Emanuel Management Pty Ltd (in liq) & Ors v Fosters Brewing Group Limited & Ors [1999] QSC 270

3707,) State Reporting SC?1 /~70 ..(' I' Ie Bureau TRANSCRIPT OF PROCEEDINGS Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau. SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION WILLIAMS J ,No S3723 of 1999 EMANUEL MANAGEMENT PTY LTD (IN LIQUIDATION) & ORS and FOSTERS BREWING GROUP LIMITED & ORS AND COOPERS & LYBRAND & ORS BRISBANE .. DATE 28/07/99 JUDGMENT 1 REVISED COPIES ISSUED State Reporting Bureau Date 1:1",,1', Tile Law COllrts, Gco ... ·c Slrecl, Ilrlsh:lllc, Q. 4000 T I I (117) J2 '7 '11'11" (17) ~"7 '"<; " ,.. e ep IIlIIC: ."t 't." ':1:'<: ( .'_"t;:> ••'_ -- 1 of 5 -- 280799 T8/BP17 M/T 5021/99 ,Williams J) HIS HONOUR: This action is one of the matters on the supervised case list. Justice Moynihan has to date made various orders and the matter has been assigned to me for future management. 10 Justice Moynihan was made aware of the fact that the first group of defendants, the Fosters Group, proposed to have all or at least a substantial pa:"t of the statement of claim of the plaintiffs struck out. It was ordered that that appiication be heard before me in the week commencing 16 August: 1999. Since that order was made, various problems have arisen which have resulted in the matter being further mentioned this morning. There are over 60 companies in the group comprising the plaintiffs in 30 the action. Most of them are in liquidation. Most have been wound up pursuant to orders of the Federal Court. Given the recent decision of the High Court in the matter of Re Wakim Ex parte McNally, the question has arisen as to the 40 validity of those orders. At: least so far as Queensland is concerned, that is likely to be remedied within the next day or so when the remedial legislation passed by the Queensland Parliament receives Royal assent. :;0 However it may well be that a number of the orders are dependent upon similar legisJation being enacted in South Australia. Legislation to tl.at effect has been introduced 60 2 JUDGMENT -- 2 of 5 -- 280799 T8/BP17 M/T 5021/99 {Williams J) into the South Australian Parliament, but has not yet formally been passed. Against that background, the Fosters Group have commenced proceedings seeking to have chose orders set aside for want of jurisdiction. However Mr Keane Q.C. who appeared for the Fosters Group this morning informed me that his clients would not be challenging the constitutional validity of the remedial legislation and on the remedial legislation being 10 formally enacted that would appear to resolve the 20 jurisdictional issue. There is however a further and more significant problem. As would be obvious from what I have already said, there is a difficulty in the plaintiffs finding the necessary resources 30 to fund this litigation. In consequence an order, which I will call the funding order, was made in the South Australian Federal Court; it provided a basis upon which the liquidator could fund this litigation. It is conceded by Mr Morrison, Queen's Counsel for the plaintiffs, that without that funding order the plaintiffs would not be in a position to prosecute this litigation. It is anticipated if the challenge to the pleadings went ahead on 16 August that at least three hearing days would be required with Senior Counsel involved. It is agreed,that a 3 JUDGMENT 40 50 -- 3 of 5 -- 280799 T9/BC7 M/T 5021/99 (Williams J) conservative estimate for the" costs of each side would be of the order of $90,000. It has been foreshadowed that: the Fosters Group wishes to challenge on the merits the funding order. The difficulty is that because of the Wakim decision that order cannot be regarded as an order of the Federal Court made within jurisdiction. When the appropri~te remedial legislation is passed, that funding order would become an order of either the Supreme Court of South Australia or I:he Supreme Court of Queensland. It is not necessary for me to finally decide that particular issue. Once it is deemed to be an order of a Supreme Court, then the Fosters Group intends to apply in that Supreme Court to have it set aside on the merits. If that order was set aside, then it may well be that the liquidators would be personally liable for any costs which were incurred in relation to the strike~out proceedings if they proceeded on 16 August. As I put in the course of debate with counsel, if the Fosters Group was successful in obtaining an order for costs against the plaintiffs, and subsequently the funding order was set aside, the liquida~or could well be personally liable for costs ori his own side and the Fosters Group costs; in other words, he could be personally liable for something in the order of $180,000. 4 JUDGMENT 10 20~ \~ c 30 c 40 c 50 -- 4 of 5 -- , ) 280799 T9/BC7 M/T 5021/99 (Williams J) In my view, the overall justJ.ce of the case requires that the issue of the validity of the funding order be determined before the liquidator is placed in the position of deciding whether or not to proceed with a defence to the strike-out .' application. Because of the problem I have referred to as to the identity of the Court in which the challenge on the merits is to be made, it is not possible for me to give directions to the defendants as to the time-frame within which such proceedings should be brought. If I felt I could make meaningful directions, I would certainly do so. In the circumstances, all I can do is say that the Fosters 10 20 Group should take all reasonable steps to ensure that the 30 . challenge on the merits to the funding order is heard and determined prior to November of this year. I say November of this year because I am in a position to offer the parties the week commencing 22 November for the 40 strike-out application. I will order that the application to strike out be adjourned to 22 November 1999. I will further order that the directions order of Justice Moynihan be varied so that the so affidavits of the plaintiffs in response to that application should be filed by 1 November and the plaintiff's submissions with respect to that application be served and delivered to the Court by 8 November. Costs reserved. 60 5 JUDGMENT -- 5 of 5 --