is unhelpful to suggest that HPPL has an “interest” in certain kinds of disputes being resolved in private arbitration (cf HPPL’s submissions at [111]); and that the Hope Downs Deed is not to be construed by reference to what is now in HPPL’s interests.
  3. Finally, in this context, it is submitted that it is not to the point that the Court of Appeal Decision was determined prior to the coming into force of the Commercial Arbitration Act. It is noted that by the time the Court of Appeal came to consider the Hope Downs Deed for the second time (i.e., the Leave Decision), the Commercial Arbitration Act was in force (referring to the 2013 Decision at [38], [82], where Bergin CJ in Eq held that s 8(1) governed the then stay application). It is noted that, despite the Commercial Arbitration Act coming into force, both Bergin CJ in Eq (in the 2013 Decision) and the Court of Appeal (in the Leave Decision) proceeded to apply the Court of Appeal Decision.
  4. It is submitted that one reason for the willingness of this Court and the Court of Appeal to continue to apply the Court of Appeal Decision after the introduction of s 8(1) was that, as the Full Court itself recognised, the “proper construction of the arbitration agreement is relevant to the focus one applies to the meaning of the word “matter” in any given circumstance” (the Full Court Decision at [157]) (cf Gina’s submission at [38]). Bianca submits that it is the construction of cl 20, as contained in the Court of Appeal Decision, that informs the way in which “matter” is to be approached, not the other way around.
  5. Bianca submits that a consideration of the claims advanced in the Federal Court proceeding makes clear that those claims concern matters that closely relate to the subject matter of the Hope Downs Deed but she contends that those claims find no reflection in the statement of claim in the present proceeding. Bianca emphasises that the central origin of the Hope Downs Deed was a desire by HPPL to quell a controversy sought to be ventilated by John in the Supreme Court of Western Australia in the period 2004 to 2006 (in relation to the title of HPPL to valuable mining assets) referring to the finding by Full Court at [203] (in a passage expressly approved by the High Court in the High Court Decision at [27]).
  6. Bianca submits that it is significant that in the present case, unlike in the Federal Court, no reliance is placed by Gina and HPPL on the releases in the Hope Downs Deed. It is said that the absence of such an allegation takes the present case outside the scope of the reasoning adopted by the Full Court and High Court. Indeed, it is submitted that the fact that no reliance is foreshadowed to be placed by the defendants on cl 6 of the Hope Downs Deed should give me pause when considering the stay application; and that the situation facing me is unique in that no other judge in any jurisdiction has been asked to stay a proceeding in the absence of any reliance by the defendants on the cl 6 releases. (Suffice it to say that I have given careful consideration to all of the submissions made in this matter.) The position of the defendants in this regard is that: it is not surprising that no reliance is to be placed on the cl 6 releases since the conduct of which Bianca complains is conduct that post-dates the Hope Downs Deed; but that the matters that will be relied upon by way of defence do raise other provisions of the Hope Downs Deed (as noted above).
  7. Emphasis is placed by Bianca on the fact that the substantive allegations in the proceedings in the Federal Court and subject of the High Court Decision mirrored in large part the allegations made in the unsigned affidavit of John (referring to the Gleeson Decision at [290] and the High Court Decision at [9]). Bianca says that no similar argument is advanced by Gina and HPPL in this Court; that it is not suggested by Gina or HPPL that there is “significant commonality” (or, indeed, any material commonality) between the allegations made in the unsworn affidavit and the allegations made in the statement of claim in this proceeding; nor is it suggested that the statement of claim in this Court reiterates claims made previously by John (a matter that Bianca says is highlighted by the absence of reliance on cl 6).
  8. Bianca emphasises the nature of the Federal Court claims and their close connection to the Hope Downs Deed and says that there are distinct allegations brought in the statement of claim in this proceeding: that, here, there is no attack on the title to the mining tenements held by HPPL but, instead, the claim proceeds on the basis that the title to those assets continues to reside in HPPL; and that nor does the statement of claim repeat any of the other claims brought by John in the Supreme Court of Western Australia. It is said that the present proceeding amounts to a “free-standing and separate piece of litigation without connection to the Hope Downs Deed or its subject-matter, which must be assessed on its own merits in order to determine whether it gives rise to a dispute under the Hope Downs Deed”.
  9. As to the claims advanced in the statement of claim, Bianca submits that the fact that the statement of claim is lengthy does not mean that the whole of the proceeding must be characterised as one inseverable matter (cf HPPL’s submissions at [86]; Gina’s submissions at [45]).
  10. Bianca identifies the following seven matters raised by the statement of claim:
    • Bianca’s s 247A application (seeking relief at prayer 2 of the statement of claim), which she says is wholly severable from every other aspect of the proceeding and is a matter under the Corporations Act;
    • claims of breach of trustee duties by Gina (reflected in the relief sought in part of prayer 3 and in prayers 4 and 5) (summarised at [662]-[667] of the statement of claim), which she says arise under the general law and the documents constituting the HMH Trust;
    • claims as to the improper use of HPPL funds by Gina for non-corporate purposes (see statement of claim at [630] and [671]) (this being reflected in the relief sought in part of prayer 3 and in prayer 6), which it is said arise under the Corporations Act, HPPL’s Articles of Association and the general law and is a matter distinct from the matters relating to non-payment of dividends (cf Gina’s submissions at [79]) even though a potential consequence of Gina’s use of corporate funds for non-corporate purposes was that HPPL failed to declare dividends;
    • a claim for oppression relating to payment of dividends (see prayer 7 and [634]-[649]; [672] of the statement of claim), which it is said is a matter that directly arises under the Corporations Act;
    • a claim under HPPL’s Articles of Association in relation to payment of dividends (Bianca claims that HPPL has breached a contractual obligation imposed by Art 3A of HPPL’s Articles of Association by failing to declare and pay dividends) (prayer 15; [661] and [682] of the statement of claim), which it is said arises under HPPL’s Articles of Association;
    • the future management of HPPL (see prayers 7, 8, 10, 11 and 12; and, in particular, [214]-[224], [628]-[634] and [673]-[675] of the statement of claim), which it is said arises directly under the Corporations Act and, in respect of which, Bianca emphasises the fact that nothing in the relief sought would “inevitably … result in HPPL ceasing to be wholly owned and controlled by “Hancock Family Group Members” (see cl 7(c) of the Hope Downs Deed) submitting that the relief sought could all be given with control continuing to reside in the “Hancock Family Group Members” as defined); and
    • a claim for oppression and derivative action (and “information gathering”) (referring to prayers 13 and 14 and, in particular, [679]-[680] of the statement of claim), which it is said arises directly under the Corporations Act.
  11. Bianca maintains that none of those matters is governed or controlled by the Hope Downs Deed. Bianca emphasises in relation to those matters that: each of the claims is pursued by her in her capacity as trustee; a number of the claims involve assertions that there were breaches of directors’ duties (claims relating to misuse of HPPL funds, failure to pay dividends and past mismanagement of HPPL), noting the public aspect of director’s duties (see International Swimwear Logistics Ltd v Australian Swimwear Company Pty Ltd [2011] NSWSC 488 at [106]); the public aspect of directors’ duties is reflected in the inability to ratify a breach of statutory duties (referring to Anglas Law Services v Pty Ltd (in liq) v Carabelas (2005) 226 CLR 507; [2005] HCA 23 at [32] per Gleeson CJ and Heydon J) and the potential for breach to give rise to disqualification; and the whole of the proceedings is not comprised by the “oppressive conduct” claim by reason of failure to pay dividends (cf Gina’s submissions at [37]-[46] and [54]), there being other distinct claims and causes of action advanced by her.
  12. Bianca says, by way of example, that she could be successful in obtaining large parts of the relief sought by her (referring to prayers 2, 4, 5, 6, 13 and 15) even if it were ultimately found that there was no oppressive conduct or no improper failure to pay dividends; and that she could succeed on her oppression claims even if there had been no improper failure to pay dividends. It is submitted that Gina’s characterisation of the “matter” also cannot stand with the proposition that the “matters” in the proceedings are, in part, determined by reference to the particular arbitration agreement, in that the arbitration agreement directs attention to the instrument or law which governs or controls the relevant claims and there are different instruments and laws governing or controlling different parts of Bianca’s claims.
  13. Bianca submits that it is an error to characterise the whole of the dispute regarding dividends as a single “matter” (cf HPPL’s submissions at [117]). She says that this characterisation proceeds from an erroneously broad construction of the arbitration agreement and an erroneously broad view of the subject-matter of these proceedings.
  14. As to the classification of the matters in the proceedings advanced by HPPL in its submissions (at [89]-[93]), Bianca says that [38]-[66] of the statement of claim (Chapter III) simply plead the factual basis for Gina’s control of HPPL and [67]-[94] of the statement of claim (Chapter IV) simply plead the factual basis for Gina’s control of the HMH Trust (not being allegations about Gina’s control of HPPL per se; cf HPPL’s submissions at [90]). It is further said that [95]-[383] of the statement of claim (Chapter V) plead the factual basis for the dual contentions that Gina was at all material times motivated by retaining control of HPPL and of restricting the ability of the beneficiaries of the HMH Trust to understand and scrutinise HPPL’s affairs (such purposes inferred from: amendments to the trust instrument in 1995 ([97]-[102], Part A of the statement of claim); the failure to provide the trust instrument to the beneficiaries ([103], Part B of the statement of claim); Gina’s attempt to remove Mr Hancock as a beneficiary ([104]-[109], Part C of the statement of claim); Gina’s refusal properly to audit the trust’s accounts ([110]-[124], Part D of the statement of claim); conduct in September 2011 calculated to induce John and Bianca not to challenge Gina’s appointment as trustee ([125]-[213], Part E of the statement of claim); Gina’s use of HPPL resources to facilitate her conduct in September 2011 ([214]-[224], Part F of the statement of claim); amendments to HPPL’s Articles of Association on 12 October 2011 ([225]-[230], Part G of the statement of claim); the removal of Bianca as a director of HPPL on 31 October 2011 ([231]-[235], Part H of the statement of claim); ceasing to pay dividends pursuant to HPPL’s Articles of Association art 3A, making related amendments to HPPL’s Articles of Association and taking related steps to deter or disable the beneficiaries of the HMH Trust from obtaining Article 3A dividends ([236]-[348], Part I of the statement of claim); causing HPPL to pay funds for the benefit of Gina in the proceedings to remove Gina as trustee ([349]-[360], Part J of the statement of claim); entering into an arrangement with Hope calculated to maintain Gina’s control over the HMH Trust and HPPL ([361]-[369], Part K of the statement of claim); and causing HPPL to be involved in the Removal Proceeding ([370]-[383], Part L of the statement of claim).
  15. It is submitted that it is “overly simplistic” to characterise Chapter V of the statement of claim as an allegation that Gina “misused her position of control over HPPL in various ways, including in relation to the alleged non-declaration of dividends” (cf HPPL’s submissions at [90]); and that “most” of Chapter V has nothing to do with dividends. While it is accepted that parts of Part I of Chapter V make allegations in respect of Gina causing HPPL to cease paying dividends, it is said that the allegations relate to a failure to pay dividends pursuant to HPPL’s Articles of Association art 3A.
  16. As to [384]-[393] of the statement of claim (Chapter VI), it is noted that these paragraphs plead interests that Gina had which were collateral to the HMH Trust and duties which Gina owed to HPPL as a director.
  17. As to Chapter VII of the statement of claim, it is noted that: [394]-[420] (Part A) plead HPPL’s profitability and capacity to pay large discretionary dividends in the period FY08 to FY16; [421]-[485] (Part B) plead the actual dividends paid by HPPL during that period; [486]-[517] (Part B) plead that Gina was, at material times, motivated by the purpose of ensuring that the beneficiaries of the HMH Trust did not receive the benefit of dividends from HPPL and that that purpose influenced the exercise of Gina’s offices as director of HPPL and as trustee of the HMH Trust; and [518]-[567] (Part C) plead that Gina caused HPPL to expend HPPL funds on non-corporate purposes and that Gina failed to exercise the functions of her office as trustee to prevent that occurring.
  18. It is similarly submitted that it is an error to characterise the allegations at [518]-[567] of the statement of claim as that Gina “has misused corporate funds which could have been used to pay dividends” (cf HPPL’s submissions at [91]). Rather, it is said that the allegation of expenditure on non-corporate purposes is a stand-alone allegation of expenditure for an improper purpose (in breach of directors’ duties).
  19. As to Chapter VII of the statement of claim, Bianca notes that [568]-[621] of the statement of claim plead breaches of Gina’s duties as trustee to which HPPL was accessory. It is said that the asserted conflict is, at its root, a conflict between Gina’s interest in using HPPL for her own private purposes and Gina’s duty to the beneficiaries of the HMH Trust to ensure that HPPL was managed for their interests as well; and that that conflict was manifested in (but not constituted by) various failures by Gina to take steps to ensure that HPPL was managed in the interests of the beneficiaries (referring to [582]-[617] of the statement of claim). It is submitted that it is erroneous to characterise the matter as a contention that Gina should have fettered her control over HPPL (cf HPPL’s submissions at [93(a)]); rather, the issue is Gina’s private interest in obtaining for herself the fruits of HPPL and the conflict between that interest and her duties as trustee. It is said that such control as Gina had over HPPL is the mechanism by which she was able to pursue that interest, but is not the interest itself. It is submitted that even if Gina had never used any mechanisms she had to pursue her private interest, the conflict would have remained (and that the conflict could have been avoided by Gina ceasing to be trustee of the HMH Trust). It is submitted that cl 8 of the Hope Downs Deed is not an answer to this contention.
  20. Bianca disputes the proposition by HPPL that the matters in Chapters III to VI of the statement of claim are matters “under” the Hope Downs Deed because of the defences which HPPL intends to advance under cll 7(a), 7(c), 7(e) and 8 of the Hope Downs Deed (referring to HPPL’s submissions at [90]); and similarly disputes the proposition by HPPL that the matters in Chapter VII of the statement of claim are matters under the Deed because of those foreshadowed defences (referring to HPPL’s submissions at [91]).
  21. As to the pleading of oppression at [634]-[660] of the statement of claim, it is said that the oppression arises from: failure to pay dividends (see [634]-[649] of the statement of claim); amendments to HPPL’s Articles of Association calculated unfairly to benefit Gina (see [650]-[657] of the statement of claim); and expenditure of HPPL funds for non-corporate purposes (see [658]-[660] of the statement of claim). Bianca emphasises that the oppression is not limited to failure to pay dividends. It is noted that HPPL contends that the failure to pay dividends, but not the other contentions, is addressed by cll 5, 7(a), 7(c), 7(e) and 8 of the Hope Downs Deed (referring to HPPL’s submissions at [93(b)]). Bianca points to [661] of the statement of claim there being an allegation of breach of contract constituted by a breach of Article 3A of HPPL’s Articles of Association; and says that HPPL does not address this contention in its categorisation at [92] of its submissions.
  22. As to Chapter IX of the statement of claim, Bianca notes that at [662]-[665] there is pleaded the basis for various declarations in respect of Gina’s breaches of trust. Bianca disputes that proposition by HPPL that these allegations “engage the nature and extent of [Gina’s] entitlement under the Hope Downs Deed to have ‘full ongoing control’ of HPPL, as well as HPPL’s dividend payment history” (referring to HPPL’s submissions at [93(a)]). At [666]-[668] of the statement of claim, there is pleaded the basis for equitable relief in respect of HPPL’s failure to pay dividends. Bianca notes that the underlying breach of equitable duty is identified as the improper state of mind referred to in the second particular to [666] of the statement of claim. It is said that the matter arising out of [666]-[668] of the statement of claim is distinct from that appearing in [672] of the statement of claim and [682] of the statement of claim (see [672] seeking relief on the basis of oppression and [682] seeking relief on the basis of breach of art 3A); and that merely because the remedy sought in respect of discrete matters “relate[s] to dividends” does not make the various matters “one single matter” (cf HPPL’s submissions at [93(b)]) It is also noted that, at [673]-[675] of the statement of claim there is pleaded the factual basis for relief regulating the future management of HPPL.
  23. Bianca thus submits that the proceedings do not comprise a single, interlocking matter under the Hope Downs Deed (cf HPPL’s submissions at [94]). Rather, it is said that the proceedings comprise a set of discrete claims, each with a different juridical basis (the Corporations Act, general law directors’ duties, equity, and HPPL’s Articles of Association), none of which, it is said, relies on, “let alone is governed or controlled by”, the Hope Downs Deed.
  24. Bianca invokes the approach of Bathurst CJ in the Court of Appeal Decision to the effect that a matter does not become “under” the Hope Downs Deed merely because of a threatened defence which will refer to the Hope Downs Deed. Further, Bianca contends that the anticipated defences are not otherwise tenable for the following reasons.
  25. As already noted, Bianca submits that the absence of reliance on cl 6 as a defence is a key distinction between this case and the Federal Court proceeding, where reliance on cl 6 was made and where the Full Court relied upon that clause in holding that the substantive claims in that proceeding fell under the Hope Downs Deed (referring to the Full Court Decision at [218]-[225]).
  26. Bianca submits that: the arbitration agreement requires a disciplined analysis of the matters in the proceeding for the purpose of ascertaining whether the matter is a dispute under the Hope Downs Deed “or is no more than a dispute loosely related to the Deed or its parties”; and the defendants have mischaracterised the connection between this proceeding and the arbitration agreement. Further, Bianca submits that the weight given to anticipated defences (particularly when unpleaded) must be low (in light of the Court of Appeal’s holding in the Court of Appeal Decision at [130]). As to the specific clauses to which HPPL and Gina refer in their submissions, Bianca makes various responsive submissions.
  27. First, in relation to cl5, Bianca contends that cl 5 does not govern or control any of the relief sought in the statement of claim. It is submitted that, even on the broadest reading of cl 5, all of the relief in the statement of claim can be given independently of the clause. In particular, it is said that on the assumption that cl 5(a) and (c) are valid, and on the further assumption that cl 5(c) was triggered, all that would mean was that the duty imposed by 5(a) did not apply (referring to the Court of Appeal Decision at [146(a)]) and that HPPL (and the directors of HPPL) would remain subject to any other lawful obligations in relation to dividend payments. Further, it is said that HPPL (and the directors of HPPL) would retain all lawful discretions in relation to dividend payments. It is submitted that, a fortiori, the court would retain its “wide” discretion under Corporations Act, s 233 to order the payment of past dividends.
  28. Further, it is said that cl 5 cannot be characterised as an exhaustive agreement by the shareholders of HPPL “on a particular approach to the payment of dividends” (cf HPPL’s submissions at [115(a)], [116] and Gina’s submissions at [63]-[64] and [73]). Bianca says that cl 5(a) purports to give a (limited) contractual right to dividends (as, it is said, is made clear by the fact that the dividend entitlement conferred by cl 5(a) is confined to dividends paid out of an identifiable part only of HPPL’s profits; being dividends payable from “Hope Downs Net Cashflow After Tax”); and it is said that cl 5(c) qualifies that (limited) right. It is submitted that clear words would be needed (and are not contained in the clause) to oust the directors’ discretions under HPPL’s Articles of Association and that the opening words of cl 5(a) (“to the extent that it is lawfully permitted”) suggest that the clause is not even exhaustive of the field covered by its terms. It is submitted that whether or not the right in cl 5(a) exists at any point in time does not oust the directors’ residual discretions in respect of dividends under HPPL’s Articles of Association (a constituent document which Bianca points out does not include an arbitration agreement). Bianca submits that the arguments of HPPL and Gina to the contrary proceed from the erroneous premise that the Hope Downs Deed is a shareholders’ agreement.
  29. Finally, insofar as Gina suggests that cl 5 might be “a relevant circumstance” in deciding whether there has been oppression (Gina’s submissions at [47(a)]), Bianca says that, on that approach, cl 5 has “nothing to say” to the non-oppression matters raised. Further, as already noted, it is said that the fact that the Hope Downs Deed is relevant is not enough to give rise to a dispute “under” the deed (referring to the Court of Appeal Decision at [146]).
  30. Second, in relation to cl 7(a), Bianca says that the clause cannot be read as constraining the trustee’s power to commence and maintain to completion proceedings on behalf of the HMH Trust (cf Gina’s submissions at [47(c)]), particularly where the proceeding is, in significant part, a suit against the former trustee (and her accessories) for breach of trust and mismanagement of trust assets. It is said that this follows from general principle, noting that a clause purporting to exempt a trustee “from the consequences of a breach of trust” is void as contrary to public policy (referring to McLean at 641 per Young J, as his Honour then was and that a clause purporting to prevent there being a breach of trust in the first place will be read “as strictly as possible” (McLean at 641). It is noted that in the Court of Appeal Decision, one of the matters relied on by Bathurst CJ in holding that the defences raised under cl 7 did not render the matter “under” the Hope Downs Deed was that those defences assumed a construction of the deed that would render it “void as ousting the beneficiaries’ right to due administration of the trust” (see at [146(c)]).
  31. Further, it is said that “[n]o contractual provision which attempts to disable a party from resorting to the Courts of law was ever recognized as valid” (there citing Dobbs v National Bank of Australasia Limited [1935] HCA 49; (1935) 53 CLR 643 at 652; [1935] HCA 49 per Rich, Dixon, Evatt and McTiernan JJ; and referring to CPB Contractors Pty Ltd v JKC Australia LNG Pty Ltd (No 2) [2017] WASCA 123 at [95] per Buss P, Murphy and Beech JJA where it was said that “[t]he policy of the law against the ouster of the court’s jurisdiction means that a provision which purports to do so will not be enforced”). Bianca says this militates in favour of a narrow construction of the clause.
  32. Bianca submits that it is “presumptively unlikely” that the parties to the Hope Downs Deed intended it to have a meaning which would have the effect that it was entered into by Gina in breach of trust. It is said that if cl 7(a) purported to prevent the trustee from commencing or maintaining proceedings which are in the interests of the beneficiaries, then it would violate the rule articulated by Fletcher Moulton LJ in Osborne v Amalgamated Society of Railway Servants [1909] 1 Ch 163 at 187 that a trustee may not “[bind themselves] contractually for valuable consideration that he will exercise a trust in a specified manner to be decided by considerations other than [the trustee’s] own conscientious judgment at the time as to what is best in the interests of [the beneficiaries]”. It is said that what would independently follow from general principle is confirmed by the express terms of cl 9.3 which states that:

Notwithstanding either of the provisions in clause 9.1 and 9.2, the Trustee and the beneficiaries agree that nothing in this Deed limits any of the powers of the Trustee of the HMH Trust.

  1. Bianca submits that in that context, cl 7(a) cannot be read as preventing the present proceedings or any part of them.
  2. It is said that the obligation, if any, imposed by cl 7(a) is imposed only on “the parties”. Bianca submits that that phrase does not refer to the trustee so far as the Hope Downs Deed is not part of the trust property; and that cl 7(a) does not bar a court from giving the relief sought in the statement of claim and that if it purported to do that it would be void (hence it does not govern or control the proceedings). Bianca submits that what was said of cl 7(a) by the Court of Appeal in the Leave Decision at [13], [15] is applicable, namely that:

13. The applicants contend that the plaintiffs’ claims concerning the identity of the trustee of the Trust constitute a breach of the undertaking contained in clause 7(a) not to do anything which could have an adverse impact on the Hancock Group’s rights in certain respects. However, even if, by making those claims, the plaintiffs breached that undertaking, those claims would not necessarily fail. That breach of undertaking might be relevant to the Court’s consideration of the plaintiffs’ claims concerning the trustee but it would not automatically foreclose them. This was the approach, with which we respectfully agree, taken by Bathurst CJ (with the concurrence of Young JA) in Rinehart v Welker [2012] NSWCA 95 to breaches of undertakings contained in the Deed (see the chapeau to [146] and (b) and (c)). Whilst his Honour was dealing with undertakings in other sub-clauses of clause 7 than (a), his reasoning is in our view equally applicable to clause 7(a). …

[…]

15. In these circumstances, we do not consider it to be reasonably arguable that a finding that the plaintiffs had breached their undertaking in clause 7(a) would necessarily determine the plaintiffs’ claims concerning the 2006 Amendments in favour of the defendants.

  1. Insofar as Gina contends only that cl 7(a) affects the proceedings so far as they seek relief “concerning the composition of HPPL’s board” (referring to Gina’s submissions at [47(c)]) and submitting, referring to HPPL’s submissions at [110], that HPPL does not take the matter further, it is said that cl 7(a) can therefore only be relevant to that “matter” comprising the claim for relief in respect of future management of HPPL. It is said that cl 7(a) does not in its terms or effect require that Gina retain control of HPPL; and that restrictions on Gina’s control of HPPL do not necessarily infringe cl 7(a) (cf HPPL’s submissions at [119]-[121]).
  2. Third, in relation to cl 7(c), Bianca argues that this clause cannot and should not be given a meaning which prevents the trustee from commencing and maintaining proceedings of the present kind (cf Gina’s submissions at [47(d)]) and that the clause only applies to “parties” within the meaning of the Hope Downs Deed. It is said that the clause only requires that HPPL remain “controlled” by “Hancock Family Group Members”; it does not require that no other person may be involved in the management of HPPL; and that what was said of cl 7(c) in the Court of Appeal Decision at [144] applies equally here, namely that:

144. Clause 7(c) also does not bar the proceedings. The claims made by the respondents do not seek to replace GHR [Gina] with a non-Hancock Family Group Member, nor can it be said that it is inevitable this will occur, particularly when it is not sought by the respondents.

  1. It is submitted that none of the relief sought by Bianca necessarily requires that HPPL cease to be wholly owned and controlled by “Hancock Family Group Members”.
  2. Insofar as Gina contends only that cl 7(c) affects the proceedings so far as they seek relief “concerning the composition of HPPL’s board” (see Gina’s submissions at [47(d)]); it is again said that the clause can only be relevant to that “matter” comprising the claim for relief in respect of future management of HPPL; and that “relevance” is not enough to give rise to a dispute under the Hope Downs Deed.
  3. Fourth, in relation to cl 7(e), Bianca says that cl 7(e) cannot be read as preventing her, as trustee, from commencing and maintaining these proceedings (cf Gina’s submissions at [47(e)]); nor can it be read as ousting the court’s power to issue the relief sought. It is said that this is consistent with the conclusion of Bathurst CJ in the Court of Appeal Decision at [146(c)] that:

… it does not seem to me that the clause would absolutely bar a claim to remove the trustee even if such a claim was in breach of the provision. If the clause absolutely precluded the right to remove [Gina]as trustee it would be void as ousting the beneficiaries’ right to due administration of the trust: see [139]-[140] above …

  1. Bianca argues that even if the pursuit of this claim was a breach of cl 7(e), it would not bar the claim and therefore would not govern the matter. Moreover, insofar as Gina “only” asserts that this clause is relevant to the matter concerning the composition of HPPL’s board, Bianca says that this is not enough.
  2. Fifth, in relation to cl 8, Bianca says that cl 8 can only be relevant to the proceedings so far as relief affecting Gina’s control of HPPL is sought. It is said that it cannot be an answer to the relief sought in prayers 1 to 9, 11, 13 and 14. Bianca maintains that it is wholly irrelevant to all of the matters in the proceedings “save possibly for the oppression claim so far as it seeks relief in relation to the future management of HPPL”. Bianca further says that HPPL advances no plausible reason, beyond assertion, for the contention that cl 8 “limit[s] or inform[s] normative rights of the parties to the Hope Downs Deed such as those conferred by s 232 and s 247A” (see HPPL’s submissions at [108]). It is said that HPPL’s argument (at [106]]-[109] of HPPL’s submissions) appears erroneously to assume that a contractual provision acknowledging Gina’s control of HPPL could afford a defence to a breach of trust by Gina and/or through Gina’s improper exercise of that control. It is submitted that cl 8 does not contain the clear language that would be required to effect such an outcome (cf Leerac Pty Ltd v Fay [2008] NSWSC 1082 at [13] per Brereton J); and that, on no view, could cl 8 govern or control a court’s conclusion as to whether there has been oppression or whether a shareholder should be entitled to documents.
  3. Bianca maintains that cl 8 cannot be read as preventing her, as trustee, from suing in the best interests of the beneficiaries (cf Gina’s submissions at [47(b)]); and that, in any event, the clause is not in terms a prohibition on commencing proceedings. It is submitted that the clause appears to be directed to the “illegal” purpose of preventing a court from making orders under the Corporations Act effecting a change in the control of HPPL. Bianca again says that this clause is only binding on the “parties” and argues that critical parts of cl 8 are no more than an “acknowledgement” of certain matters. It is said that the language is exhortatory not obligatory (cf Gina’s submissions at [47(b)] which characterise it as a “warranty”). It is submitted that so far as there is obligatory language in the clause it applies only to the “continuing right” referred to at the end.
  4. Bianca submits that what was said of cl 8 in the Court of Appeal Decision at [146(d)] applies by analogy, namely that:

Whether that would prevent her from retaining full ongoing control and management may well be open to doubt. She would certainly be left with sufficient voting power to control the board of directors and pass any special resolution. However, even if it did diminish her ownership or control to some extent, that would not in my opinion prevent a court from removing her as trustee if it found that she was unfit to carry out that function.

  1. It is submitted that, similarly, a court would not hesitate to cause Gina to be removed from positions of control of HPPL if she were unfit to carry out that function and/or her continued control was oppressive.
  2. Finally, insofar as HPPL does not put the contention that cl 8 gives rise to an estoppel by deed any higher than that there is an “argument” (see HPPL’s submissions at [108]), Bianca says that even if the acknowledgments in cl 8 did give rise to an estoppel preventing a party from denying those acknowledgements, they would not and could not prevent the court from issuing relief removing Gina as a director; nor is it established that Bianca is privy to any estoppel in circumstances where any acknowledgement on the part of the HMH Trust was given by Gina.
  3. As to whether each of the seven “matters” identified by Bianca as being raised by the statement of claim falls within the arbitration agreement (and leaving aside for the moment Bianca’s s 247A application), Bianca submits that each “matter” is not a dispute under the Hope Downs Deed for the following reasons.
  4. As to the claim in relation to breaches of trustee duties by Gina (the second “matter” identified by Bianca), the underlying default is said to be “an improper view that distribution of Trust benefits was a gratuity from Gina”. Bianca says that this claim is under the general law and that cl 5 of the Hope Downs Deed does not govern or control that claim. It is said that nothing in cl 5(a) entitled Gina to form the view that distribution of Trust benefits was a gratuity from her. Further, it is said that cl 5 is not, and cannot be read as, an exhaustive specification of HPPL’s dividend arrangements (which is said implicitly to be assumed by Gina in her submissions at [63]-[64]).
  5. As to the contention that Gina caused HPPL to misuse HPPL funds for non-corporate purposes (the third “matter” identified by Bianca), it is noted that this claim is under the general law, the Corporations Act and HPPL’s Articles of Association. It is said that nothing in the Hope Downs Deed “entitles” Gina to misuse HPPL funds for her own purposes and that this “matter” is not “under” the Hope Downs Deed.
  6. As to oppression, and the claim for an order for payment of past dividends under the Corporations Act, (the fourth “matter” identified by Bianca) it is said that nothing in the Hope Downs Deed (and, in particular, nothing in cl 5) entitled HPPL not to exercise its discretion to declare dividends for the benefit of the HMH Trust (cf Gina’s submissions at [73]). It is submitted that even if HPPL is correct in arguing that cl 5 of the Hope Downs Deed raises a “substantial” issue involving a “sustainable” argument that could be advanced in this proceeding, that would not entail that this “matter” is under the Hope Downs Deed; and a fortiori, it would not entail that the Hope Downs Deed governs or controls the matter.
  7. As to the contention that there is a contractual right to dividends under art 3A of HPPL’s Articles of Association (the fifth “matter” identified by Bianca), Bianca says that cl 5 does not exclude the operation of art 3A and that this “matter” is not under the Hope Downs Deed (and it is submitted that Gina does not appear to suggest otherwise, referring to Gina’s submissions at [84]-[85]).
  8. As to the claim in relation to the future management of HPPL (namely that, by reason of past oppressive conduct, detailed orders should be made regarding the future management of HPPL) (the sixth matter identified by Bianca), it is said that this claim is under the Corporations Act. It is said that none of cll 5, 7(a), 7(c), 7(e) and 8, does or could require the Court to refrain from exercising its discretion under the Corporations Act.
  9. Finally, as to the relief sought in the nature of information gathering as to past misconduct by the controllers of HPPL (the seventh “matter” identified by Bianca), this is sought under ss 233 and 241 of the Corporations Act. It is said that nothing in the Hope Downs Deed does or could govern or control the Court’s exercise of the powers given by those provisions.
  10. Insofar as it is contended that the proceedings should be referred to arbitration because Bianca contends that the proceedings are not covered by the arbitration agreement (see HPPL’s submissions at [101], [103]-[105]), Bianca says that that contention is inconsistent with the approach in the Court of Appeal Decision and that this Court is entitled to, and should, determine whether or not the matters in the proceedings fall within the arbitration agreement.
  11. In the alternative to her primary contention (that the reasoning in the Court of Appeal Decision is binding as to the proper construction of cl 20 of the Hope Downs Deed and that the test is that of “governed or controlled”), Bianca submits that, even on the approach of the High Court or the Full Court (“without reference to” the Court of Appeal Decision), the referral/stay applications must be refused.
  12. As to the High Court Decision, Bianca emphasises the important role played by “context” in the High Court’s approach and the High Court’s acceptance that a fundamental objective of the Hope Downs Deed was the quelling of controversy as to the title of the Hope Downs mining tenements (see at [185]ff); and the observation of the High Court that the substantive allegations made in the Federal Court proceeding “reiterated” the very claims made in John’s unsworn affidavit (see the High Court Decision at [9]). It is submitted that that approach in no way supports a conclusion that a different proceeding (in which no challenge is made to the Hope Downs mining tenements, no challenge is made to the shareholdings in HPPL and no claims are said to be made that are the subject of releases in the Hope Downs Deed) also falls under the Hope Downs Deed. Bianca maintains that there are stark and important differences between the claims before the High Court and the claims in the present proceeding; and she submits that the context in which the deed was entered into demonstrates that the Hope Downs Deed was not intended to capture each and every dispute between the shareholders of HPPL that might arise at some point in the future.
  13. Further, it is submitted that the High Court’s analysis was also substantially informed by the fact that the “validity claims” in that case were intertwined with the substantive claims (see the High Court Decision at [12] and [43]). Bianca says that no such issue arises here because no validity claims are made in the statement of claim and, insofar as the anti-arbitration application is concerned, the matters relied upon do not intertwine with any substantive claims made in the statement of claim in this Court.
  14. As to the Full Court Decision, Bianca says that it is not “entirely clear” what construction of cl 20 of the Hope Downs Deed was ultimately adopted by their Honours but points to the central finding at [204] that, in the circumstances of that case, “the deeds, in [sic] their operation is valid, and by reason of their invalidity if not, lie at the heart of the dispute”. Emphasis is placed on the fact that that observation was immediately preceded by their Honour’s recognition that one of the fundamental purposes of the Hope Downs Deed was the quelling of disputes about the title to the Hope Downs mining tenements.
  15. Bianca maintains that Gina and HPPL have not established that the operation of the Hope Downs Deed, whether valid or invalid, lies at the heart of the dispute in this Court (noting that they “do not even assert” that the Hope Downs Deed precludes the claims being made by reason of a plea in bar or release in contrast to the position they took in the Federal Court and in the Western Australian Supreme Court).
  16. Insofar as the Hope Downs Deed might be a “relevant” matter to consider in respect of some of the claims brought, it is submitted by Bianca that nothing in the Full Court’s approach supports the conclusion that that circumstance is enough. It is noted that the Full Court (at [193] of the Full Court Decision) incorporated a concept of materiality into the assessment of whether a dispute was “under” an arbitration agreement; and spoke of a dispute that contained a “substantial” issue that concerned the exercise of rights or obligations under an agreement, or a dispute that concerned the existence, validity or operation of an agreement as a “substantial” issue or a dispute the resolution of which was governed or controlled by the agreement. Bianca says that Gina and HPPL have failed to identify, with particularity, how it could reasonably be said that the matters the subject of the statement of claim meet that standard.
  17. For Bianca it is submitted that the foreshadowed reliance on the various clauses of the Hope Downs Deed referred to above does not in effect amount to more than that those clauses may be of some relevance and that this is not sufficient. It is submitted that the propositions put forward by the defendants amount to extraordinary suggestions which a court would not entertain. So, for example, Bianca accepts that the existence of the Hope Downs Deed (“assuming that it remains in place … in regard to the proceedings in other jurisdictions”) is a relevant matter that a court would have regard to in determining whether or not to grant the relief sought under s 233 of the Corporations Act, but says that this does not lead to the conclusion that the outcome was governed or controlled by the Hope Downs Deed.
  18. It is said that the suggestion that cl 8 provides a complete defence to s 233 insofar as a court would wish to remove Gina as a director of HPPL (“[n]o matter what the nature of her misconduct, no matter how bad it is, she has a guaranteed right that this Court cannot interfere with to remain as a director for life”) is an outrageous submission unsupported by authority (i.e., that there can be no sustainable argument that a director can contract with her shareholders in such a way that she is immune from being removed by a court for misconduct). Similarly it is said that if all of the misconduct is established it cannot be the case that cl 7(e) operates as an absolute bar to a claim for appointment of an independent director or for a claim to qualify the ability of Bianca and Gina to elect directors (because that would be void as a matter of public policy); or that a director can contract entirely out of s 233 of the Corporations Act.
  19. Finally, it is submitted that the defendants are here asking the court to accept that there is a sustainable argument, with reasonable prospects of success, that Gina is exempt from the powers of this Court to control and supervise corporate function (and that such an argument has been foreclosed by the Court of Appeal at [186] of the Court of Appeal Decision).

Determination

  1. At the outset, I accept that there are a number of “matters” the subject of the present proceeding and that, though there is an obvious element of interconnectedness, there is not a single inseverable matter here to be determined.
  2. I proceed, as indicated earlier, on the basis that the High Court’s construction applies and that what is here required is to determine whether there is a dispute that contains a substantial issue that concerns the exercise of rights or obligations in the agreement contained in the Hope Downs Deed, or a dispute that concerns the existence, validity or operation of the agreement as a substantial issue, or a dispute the resolution of which is governed or controlled by the agreement (see the Full Court Decision at [193]).
  3. As to the matters identified by Bianca (leaving the first, Bianca’s s 247A application, to be dealt with separately below), it must be noted that a critical object (which the High Court said could not be clearer) of the Hope Downs Deed was the maintenance of confidentiality about “the affairs of the Hancock Group, the trusts, the intra-family dispute and the provisions of the Deeds themselves” (see the High Court Decision at [46]) and that the High Court further contemplated that the confidential disputes resolution provisions might apply to disputes arising after the Hope Downs Deed had been entered into (insofar as the plurality considered that claims concerning the validity of the deed itself would be covered, see at [48]).
  4. Once that is appreciated, it seems to me that there is little doubt that the allegations in relation to breach of trustee and directors’ duties, and of oppressive conduct, insofar as they encompass allegations relating to the payment of dividends, misuse of corporate funds and relief going to the control and further management of HPPL, raise or involve a substantial dispute as to matters the subject of the agreements or acknowledgments contained in the Hope Downs Deed.
  5. Whether the defendants will be able successfully to invoke the provisions of the Hope Downs Deed in order to resist some or all of the relief claimed by Bianca (and hence whether there is a complete defence or absolute bar by reference to the various provisions of the Hope Downs Deed) is not to the point. It is to my mind an inescapable conclusion, having regard to the various clauses that the defendants here wish to invoke in answer to the claims made against them, that the issues that will be raised in defence of the substantive claims in this proceeding are issues of the kind which the parties agreed should be determined under the confidential arbitration process (no doubt against the background of the threat of “unwelcome publicity” having historically been invoked by John).
  6. Much of Bianca’s argument seems to focus on whether the clauses here sought to be invoked by the defendants will ultimately succeed (and she contends that it was outrageous for such a defence ever to be contemplated). However, that harks back to the “governed or controlled” test that the High Court has in my opinion rejected. The reliance sought to be placed by the defendants on the various provisions of the Hope Downs Deed that they have identified goes beyond the mere “relevance” of those provisions to the issues in dispute. Indeed, I have reached this conclusion, as the High Court has dictated that I must, taking into account the nature of the matters the subject of the proceeding and not by mere reference to the fact that provisions of the Hope Downs Deed might, or even will, be raised by the defendants and that those provisions might, or will, bear on the determination of these disputes. Accordingly, and broadly accepting the defendants’ submissions in this regard, I consider that (leaving aside Bianca’s s 247A Application for the moment) the matters raised by the statement of claim, in light of the anticipated defences, do fall within the arbitration agreement.
  7. In saying this, I note that Bianca’s submissions characterise the defences sought to be raised as impermissibly seeking to oust the jurisdiction of the Court or to put herself (as trustee or director) beyond the control of the Court. I do not accept that the referral of the disputes to arbitration has that consequence. Determination by the arbitral panel of the factual disputes raised by the pleaded claims may still have consequences insofar as a subsequent grant of relief in this Court is concerned (see ACD Tridon); moreover, acceptance of the defendants’ submissions as to the referral to arbitration does not (as Bianca contends) involve any acceptance of the proposition that the Hope Downs Deed “entitles” Gina to misuse corporate funds for her own purposes or to breach her duties as trustee or director.
  8. The conclusion that the proceeding raises matters the subject of an apparently valid arbitration clause, and that the other requirements of the commercial arbitration legislation are satisfied, means that I am required to refer the parties to arbitration (this is not a matter of discretion).

Bianca’s s 247A application

  1. I consider this “matter” separately because it raises issues both as to whether it is a “matter” under the arbitration clause and as to whether it is arbitrable in any event.
  2. It is accepted that there are some disputes which may not be submitted to an arbitrator; and that in such a case, the arbitration agreement is “incapable of being performed” for the purposes of s 8(1) of the Commercial Arbitration Act (see Fitzpatrick v Emerald Grain Pty Ltd [2017] WASC 206 at [90] per Martin CJ and the authorities there cited).
  3. The parties’ intentions are not relevant when it comes to issues of arbitrability (see Robotunits at [65] per Croft J); the general principle being that the public policy in certain disputes being resolved judicially cannot be surrendered into the hands of private parties.
  4. In Comandate, the Full Court of the Federal Court stated a number of general principles relating to arbitrability, including (at [200]) that:

200. … First, the common element to the notion of non-arbitrability was that there was a sufficient element of legitimate public interest in these subject matters making the enforceable private resolution of disputes concerning them outside the national court system inappropriate. Secondly, the identification and control of these subjects was the legitimate domain of national legislatures and courts… (Emphasis added.)

  1. In ACD Tridon, Austin J said (at [191]-[192]) that a “strongly persuasive” ground for holding that a dispute was non-arbitrable was that it “operates to affect the rights of third parties”. In BTY , Coomaraswamy J noted (at [148]) that:

148. … [T]here is a class of disputes which is not capable of settlement by arbitration. At the core of this class are disputes which are of a public character and disputes whose outcome will affect the interests of persons beyond the immediate disputants. An agreement to resolve any such dispute by arbitration is ineffective and cannot ground a stay. (Footnotes omitted.)

and in obiter said that at a challenge to the public filing of documents by a corporation might be non-arbitrable because “the outcome could affect a public register and thereby could affect third parties who may have acted in reliance on the accuracy of that register” (see at [144]).

Gina’s submissions

  1. Gina submits that there is no doubt that claims under the Corporations Act are capable of being resolved by arbitration (citing ACD TridonWDR Delaware Corporation v Hydrox Holdings Pty Ltd (2016) 245 FCR 452; [2016] FCA 1164 (WDR Delaware) at [144] per Foster J and Re Infinite Plus Pty Ltd (2017) 95 NSWLR 282; [2017] NSWSC 470 at [63]- [66] (Gleeson JA) (Re Infinite Plus). As to BTY, Gina notes those remarks were obiter because neither party raised any claim or defence under the agreement containing the arbitration clause, so the dispute was not caught by that clause (see at [64], [69]-[70], [75], [111] and [143]); and submits that those remarks do not apply to the current dispute (because it does not concern such a publicly filed document); and that they may not be in accordance with Australian law.
  2. Reliance is placed on the obiter observations of Austin J explained in ACD Tridon at [191]-[194]:

191. In A Best Floor Sanding Pty Ltd v Skyer Australia Pty Ltd [1999] VSC 170, the parties to a joint venture agreement agreed to arbitrate any dispute, difference or question touching, inter alia, the dissolution or winding up of the “association” which was their joint venture entity. Warren J declined an application for an order staying a winding up proceeding, under the Victorian commercial arbitration legislation, on the ground that the arbitration clause was null and void because it had the effect of “obviating the statutory regime for the winding up of a company” (at paragraph [18]). Her Honour’s decision was partly based on public policy considerations surrounding the process of winding up a company pursuant to court order. An additional ground seems to have been that a winding up order operates to affect the rights of third parties, not merely the rights of the parties to the arbitration clause.

192. In my opinion, the latter ground is a strongly persuasive one, in keeping with the general observations by Mustill & Boyd. I accept, as well, that public policy considerations operate against referring to arbitration a determination to wind up a company on the grounds upon which a court may order that a company be wound up. However, I would not regard these public policy considerations as preventing parties to a dispute from referring questions to arbitration merely because those questions arise under the Corporations Act. I see nothing special about the Corporations Act that would distinguish it, as a whole, from other legislation such as the Trade Practices Act. This seems to be the position reached by United States courts: see Dean Witter Reynolds Inc v Byrd [1985] USSC 44; 470 US 213 (1985); Shearson Lehman Hutton Inc v Wagoner [1991] USCA2 988; 944 F 2d 114 (2nd Cir 1991); also Pick v Discover Financial Services Inc 2001 No.Civ.A 00-935-SLR (D) Del Sept 28, 2001.

193. The statutory powers of a Court under the Corporations Act are, generally speaking, comparable to the powers exercised by a court under the general law (the power to make a winding up order being an exception to this proposition). They are generally not special powers to be exercised having regard to specialist public interest criteria.

194. Specifically, the public policy considerations held by Warren J to be applicable to a disputed claim to wind up a company do not seem to me to prevent the parties from referring to arbitration a claim for some merely inter partes relief under the oppression provisions of the Corporations Act, or for access to corporate information under s 247A. However, the “in rem” nature of an order for rectification of the share register of a company may prevent reference of that power to an arbitrator.

  1. Gina notes that those comments were applied in: Robotunits (at [66]; [69] per Croft J) which involved alleged breaches of directors’ duties; WDR Delaware (at [144]) which involved oppression claims and Infinite Plus (at [65]-[67]) which involved oppression claims and seeking to alter the board of the company; and that in Robotunits, Croft J went on to state at [69]-[70]:

69. In my view, and as a general proposition, there is not a sufficient element of legitimate public interest in matters involving the Corporations Act to make their resolution by arbitration – that is, outside the national court system – inappropriate.

70. Further, I do not consider there to be a sufficient element of legitimate public interest in a matter making it inappropriate for private dispute resolution merely because a statutory body such as the Australian Securities and Investments Commission (ASIC) may have an interest in the proceeding, or have sufficient standing to bring an action in relation to it. In the present case, there is nothing stopping ASIC from prosecuting Mennel under s 184(1) of the Corporations Act, or any other statutory provision, if it appears to ASIC that Mennel ought be prosecuted. Indeed, although ASIC may, as Robotunits submits, have an interest in the determination of Robotunits’ claims against Mennel, the settlement of these matters by arbitration does not interfere with ASIC’s statutory powers under Part 3 of the Australian Securities and Investments Commission Act 2001 (Cth) to investigate contraventions of, and prosecute offences against, the Corporations Act.

  1. Reference is also made to what was said in WDR Delaware at [161]:

161. In substance, the present case is a dispute between the sole shareholders of Hydrox involving the way in which those shareholders performed their contractual and other obligations inter partes. In truth, there is no substantial public interest element in the determination of these parties’ disputes. At the present time, it is not suggested that Hydrox is insolvent. Indeed, there is evidence to the effect that Woolworths has provided letters of comfort to the directors of Hydrox in order to allay any concerns that they may have as to the solvency of Hydrox. No creditor has attended any Court hearings or has sought leave to participate in the proceeding. This is despite the fact that it has been advertised as required under the relevant regulatory regime and despite the fact that the dispute between the plaintiffs and Woolworths has received considerable press coverage.

  1. It is submitted by Gina that in the present case there is an inter partes dispute between the company, its directors and its shareholders; and that it can and should be arbitrated. Gina notes that, even where particular powers may not be exercised by an arbitrator, it can be appropriate to refer the matter to arbitration and for a court then to consider whether to exercise the particular power, such as to wind up a company, on the basis of the award (referring to WDR Delaware at [164]). Therefore, it is said that even if the power in s 247A could not be exercised by an arbitrator, it would nevertheless be appropriate for the matter to be referred so that the factual controversy concerning the s 247A application could be determined by confidential arbitration.
  2. Finally, Gina submits that it should not be accepted that the s 247A application is a distinct “matter” from the substantive disputes. It is said to be telling that the s 247A relief was sought as interlocutory relief in aid of these proceedings, rather than independently (as Gina accepts it could have been). It is said that this is because it is part of the dispute raised in this proceeding. Further, it is said that the documents sought under s 247A are related to the issues raised in this proceeding (which Gina maintains are under the Hope Downs Deed). Moreover, it is said that, as is clear from the face of the categories of documents themselves, in many respects they appear to serve as categories for discovery in the proceeding.

HPPL’s submissions

  1. HPPL maintains that Bianca’s s 247A application forms part of the same “matter” in the sense that it can be seen as “part of the fabric of the overall dispute under the deed” (adopting the terminology of the Full Court Decision at [242]). It is submitted that the broad construction of the arbitration agreement (including, with reference to the Full Court Decision at [201], its extension to “any dispute” under the Hope Downs Deed,) is critical to this conclusion.
  2. HPPL says that Bianca’s s 247A application is brought as an interlocutory step in the main proceeding (that being the basis upon which Bianca sought, and obtained, judicial advice from Rein J); and maintains that it is not to the point that s 247A relief is final (cf Bianca’s submissions at [215]).
  3. HPPL submits that Bianca’s s 247A application and the main proceeding are intrinsically interlinked; that each s 247A category has a cognate complaint in the statement of claim and thus serves as a discovery application in aid of the main proceeding. It is noted that Bianca acknowledges in her submissions (at [217]) that a purpose of Bianca’s s 247A application is to facilitate these proceedings. Therefore, it is submitted that, as a matter of “substance”, Bianca’s s 247A application and the main proceeding must be seen as one “matter”. HPPL says that it is not to the point that, as well as facilitating this proceeding, s 247A relief may also facilitate an independent investigation and relations between the shareholder and company (as Bianca submits at [216]). Rather, it is said that the question is whether Bianca’s s 247A application forms part of “any dispute” between the parties under the Hope Downs Deed. It is said that the fact that s 247A relief may ultimately enable documents to be deployed in fora other than this proceeding does not render the relief sought any less part of the dispute between the parties.
  4. HPPL submits that the fact that Bianca’s s 247A application seeks relief under the Corporations Act also does not affect the analysis. It is noted that claims under the Corporations Act, including claims for s 247A relief, are capable of being resolved by arbitration (referring to ACD Tridon at [192]-[194] per Austin J; Siemens Ltd v Origin Energy Uranquinty Power Pty Ltd (2011) 80 NSWLR 398; [2011] NSWSC 195 at [37] per Ball J; Robotunits at [66]-[69] per Croft J; WDR Delaware at [124]-[164] per Foster J; and Re Infinite Plus at [63]-[66] per Gleeson JA). HPPL says that Bianca is not shut out from seeking s 247A relief and using documents for parallel investigations and shareholder relations if she so chooses; but that she is precluded from seeking that relief in this forum.
  5. It is submitted by HPPL that even if Bianca’s s 247A application had been brought as a “standalone” application, it would constitute a “matter” in and of itself because whether there is a “case for investigation” warranting s 247A relief necessarily requires an understanding of the nature and content of the shareholder rights at issue. It is said that in this case those rights are informed or prescribed by the Hope Downs Deed in respect of payment of dividends and control of HPPL and, therefore, the question whether 247A relief should be granted, at all, is inextricably linked to the Hope Downs Deed.

Bianca’s submissions

  1. Bianca accepts that disputes as to rights and obligations under the Corporations Act may be arbitrable (see Gina’s submissions), but says that each case depends on the circumstances (referring WDR Delaware at [144] per Foster J). Relevantly, that an oppression claim may or may not be arbitrable and that this depends, in particular, on whether the issue is essentially inter partes (referring to BTY at [155]-[156]; WDR Delaware at [131], [149]); and, similarly, that a claim under s 247A might be arbitrable if it was “merely inter partes” (see ACD Tridon at [194] per Austin J in dicta and Robotunits at [66]).
  2. In the present case, Bianca maintains that some of the matters in the proceeding are not arbitrable, namely: Bianca’s s 247A application; the claim that Gina misused HPPL funds (in breach of directors’ duties); the claim of oppression leading to relief as to the future management of HPPL; and the claim for relief in prayers 13 and 14, which relate to information-gathering in relation to past misconduct.
  3. It is said that each of these matters involves investigations towards and/or orders in respect of breaches of directors’ duties by Gina (and, in part, the third and fourth defendants); that the relevant breaches occurred over an extended period of time, involved hundreds of millions of dollars of loss and were apt to affect the interests of beneficiaries of a trust; and that the breaches may have involved deliberate and conscious wrongdoing. It is said that these are not matters only of inter partes interest; rather that the underlying obligations are public ones. It is submitted that there is a sufficient element of legitimate public interest in the kind of major breaches of directors’ responsibilities at issue in this case being resolved in court and not by an arbitrator.
  4. Bianca submits that if some, but not all, matters in a proceeding are the subject of an arbitration agreement and are arbitrable that does not entail that the whole of the proceedings must be stayed. It is noted that the applicable principle was stated in Recyclers at [20]:

… it is clear that a proceeding that includes matters severable from or independent of the matter required to be referred to arbitration need not be stayed in respect of those matters.

and that that principle was subsequently adopted by Nettle JA, as his Honour then was, in Flint Ink NZ Ltd v Huhtamaki Australia Pty Ltd (2014) 44 VR 64; [2014] VSCA 166 at [105]. Bianca says that the approach to be taken to such matters is essentially a case management decision.

  1. Bianca says that the right asserted by her under Bianca’s s 247A application is a right given by the Corporations Act; that no provision of the Hope Downs Deed could, or does, deny the power to issue that relief; and that the Hope Downs Deed does not “govern or control” the application. Further, Bianca says that although the relief sought is described as “interlocutory”, it is in substance final relief (and that the description of relief in a pleading does not and cannot determine its character). It is said that the s 247A relief could have been sought by itself in separate proceedings (both under s 247A(1) and (3)) and would not have been treated as an interlocutory step in such proceedings (cf Gina’s submissions at [125]). It is noted that the relief under s 247A is not “until further order”; and it is said that relief under s 247A(1) is not logically “interlinked” with the final proceedings (cf HPPL’s submissions at [122]). It is said that the fact that fresh judicial advice might have been necessary to commence separate proceedings under s 247A does not mean that there is any necessary or substantive connection between the s 247A application and the final proceedings (cf HPPL’s submissions at [123]).
  2. Bianca notes that the power given to the Court by s 247A may be exercised for purposes other than facilitating the bringing of proceedings (such as, for example, being exercised for the purpose of facilitating “mere investigation”) and for the purpose of facilitating intra-mural relations between the shareholder and the company (referring to In the matter of Sirrah Pty Ltd [2017] NSWSC 1683 at [24], [26] per Black J). It is submitted that if Bianca obtains documents under s 247A, there is no reason to think that her use of those documents will be limited to these proceedings (postulating that they could be used to ask questions at general meetings or to communicate with ASIC or other regulators).
  3. Bianca says that the fact that one effect of the s 247A application will be to facilitate these proceedings does not make the application inseverable from the balance (cf HPPL’s submissions at [124]). By way of illustration, Bianca says that one effect of her briefing solicitors is to facilitate these proceedings, but that does not make her legal arrangements part of the “matter” or “matters” in these proceedings.
  4. Further, it is submitted that even if the application under s 247A(3) is connected to the final proceedings, the application under s 247A(3) is severable from the application under s 247A(1) (cf HPPL’s submissions at [123]). It is said that the fact that relief similar to that sought under s 247A could have been obtained through compulsory production (including discovery) incidental to the determination of the final proceedings does not intertwine the s 247A application with the balance of the proceedings (cf HPPL’s submissions at [126]); and that s 247A gives the Court a statutory power distinct from any interlocutory processes and should not be confused with them.
  5. It is further said that the fact that the s 247A application seeks material relating to use of HPPL funds for non-corporate purposes (which, in turn, is said to be related to the dividend dispute) does not intertwine it with the balance of the dispute (cf HPPL’s submissions at [127]). It is said that such an argument proceeds from too narrow an understanding of the function of s 247A orders.
  6. As to HPPL’s submission (at [128-129]) to the effect that, because Bianca has advanced submissions that Bianca’s s 247A application is not a dispute under the Hope Downs Deed, then the s 247A application must be a dispute under the Hope Downs Deed, it is said by Bianca that this contention is: inconsistent with the approach in the Court of Appeal Decision; finds no support in the High Court Decision; and that it suffers from manifest circularity (in suggesting that a dispute becomes under a deed because the dispute is said not to be under that deed).
  7. Insofar as HPPL (at [130]) indicates that it may refer to the Hope Downs Deed on the issue of proper purpose and discretion, Bianca again argues that this does not mean that any part of the Hope Downs Deed “governs or controls” the application.

Determination

  1. As adverted to above, there are two issues that arise in relation to Bianca’s s 247A application. First, whether it is a “matter” under the Hope Downs Deed (which, if arbitrable, must pursuant to s 8 of the Commercial Arbitration Act and the WA Commercial Arbitration Act, be referred to arbitration); and second, whether it is an arbitrable dispute.
  2. Turning first to the second of those questions (i.e., whether the s 247A application is arbitrable at all), it is relevant in this context to consider BTY, which involved an appeal from a decision of an assistant registrar of the Singapore High Court, in which a stay had been granted of shareholder’s litigation (the application for a stay having been based on an arbitration clause contained in a shareholder’s agreement between a joint venture company and its shareholders). The allegation in the substantive proceeding was that the company had breached the articles of association. The appeal was allowed and the shareholder’s litigation permitted to continue.
  3. Coomaraswamy J decided the appeal on the basis that the dispute was not within the ambit of the arbitration clause. His Honour also, however, in obiter considered whether a dispute of this kind was arbitrable in any event.
  4. As to the reasoning that led to the conclusion that the arbitration clause was not enlivened, his Honour concluded that there were two different relationships on two different planes: the Investment Agreement (a private contract deriving its contractual force purely from the private law of obligations) and the Articles of Association. Importantly, the latter being a component of the defendant’s constitution and which derived its contractual force from company law, not private law; and being a public contract in the sense that it is given binding force by a public Act of Parliament and not by a private act of the parties (not least in the sense that a company’s constitution, which includes its articles, must be lodged with the relevant authority under the companies legislation in that jurisdiction). His Honour concluded that the fundamentally different legal character of the two contracts meant also that they operated on separate planes (at [85]). Reference was made to ACD Tridon in this regard (at [92]).
  5. His Honour (at [106]) was prepared to accept the defendant’s submission that an arbitral tribunal was empowered to grant the relief sought by the plaintiff in this case (noting that the Court of Appeal in Tomolugen Holdings Ltd and another v Silica Investors Ltd [2016] 1 SLR 373 (Tomolugen) noted that the International Arbitration Act conferred wide remedial power on arbitral tribunals – see Tomolugen at [97]) but noted that the plaintiff had raised the issue of relief as support for its principal argument that the two agreements in question were of a fundamentally different character and that the dispute in that litigation arose out of the agreement which is not subject to an arbitration clause. His Honour accepted the plaintiff’s submissions on that issue.
  6. His Honour considered that the parties’ objectively ascertained intention was not that cl 29.2 of the Investment Agreement should apply to disputes arising from the separate legal relationship between the parties created by the Articles (referring to Robotunits at [4]-[5]; [8] and at [28], [47]; [56]-[58]). At [117], his Honour considered that a reasonable person in the position of the parties would not have understood the arbitration agreement in the Investment Agreement, without more, as extending to disputes arising under the Articles; rejecting each of the arguments raised by the defendant for the proposition that there was manifested an objectively ascertainable intent that cl 29.2 should apply to disputes arising under the Articles (at [118]). His Honour’s conclusion at [143] was that:

143 Clause 29.2 of the Investment Agreement on its proper construction

applies only to the legal relationship between the parties which arises out of the Investment Agreement itself. The Articles create a separate legal relationship between the parties which operates a separate legal plane. A dispute under the Articles is not within the scope of cl 29.2 and are governed by recourse to the courts in accordance with ordinary principles of company law. This dispute arises only under the Articles. The defendant has failed to establish the only basis on which it sought to stay this litigation.

  1. Hs Honour then went on to consider the question of arbitrability, as I have already noted in obiter, saying (at [144]):

144 I have found that the “matter” in this litigation is not the subject of the

parties’ arbitration agreement, and therefore a statutory stay under s 6(1) of the Companies Act is not available. But it also seems to me that it could be argued that an application to challenge the filing of documents on ACRA’s register is not arbitrable because the outcome could affect a public register and thereby could affect third parties who may have acted in reliance on the accuracy of that register.

  1. It was noted that this issue had apparently been conceded before the Assistant Registrar that the dispute underlying the litigation was arbitrable but that on appeal the plaintiff had raised the issue of arbitrability in its written submissions. In that regard, his Honour said (at [147]-[148]):

147 The second point which the plaintiff makes, and which I accept might

be a valid consideration on the question of arbitrability, is that any order which might be made in this litigation has the potential to affect third party rights. I bear in mind that the plaintiff made the point on arbitrability in its written submissions only in passing and did not pursue the point in oral submissions with any great enthusiasm. I have therefore rested my decision on the proper construction of s 6(1) of the IAA and cl 29.2 of the Investment Agreement and not on arbitrability. But since the plaintiff has raised arbitrability, is nevertheless apposite that I make a few remarks on it.

148 As the Court of Appeal in Tomolugen noted, there is a class of disputes which is not capable of settlement by arbitration. At the core of this class are disputes which are of a public character and disputes whose outcome will affect the interests of persons beyond the immediate disputants. An agreement to resolve any such dispute by arbitration is ineffective and cannot ground a stay: Tomolugen at [71] and [74].

  1. His Honour proceeded (from [149]ff) to consider the limits of arbitrability where third party rights intrude as explored in cases such as Larsen Oil and Gas Pte Ltd v Petroprod Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore) [2011] SGCA 21; [2011] 3 SLR 414, Tomolugen, and Fulham Football Club, and considered the present case, while superficially similar to that in Fulham Football Club (which likewise concerned an alleged breach of a company’s articles of association), to be distinguishable in that the dispute there was entirely contractual, whereas the dispute before his Honour impinged upon the statutory safeguards for the benefit of third parties and engaged the public interest in the information on the public register. At [160]-[161], his Honour said:

160 I am conscious that the “matter” in this litigation, as I have found, is

whether the defendant has adopted or approved the 2015 Accounts in breach of the Articles. Whether the 2015 Accounts reflect a true and fair view of the defendant’s financial position and performance for the 2015 financial year is no part of the dispute in this litigation. But if the plaintiff is correct: (a) the public face of the defendant has disclosed inaccurate information – to put it neutrally – to its creditors and potential creditors since August 2017; and (b) that information will have to be expunged from the register. To my mind, that engages the public interest in the “matter” which is at the heart of this litigation.

161 I need say nothing further on arbitrability. As I have said, the plaintiff

raised it only obliquely in its written submissions and did not argue it with any great enthusiasm in its oral submissions. In any event, having rested my decision on the proper construction of s 6(1) of the IAA and cl 29.2 of the Investment Agreement, it is not necessary for me to decide the question of arbitrability in order to dispose of this appeal.

  1. In the present case, similar issues as to the arbitrability of the “matter” comprised by Bianca’s s 247A application arise.
  2. The principles applicable in considering arbitrability have been referred to above. In particular, in Comandate, the issue was framed by reference to public and private interests. The history leading up to the present application, concerning Bianca’s s 247A application, includes the fact that on previous interlocutory applications before me there has been some articulation of the purpose of that application. In particular, in the context of applications to set aside subpoenas that had been issued on applications by Bianca for the purpose of obtaining documents to assist in the s 247A applications, my attention was drawn to correspondence in which Bianca’s solicitors (in a letter dated 6 March 2018) had identified 13 categories of HPPL’s documents to which Bianca seeks access (in earlier submissions having indicated that she would narrow the scope of the relief sought under s 247A of the Corporations Act to particular categories of documents “in due course”).
  3. In oral submissions at a directions hearing before me on 8 March 2018, it was put that the purpose of Bianca’s requests for inspection of the books of HPPL (made as part of her claim for interlocutory relief in prayer 2 of the statement of claim and in her notice of motion filed 27 April 2017) was that there was a serious case for investigation by Bianca, as a trustee shareholder, of the matters the subject of multiple requests for documents and a need for her to obtain a greater insight and understanding of the affairs and governance of the company (see T 1.32-2.18; 8/3/2018).
  4. For the purposes of an application under s 247A of the Corporations Act, it is necessary that the court be satisfied that the applicant is acting in good faith and that the inspection is to be made for a proper purpose. The concept of “good faith and proper purpose” is a composite concept; its existence is to be determined objectively; and the applicant bears the onus in that regard (see Mesa Minerals Ltd v Mighty River International Ltd (2016) 241 FCR 241; [2016] FCAFC 16 (Mesa Minerals) at [22(4)] per Katzmann J).
  5. In Mesa Minerals, it was recognised that pursuing a reasonable suspicion of breach of duty is a proper purpose and that it is not necessary to establish that a breach of duty has occurred. What is said to be necessary is that the applicant demonstrate “‘a case for investigation’” (Praetorin Pty Ltd v TZ Ltd [2009] NSWSC 1237; 76 ACSR 236 at [38]- [39] per Barrett J, as his Honour then was) or that the issue raised by the applicant is “substantive and not fanciful” (In the matter of Style Ltd, Merim Pty Ltd v Style Ltd [2009] FCA 314; 255 ALR 63 at [66]- [67] per Goldberg J).
  6. At this stage, no affidavit evidence has been read going to the matters to be established on Bianca’s s 247A application and the merits of the application have not been explored. All that is presently before me is the application itself and the indication in the correspondence (to which I have referred in my earlier decisions) as to the categories that are being sought.
  7. However, as I apprehend it from the debate that took place in earlier interlocutory contests in this matter relating to subpoenas that had been issued by Bianca for the purpose of Bianca’s s 247A application, Bianca intends to discharge her onus of establishing good faith and proper purpose (a precondition to relief under s 247A) by demonstrating: a reasonable suspicion, a substantive and not fanciful issue, or a case for investigation of breaches of directors’ duties in relation to various of the matters the subject of the allegations in the present proceeding. The strength of the case for investigation is relevant to the issue of discretion on the grant of relief under s 247A, that discretion not being circumscribed and one that is apt to be informed by the Court’s assessment of the entirety of the evidence and submissions at a final hearing (see In the matter of Combined Projects (Arncliffe) Pty Ltd [2018] NSWSC 649 at [23] per Leeming JA).
  8. As I explained in Rinehart v Rinehart [2018] NSWSC 1102, what is likely ultimately to be in issue on the hearing of Bianca’s s 247A application will be whether, objectively ascertained, the application by Bianca for access to the books of HPPL is made in good faith and for a proper purpose. In that context, it seems clear that Bianca will be seeking to put before the Court on that application material going to the allegations of breach of duty that will include matters the subject of referral to arbitration in other proceedings as well as the subject of referral in the present proceeding.
  9. Bianca submits that Bianca’s s 247A application raises its own discrete discretionary issues and that that application can be resolved conveniently and expeditiously immediately. I accept the former proposition (though I note that Gina argues that it is not an isolated application and that it does engage cll 8 and 5 of the Hope Downs Deed – see T 139); the latter is more problematic. True it is that Bianca’s s 247A application can be seen as a discrete application; but the evidence that is likely to be adduced in relation to that application and the issues to be explored on that application as to the reasonable basis for suspicion of breach of duty, will raise many if not all of the issues the subject of the substantive disputes that are to be referred to arbitration. Bianca argues that it would be contrary to modern case management principles to require duplication of argument and evidence on this issue before an arbitrator. However, that assumes that the argument and evidence on this issue has been heard already –it has not.
  10. I have concluded, with some hesitation, that the dispute as to whether Bianca as shareholder should have access to the books and records of HPPL that she is seeking is arbitrable (though had the application been brought as a standalone application there might have been more doubt as to that issue).
  11. Where I have more difficulty is the proposition that Bianca’s s 247A application is a matter “under this Deed” for the purposes of Commercial Arbitration Act, s 8 or the equivalent under the WA Commercial Arbitration Act. There is force to HPPL’s submission that even a standalone s 247A application would be a matter “under” the Hope Downs Deed, as its determination would necessarily require consideration and determination of issues under the Hope Downs Deed. Insofar as a critical object of the Hope Downs Deed was the maintenance of confidentiality about, inter alia, the affairs of the Hancock Group, the trusts and the intra-family dispute (see the High Court Decision at [45]) and insofar as it is appropriate to ask whether a reasonable person in the position of the parties would have considered the s 247A dispute would be subject to confidential arbitration or heard and determined publicly in open court (see the High Court Decision at [48]), there is much to be said for the proposition that a standalone s 247A application would fall within cl 20 of the Hope Downs Deed at least to the extent that it requires consideration of matters relating to the affairs of the Hancock Group and the trusts that would otherwise have been expected to be subject to a confidential arbitration.
  12. That the relief sought is under the Corporations Act (and that relief in that form would not be available in an arbitration) is not determinative of the question whether a dispute as to that relief contains a substantial issue concerning the exercise of rights or obligations in the Hope Downs Deed or a dispute that concerns the existence, validity or operation of the Hope Downs Deed (which would bring the dispute within the arbitration agreement).
  13. Despite those matters, I have concluded, again with some hesitation, that Bianca’s s 247A application is not a dispute “under” the Hope Downs Deed because it is properly characterised as a claim by the trustee for access to documents of the company which the trustee contends are necessary for the proper administration of the trust. Nevertheless, that is not determinative of the position because there remains a discretion to stay the application (see Amcor Packaging) and I have concluded that, in circumstances where exploration of the issues that will inevitably arise on a hearing of the s 247A application will involve the airing of disputes as to factual matters the subject of the arbitration agreement, I should exercise the discretion to stay that application pending the outcome of the various arbitrations to which the parties have been referred. I accept the force of what one might term Bianca’s “public interest” submission (i.e., that Bianca’s s 247A application goes to matters not only in relation to a private dispute but raises public interest considerations, including alleged misuse of corporate funds or misconduct as a director or trustee). Nevertheless, I consider that this must be balanced against the fact that airing the matters in dispute in relation to Bianca’s s 247A application will trespass into the matters the subject of the arbitration and I do not consider that it is consistent with the public interest in the proper administration of justice for there to be overlapping proceedings in which the same issues are raised in different forums (see below in my discussion of the case management/abuse of process stays).
  14. I do not accept (as was submitted by Bianca) that the stay of Bianca’s s 247A application will effectively place Bianca in a “straitjacket”, as she has asserted, for the conduct of the claims she brings. It is open to an arbitrator or arbitral panel to order the production of documents (albeit not under Corporations Act, s 247A) insofar as they would be relevant to the matters the subject of the arbitration.
  15. Accordingly, I will stay Bianca’s s 247A application pending the outcome of the arbitration (and thus will stay motion (ii) until that time).

Section 8 Case Management Stay

  1. Insofar as Gina (in her submissions at [83]-[85]) and HPPL (in its submissions at [131]-[132]) contend that, if part only of the proceedings involves a matter which should be referred to arbitration, then the balance of the matter should be stayed pending arbitral determination of that matter (or those matters), Bianca says that there are difficulties in making submissions on this issue in advance of any ruling on what is covered by the arbitration agreement and that it may be appropriate to hear further from the parties after a ruling on arbitrability (on the basis that whether the s 8 Case Management Stay should be granted turns, in part, on which if any of the matters are subject to the arbitration agreement).
  2. In particular, Bianca accepts that if “only a small part of the dispute” is non-arbitrable, then it may be appropriate to stay that residual part (referring to the Court of Appeal Decision at [190]) but says that that this is not the case here. Bianca says that a stay of the court proceedings would not ordinarily be granted if the arbitrable claims are “subsidiary to” or “ancillary” to the non-arbitrable claims (referring to Recyclers at [66], which was approved in the Federal Court Decision at [334]); and that this would be the case here. Further, Bianca submits that the following discretionary factors count against the grant of a stay of any residuary claim in the proceedings.
  3. Bianca emphasises again that there is a strong public interest in a number of the matters in the proceedings going ahead in open court, noting that the matters include claims of wrongdoing against a trustee and claims of wrongdoing by directors of HPPL and the future management of HPPL. Reference is made to the observation of Bathurst CJ in the Court of Appeal Decision at [191] that the fact that a “claim relates to the proper conduct of a trustee, a matter warranting close public scrutiny” means that it would not be a proper exercise of discretion to deny a beneficiary the right to approach the court in respect of alleged misconduct of a trustee where the issue in question was not covered by the arbitration clause”. It is said that the matters in issue are matters warranting close public scrutiny. It is further submitted that there is a strong public interest in these matters being resolved expeditiously, noting that the proceedings were commenced in 2017, that they include relief directed to the management of HPPL and that Gina and HPPL have not identified steps that will or may be taken to ensure that an arbitrator can and will resolve the matters expeditiously.
  4. I consider below the submissions made in the context of the more general submissions in respect of Gina’s and HPPL’s alternative Case Management Stay Applications. Suffice it here to say that I do not consider that further submissions are warranted or necessary on the question as to whether the residual aspect of the proceeding should be stayed, since I have concluded that the only residual aspect is the s 247A application and that was the subject of detailed submission in the course of the present hearing. For the same reasons (set out below) that the alternative case management/abuse of process bases of the stay applications would have succeeded (had they arisen in light of the conclusion as to the referral/stay applications), I consider that any residual aspect of the proceeding remaining after referral of the parties to arbitration on the substantive claims should be stayed pending the outcome of the arbitration.

Case Management Stay

  1. That brings me to the first of the alternative bases for the respective stay applications. As already noted, Gina and HPPL place their Case Management Stay Applications (in the alternative to their application for the referral to arbitration and stay) on the basis that this is the only way in which Bianca’s inconsistent positions can be reconciled; arguing that the position taken by Bianca in this proceeding is fundamentally inconsistent with her position in the Federal Court proceeding and the French Arbitration. In HPPL’s case, it is said that the further difficulty that arises for it is that it is party to the Martin Arbitration and the arbitration now ordered by Le Miere J, in which proceedings it is being sued for all of its assets and that the outcome of those disputes will determine much of the relief sought in the present proceeding. Hence it is said that the character of the dispute in the present proceeding may change once the outcome of the arbitrations is known and it would be a waste of resources and costs to take steps progressing the present proceeding (and, for that matter, in listing for hearing Bianca’s unconscionability motion) until that time. Put baldly, it is said that in one forum HPPL is being sued for all of its assets and in another the position adopted by Bianca is that she accepts that HPPL owns all of those assets (see T 190).
  2. As both the Case Management Stay Application and the abuse of process applications are founded on the inconsistency argument, it is useful here to summarise HPPL’s position as to the problems it faces having regard to the allegations made in the present proceeding as to the non-payment of dividends (see T 124) and the uncertainty this poses.
  3. HPPL identifies four problems in this regard: first, that it does not know whether, under the Hope Downs Deed, it is obliged to pay 100% of the dividends to Gina (as the sole Class B shareholder) or some portion of the dividends to the Class A shareholder (Bianca as trustee of the HMH Trust), that issue turning on the dispute as to whether there has been a breach of the Hope Downs Deed and the validity of it (the subject of the French Arbitration); second, that it does not know whether the Hope Downs Deed will apply at all and says that, if the Hope Downs Deed is set aside, then there will be no obligation to make dividend payments under cl 5, rather, the obligation will arise by reference to the parties’ shareholdings and under HPPL’s Articles of Association (and, of course, subject to the allegation that assets are held on trust for the siblings that being the subject of the Federal Court proceeding now referred to the Martin Arbitration); third, the dispute as to the debt restructure, under which it is said that the outcome for the beneficiaries of the HMH Trust improved (from a 17.7% share to a 23% share), which is the subject of challenge in the Federal Court proceeding now referred to the Martin Arbitration and the relief there sought including to effect a change in the shareholding of the company (which, HPPL says, is another instance of inconsistency and gives rise to some concerns as to Bianca being in a position of conflict); and fourth, the claim by Bianca and John that they own the Hope Downs mining tenements beneficially (and their claim for an account of profits and equitable compensation that being the subject of the Federal Court proceeding now referred to the Martin Arbitration and the Western Australian proceedings now also referred to arbitration).

Gina’s submissions

  1. Gina says that the reasons for staying these proceedings are principally by reference to the assertion that the relief sought by Bianca (in her personal capacity) in the former proceedings before the Federal Court is entirely inconsistent with the claims she seeks to advance in this proceeding.
  2. It is noted that in the Federal Court dispute, Bianca (in her personal capacity) relevantly seeks: declarations that the Roy Hill tenements, Hope Downs tenements, Nicholas Down tenements and Mulga Downs tenements, which are owned by HPPL or its subsidiaries, have been held at all times on constructive trust for Bianca and her siblings (prayers 1, 15, 29 and 32); orders that Gina provide an account of profits to Bianca and her siblings, for the benefits she has received as a result of the Roy Hill and Hope Downs tenements, or equitable compensation (prayers 2, 3, 16, 17); and orders that HPPL provide an account of profits to Bianca and her siblings for the benefits it has obtained as a result of the Roy Hill, Hope Downs and Nicholas Downs tenements, or equitable compensation (prayers 6, 7, 20, 21, 30 and 31).
  3. It is said that Bianca sought the same relief in the Western Australian proceedings, by way of: a counterclaim in proceedings CIV 3041 of 2010 consolidated with CIV 2617 of 2012 (see [228]-[233] in relation to the Hope Downs tenements); in relation to the [243]-[258] Nicholas Downs tenements; [259]-[270] in relation to the Mulga Downs tenements) and a counterclaim in proceedings CIV 2737 of 2013 (see [228]-[233] in relation to the Hope Downs tenements; [243]-[258] in relation to the Nicholas Downs tenements; [259]-[270] in relation to the Mulga Downs tenements).
  4. It is said that, despite claiming that at all relevant times HPPL and its subsidiaries have not held many of its valuable mining tenements beneficially, Bianca’s central complaint in this proceeding is the underpayment of dividends by HPPL, including from profits generated form those very mining tenements.
  5. Insofar as Bianca asserts that the inconsistency between her positions in the two proceedings is “chimerical”, including because it is a question of fact and there is no admissible evidence that the non-payment of discretionary dividends by HPPL occurred because of the existence of the Federal Court proceeding (see Bianca’s submissions at [257], picking up her supplementary s 247A submissions at [12]), Gina puts forward two responses. First, that there is evidence that the Federal Court proceeding is a factor in dividend determinations (referring to the minutes of directors meeting held on 3 February 2017, which attached an explanatory document). Second (and, it is said, more importantly), that that assertion fails to grapple with the true inconsistency that arises: namely, that if Bianca succeeds in the arbitral dispute she maintains in her personal capacity, and many of HPPL’s principal assets are found not to be held by it beneficially, the whole basis of the numerous complaints made in this proceeding about the underpayment of dividends falls away.
  6. Furthermore, it is said that another issue raised in this proceeding is the propriety of providing for, but not paying, discretionary dividends in FY14 to FY16 (see statement of claim at [643]-[647]). That action is said to have constituted a breach of directors’ duty (see statement of claim at [628], [501]-[510]) and to have been oppressive (see statement of claim at [672]). However, it is noted that provision was made by HPPL pending the determination, by confidential arbitration before the Hon Fitzgerald AC QC (and now the Hon French AC), of a dispute as to the proper operation of cl 5 of the Hope Downs Deed. It is said that this proceeding should be stayed pending the determination of that extant arbitration.
  7. Insofar as Bianca suggests that this proceeding should continue to be progressed to trial even though it may not be determined until the various arbitral proceedings are determined (see her submissions at [258]-[262]), Gina says that these proceedings may be rendered moot by the determination of the arbitral proceedings “which will doubtlessly be years away”. It is submitted that the parties’ time and expenses (and the resources of the Court), should not be wasted in the meantime. It is submitted that there is no prejudice to Bianca from this course. Further, it is submitted that the outcome of the arbitrations will necessarily affect the defences and evidence that will be filed in this proceeding.
  8. It is submitted that the matters advanced by Bianca in this Court cannot properly be seen as claims made in the alternative to those that she advances in the arbitrations arising from the referrals made by the Federal Court and the Supreme Court of Western Australia. It is said that Bianca is asking separate decision-makers to come to conflicting and irreconcilable conclusions (something that could not happen if alternative claims are advanced before a single decision-maker). It is submitted that it is an abuse of the process of this Court to press for relief that is inconsistent with relief that is pressed in other proceedings. Gina notes that the circumstances in which the use of the Court’s processes will amount to an abuse include “where the use of the court’s procedures occasions unjustifiable oppression to a party” or “where the use serves to bring the administration of justice into disrepute” (citing UBS AG v Tyne [2018] HCA 45; (2018) 92 ALJR 968; 360 ALR 184 (UBS AG v Tyne) at [1] per Kiefel CJ, Bell and Keane JJ). It is submitted that these proceedings are apt to bring the administration of justice into disrepute because the one litigant simultaneously asks different decision-makers to come to irreconcilable conclusions.
  9. Insofar as Bianca also notes that qua trustee she will obtain no benefit from the arbitral proceedings (see her submissions at [263]), it is said that, aside from highlighting a potential conflict of interest she may have, this submission does not affect the case management decision to be made.

HPPL’s submissions

  1. It is noted that, in the Federal Court proceeding and the Western Australian proceeding (and the respective arbitral proceedings which have been commenced by reason of those proceedings), Bianca contends that: she is entitled to a constructive trust, an account of profits and equitable compensation in respect of various of HPPL’s mining interests, including the Hope Downs mining tenements; and that the Hope Downs Deed and other settlement deeds are void or should be set aside. As to the French Arbitration it is noted that this involves claims by Bianca that she is entitled to be paid the dividends under cl 5 of the Hope Downs Deed.
  2. I have set out already the problems that HPPL maintains the existence of the various proceedings give rise in terms of its uncertainty as to the payment of dividends. In essence, it is submitted that there is a live dispute as to who owns the mining tenements and a very considerable overlap between the respective proceedings in that regard.
  3. Considerable focus was placed in the course of argument on the uncertainty HPPL faces in relation to the payment of dividends (not least the issue arising under s 254T of the Corporations Act). HPPL says that it needs to have certainty as to what its assets are (since it cannot pay dividends if this would materially prejudice the company’s ability to pay creditors); that if Bianca and John fail in their claim to the assets in the Martin Arbitration then that would have the consequence that those assets are assets the income from which would be available to pay dividends but that if HPPL loses on that issue then the circumstances in which the breach of duty and breach of contract claims fall to be considered in the present proceeding will be very different (since HPPL will no longer have the beneficial interest in its only income generating assets). A further complication is envisaged if HPPL retains the assets but loses on the account of profits and/or equitable compensation claims.
  4. Accordingly, HPPL maintains that the present proceeding must await the outcome of at least the Martin Arbitration and, as I understand the submission, also the arbitration ordered by Le Miere J (since the claims by Bianca and John in those respective proceedings mirror each other).
  5. HPPL also says that Bianca has now deployed, in the Western Australian proceedings in which she appears in her personal capacity, the Sceales advice that was obtained by her in her capacity as trustee, in order to seek to “appropriate” HPPL assets for her benefit (but not for the benefit of the beneficiaries of the HMH Trust); and raises this as another reason that the present proceeding needs to await the outcome “in toto” of the dispute in relation to HPPL’s assets.

Bianca’s submissions

  1. Bianca submits that there is no proper justification for a wholesale stay of the proceedings pending the determination of the respective arbitral and other proceedings. It is submitted that the correct approach, consistent with case management principles, is to require the filing of pleadings and the provision of evidence in these proceedings and to assess any temporary stay after those steps have been completed.
  2. As to the discretion to stay proceedings pursuant to s 67 of the Civil Procedure Act, Bianca notes that the onus is on the person seeking the stay to must satisfy the court that the “requirements of justice require one” (see In the matter of Webuidem Pty Ltd [2012] NSWSC 708 at [13] per Black J).
  3. Bianca submits that, in addition to the matters referred to in cases like Sterling Pharmaceuticals Pty Ltd v Boots Co (Aust) Pty Ltd [1992] FCA 72; (1992) 34 FCR 287 at 290-291 per Lockhart J and In the matter of Treadtel International Pty Ltd [2014] NSWSC 1406 at [12] per Brereton J (as his Honour then was), the following matters are relevant to the exercise of the discretion: first, that prima facie “a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the Court” (see Rochfort v John Fairfax & Son Ltd [1972] 1 NSWLR 16 at 19 per Sugerman ACJ); second, that “it is a grave matter to interfere with [a plaintiff’s] entitlement by a stay of proceedings, which requires justification on proper grounds” (citing ResMed Limited v Australian Manufacturing Workers Union (No 2) (2015) 243 FCR 366; [2015] FCA 537 at [50(b)] per Perry J (ResMed)), applying Apotex Pty Ltd v Les Laboratoires Servier (No 6) [2012] FCA 745 (Apotex) at [9] per Bennett J; and that “the burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff’s ordinary rights should be interfered with” (ResMed at [50(b)], applying Apotex at [9]).
  4. It is submitted that Gina and HPPL have not discharged that onus for the following six reasons.
  5. First, that there is no “inconsistency” between these proceedings and the Federal Court Proceeding (now the subject of arbitration) and the related Hope Downs Proceeding (the Supreme Court of Western Australia proceedings), (see Bianca’s supplementary s 247A submissions at [11]-[15]). Bianca emphasises that: there is no asset claim made in this proceeding; there is no attack on the mining tenements made in this proceeding; and there is no attack on the debt or share restructure in this proceeding (see T 196). Bianca argues that there is more similarity between the Removal Proceeding and the present proceeding than between this proceeding and that in the Federal Court (though she accepts that Bianca’s unconscionability motion itself has an element of commonality) (see T 203).
  6. In oral submissions, responding to the allegation of inconsistency in relation to the dividend issue, Bianca’s position was put as follows (see T 248ff):

… This case that is brought in this court, is brought by reference to the facts as they fall as they currently are. What I mean by that, your Honour, is that we accept that dividends have been provided for in the context of the Fitzgerald arbitration. We also accept that claims have been made for many years against the mining tenements of HPPL, and your Honour was told about the WPPL claims. So those WPPL claims pre date the claims that Bianca in her personal capacity and John bring.

So we accept that this company has been the subject of attack with respect to its mining tenements for many, many years if not decades. What we say, your Honour, is that for the purposes of a 233 application for dividends, the court takes those matters into account but would be satisfied at trial that a further amount of discretionary dividends ought to have been paid nevertheless; and if we had reached the 247A application, I was going to be tendering by way of example, your Honour, resolutions of the board of HPPL which recognise the existence of the Federal Court claim about the mining tenements, recognise the existence of the Fitzgerald arbitration, recognise the existence of the WPPL claims, but then identify that there is sufficient amount of cash flow available within the business despite those matters to make a discretionary dividend of some tens or hundreds of millions of dollars.

So the actual facts, the actual fact is that HPPL was able in several years to make a determination of discretionary dividend despite those challenges to the relevant assets. The submission we’ll be making at trial, your Honour, is that at the level of 233 the Court would be satisfied that a higher amount of discretionary dividends could be paid. So we don’t see that as an inconsistency, we see that a recognition of actual fact, that the Court will be asked to determine what is a fair and reasonable amount of dividends to be paid to the shareholders and will take into account the challenges to assets that have been put in the proceedings. (Emphasis added.)

and at T 280:

… the way we put it, your Honour, is the trustee who I act for has an obligation to robustly preserve and make claims on behalf of the trust.

HER HONOUR: How does the trustee say that the trustee has a claim on behalf of the trust that there’s been oppression in not paying dividends out of assets that the trustee in her personal capacity says aren’t available to be paid to you because they’re hers.

THOMAS: No, we don’t want a hypothecation argument. So what we say is the company has an obligation to consider making discretionary dividends from time to time out of its assets or its income from whatever source, and we say the company in the first instance has failed to undertake that consideration from time to time and, secondly, that if it had undertaken that consideration it would have paid higher amounts by way of discretionary dividends, notwithstanding the existence of challenges to its assets.

So we don’t accept that a company in the position of HPPL given its profitability across all of its assets can decline to make discretionary dividends in some years or make low discretionary dividends where there are claims against its assets brought by my client and others. That’s an argument for trial. That’s the way we put the argument. We don’t see it as an inconsistency. It’s a matter, we accept, that a Court will closely consider in determining the quantum of dividends that it orders under 233. So it’s different to – we’re running it as a 233. It’s not a contract claim, it’s inviting the Court to‑‑

THOMAS: ‑‑determine a quantum in relation to that. Clause 5 will no doubt feature, at least on my right, as a relevant consideration and we will need to consider whether we agree it’s relevant at that time or whether we say that it needs to be contextualised or that it’s entirely irrelevant, but that’s the issue. We don’t see that there’s an inconsistency. My client is not here attaching herself to obtaining or seeking to obtain the underlying assets, as I’ve indicated.

  1. Second, it is said that it is premature to stay these proceedings because of asserted inconsistency with other proceedings. It is submitted that the risk of inconsistency could not possibly arise until the court is called on to make a determination; and that, until then, there are a number of steps that can be taken to ensure that this matter progresses. In particular, it is submitted that Gina and HPPL should be directed to file a defence; that nothing in the taking of that step could give rise to inconsistency; and that the filing of a defence may expose that some of the feared inconsistency cannot arise. For example, it is said that it may be clear that it is no part of Gina and HPPL’s defence to the directors’ duties claims that there were no profits available for the declaration of dividends (cf HPPL’s submissions at [140]). It is said that, once defences are on, Bianca should be directed to file evidence in support of her case (a step about which it is said Gina and HPPL could hardly be heard to complain); and then the question as to whether steps should be taken after Bianca’s evidence will then be a matter for the Court. It is submitted that, as a means to avoid the “feared” inconsistency, a wholesale stay of the proceedings is disproportionate and is apt to cause unnecessary delay. It is said that if a stay of the whole of the proceedings were now to be granted, the parties will need effectively to start these proceedings “from scratch” (save for the filing of a statement of claim) at some unspecified point in the future.
  2. Third, as has been emphasised throughout her submissions, that in each of the other proceedings relied on by Gina and HPPL, Bianca is not suing or being sued in her capacity as trustee. It is said that the benefits and burdens of those other proceedings will not necessarily accrue to the HMH Trust.
  3. Fourth, it is said that the fact that the construction of cl 5 of the Hope Downs Deed is in issue in the French Arbitration does not justify a stay of these proceedings (cf Gina’s submissions at [92]). It is said that the fact that the construction of cl 5 might ultimately be determined in that arbitration (and on the assumption that that construction is binding on Bianca) should not prevent the taking of pre-trial steps in this litigation.
  4. Fifth, it is noted that in this proceeding, insofar as Bianca seeks prospective relief relating to the future management of HPPL and that, if that relief should be granted then it should not be delayed.
  5. Sixth, it is submitted that the defendants are well-resourced and there is no reason to think that the progression of this proceeding (at least to an extent) will be financially oppressive.
  6. Finally, it is submitted that it is important to distinguish between Bianca’s s 247A application and other parts of this proceeding. It is said that there is, and can be, no inconsistency between the relief sought by Bianca under s 247A and any other proceedings; and it is submitted that if there were a risk of impermissible collateral use, that can be addressed by court order (cf HPPL’s submissions at [148]).

Abuse of process stay

  1. As to the abuse of process stay, this is again founded on the inconsistency in Bianca’s position in the proceeding with that in other proceedings.

Bianca’s submissions

  1. Bianca submits that there is no basis on which this proceeding, or any relief claimed therein, constitutes an abuse of process.
  2. Insofar as HPPL contends that these proceedings are an abuse of process because they are “unjustifiably oppressive” (HPPL’s submissions at [152]-[154], Bianca notes that the onus of satisfying the court that there is an abuse of process is “a heavy one” and lies upon the party alleging it (citing Williams v Spautz ([1992] HCA 34; 1992) 174 CLR 509 at 529; [1992] HCA 34 (Williams v Spautz) per Mason CJ, Dawson, Toohey and McHugh JJ). It is noted that the fact that “the same transactions and events are the subject of two separate proceedings in different forums … does not lead inexorably to the conclusion that there is an abuse” (citing Michael Wilson & Partners Limited v Nicholls (2011) 244 CLR 427; [2011] HCA 48 (Michael Wilson v Nicholls) at [110] per Gummow ACJ, Hayne, Crennan and Bell JJ). Bianca submits that there is no cogent evidence of oppression, noting again that the parties are well resourced.
  3. I should also add here that Bianca emphasises the observation made by Brereton J as to the pressure that was placed on her in the course of the litigation in this Court (see at T 203) and as to the need for robustness as trustee (see the 2015 Decision at [47] and see T 199.30 in this Court).

Determination

  1. I consider these alternative bases together.
  2. Proceedings have been held to be an abuse of process where: the Court’s processes are invoked for an illegitimate or improper purpose (see Williams v SpautzRogers v The Queen [1994] HCA 42; (1994) 181 CLR 251 at 287; [1994] HCA 42 per McHugh J); the use of the Court’s processes is unjustifiably oppressive to one of the parties or vexatious (Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538; [1990] HCA 55); and the use of the Court’s processes in the manner contemplated would bring the administration of justice into disrepute (Walton v Gardiner (1993) 177 CLR 378 at 393; [1993] HCA 77 (Walton v Gardiner) per Mason CJ, Deane and Dawson JJ). The categories of abuse of process are not closed (Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; (2015) 256 CLR 507 (Tomlinson v Ramsey) at 518-20; [2015] HCA 28 per French CJ, Bell, Gageler and Keane JJ; Perera v GetSwift Ltd (2018) 263 FCR 92; [2018] FCAFC 202 at [144]; Michael Wilson v Nicholls at [89] per Gummow A-CJ, Hayne, Crennan and Bell JJ). It has been recognised that the doctrine of abuse of process is fluid and adaptable (Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256; [2006] HCA 27 at [9] per Gleeson CJ, Gummow, Hayne and Crennan JJ; Jeffery and Katauskas Pty Ltd v SST Consulting Pty Ltd (2009) 239 CLR 75; [2009] HCA 43 at [70] per Heydon J).
  3. The bringing of two proceedings where one will lie, such as where the plaintiff bringing the second proceedings may obtain complete relief in the first (Moore v Inglis (1976) 9 ALR 509 at 513-14 per Mason J, as his Honour then was; Henry v HenryThirteenth Corp Pty Ltd v State [2006] FCA 979; (2006) 232 ALR 491 at [36]- [37] per Jessup J; Lidden Composite Buyers Ltd (1996) 67 FCR 560; (1996) 139 ALR 549 at 563-4 per Finn J; Branir Pty Ltd v Wallco Pastoral Co Pty Ltd [2006] NTSC 70; (2006) 203 FLR 115 at [17]- [20] per Mildren J; Commissioner of State Revenue v Aidlaw Pty Ltd (No 2) [2010] VSC 405 at [15] per Davies J) is one of the instances where an abuse of process has been found.
  4. The majority in the High Court, comprising Dawson, Gaudron, McHugh and Gummow JJ, in Henry v Henry (1996) 185 CLR 571; [1996] HCA 51 (Henry v Henry) said (at [35]):

35. It is prima facie vexatious and oppressive, in the strict sense of those terms, to commence a second or subsequent action in the courts of this country if an action is already pending with respect to the matter in issue [their Honours there referring to Moore v Inglis (1976) 50 ALJR 589]. And although there are cases in which it has been held that it is not prima facie vexatious, in the strict sense of the word, to bring proceedings in different countries, the problems which arise if the identical issue or the same controversy is to be litigated in different countries which have jurisdiction with respect to the matter are such, in our view, that, prima facie, the continuation of one or the other should be seen as vexatious or oppressive within the Voth sense of those words. (Emphasis added.)

  1. Their Honours went on to say that it did not necessarily follow that because one or other of the proceedings is prima facie vexatious or oppressive the local proceedings should be stayed but that:

… it does follow that the fact that there are or, even, that there may be simultaneous proceedings in different countries with respect to the same controversy is highly relevant to the question whether the local proceedings are oppressive in the sense of “seriously and unfairly burdensome, prejudicial or damaging”, or, vexatious, in the sense of “productive of serious and unjustified trouble and harassment”. And it also follows that courts should strive, to the extent that Voth permits, to avoid that situation. (Emphasis added.)

  1. In the context of representative proceedings, at first instance in the GetSwift proceedings (see Perera v GetSwift Ltd (2018) 263 FCR 1; [2018] FCA 732 (GetSwift)), Lee J concluded that it would be an abuse of process for more than one of those proceedings to continue and ordered that two of the proceedings be permanently stayed (see at [306]ff; [345]-[347]). On appeal, the Full Court (Middleton, Murphy and Beach JJ) did not consider it necessary to determine the question whether the continuation of competing proceedings was an abuse of process, concluding that there was power to stay one or more competing class actions pursuant to the Court’s inherent case management powers (see Perera v GetSwift Ltd (2018) 263 FCR 92; [2018] FCAFC 202 at [121] ff; [136]).
  2. In United Pacific Finance Pty Ltd v Tarrant [2009] NSWSC 630, Austin J (at [33]) noted that “the commencement of proceedings which create duplicity of proceedings is an abuse of process” (citing Moore v Inglis at 514 and 516 per Mason J; Commonwealth v Cockatoo Dockyard Pty Ltd [2003] NSWCA 192 at [56]–[63] per McColl JA; and referring also to Slough Estates Ltd v Slough Borough Council [1968] Ch 299 at 314–5 per Ungoed-Thomas J. His Honour also cited Thames Launches Ltd v Trinity House Corporation of Deptford Strond [1961] Ch 197 where Buckley LJ said (at 209):

[Counsel for the defendant] says that the principle is that a man should not pursue a remedy in respect of the same matter in more than one court. In my judgment, the principle is rather wider than that. It is that no man should be allowed to institute proceedings in any court if the circumstances are such that to do so would really be vexatious. In my judgment it is vexatious if somebody institutes proceedings to obtain relief in respect of a particular subject-matter where exactly the same issue is raised by his opponent in proceedings already instituted in another court to which he is not the plaintiff but the defendant. (Emphasis added.)

  1. In UBS AG v Tyne, Kiefel CJ, Bell and Keane JJ (with whom Gageler J agreed), said (at [1]) that:

1. … The varied circumstances in which the use of the court’s processes will amount to an abuse, notwithstanding that the use is consistent with the literal application of its rules, do not lend themselves to exhaustive statement. Either of two conditions enlivens the power: where the use of the court’s procedures occasions unjustifiable oppression to a party, or where the use serves to bring the administration of justice into disrepute … [Footnotes omitted.]

  1. Their Honours noted (at [38]) that the “timely, cost effective and efficient conduct of modern civil litigation takes into account wider public interests than those of the parties to the dispute” (citing Batistatos at [14] per Gleeson CJ, Gummow, Hayne and Crennan JJ; and Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 at [95] per Gummow, Hayne, Crennan, Kiefel and Bell JJ).
  2. As to the question of unjustifiable oppression, their Honours said (at [58]) that:

58. … That oppression is found not only in the significant delay in the resolution of the dispute and the inevitability of increased costs to UBS. At its core is the vexation of being required to deal again with claims that could have been resolved in the SCNSW proceedings. … On the final determination of the SCNSW proceedings, it was reasonable for UBS to order its affairs upon the understanding that the dispute between it and Mr Tyne, and the entities that he controlled, arising out of those dealings was at an end.

  1. At [59], their Honours said:

59. For the Federal Court to lend its procedures to the staged conduct of what is factually the one dispute prosecuted by related parties under common control with the attendant duplication of court resources, delay, expense and vexation, as Dowsett J [who had dissented in the Full Court] found, is likely to give rise to the perception that the administration of justice is inefficient, careless of costs and profligate in its application of public moneys…

  1. Gageler J, agreeing with the plurality, emphasised (at [62]) that in Tomlinson v Ramsey (at [24]-[25]), the doctrine of abuse of process, in its application to the assertion of rights or the raising of issues in successive proceedings, “was there explained to be informed in part by considerations of finality and fairness similar to those which inform the doctrine of estoppel but to be inherently broader and more flexible than that doctrine”.
  2. It is recognised that there may be circumstances in which the prima facie position that it is an abuse of process for any party to institute two proceedings for the one claim may be the subject of an explanation satisfactory to the Court (see Mala Pty Ltd v Johnston (1994) 13 ACLC 100 at 102 per Adams J; Roy Morgan Research Center Pty Ltd v Wilson Market Research Pty Ltd (1996) 39 NSWLR 311 at 317 per Santow J, as his Honour then was; Guardian Group Australia Pty Ltd v Lu [2005] NSWSC 1299 at [58] per Brereton J, as his Honour then was). Similarly, there may be a sufficient explanation as to why two proceedings raising the same issues should be continued at the same time. However, in general it is contrary to the public interest in the administration of justice for there to be permitted the risk of inconsistent decisions on the same issues; and there would be oppression at the continuation of proceedings with the risk of conflicting judgments, if the same or similar issues will arise for determination in each.
  3. Here, the commencement of the proceeding in New South Wales was the subject of the Judicial Advice Decision but the real question is as to the continuation of proceedings in which there is a duplicity of issues, or at least overlapping issues, between those raised in the other judicial and arbitral proceedings (particularly where the proceeding in this Court is hardly at an advanced stage).
  4. It is relevant in this context to note Gordon J’s observations (albeit in dissent as to the result) in UBS AG v Tyne that (at [151]):

151. The administration of justice may be brought into disrepute, in such a way as to amount to abuse of process, if the public perception is that the legal system is unfair, inefficient, ineffective, expensive (both for the parties and in terms of the use of public monies) or contrary to the rule of law. Permitting a proceeding to continue in such circumstances might suggest tolerance of behaviour that is contrary to the just, efficient and timely resolution of disputes including attempts to relitigate questions already resolved. (Footnotes omitted.)

  1. Here, of course, there is no suggestion of re-litigating questions already resolved but there is the spectre of inconsistent decisions at the very least in relation to the ownership of the mining assets; and the difficulty occasioned to HPPL arising from the inconsistency in Bianca’s position.
  2. At [155], Gordon J referred to considerations of finality, fairness and maintenance of public confidence in the administration of justice. At [80], Gageler J, agreeing with the majority, also emphasised the public interest in the timely and efficient administration of civil justice.
  3. As extracted above, the plurality (at [58]) spoke of oppression in the significant delay in the resolution of the disputes and the inevitability of increased costs. Those concerns as to the timely and efficient administration of justice arise in the present case. There is in my opinion much force to the submission by HPPL that all issues in relation to the payment of dividends and the ownership of the relevant assets should be dealt with the one set of proceedings.
  4. I have concluded that case management principles would have coupled with the stay of the proceedings even if the disputes had not been covered by the arbitration clause by reason of the fundamental inconsistency in the maintenance of the two claims as to the beneficial ownership of the mining tenements assets. From a case management perspective, it is inefficient and raises the spectre of inconsistent judgments to have these matters dealt with in different places before different decision-makers. I accept that there is not one single matter but I also accept that there is a marked degree of interconnectedness (or interconnectivity) in the respective allegations. Whether or not this is “all about the dividends”, as was put to me, there is little doubt that issues relating to the payment of dividends are squarely raised in the pleadings by Bianca and that this will give rise to submissions made on the basis of inconsistency with provisions of the Hope Downs Deed. The fact that a court might be unlikely to grant certain of the relief, or that reliance on certain clauses might ultimately be found to be against public policy or the like, is not to the point – what is relevant is that it is abundantly clear that the defendants will be relying on provisions of the Hope Downs Deed in their defence of the allegations made against them; and that exploring the issues so raised will involve disputes as to the provisions of the Hope Downs Deed. Moreover, I consider this continuation of the present proceedings involving overlapping issues and inconsistent claims for relief (and premised on inconsistent positions albeit raised in different capacities) would amount to an abuse of process.

Bianca’s unconscionability motion (motion viii)

  1. The basis of Bianca’s unconscionability motion (only before me for directions, as noted already) comprises: the conflict of interest and duty on the part of Gina that is said to be manifest on the face of the Hope Downs Deed (namely, that Gina obtained a personal benefit under the Hope Downs Deed and also purported to execute the Hope Downs Deed on behalf of the HMH Trust); the onus on Gina to justify that breach of duty (which onus is said to be undischarged); and the evidence indicating that Gina did not disclose material information to the beneficiaries prior to execution of the deed.
  2. In particular, the allegation by Bianca is that Gina failed to disclose to the beneficiaries that, after executing the Hope Downs Deed, Gina had requested (but not received) legal advice in her capacity as trustee about the lawfulness of the Hope Downs Deed.

Bianca’s submissions

  1. It is submitted by Bianca that, in circumstances where the Hope Downs Deed was “self-evidently a self-dealing transaction”, the failure of Gina to inform the beneficiaries prior to their own execution of the Hope Downs Deed that advice as to the lawfulness of the deed was outstanding precluded Gina from obtaining their fully informed consent; and that, whatever may be the effect of that conduct on the validity of the Hope Downs Deed, these facts support an injunction in the Court’s inherent jurisdiction preventing Gina (and HPPL, with reference to Farah v Say-Dee Pty at [110] per Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ, said to be her “alter ego” and accessory to the breach of trust) from seeking unconscientiously to deploy the Hope Downs Deed (entered into in breach of trust by Gina) against her successor trustee in aid of arbitration.
  2. It is submitted that Gina’s “breaches of trust and abuses of fiduciary position” are examples of “unconscientious conduct” in the strict sense (referring to Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315; [2003] HCA 57 at [20] per Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ); that HPPL is an accessory to that unconscientious conduct; and that it would be unconscientious for Gina or HPPL to assert rights deriving from a transaction which was entered into unconscientiously (relying on what was said in CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 (CSR) at 392 by the majority of the High Court; and noting the reference by the majority to what was said by Gummow J, then sitting in the Federal Court, at 232 in National Mutual Holdings Pty Ltd v Sentry Corp (1989) 22 FCR 209 (National Mutualas to the principles applicable in Chancery to restrain proceedings outside the forum). Reference is also made to the statement by Deane J in Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583 at 619-20; as to the traditional doctrine of equity which operates upon a legal entitlement to prevent a person from asserting or exercising a legal right in circumstances where the particular assertion or exercise of it would constitute unconscionable conduct; and to the academic commentary by RP Meagher, JD Heydon and MJ Leeming, Equity: Doctrines and Remedies (4th ed, 2002, LexisNexis Butterworths) at [21-015] in this regard.
  3. Bianca says that these principles apply equally in the context of anti-arbitration injunctions, referring to Kraft Foods Group Brands LLC v Bega Cheese Ltd [2018] FCA 549 at [24], [61], [63] per O’Callaghan J; and says (cf Gina’s submissions) that s 5 of the Commercial Arbitration Act does not abrogate the power of the court to grant an anti-arbitration injunction (pointing to art 5 of the Model Law, the text of which is set out in sch 2 of the International Arbitration Act 1974 (Cth) (International Arbitration Act), which is in relevantly identical terms to s 5 of the Commercial Arbitration Act and which has the force of law in Australia pursuant to s 16(1) of the International Arbitration Act.
  4. Bianca relies on the proposition that fiduciary duties will continue beyond the end of the fiduciary relationship (citing Disctronics Ltd v Edmonds [2002] VSC 454; (2002) 86 ATR 753 at [168] per Warren J, as her Honour then was; and Oliver Hume South East Queensland Pty Ltd v Investa Residential Group Pty Ltd (2017) 259 FCR 43; [2017] FCA 141 at [361] per Greenwood J).
  5. Bianca says that, in circumstances where Gina entered into the Hope Downs Deed in breach of the rule against conflicts, the benefit of Gina’s and HPPL’s rights under the Hope Downs Deed are appropriated for the benefit of the beneficiaries of the HMH Trust; and submits that in such circumstances, the constructive trustees, Gina and HPPL, would not be permitted to seek to enforce the legal rights (if any) against the interests of their beneficial owner, the beneficiaries of the HMH Trust; and that to seek to do so would breach Gina and HPPL’s duties as trustees de son tort. It is said that, by the unconscionability motion, Bianca seeks to defend the beneficiaries’ rights. Reference is again made in this context to the recognition in Young v Murphy that a trustee who has committed a breach of trust may be sued in respect of the breach by a successor trustee (see at 725).
  6. Pausing here, there is no suggestion that Bianca has received the benefit of any judicial advice as to whether she is justified in pursuing her unconscionability motion, as opposed to the judicial advice she obtained in relation to the commencement of the proceeding itself.
  7. Bianca submits that Gina and HPPL should not be permitted unconscientiously to seek to enforce an agreement entered into in breach of trust by Gina; and that this can be prevented through the exercise of the court’s inherent jurisdiction to control its own processes (by declining to grant the stay sought by Gina and HPPL and/or declining to entertain the application).
  8. Bianca maintains that Bianca’s unconscionability motion is not a dispute under the Hope Downs Deed nor is it a challenge to the validity or enforceability of the Hope Downs Deed (cf HPPL’s submissions at [100]), arguing that the application can succeed even if the Hope Downs Deed is valid and otherwise enforceable; and that nothing in the High Court Decision is directed to the kind of restraint here sought by Bianca, as trustee. In particular, it is submitted that the maintenance of the unconscionability motion is not foreclosed by the High Court Decision (cf HPPL’s submissions at [154] and Gina’s submissions at [142]-[145]). It is noted in this regard that: Bianca was not party to the High Court proceedings in her capacity as trustee; there was no contention in those proceedings that Gina and HPPL should not be entitled to rely on the arbitration agreement against Bianca (acting in her capacity as trustee); there was no contention in those proceedings that HPPL or Gina should not be entitled to maintain a stay application because doing so would breach equitable duties; and there was no contention that the beneficiaries of the HMH Trust were the equitable owners of the benefits given to Gina and HPPL by the Hope Downs Deed.
  9. Bianca says that the “validity” claims that were at issue in the Federal Court and High Court (contentions that the Hope Downs Deed was invalid and should be set aside) are not the dispute here; that the material on which she relies in these proceedings in support of the unconscionability motion was not before the Federal Court or the High Court; and that the relief that she seeks here is fundamentally different from the relief referred to in Gina’s closing submissions at [143].
  10. Bianca further says that the unconscionability motion is not foreclosed by the decisions of Le Miere J in the Western Australian proceedings. It is submitted that (cf Gina’s submissions at [146]) Le Miere J did not dismiss that application (noting that his Honour did not determine it but, rather, declined to hear the injunction application at the hearing commencing on 30 May 2018 for case management reasons – see Le Miere (No 9) at [47]); and that Bianca and John were confined in that case to arguing that the court should “dismiss” the s 8 application by reason of Gina’s unconscionable conduct (see Le Miere (No 10) at [150]ff). It is said that this is an argument “far removed” from an anti-arbitration injunction.
  11. As to the reference by Gina in her closing submissions to Tyne v UBS, Bianca says that to the extent that Mr Tyne (in his capacity as trustee of the relevant trust) was not bound by the decision in the Singapore proceedings (to which he was party in his personal capacity) and was pursuing the Federal Court proceeding in his capacity as trustee, the case is on all fours with the position of Bianca in the Western Australian proceedings. I note that in UBS v Tyne, by majority, the High Court held that the primary judge had been correct to stay the subsequent Federal Court proceeding brought by Mr Tyne in his capacity as trustee as an abuse of the process of the Federal Court (see at [59], [61]).
  12. Bianca says that the suggestion raised by HPPL in oral submissions that it is an abuse of process for her to pursue the unconscionability motion in these proceeding is without merit, noting that the onus of establishing abuse is on the party alleging it and is a heavy one. Emphasis is placed on the fact that Bianca, in her capacity as trustee, is not a party to the other proceedings to which reference has been made. It is said that Bianca’s unconscionability motion is raised defensively and has not been determined elsewhere; that Bianca’s claim (that the rights under the arbitration agreement are held on constructive trust for the beneficiaries) is a claim that is properly agitated by Bianca as trustee in these proceedings; and that there is no contention of oppression. It is submitted that there can be no serious suggestion that it would bring the administration of justice into disrepute for a trustee to raise, on behalf of beneficiaries, a defensive stay in circumstances of the present kind.
  13. Finally, while Gina and HPPL seek the referral of Bianca’s unconscionability motion itself to arbitration, Bianca says that the unconscionability motion engages the court’s inherent powers to control its own processes and engages those powers prior to the court adjudicating on a request made by a party under s 8. It is submitted that Bianca’s unconscionability motion is “inherently non-arbitrable” since no arbitrator has the ability to utilise this Court’s inherent powers to control its own processes; and hence must be determined by the court. Further, it is submitted that Bianca’s unconscionability motion must be determined prior to the s 8 Stay Applications since otherwise the right that Bianca (as trustee) seeks to vindicate by bringing the application would be destroyed before the application can be determined.
  14. In these circumstances, in her written submissions, Bianca argued that it is wrong, and procedurally unfair, to determine the stay applications before Bianca’s unconscionability motion is heard; particularly, it is said, where neither Gina nor HPPL has pointed to any or, any material, prejudice in having that motion heard before the stay applications are determined (and where Gina has addressed the substance of the anti-arbitration application in her written closing submissions). It is said that Bianca should not be left in a position where Gina and HPPL are permitted to proceed in that fashion without the unconscionability motion being heard and then determined concurrently with the stay applications.
  15. Bianca’s position is that, logically, the s 8 Stay Application(s) arise for determination only if Bianca is bound by the Hope Downs Deed in her capacity as trustee of the HMH Trust; and that the anti-arbitration motion should therefore be determined at the same time as, or prior to, the balance of issues arising on the s 8 Stay Applications and the s 8 Case Management Stay Application(s).
  16. Bianca submits that the consequence of the defendants’ submission that their stay applications should be heard and determined first, before the Court embarks upon the hearing of any other motion filed in this proceeding, is that she would be “shut out from even ventilating the 247A Application in open court”. Insofar as Gina submits that this approach is consistent with the High Court Decision, Bianca’s position is that the High Court Decision “is a distraction at this point in the analysis” and that it does not speak to the parties’ intentions or expectations in respect of either a s 247A application or Bianca’s unconscionability motion.
  17. Thus Bianca’s position on sequencing is that: it would be appropriate to determine the referral/stay applications prior to the s 247A application at least so far as the stay application seeks a stay which would encompass the s 247A application but that Bianca’s unconscionability motion should be determined at or before the determination of the s 8 Stay Application(s) and the s 8 Case Management Stay Application(s) (because Bianca’s unconscionability motion logically comes prior to the Gina and HPPL referral/stay applications). Bianca submits that the pursuit of those stay applications is in breach of duty and it would be procedurally unfair for the s 8 Stay Application(s) to be determined prior to Bianca’s unconscionability motion as that, as already adverted to, this would defeat the very right that she seeks to vindicate by pursing the application (and would do so in circumstances where the respondents to the motion have not identified any prejudice in the course proposed by her and have addressed the motion solely by way of written submission).

HPPL’s submissions

  1. HPPL maintains that, since it has been recognised that it is not appropriate to enter into consideration of the circumstances in which the arbitration agreement was entered into, it is not appropriate to entertain motion (viii) (Bianca’s unconscionability motion). As noted earlier, HPPL says that there are other reasons why it would be inappropriate to entertain Bianca’s unconscionability motion on HPPL’s s 8 stay application, including: that the anti-arbitration application is “itself unquestionably arbitrable” in that it challenges the “efficacy” of the Hope Downs Deed (referring to the High Court Decision at [44]); that substantially identical claims by Bianca (that the Hope Downs Deed was entered into by Gina in breach of her duties as the trustee of the HMH Trust, including by reason of her alleged failure to disclose certain legal advice to the beneficiaries) and that Gina and HPPL ought be restrained from relying upon the Hope Downs Deed, including the arbitration agreement in cl 20 of that Deed, have already been referred to arbitration (referring to the Federal Court Decision at [250]-[253]; Le Miere J (No 10) at [147]-[148], [154]); and that Bianca’s unconscionability motion is “relevantly indistinguishable” from an application made by Bianca to the Supreme Court of Western Australia, which application has been referred to arbitration. HPPL says that it is not suggested that Bianca’s unconscionability motion involves a direct attack on the arbitration agreement, in the sense that it would render the arbitration agreement null and void, inoperative or incapable of being performed; and hence that the hearing of Bianca’s unconscionability motion as part of the s 8 stay application would offend the principle of separability, as enshrined in s 16 of the Commercial Arbitration Act (citing the Full Court Decision at [341]-[360]; Le Miere (No 10) at [156]-[160]);
  2. HPPL notes that it has been suggested that there is a real question as to whether the Court has the power to grant anti-arbitration injunctions given Commercial Arbitration Act, s 5, to which I have referred earlier (referring to academic commentary B Lincoln, “The Role of the Courts: Enforcement of Arbitration Awards and Antiarbitration Injunctions” in International Commercial Litigation and Dispute Resolution (2010, Ross Parsons Centre of Commercial, Corporate and Taxation Law) at 93; and the view that anti-arbitration injunctions should only be granted “sparingly”, “with great caution” and only when “exceptional circumstances” exist, expressed in D Joseph, Jurisdiction and Arbitration Agreements and their Enforcement (3rd ed, 2015, Sweet & Maxwell) at [12.88]; see also Lord Collins of Mapesbury and J Harris, Dicey, Morris and Collins on the Conflict of Laws (15th ed, 2012, Sweet & Maxwell) at [16-089]). Further, HPPL notes that Bianca’s unconscionability motion was brought more than two years after HPPL’s referral/stay motion was filed (and only shortly before the listed hearing of the referral/stay motions).
  3. Finally, it is said that although Bianca invokes the inherent jurisdiction of the Court in support of the anti-arbitration application (at [8] of Bianca’s submissions), it has been said that the Court will only exercise its inherent jurisdiction if the arbitration has an impermissible tendency to interfere with proceedings pending in Court (citing CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 at 391-4). It is said that Bianca makes no attempt to identify how an arbitration would have this effect on the present proceeding. It is said that, had Bianca sought to invoke the Court’s equitable jurisdiction, she would bear the burden of establishing that the arbitral proceedings are vexatious or oppressive in the relevant sense.

Gina’s submissions

  1. Insofar as Bianca takes the position that the stay applications cannot be determined until Bianca’s unconscionability motion is determined (see Bianca’s submissions at [28(c)-(d)]), Gina complains that she has not had an opportunity to respond to the allegations made by Bianca in support of that motion. It is said that the apprehension by Bianca that the alleged breaches of trust will not be matters of contest (see the submissions at [14]) is misplaced.
  2. Gina argues that it is not correct that the determination of Bianca’s unconscionability motion should precede the determination of the stay motions.
  3. First, it is submitted that, in accordance with the approach applied by the High Court, Bianca’s unconscionability motion itself involves a dispute that must be referred to arbitration because that motion has at its heart a dispute about the efficacy of the Hope Downs Deed and, as the High Court has said “[i]t could not have been understood by the parties to these Deeds that any challenge to the efficacy of the Deeds was to be determined in the public spotlight” (see the High Court Decision at [44]).
  4. It is noted that, in the Federal Court, Bianca sought the following relief: injunctions restraining HPPL and Gina from enforcing or seeking to enforce the releases and arbitration clauses in the Hope Downs Deed (prayers 35, 40 and 42); declarations that the Hope Downs Deed was void ab initio as against Bianca (prayers 36 and 37) and John (prayer 41); and declarations that the Hope Downs Deed arbitration clause was void ab initio including as a fraud on the power by Gina acting in her capacity as the trustee of the Trust (prayers 38, 39, 42-47).
  5. It is noted that the basis of the relief relevantly includes the following allegations in the statement of claim in the Federal Court proceeding: breaches of trust and fraud on the power (see at [349]-[358]), including that by executing the Hope Downs Deed in her capacity of trustee, Gina breached her duties as the Deed was intended to benefit her personally and was not in the best interest of the beneficiaries of the trust (it is said that these allegations are very similar to those advanced in Bianca’s submissions at [14]-[16]; [271]-[280] albeit that the precise breach of trust is not clearly articulated); unconscionable conduct (see at [327]-[337]), on the basis of taking advantage of Bianca’s alleged vulnerability; that the purpose of Gina and HPPL entering into the Hope Downs Deed was Gina maintaining control of HPPL during her lifetime, preventing the beneficiaries from advancing claims against Gina and HPPL concerning “the ownership of the Hope Downs Tenements and Roy Hill Tenements, [Gina’s] shareholder of HPPL and the conduct of [Gina], the other relevant directors and officers of HPPL and HPPL in relation to the HFMF Trust or the HMH Trust” and to prevent public scrutiny (see at [288]); false and misleading representations that the entry into the Hope Downs Deed was in Bianca’s best interest (see at [292] and [294]); and fraudulent concealment by Gina and HPPL including of alleged breaches of trust by Bianca and HPPL’s knowing involvement in the same (see at [307]);
  6. It is said that the majority in the High Court held in relation to those claims that they were obviously within the scope of the arbitration agreement and referred them to arbitration (referring to the High Court Decision at [43]-[48]). It is submitted that, so too here, the question whether the relief sought concerning control over HPPL and dividends is available in light of cll 5, 7 and 8 of the Hope Downs Deed may be seen as depending upon whether the claim to restrain Gina and HPPL from relying upon the Hope Downs Deed are available and if so whether they are made out.
  7. Second, it is said that Bianca has already sought the very same relief in the Supreme Court of Western Australia, and her claims in that proceeding have been referred to arbitration. In her counterclaims, Bianca claimed that the Hope Downs Deed was entered into in breach of trust included because when Gina entered into it, she “knew of the Sceales Advice”, had a personal interest in executing the Hope Downs Deed, and so was in a position of conflict (see at [348]-[356]).
  8. It is noted that before Le Miere J determined HPPL’s and Gina’s stay application in the Western Australian proceeding, Bianca and John filed a motion seeking to restrain them from relying on the Hope Downs Deed on the basis that such reliance was unconscionable; and that at the hearing on 27 March 2018, Bianca and John contended that the stay application could not be determined before the restraint application. Le Miere J dealt with that matter as follows in the Le Miere (No 9) Decision at [46]-[47]. It is submitted that the same applies in this Court.
  9. Insofar as Bianca asserts that she was not a party to these and other proceedings in her capacity as trustee and thus asserts that no res judicata, issue estoppel or Anshun estoppel arises from those proceedings (citing Tyne v UBS AG (No 3) (2016) 236 FCR 1; [2016] FCA 5 at [376]- [400]; see Bianca’s submissions at [24]), Gina submits that Tyne does not support that assertion.
  10. It is noted that, in Tyne, the trustee was not a party to the relevant proceedings (see [378]-[379], [384] and [391]), as opposed to being a party in a capacity, and was not “privy” to the parties to the proceeding; and so it followed that no res judicata, issue estoppel or Anshun estoppel arose. It is said that the same cannot be said about Bianca, who is bound as a party to the various proceedings. Gina argues that this highlights the abuse of seeking to press the anti-arbitration application in this proceeding to restrain Gina and HPPL from relying upon the Hope Downs Deed, when that dispute has been referred to arbitration.

Determination

  1. The hearing of Bianca’s unconscionability motion at this stage would in my opinion offend the separability principle. It is not an attack on the validity of the arbitration agreement per se; and it raises factual matters the determination of which raise issues relating to matters that are (absent an anti-arbitration injunction being granted) to be referred to arbitration. The Full Court made clear that in the context of the application to adduce in evidence the Sceales advice (thus in a somewhat different context) (see the Full Court Decision at [412]) that it was “simply not relevant to hear detailed evidence in order to engage in fine assessments of the strengths of particular allegations”. The defendants similarly here say it is not appropriate to entertain a hearing of the allegations raised by Bianca’s unconscionability motion. It is said that the unconscionability motion wrongly seeks a ruling as to whether the Hope Downs Deed is property of the HMH Trust and whether it is binding on Bianca as party to the deed in her capacity as a trust, for example.
  2. Moreover, HPPL argues that Bianca’s unconscionability motion ignores the fact that HPPL is a separate entity. It is said that there will be a question of the conduct of Gina and its attribution to HPPL, just as there will be a question of the attribution of Bianca’s conduct to HPPL. I was informed during the course of closing submissions, for example, that at the Martin Arbitration HPPL proposes to tender a board minute recording Bianca’s presence at the board meeting at which it was decided to enter into the Hope Downs Deed.
  3. Also of relevance is the fact that it became apparent during the course of argument on the sequencing of the motions (as submitted by both Mr Giles and Mr Brereton) that the hearing of Bianca’s unconscionability motion itself would occupy considerably longer than the three days that I then had available in August last year.
  4. Emphasis was placed on the fact that Bianca’s unconscionability motion does not seek to restrain Gina solely from relying on the Hope Downs Deed in the present proceeding but in any court (see T 139). Mr Brereton submits that, on its face, the motion seeks final relief and that this will require findings on all of the matters involved in the present arbitrations. It is said that this is a “blatant attack” on the efficacy of the Hope Downs Deed (T 139) and that all attacks on the efficacy of the Hope Downs Deed should be addressed in the one forum (T 148). That last is a sentiment with which I agree.
  5. I do not accept that staying the hearing of Bianca’s unconscionability motion will prejudice Bianca in circumstances where she can raise the same issues in the arbitration that she wishes to do so here and, while cognisant of the issues as to public scrutiny of trusts, it seems to me that the prejudice to the defendants of entertaining an argument that might ultimately be found should have been referred to arbitration is the greater prejudice in the overall scheme of things.

Conclusion

For the above reasons, I make the following orders:

      • (1) Pursuant to s 8(1) of the Commercial Arbitration Act (NSW) and s 8(1) of the Commercial Arbitration Act (WA), refer the parties to arbitration of the disputes the subject of this proceeding other than the claim for relief pursuant to s 247A of the Corporations Act 2001 (Cth).
      • (2) Stay the balance of the proceeding pending determination of the arbitration of the disputes so referred to arbitration in accordance with order 1.
      • (3) Stay the following motions pending the determination of the said arbitration: notice of motion filed on 27 April 2017 by Bianca (referred to in these reasons as motion (ii)); notice of motion filed on 14 August 2018 by Gina (referred to in these reasons as motion (vii)); notice of motion filed on 11 June 2019 by Bianca (referred to in these reasons as motion (viii)); and notice of motion filed on 20 June 2019 by HPPL (referred to in these reasons as motion (ix)).
      • (4) By consent, adjourn sine die notice of motion filed on 12 May 2007 by Bianca (referred to in these reasons as motion (iv)).
      • (5) Direct the parties to file brief written submissions as to costs within 14 days with a view to determining that issue on the papers.
      • (6) Direct the parties to file brief written submissions within 14 days as to whether (if that be the case) they oppose the referral of this matter (on the Court’s own motion) to mediation; and, in any event, as to the appropriate time frame within which any such mediation may expeditiously take place.

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