Talifero v Asbestos Injuries Compensation Fund Limited as Trustee for the Asbestos Injuries Compensation Fund (No 2)

1. [1]

   BEAZLEY P AND SACKVILLE AJA: The Court delivered judgment in this appeal on 11 October 2018. [1] This judgment assumes familiarity with the Principal Judgment, including the abbreviations used in the Principal Judgment.

2. [2]

   The Court made the following orders in the Principal Judgment:

3. [3]

   Since the Principal Judgment was delivered the following events have occurred:

Substantive order

1. [4]

   The parties are agreed that the Trustee should have leave to amend its summons to claim the following relief (Order 1A):

2. [5]

   The amendment sought by the Trustee, if permitted, will overcome the procedural difficulty identified in the Principal Judgment. An order in the form of proposed Order 1A will also enable the Court to determine the issue presented to it and avoid a waste of court time and costs. [4] Accordingly, the Trustee should have leave to amend its summons to include a claim for relief in the form of Order 1A and an order to that effect should be made.

3. [6]

   The Trustee submitted, without elaboration, that the judicial advice should also be given pursuant to s 63 of the Trustee Act. It may be that the Trustee had in mind (although it did not say so) that a direction pursuant to s 63 of the Trustee Act would bind persons who were given notice of the application for judicial advice (including the Estate). [5] However, the Trustee has not explained why it should be permitted at this stage to invoke the power conferred by s 63 of the Trustee Act when it instituted the proceedings under s 55 of the Winding Up Act and now seeks a direction pursuant to that provision. In our view, the Trustee should not be given leave at this stage of the proceedings to amend its summons to seek judicial advice pursuant to s 63 of the Trustee Act and no such advice should be given.

Costs

1. [7]

   The parties are agreed that it is unnecessary for this Court to make any costs order in relation to the application before the primary Judge because his Honour made a costs order (Order 3) which has not been set aside. The parties are also agreed that the Trustee should be ordered to pay the Estate’s costs of the appeal from the assets of the Fund on an indemnity basis.

Stay

1. [8]

   On the assumption that this Court is prepared to make Order 1A, the Trustee submitted that the operation of Order 1A should be stayed until the determination of the Trustee’s application for special leave to appeal and, if the High Court grants special leave, the determination of the appeal. [6] The Trustee recognised that exceptional circumstances must be shown before a stay is warranted, including a stay to preserve the subject matter of litigation pending the determination of an application for special leave to appeal. [7]

2. [9]

   The Trustee contended that exceptional circumstances exist which justify the grant of a stay of Order 1A. It argued that a stay would preserve the subject matter of the litigation, namely the sum of $269,031.36 being the amount of damages awarded by the Dust Diseases Tribunal not already paid to the Estate. The Trustee expressed “concern” that if it succeeds in obtaining special leave to appeal and the High Court allows the appeal, the Estate may not have the financial resources to repay the amount. The Trustee submitted that the application for special leave to appeal is strongly arguable and has a significant chance of success. It offered to pay the sum of $269,031.36 into Court pending determination of the application for special leave to appeal and of any subsequent appeal should leave be granted as a means of overcoming any prejudice to the Estate.

3. [10]

   The Estate submitted that this Court has no power to stay an order in the nature of judicial advice given pursuant to s 55 of the Winding Up Act. A provision such as s 55 of the Winding Up Act provides a facility for a court to give private advice to a trustee and is an exception to the Court’s ordinary function of deciding disputes between competing litigants. [8] The only effect of a stay of an order made under s 55 would be to suspend the personal protection afforded to the Trustee by the judicial advice. The stay would not relieve the Trustee from its legal obligation to pay to the appellant the whole of Amaca’s liability pursuant to the judgment of the Dust Diseases Tribunal.

4. [11]

   In the alternative, the Estate submitted that there are no exceptional circumstances justifying a stay, for two reasons:

5. [12]

   Section 55 of the Winding Up Act relevantly provides as follows:

6. [13]

   The Trustee commenced these proceedings seeking an order pursuant to s 55 of the Winding Up Act that:

7. [14]

   The Estate was granted leave to appeal from the orders made by the primary Judge on the basis that although not a party to the Trustee’s application, its interests were affected. [11] The grant of leave to appeal, however, does not constitute the Estate a party to the Trustee’s application for judicial advice.

8. [15]

   The effect of advice given under s 55 of the Winding Up Act to the Trustee is that no proceedings lie or any civil or other liability arises against the Trustee on account of any act done by it in good faith and in accordance with the direction or advice (s 55(10)). Section 55 does not say that judicial advice that the Trustee is obliged to act in a particular way creates an obligation enforceable by a third party who would benefit if the Trustee acted in that way. In the present case, the Estate will not be able to enforce Order 1A and will not be able to levy execution on the judgment in order to recover the amount due from the Trustee. [12] The effect of any stay, as the Estate submitted, would therefore be limited to suspending the immunity conferred on the Trustee by s 55(10) of the Winding Up Act pending the determination of the application for special leave to appeal.

9. [16]

   There is authority supporting the proposition that ordinarily a declaratory order will not be stayed. [13] One rationale advanced for this proposition is that a stay of the declaration does not alter the underlying rights of the parties and therefore lacks utility. [14] Order 1A is not a declaration, but it is similar in the sense that it does not create rights and obligations enforceable as between the Trustee and the Estate. A stay of Order 1A will therefore not alter their underlying rights and obligations. For that reason Order 1A should not be stayed.

10. [17]

    In Re Marks and Federated Ironworkers’ Association; Ex parte The Australian Building Construction Employees’ and Builders Labourers’ Federation [15] an application was made to stay certain orders made by the Commission in a demarcation dispute between unions. It was submitted that where orders create rights and do not merely declare rights the Court has power to stay the orders. In response Mason J said that: [16]

11. [18]

    If this conclusion is wrong, we would not in any event grant a stay. We are prepared to assume that the Trustee has reasonable prospects of obtaining special leave to appeal notwithstanding that Order 1A does not create rights and obligations between the Trustee and the Estate. The difficulty facing the Trustee is that the evidence falls well short of establishing that there is a likelihood that if the Trustee pays the amount in dispute to the Estate it will not be able to recoup that amount if its appeal to the High Court is ultimately allowed.

12. [19]

    Mr Walter’s affidavit annexes correspondence in which the Trustee sought information concerning the Estate’s financial position prior to the hearing in this Court. The Trustee threatened that if the requested information was not forthcoming, it would apply for an order for security for costs. The Trustees’ own inquiries revealed that Anthony Talifero, the executor and trustee of the Estate, is the registered proprietor of a number of properties. The inquiries did not reveal whether Mr Talifero was registered as proprietor in his own right or in his capacity as executor and trustee of the Estate. Beyond this, the Trustee’s inquiries yielded no information and the Trustee did not pursue an application for security for costs.

13. [20]

    In the absence of more compelling evidence that a stay is needed to preserve the subject matter of the special leave application, there are no exceptional circumstances that would justify the grant of a stay.

Orders

1. [21]

   The following orders should be made, in addition to those made in the Principal Judgment:

2. [22]

   EMMETT AJA: On 11 October 2018, Beazley P and Sackville AJA published reasons for their conclusions in relation to the issues raised by the appeal and directed the parties to file short minutes of orders to give effect to their conclusions. However, the parties were unable to agree on the orders and it is necessary for the Court to resolve the parties’ differences. I have read the proposed reasons for the orders that are proposed by Beazley P and Sackville AJA. Having reached a different conclusion from that of Beazley P and Sackville AJA, I would not make those orders. However, I do not wish to say anything against the making of the orders proposed in the light of the conclusions reached by Beazley P and Sackville AJA.