Case: Morningstar Research Pty Ltd v Fiduciary Ltd [2003] FCA 870 ; (2003) 131 FCR 236
Outcome: distinguished
As to the broader abuse of process point, Senior Counsel for the applicants submitted that the present case was on all fours with a number of decisions in this Court which have dealt with the cross-vesting legislation. In particular, he relied upon Palm Springs Limited v Darling [2002] FCAFC 239 ; (2002) 123 FCR 527 and Morningstar Research Pty Ltd v Fiduciary Ltd [2003] FCA 870 ; (2003) 131 FCR 236. 64 After reviewing two authorities in this Court ( Palm Springs [2002] FCAFC 239 ; 123 FCR 527 and Morningstar [2003] FCA 870 ; 131 FCR 236) , Mr West QC submitted that it was a legitimate tactical procedure for the applicants to engage the jurisdiction of this Court so as to enable the proceeding commenced in this Court as part of that strategy to be transferred to the Supreme Court of New South Wales in circumstances where the facts that such proceedings were pending and were related to other proceedings in a State court or tribunal were critical factors in enabling the applicants to have the McCauslands' IRC proceedings removed into the Supreme Court even though no substantive proceedings were on foot in that Court and even though that Court ordinarily had no jurisdiction to hear and determine those IRC proceedings. Mr West said that, expressed in those terms, such a use of this Court's processes was not improper nor did it constitute an abuse of the process of this Court. 80 Mr West also referred me to Morningstar [2003] FCA 870 ; 131 FCR 236. In Morningstar , Hely J succinctly explained the way in which the current cross-vesting legislative scheme is being utilised by litigants (see [2003] FCA 870 ; 131 FCR 236 at [15] [18], pp 239 240). 81 In Morningstar [2003] FCA 870 ; 131 FCR 236 , as in Palm Springs [2002] FCAFC 239 ; 123 FCR 527 , there were real disputes in several courts on foot at the same time. The first of those proceedings was a suit in the Equity Division of the Supreme Court brought by the group which Hely J described as " the Rich interests ". The second proceeding was a proceeding commenced in the IRC by the Rich interests seeking relief pursuant to s 106 of the Industrial Relations Act 1996 (NSW). The next important proceeding was the filing by the Morningstar interests against the Rich interests of a significant cross-claim in the Supreme Court proceedings. The last proceedings to be commenced were the proceedings in the Federal Court commenced by the Morningstar interests. The Statement of Claim in the Federal Court proceedings in effect replicated the cross-claim filed by the Morningstar interests in the Supreme Court proceedings. 82 The basis of the contention advanced by the Rich interests in Morningstar [2003] FCA 870 ; 131 FCR 236 to the effect that the Federal Court proceedings were an abuse of the process of the Court was that there were two sets of proceedings substantially seeking the same relief upon the same grounds on foot at the same time. These duplicate actions were the action on the cross-claim in the Supreme Court proceedings and the Federal Court proceedings. The Rich interests contended that the Federal Court should not permit both actions to be prosecuted at the same time and that, in the circumstances of that case, the Federal Court proceedings having been commenced last, those proceedings should be dismissed or stayed. Critical to his Honour's reasoning was the circumstance that the Morningstar interests conceded that they could not prosecute at the same time both the cross-claim in the Supreme Court and their claims in the Federal Court. The Morningstar interests also tendered evidence to the effect that they would never have filed a cross-claim in the Supreme Court proceedings had they been aware at the time that they did so that the Rich interests had commenced their IRC proceedings. His Honour accepted that evidence. 83 In effect, his Honour approached his consideration of the application before him as if the cross-claim in the Supreme Court proceedings was no longer on foot, given the terms of an undertaking provided to the Court by the Morningstar interests to the effect that they would not prosecute the claims articulated in that cross-claim and given the evidence tendered on their behalf as to what they would have done had they known of the existence of the IRC proceedings. 84 In Morningstar [2003] FCA 870 ; 131 FCR 236 at [26] (p 242), his Honour said: [26] I accept, as the submissions of the Morningstar interests concede, that their purpose in commencing the Federal Court proceedings was to have the entirety of the disputes between them and the Rich interests dealt with by one court, utilising the procedures under the cross-vesting legislation. However, this is an advantage for which the law provides, and the decision of the Full Court in Palm Springs Ltd v Darling establishes that it is not an abuse of process to commence a proceeding for the purpose of achieving that advantage. His Honour said at [29] (p 242) as follows: [29] As the Full Court observed in Palm Springs Ltd v Darling , the present case is a world away from the kind of collateral benefit that Dr Spautz sought: the acquiescence of defendants to demands which had no connection with his criminal defamation action. The Morningstar interests are not seeking an object beyond that which the legal process offers. If there is a problem for the Morningstar interests it does not lie the fact that they do not genuinely seek to obtain the relief sought in the cross claim and in these proceedings. Clearly they do. If there is a problem, it lies in the fact that the Morningstar interests have asked for that relief twice, and from two different courts. 85 There was an acceptance by the Rich interests in Morningstar [2003] FCA 870 ; 131 FCR 236 that the claims made by the Morningstar interests in their cross-claim in the Supreme Court and in their Statement of Claim in the Federal Court were genuine claims and were not being agitated for an improper purpose such as the type of collateral benefit sought by Dr Spautz in the proceedings to which reference was made by the Full Court in Palm Springs [2002] FCAFC 239 ; 123 FCR 527 at [22] (p 532) and again at [27] (p 533). 86 In my judgment, the present case can be distinguished from Morningstar [2003] FCA 870 ; 131 FCR 236. My reasons for doing so are substantially the same as the reasons which I have given for distinguishing Palm Springs [2002] FCAFC 239 ; 123 FCR 527. To use the words of Hely J: The applicants " ... do not genuinely seek to obtain the relief ... " which they have sought in the proceedings in this Court. 87 Accordingly, I am of the view that neither Palm Springs [2002] FCAFC 239 ; 123 FCR 527 nor Morningstar [2003] FCA 870 ; 131 FCR 236 requires me to reject Mr McCausland's application. On the contrary, the reasoning in both of those cases requires that I should accede to it.