Should I stay or should I go?

Today the Supreme Court of WA refused a stay application in respect of a corporations application to rectify the ASIC register regarding allegedly improper changes to directorship of an Australian company.

The Australian company, Adamus Resources Pty Ltd is a former ASX-listed company now wholly owned by a company in St Kitts and Nevis, controlled by the List family.  As part of a material relationship breakdown, there are ongoing proceedings in the Eastern Caribbean Supreme Court regarding the ultimate control of a parent company, Nguvu Holdings Ltd.  Meanwhile, one family member, purportedly in control of the parent, signed documents seeking to remove and replace the director of the Australian subsidiary, which in turn owns a company in Ghana that controls the Nzema Gold Project in the West African company.

The original director commenced proceedings in Western Australia seeking orders effectively to nullify the relevant ASIC 484 provided to changes to the ASIC register.  The purported newly appointed directors sought to stay the proceedings in Australia until the proceedings in the Caribbean had been dealt with.

In Morrison v Woodthorpe [2022] WASC 179, Master Sanderson refused to stay those proceedings.  The Master adopted the plaintiffs’ submissions to the effect that factors affecting whether a stay should be granted included:

  • a consideration of the true nature and full extent of the issues involved in proceedings in the local court and in the foreign court;
  • whether, in the light of that consideration, the foreign court has jurisdiction to deal with the same subject matter as is before the local court;
  • the degree of connection which both proceedings share with the law of the foreign court and the law of the local court;
  • where the relevant acts or omissions occurred;
  • where the parties reside and carry on business;
  • whether local professional or other standards of care have a bearing on the legal quality of the relevant acts or transactions or the liability of the parties;
  • where and how the damage was suffered;
  • where the relevant evidence in the action is to be found;
  • whether the application to the local court for a stay or dismissal has been made with reasonable promptness;
  • the stage which proceedings in the foreign court have reached in comparison with the stage of proceedings in the local court;
  • the order in which the two sets of proceedings were instituted and the costs which have been incurred in each;
  • whether each court recognises the orders and decrees of the other;
  • which court can provide more effectively for the complete resolution of the whole of the controversy between the parties;
  • that a party properly invoking the jurisdiction of the local court has a prima facie right to insist upon the exercise of that jurisdiction, so long as that prima facie right is not given undue emphasis;
  • that considerations of comity and restraint should be taken into account where a defendant carries on business in a foreign country and the jurisdiction of the courts of that country would be recognised under local conflict rules;
  • the undesirability of allowing two independent actions involving the same question of liability to proceed contemporaneously in the courts of different countries; and
  • whether the dominant purpose of a party in commencing proceedings in one jurisdiction or another is to prevent another party from pursuing remedies available in the courts of another country having jurisdiction.

Those factors are consistent with the decision of the New South Wales Supreme Court in Colosseum Investment Holdings Pty Ltd v Vanguard Logistics Services Pty Ltd [2005] NSWSC 803.

Ultimately, despite material overlap between the facts in issue in the Australian proceedings and those in Nevis, the Master determined as follows:

In my view, it is appropriate that the issues raised in this application be heard and determined in this court and that hearing take place as soon as possible. What is to be determined in this court is particularly within the province of Australian courts. It is the validity of the appointment of directors to an Australian company. I accept there is significant overlap between the Nevis proceedings and this action. But it is important control of the Australian company be determined by an Australian court and it is inappropriate to leave the matter hanging for a period of two years or perhaps longer. Accordingly, I am not satisfied a stay ought be granted …

Blackwall Legal acted for the plaintiffs in successfully opposing the stay.

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