Pathway Investments Pty Ltd v National Australia Bank Limited (No. 2) [2012] VSC 495
| Author | Selva Veeriah |
The shareholders of National Bank of Australia (‘NAB’) brought a class action against NAB for alleged misleading and deceptive conduct and breach of continuous disclosure obligations regarding its exposure to certain financial products affected by the US residential mortgage crisis (‘the Victorian proceedings’).
About two months before trial, the shareholders applied to the South District Court of New York to take depositions (i.e., a form of oral discovery) from current and former employees of NAB, Ernst & Young, and KPMG currently working in New York (‘the New York proceedings’). NAB had an office in New York.
NAB applied for an anti-suit injunction to restrain the shareholders from participating in or continuing with the New York proceedings.
NAB contended that the New York proceedings were frivolous and vexatious. NAB argued that any order for taking depositions is likely to interfere with the Victorian proceedings, in that, it would bypass the supervision of the domestic court in a case managed list; materially prejudice NAB by disrupting its trial preparations; and create procedural distortions.
The shareholders contended that the New York proceedings were commenced in aid of their claim in the Victorian proceedings. The shareholders argued that the depositions, although inadmissible as evidence of witnesses at trial, could be useful for the below reasons.
The statements of former employees of NAB could be binding admissions on NAB. The contents of the depositions could be used to to interrogate NAB and to cross examine NAB’s witnesses. The depositions would assist the shareholders to fully understand documents discovered by NAB New York.
The Court accepted that the shareholders were acting lawfully in making the application, and the material sought in the deposition process were relevant but, nonetheless, restrained the shareholders from continuing with the New York proceedings for the reasons set out below.
The ability of a domestic court to grant an anti-suit injunction is an aspect of its inherent powers to protect the integrity of its processes by preventing parties from pursuing other processes in other jurisdictions.
The power to grant an anti-suit injunction has generally been used to prevent an abuse of process.
However, this power is not confined to that category or to any other defined or closed...
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