NSW Supreme Court Rejects Anti-Suit Injunction Request

The Court denied an anti-suit injunction requested by the claimant, emphasising the importance of resolving disputes through agreement and considering the close relationship between the issues in the two proceedings.

Supreme Court New South Wales

Medium Neutral Citation: [COMPANY] atf [COMPANY] v [NAME] [2015] NSWSC 1641 Hearing dates: 3 November 2015 Date of orders: 03 November 2015 Decision date: 05 November 2015 Jurisdiction: Common Law Before: Schmidt J Decision: [NAME]'s 3 November 2015 motion dismissed.

The usual order as to costs is that they follow the event. Unless the parties approach to be heard on that question within 7 days, the Court's order will be that [NAME] bear [NAME]'s costs of the motion, as agreed or assessed. Catchwords: PROCEDURE – notice of motion – anti suit injunction sought - motion dismissed Legislation Cited: Civil Procedure Act 2005 (NSW) Family Law Act 1975 (Cth) Cases Cited: [COMPANY] v [NAME] [1997] HCA 33; (1997) 189 CLR 345 [COMPANY] atf [COMPANY] v [NAME] (Supreme Court (NSW), Hall J, 1 October 2015, unrep) [NAME] (Australia) Ltd v Hotchin [2011] NSWSC 681 Reale v Duncan Reale Pty Ltd [2006] NSWSC 227 Valceski v Valceski [2007] NSWSC 440; (2007) 70 NSWLR 36 Category: Procedural and other rulings Parties: [COMPANY] 164 361 666 atf [COMPANY] (Plaintiff) [NAME] (First Defendant) [NAME] (Second Defendant) Representation: Counsel: [redacted] [NAME] (Second Defendant)

Solicitors: [redacted] [NAME] (Second Defendant) File Number(s): 2015/205495 Publication restriction: None

Judgment 1. In July 2015, [COMPANY] brought proceedings against [NAME] and [NAME], seeking possession of a property located at Woollahra, of which they are registered proprietors. It also seeks judgment in the sum of $7,400,000, claiming that it loaned Mr and [NAME] this sum; that it was secured by a mortgage registered over the property; and that the loan was not repaid when it fell due, with the result that they are in default under their loan agreement with [NAME]. 2. [NAME] filed a motion in August 2015, seeking orders that the proceedings be transferred to the Family Court, where in July 2015 she had brought other proceedings against [NAME], to which [NAME] is also a party. [NAME] filed a motion later in August, seeking that parts of [NAME]'s defence be struck out and that summary judgment be entered in its favour, in the sum of $7,400,000.

3. On 1 October 2015, Hall J adjourned the hearing of those motions, so that [NAME] could serve a proposed amended defence and a further motion, if [NAME] did not consent to the proposed amendments (see [COMPANY] atf [COMPANY] v [NAME] (Supreme Court (NSW), Hall J, 1 October 2015, unrep). There was no agreement reached and accordingly, [NAME] filed her further motion on 15 October.

4. The three motions were listed for hearing on 27 October before Hidden J. Settlement discussions pursued that day finally failed, at a time when it was no longer possible for the motions to be heard. The parties have approached the list judge for a further hearing of those motions.

5. Since then [NAME] has served a further amended defence on which she wishes to rely, as well as a proposed cross claim and a further motion, which has not yet been filed. It is apparent from the cases which the parties advanced at the hearing on 3 November, that these developments were designed to meet the case which [NAME] seeks to advance against [NAME], including in relation to her application that these proceedings be transferred to the Family Court.

6. On 3 November, [NAME] filed a further motion seeking orders in the nature of an anti-suit injunction, restraining [NAME] from pressing order 5 in her amended initiating application in the Family Court proceedings, pending the outcome of the motions filed by the parties in these proceedings. That motion was supported by an affidavit sworn by [NAME]'s solicitor, [NAME] on 2 November.

7. Having heard the parties on 3 November, I declined to grant that injunction. These are the reasons for that conclusion 8. The Family Court proceedings are listed for hearing on 6 November, when [NAME] will seek interim spousal maintenance orders against [NAME]. [NAME] intends then to press an application that it be removed as a party to the proceedings. In the Family Court, [NAME] also seeks an interim order 5 that: "Pending further order, the Second, Third and Fourth Respondents be restrained from doing any act or thing or giving any instructions to any firm of solicitors to commence proceedings in the Supreme Court of NSW in relation to the Notice of Demand dated 12 June 2015 or to otherwise do any act or thing or give any instructions that may adversely affect the occupation of Edgecliff by the wife and children of the marriage." 1. "Edgecliff" is a reference to the matrimonial home the subject of these proceedings. It is [NAME]'s demand for repayment of the loan the subject of these proceedings to which order 5 refers.

2. It was in those circumstances that [NAME] pressed an anti-suit injunction in this Court on 3 November, submitting amongst other things that the Court would exercise its inherent jurisdiction to protect its own processes to restrain parties from using another court, to thwart those processes.

3. There was no issue between the parties as to the Court's power to grant the injunction (see [COMPANY] v [NAME] [1997] HCA 33; (1997) 189 CLR 345; (1997); [NAME] (Australia) Ltd v Hotchin [2011] NSWSC 681 and Reale v Duncan Reale Pty Ltd [2006] NSWSC 227, where considerations of comity between this Court and the Family Court resulted in the Family Court refusing an anti-suit injunction directed at proceedings in this Court). 4. [NAME] is the fourth respondent to the Family Court proceedings, as trustee for [COMPANY]. There was no issue between the parties that the Woollahra property the subject of these proceedings is the matrimonial home; that [NAME] still lives there with the two children of the marriage; that neither Mr nor [NAME] are beneficiaries of [COMPANY]; and that [NAME] was a director of [NAME], at the time that the transactions the subject of these proceedings were entered.

5. By her original defence in these proceedings, [NAME] made certain admissions which she seeks to withdraw, by her proposed amended defence. Those amendments and the proposed cross-claim which she has also served, seek to advance claims which accord with those which she pursues in the Family Court proceedings. She requires the Court's leave to amend her defence and to file the cross-claim. [NAME] opposes that leave being granted in circumstances where it submits that any failure to repay the loan can only diminish the matrimonial assets available to the parties in the Family Court proceedings, which are unlikely to be finally heard within the next 3 years. 6. [NAME]'s application for spousal maintenance came before the Family Court in August, but it was not reached and was then adjourned for hearing on 6 November. Her position is that if, at that hearing, an order for spousal maintenance is made in her favour, she will agree to the sale of the family home and the loan the subject of these proceedings being dealt with in accordance with the terms of an undertaking given to the Family Court by [NAME], a director of [NAME] and also a respondent to the Family Court proceedings. That will ensure that the disputed $7,400,000 is not dissipated, pending determination of those proceedings.

7. On the cases which the parties advanced, it appears that a sale of the property may realise more than that amount. Any balance can then plainly become the subject either of agreement between Mr and [NAME], or of an order of the Family Court.

8. It is only if maintenance orders are not made in her favour by the Family Court that [NAME] will pursue order 5, an order sought in the alternative to her application for spousal maintenance. It should also be noted that order 6 sought in those proceedings is an interim order, in alternative to the application for spousal maintenance. It seeks a continuation of payments which [NAME] claims [NAME] had previously been making to her and [NAME]. What connection that claim has to the agreements the subject of these proceedings, if any, was not explored.

9. It was apparent, however, that if the parties' settlement negotiations on 27 October had not failed at a time when it was not possible for their motions to be heard, they could have been dealt with before the pending hearing in the Family Court on 6 November. Given what lies in issue between the parties, there was obviously then a real prospect that [NAME]'s transfer application could have succeeded, if she was given leave to amend her pleadings, given the common factual underpinnings and issues lying between the parties in the two sets of proceedings, the nature of the Family Court's powers under the Family Law Act 1975 (Cth) and its the accrued jurisdiction (see Brereton J's discussion in Valceski v Valceski [2007] NSWSC 440; (2007) 70 NSWLR 36).

10. In the circumstances as they now stand, on 6 [NAME] will press for orders removing it as a respondent to the Family Court proceedings, where [NAME] seeks orders against it under s 106B of the Family Court Act. It is difficult to see a basis for the application for [NAME]'s removal from the Family Court being granted, on the material which the parties advanced at the November hearing.

11. By s 106B the Family Court has wide power to make orders against third parties such as [NAME]. It was not suggested that [NAME] had no arguable basis for the relief which she there seeks, which explains the undertaking proffered as to the disputed $7,400.00. Orders made in [NAME]'s favour in those proceedings could, undoubtedly affect the basis upon which [NAME] seeks relief in these proceedings. True it is that such orders will not be pursued on 6 November by [NAME].

12. Nor, however, is it certain that [NAME] will that day press order 5 against [NAME], even though she declined to give an undertaking not to do so. On her case that will only be necessary if she is not granted spousal maintenance. Such maintenance could result either from an agreement between Mr and [NAME], or as the result of the Family Court's order. If [NAME] obtains such maintenance, it appears that the issues lying between [NAME] and [NAME] in these proceedings will thereby be resolved.

13. There was no issue between the parties that if [NAME] does not obtain spousal maintenance and she then seeks to press order 5, it will be open to [NAME], if it is not successful in its application to be removed as a party to the Family Court proceedings, to oppose that course on the basis that such orders ought not to be entertained until her motion in this Court, for these proceedings to be transferred to the Family Court, is determined.

14. In all of those circumstances, I was not satisfied that justice demanded that the anti suit injunction which [NAME] sought should be granted.

15. Plainly enough the issues lying between the parties as to the loan and the disposition of the matrimonial home need to be resolved as quickly and cheaply as possible. That would best be done by way of a sensible agreement. That has as yet eluded the parties, in circumstances disclosed in [NAME]'s affidavit, which do not need here to be explained. It would clearly be in the parties' common interests for that possibility to be pursued further.

16. In these proceedings both the Court and the parties are obliged by s 56 of the Civil Procedure Act 2005 (NSW), to act to facilitate the just, quick and cheap resolution of the real issues in the proceedings. The requirements of s 57(1) must also be born in mind, it providing: "57 Objects of case management (1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects: (a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties."

1. The need to eliminate delay must be born in mind (s 59), as must proportionality of costs and what s 58(2) provides as to the dictates of justice, providing as it does that the Court: "(a) must have regard to the provisions of sections 56 and 57, and (b) may have regard to the following matters to the extent to which it considers them relevant: (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under section 56 (3), (v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case."

1. I was satisfied that here these requirements dictated that the anti-suit injunction which [NAME] pressed, at this stage of these proceedings, be refused. That posed no impediment to [NAME]'s pursuit of her application to transfer these proceedings to the Family Court, as [NAME] argued. Whether that application is pressed, is a matter for [NAME]. It is [NAME] who resists both that application, as well as [NAME]'s pursuit of the relief sought against it in the Family Court. Nor can [NAME]'s application to the Family Court be accepted as being a device to circumvent this Court's jurisdiction in these proceedings, as [NAME] argued. Just as [NAME] is entitled to pursue the relief it seeks in these proceedings, [NAME] is entitled to defend its claim by the steps she has taken and to pursue the proceedings which she brought in the Family Court, even before these proceedings were commenced.

2. As Bergin CJ in Eq observed in [NAME] at [20], it is inappropriate for two courts to be deciding the very same issue, but this is not such a case. The Family Court's powers under s 106B are quite different to those which this Court has to exercise in these proceedings. In the circumstances, I was satisfied that it would be unjust to impede [NAME]'s pursuit of the relief which she seeks against [NAME] in the Family Court proceedings, particularly in circumstances where what she seeks to pursue there on 6 November against [NAME], may in any event resolve the issues lying between her and [NAME] in these proceedings.

3. The parties have been given leave to take another date for the hearing of their outstanding motions. The appropriate course is for such a date to be pursued if it is still needed, after the hearing in the Family Court on 6 November.

Orders 1. For the reasons given, I ordered that [NAME]'s 3 November motion be dismissed. The usual order as to costs is that they follow the event. Unless the parties approach to be heard on that question within 7 days, the Court's order will be that [NAME] bear [NAME]'s costs of the motion, as agreed or assessed.

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Amendments 10 November 2015 - amendment to coversheet - catchwords DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 November 2015