Abriel & Ors v Levitt [2003] NSWSC 1235 | Case summary

JUDGMENT 1 The applicant defendant sought an order under the Supreme Court Rules 1970, Pt 15 r 26 that the plaintiffs' statement of claim be struck out. Alternatively, summary judgment was sought in favour of the defendant under Pt 13 r 5 which provides, amongst other things, that the court may order proceedings that are an abuse of its process to be stayed or dismissed. 2 The principles applicable to summary dismissal of an action are well understood. The case must be very clear to justify summary intervention to prevent a plaintiff submitting a case for determination in the appointed manner (Dey v Victorian Railways Commissioners (1948-1949) 78 CLR 62 at 91). The court's powers of summary dismissal should not be exercised to deny a plaintiff access to the courts unless the lack of a cause of action is clearly demonstrated (General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129). It is for the applicant to demonstrate that the statement of claim is beyond saving by legitimate amendment (Penthouse Publications Ltd v McWilliam, unreported, 14 March 1991, NSWCA citing Mutual Life & Citizens Assurance Co Ltd v Evatt (1970) 122 CLR 628 at 631). 3 The applicant relies on a line of authority to the effect that an attempted re-litigation of issues already determined after contested proceedings constitute an abuse of process of the court sufficient to enliven summary termination. 4 In Walton v Gardiner (1992-1993) 177 CLR 378 at 393 a majority of the High Court took the view that proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances did not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it was sought to litigate anew a case that had already been disposed of by earlier proceedings. 5 Their Honours cited with approval Reichel v Magrath (1889) 14 App Cas 665 at 668, Connelly v Director of Public Prosecutions [1964] AC 1254 at 1361-1362 and Hunter v Chief Constable of the West Midlands Police [1982] AC 529 at 536. 6 In Reichel, the appellant had brought proceedings against his Bishop and the patrons of a benefice claiming he was vicar of the benefice and an instrument of resignation executed by him was void. Judgement was given against him on the ground that the vicarage was void by reason of his resignation. The respondent, having being duly appointed to the benefice, brought proceedings against the appellant claiming he was the vicar. In his defence, the appellant set up the same case as that on which he had been defeated in the earlier action. At 668 Lord Halsbury LC said: "I think it would be a scandal to the administration of justice if, the same question having being disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same case again." 7 In Connelly at 1361-1362, Lord Pearce expressed the view that the inherent jurisdiction of the court in criminal proceedings was not exhausted by the pleas of autrefois acquit and autrefois convict and it retained a power to prevent a repetition of prosecutions even when they did not fall within the exact limits of the pleas in bar. 8 Hunter concerned the "Birmingham bombers." The appellants were convicted of murder following explosions in two Birmingham hotels. At trial, they alleged they had been beaten while in police custody and their confessions were forced from them. The jury convicted them. The appellants sued for damages for assault based on the same allegations they had made at their criminal trial. The House of Lords concluded that it was an abuse of process to initiate a collateral attack on a final decision made by a court of competent jurisdiction. At 536, Lord Diplock described the court's power to deal with this situation as: "…the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people." 9 A recent discussion of the principle appears in Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198. The purchasers of a business successfully sued the vendor on the ground that a warranty as to the accuracy of 1991 financial statements annexed to the contract for sale had been breached. The purchasers were unsuccessful in their claim that the financial statements constituted misleading or deceptive conduct in terms of the Trade Practices Act 1974 (Cth), s 52 on the basis that the purchasers had relied on the warranty and not on the accuracy of figures. 10 The purchasers commenced a separate action against the accountants who had prepared the financial statements claiming damages for negligent misrepresentation. The accountants failed in their application for summary dismissal of the action as an abuse of the process. They were successful on appeal. 11 In their action against the accountants, the purchasers not only relied upon misrepresentations in the 1991 figures but also with respect to the figures for earlier years. No issue with respect to the earlier figures had been raised in their action against the vendor. The Court of Appeal took the view that the purchasers should have raised any issue with respect to the earlier figures in their proceedings against the vendor (Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589) and judgment in favour of the vendor on the cause of action for misleading and deceptive conduct created a cause of action estoppel against any claim against the vendor for negligent misrepresentation (Trawl Industries of Australia Pty Ltd (in liq) v Effem Foods Pty Ltd (1992) 36 FCR 406). 12 The court went on to hold that the proceedings against the accountants were an attempt to re-litigate issues already decided and constituted an abuse of process. The addition of the figures of the earlier years was mere camouflage, a distinction without a difference. At 203, Handley JA said: "The present proceedings are an attempt to litigate or re-litigate issues which were either decided in or are barred by the earlier proceedings. In substance, ignoring the camouflage, the purchasers are attempting to re-litigate the issue of reliance on the 1991 figures which they lost. If they cannot succeed against anyone in respect of the 1991 figures because they did not rely on them, they could hardly succeed in establishing reliance on the earlier figures." 13 In Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404, cited with approval in Rippon at 204, Hunt CJ at CL at 414 enunciated the requirements for the striking out of pleadings or a cause action as an abuse of process: the issue determined in the earlier case must be one, the party propounding it in the later case, lost in the earlier case; it must be an issue necessarily determined in the earlier case and one of importance in the final result; it must have been properly argued in the sense that the tribunal which decided the earlier proceedings was an appropriate one to do so, the parties were appropriate contradictors and the issue was regarded by them as one of importance; the decision in the earlier case must have been a final one. See, also, State Bank of New South Wales Ltd v Stenhouse Ltd (1997) Aust Torts Reports 81-423 at 64,089. 14 The application of the principle to the instant circumstances leads me to the view that the proceedings should be summarily terminated. My reasons are as follows. 15 To put the proceedings in context, interests associated with the plaintiffs obtained finance from Australian Guarantee Corporation Ltd and Westpac Banking Corporation. Proceedings were instituted against AGC and Westpac in 1993. Those proceedings were settled by a deed of release in 1994. However, the plaintiffs commenced fresh proceedings to set aside the agreement on the basis that it had been procured by undue influence as a result of unconscionable conduct. That litigation was referred to mediation and resulted in a second deed of release in April 1998. Under that deed, the plaintiffs were to be paid $90,000. The plaintiffs then commenced proceedings in the Federal Court of Australia against AGC and Westpac to set aside the second deed of release. Dowsett J dismissed those proceedings. An appeal to the Full Court of the Federal Court was unsuccessful as were a special leave application in the High Court of Australia and an application in the High Court to re-open the application for leave. 16 Mr Rothman SC appeared for the plaintiffs in the appeal to the Full Court of the Federal Court. He was sued for alleged misconduct in contesting that appeal. That action was summarily terminated by Burchett AJ. An appeal from that decision was heard by the Court of Appeal on 17 December 2003. Its decision is reserved. I am concerned with the question whether the proceedings before Dowsett J deny the plaintiffs the opportunity to continue with their present proceedings. I am not concerned with the plaintiffs' action against Mr Rothman. I doubt that the decision of the Court of Appeal will have any impact on my judgment. 17 Dr Bennett SC, now a Federal Court Judge, appeared for the plaintiffs in the second mediation. She was sued for alleged misconduct that allegedly resulted in the execution the second deed of release to their detriment. Those proceedings were summarily dismissed by Adams J. An appeal to the Court of Appeal was unsuccessful. 18 The defendant in the current proceedings is the solicitor who instructed Dr Bennett at the second mediation. 19 Prior to the second mediation, the defendant had written a letter to Mr Gary Grunstein, an employed solicitor in the office of the solicitors for AGC forwarding a draft affidavit. Portion of the letter was couched in emotive terms. It concluded thus:

"You have pointed out that Mr Abriel has sent you a number of facsimiles, some of them insulting. You are not the only target of his penned barbs. Moreover, you're not the only person who has offered his services gratuitously or substantially so, in this matter. As the saying goes, "desperate men do desperate things". Rabbi Pinchas Wollstone of the Jewish House, has assisted Mr Abriel and procured the services of Senior Counsel to act on a pro bono basis for Mr and Mrs Abriel. It would be a strange thing indeed if a firm so well regarded in the Jewish community as yours, were to act against the interests of the Abriels, in circumstances where the Jewish House is committing itself to their full support and enlisting the services of dedicated practitioners to come to the aid of his family, in their hour of need. It is not a case where Mr Abriel is capable in any respect. The AGC Deed itself sought exculpation for fraud committed by AGC and Westpac against the Abriels. If a young Jewish professional does not come to the aid of elderly Jew (especially in circumstances where you would not be sacrificing anything yourself and even gaining protection in the process) then do we not have to ask ourselves what Rabbi Akiba asked himself, "If I am not for myself, who will be for me?" This is a collective question, which we must confront as Rabbi Wollstone has done. Trusting in your earnest cooperation and with the Season's Greetings." 20 The plainitffs were unaware that the defendant had written this letter and were unaware that he had annexed it to an affidavit sworn by him before the second meditation. Dr Bennett was unaware of its existence. 21 During the second mediation counsel for AGC and Westpac, Mr Dowdy, drew Dr Bennett aside and showed her the letter. Thereafter she and the defendant had a conversation. Neither of them informed the plaintiffs of what had transpired or the content of the letter. Dr Bennett and the defendant did not act for the plaintiffs after the conclusion of the second mediation. 22 What is alleged against the defendant in the current proceedings is that he acted in breach of his duty to the plaintiffs in writing the letter, annexing it to an affidavit, failing to disclose its existence to the plaintiffs, failing to consider its content and pay due regard to its effect and the context in which it was produced at the second mediation, failing to disclose the substance and import of the conversation between counsel at the mediation, failing properly to instruct Dr Bennett, failing to disclose the reaction to and effect of the letter upon Dr Bennett's conduct of the mediation, failing to act without fear or favour, failing to act in the best interests of the plaintiffs, failing properly to advise the plaintiffs, failing to disclose that there was a conflict of interest between Dr Bennett's own interests and those of the plaintiffs associated with the letter and in intimating to the legal advisors of AGC and Westpac that the defendant was not committed to taking the matter to trial. 23 It is further alleged that the defendant was in breach of his duty to the plaintiffs in using his influence and undue pressure together with Dr Bennett to force the plaintiffs to accept $90,000 when he knew or ought to have known that such settlement was not in the best interests of the plaintiffs and in doing so he was acting in his own interests in conflict with those of the plaintiffs. 24 It is alleged that as a result of the defendant's breaches of duty, the plaintiffs executed the second deed of release and thereby suffered damage. 25 In the alternative, it is alleged that the defendant impliedly undertook to provide his professional services with due care and skill in accordance with the rules of his profession, that the circumstances already enunciated constituted a breach of the implied undertaking and the plaintiffs suffered damage as a result of the loss of moneys claimed in the original proceedings against AGC and Westpac and the Federal Court costs in seeking to set aside the second deed of release. 26 In the proceedings before Dowsett J, the plaintiffs alleged that AGC and Westpac and were guilty of unconscionable conduct under the general law or pursuant to the Trade Practices Act 1974 (Cth), s 51AA. Alternatively, it was alleged that they were parties to undue influence exerted over the plaintiffs by Dr Bennett, such conduct having induced them to execute the second deed of release. It was alleged that Dr Bennett and the defendant refused to take the plaintiffs' action to trial, that Mr Dowdy had caused Dr Bennett to withdraw, that AGC and Westpac acted deliberately through their counsel to cause this result and to cause Dr Bennett to persuade the plaintiffs to accept the second deed of release. 27 Mr Abriel appeared in person before me for the plaintiffs. He submitted that there are essential differences between the current proceedings and those before Dowsett J. He pointed to the adverse comment of his Honour about the defendant's part in the second mediation, Abriel v Australian Guarantee Corporation Ltd [2000] FCA 1198 at par 57: "As to Mr Levitt, I am somewhat equivocal as to his reliability. He seemed, at some points, anxious to assist the applicants in a way which caused him to be unfair to others. I cannot otherwise characterize his conduct in attributing Ms Bennett's withdrawal to the receipt of the Grunstein letter from Mr Dowdy and in criticizing Mr Dowdy's conduct. After all, the letter was his and there was no reason why Ms Bennett should not have been informed of its content. If it had the effect of provoking her withdrawal, then I would have thought that Mr Levitt might at least have considered the possibility that the fault lay with him and not with her or Mr Dowdy. Further, if he perceived at the mediation conference that the Grunstein letter had led to Ms Bennett's withdrawal and possibly affected her advice to the applicants, then he should have said so at the time, and certainly before they signed the deed. His duty would dictate that course, whether or not the first and second applicants had heard any conversation with Ms Bennett concerning the Grunstein letter." 28 There are differences in the current pleading against the defendant. The claim that he was in breach of his duty to the plaintiffs in writing the letter and in annexing it to an affidavit, for example, are matters not pleaded in the proceedings before Dowsett J. Nor was his withdrawal from the case. Nor was it previously alleged that the defendant acted in concert with Dr Bennett in bringing undue influence to bear upon the plaintiffs. 29 After the hearing of the application before me, Mr Abriel filed a further affidavit in which he pointed out that in a letter written to Mr and Mrs Abriel shortly before the second mediation dealing with his disclosure requirements as to costs under the Legal Practitioners Act 1987, the defendant made reference was made to a rate for fees after the conclusion of the mediation. Mr Abriel asked the rhetorical question: why would the defendant write in that fashion if he had not agreed to continue to act for the plaintiffs? 30 While there are differences in the pleaded breaches of duty, the action in negligence is grounded upon the allegedly induced execution of the second deed of release. The damages which flow from the alternative plea of a breach of an implied undertaking arise, again, from the execution of the second deed of release. Both causes of action depend upon making good the allegation that the plaintiffs were forced to accept the second deed of release against their interests when the defendant and Dr Bennett, with whom it is alleged he collaborated, knew or ought to have known that the settlement was against the plaintiffs' interests. 31 In the appeal from Adams J, the Court of Appeal commented upon the failure to join Dr Bennett in the action against AGC and Westpac. The allegations that the defendant acted in concert with her could, equally, have been raised in that action. They could, and should, have been raised in the proceedings against her. The failure to do so gives rise, in my view, to a question whether the estoppel of the kind referred to in Anshun arises. If it was the plaintiffs' case that the defendant had acted in concert with Dr Bennett, that was a matter so relevant to the subject matter of the action against AGC and Westpac or, alternatively, of the action against Dr Bennett that it was unreasonable not to have relied on the allegation in one or other of those proceedings. 32 I need not decide this issue, however, because I am of the view that the plaintiffs must fail for another reason. 33 Dowsett J in Abriel at par 69 concluded that it was not Dr Bennett's advice that led to the plaintiffs executing the second deed of release but their inability to arrange other legal representation. He went on to say that even on Mr Abriel's version of the advice, it was clearly balanced and sensible and the ultimate decision was left to the applicants. They executed the second deed of release after the conclusion of the second mediation and requested the defendant not to return it to the solicitors for AGC and Westpac for a few days as they made further attempts to find alternative representation. At par 71, his Honour made the following express findings of fact: · Ms Bennett at no time committed herself to acting for the applicants at trial. Disclosure of the Grunstein letter had no effect upon her decision not to do so. · Such disclosure also had no relevance to, and no effect upon any advice given by her to the applicants or her conduct of the mediation. · Ms Bennett gave advice in accordance with the certificate attached to the deed and as deposed to by the first applicant in par 41 of his affidavit filed on 11 June, 1999. · I am not satisfied that in entering into the deed, the applicants acted upon any such advice. 34 In order to succeed in the current proceedings, the plaintiffs must upset the findings of fact made by Dowsett J in the earlier proceedings. The present proceedings are an attempt to re-litigate those issues and that is not open to the plaintiffs in accordance with the authorities previously discussed. 35 The plaintiffs are not entitled to challenge the findings that the defendant's letter played no part in Dr Bennett's decision to withdraw and played no part in the advice she gave to the plaintiffs and the plaintiffs executed the second deed of release independently of any advice given by Dr Bennett. Any action in concert by the defendant depends upon upsetting those findings. It is not alleged that any independent action on the part of the defendant led to the damages allegedly sustained by the plaintiffs. Nor could it. The gravamen of the allegations is that it was the effect of the letter upon Dr Bennett that led her to advise acceptance of the second deed of release and withdraw from the case, being actions in which the defendant joined. In those circumstances the present action against the defendant must fail. 36 In terms of the requirements enunciated in Haines, the issues that must be upset in order for the plaintiffs to succeed in the present proceedings were lost in the earlier proceedings. They were issues necessarily determined in the earlier proceedings and issues of importance to the final result. The Federal Court was an appropriate forum for the determination of those issues and AGC and Westpac were appropriate contradictors. The issues were regarded by the parties as of importance. The decision of Dowsett J was a final one. 37 Late yesterday, after the matter had been set down for judgment, I received yet further material from Mr Abriel in the form of his complaints against Dowsett J for alleged bias. I have had the material marked as an exhibit. The material does not cause me to alter my views. 38 Notwithstanding the strictures with respect to summary termination of proceedings, I am of the view that this is an appropriate case for termination. 39 I order that the proceedings in the common law division numbered 20056 of 2003 be dismissed. I order the plaintiffs to pay the defendant's costs.

Abriel & Ors v Levitt

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Judgment (7 paragraphs)

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Cases Cited (7)