This proceeding involved a contest as to the validity of Mr Kenneth Whittingham as administrator of The Spanish Club Limited ("Club"), which has now been remitted to me to determine a remaining claim by Mr Whittingham on the basis of unjust enrichment. The Plaintiffs now seek an order, by Interlocutory Process filed on 16 October 2014, that Mr Whittingham's claims for relief in paragraphs 4(a) and 4(b) of his Amended Interlocutory Process filed 20 February 2012, constituting his claim for unjust enrichment, be struck out and that paragraphs 2 and 14 of his Amended Points of Claim filed on 10 April 2014 and the whole of his Points of Reply filed on 1 October 2014 also be struck out. The Plaintiffs' Interlocutory Process is supported by an affidavit of Mr Ryckmans dated 16 October 2014, their solicitor, which exhibited relevant documents. The parties in turn advanced elaborate submissions in support of their respective positions. The matters now raised by the Plaintiffs, in seeking to support the proposition that Mr Whittingham's claim for quantum meruit is unarguable, do not appear to have been raised by the Plaintiffs with the Court of Appeal before it remitted that claim to me for determination.
The Plaintiffs' application to strike out or summarily dismiss these claims was brought under rr 13.4 and 14.28 of the Uniform Civil Procedure Rules 2005 (NSW) which respectively provide that the Court may order that proceedings be dismissed generally in relation to a claim, if it appears to the Court that the proceedings are frivolous or vexatious, or no reasonable cause of action is disclosed, or the proceedings are an abuse of the process of the Court; and that the Court may order that the whole or part of a pleading be struck out if it discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or has a tendency to cause prejudice, embarrassment or delay in the proceeding, or is otherwise an abuse of the process of the Court. The Plaintiffs point out that UCPR r 13.4 permits an inquiry into the facts of the case and is not limited to the way in which the pleading is framed and that UCPR r 14.28 deals with the sufficiency of pleadings. The parties largely did not distinguish between those rules in making their submissions and it is also largely not necessary for me to do so given the views that I have reached as set out below.
There was no dispute between the parties as to the principles to be applied in an application of this kind. In Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 at [57], the plurality of the High Court observed that:
"Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way." (footnote omitted)
That formulation has been adopted in Batistatos v Roads and Traffic Authority (NSW) [2006] HCA 27; (2006) 226 CLR 256 at [46] and Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 at [24]. In Shaw v New South Wales [2012] NSWCA 102 at [30]-[32], Barrett JA summarised the relevant principles and noted that the relevant question was:
"… whether the claims in question are so obviously untenable or groundless that there is "a high degree of certainty" that they will fail if allowed to go to trial; and whether this is one of the "clearest of cases" in which the court may accordingly intervene to prevent the claims being litigated."
In Ren v Jiang [2014] NSWCA 388; (2014) 104 ACSR 149 at [49], the Court of Appeal in turn observed that:
"The test to be applied before entering summary judgment has been variously stated, and little is to be gained by reiterating those formulations; cf General Steel Industries Inc v Cmr for Railways (NSW) (1964) 112 CLR 125 at 129. There is no controversy that the power must be exercised with "great care" and "exceptional caution": Spencer v Commonwealth [2010] HCA 28; 241 CLR 118 at [24] and [55] (noting that this was said of the lesser standard made applicable by s 31A of the Federal Court of Australia Act 1976 (Cth)). In Spencer, Hayne, Crennan, Kiefel and Bell JJ referred to the (unamended) test as "requiring formation of a certain and concluded determination that a proceeding would necessarily fail": at [53]. Repeatedly, it has been said that the court must be so certain of the outcome that to permit the proceeding to go forward would amount to an abuse of process: Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 90; Spencer at [54]; O'Brien v Bank of Western Australia Ltd [2013] NSWCA 71; 16 BPR 31,705 at [3] and [67]."
The Defendants in turn emphasise that an application for summary dismissal or the striking out of pleadings does not permit a separate and earlier determination of particular issues that would otherwise have been determined at the conclusion of a contested trial, at least where the requisite high degree of certainty about the ultimate outcome is not established.
[3]
The history of the proceeding
Before turning to the matters on which the Plaintiffs rely for this application, it is necessary to refer to the lengthy procedural history of the matter. In the proceeding at first instance, the Plaintiffs, sought various orders under ss 447E(1) and 449E(2) of the Corporations Act 2001 (Cth) and under the general law. Mr Whittingham had at that time brought separate proceedings under s 449E of the Corporations Act and r 9.2 of the Supreme Court (Corporations) Rules 1999 (NSW) seeking approval of his remuneration to 20 August 2010 in a specified amount and approval of further remuneration from 23 August 2010 to the conclusion of the proceeding. By his Amended Interlocutory Process filed in this proceeding, Mr Whittingham had also applied for relief, in the alternative to the orders he sought under s 449E of the Corporations Act, including an order that he be paid reasonable remuneration and costs and expenses for work performed pursuant to his purported appointment as voluntary administrator and deed administrator of the Club, if that appointment was held to be invalid as:
"(a) Work performed and costs and expenses incurred by [Mr Whittingham] at the request of the [Club] and/or with the acquiescence of the [Club];
(b) Work performed and costs and expenses incurred by [Mr Whittingham] which conferred an incontrovertible benefit upon the [Club] (in circumstances where it would be unconscionable for the [Club] to retain the benefit without paying a reasonable sum for the work)."
I delivered judgment in the challenge to Mr Whittingham's appointment as administrator nearly two years ago, on 21 May 2012 (Correa and The Spanish Club Limited (subject to Deed of Company Arrangement) v Whittingham (No 3) [2012] NSWSC 526). I held, inter alia, that it was not open to the First Plaintiff, a member of the Club, Mrs Correa, or the Club to assert any failure to comply with the requirements of the Club's constitution in respect of the minimum number of directors or quorum requirements for directors meetings so as to invalidate Mr Whittingham's appointment as administrator of the Club since he was entitled to rely on the statutory assumptions under ss 128 and 129 of the Corporations Act. I also held that s 41 of the Registered Clubs Act 1976 (NSW) did not invalidate Mr Whittingham's appointment as administrator, where approval to that appointment was given by the Casino Liquor & Gaming Control Authority ("Authority") within a short time of it having occurred. I held that Mr Whittingham was entitled to pursue a claim for remuneration in respect of his role as administrator in a separate proceeding that he had brought under s 449E of the Corporations Act. I also noted that Mr Whittingham had advanced the quantum meruit claim to which I referred above against the contingency that the Court had found his appointment as administrator was invalid and did not exercise its discretion to validate the appointment under s 447A and/or s 1322(4) of the Corporations Act and observed (at [224]) that:
"It appeared to be common ground between Mr Whittingham and the Club that, if Mr Whittingham had not been validly appointed (as the Club contends), then he would be entitled to remuneration on a quantum meruit basis … Mr Whittingham identifies 19 categories of work which he contends would be within the scope of the remuneration recoverable by him on a quantum meruit basis. I have dealt with the Plaintiffs' criticisms of a number of those categories of work above."
I noted that it was not necessary to determine Mr Whittingham's quantum meruit claim since I had held that Mr Whittingham was entitled to remuneration determined under s 449E of the Corporations Act.
On appeal from my judgment, the Court of Appeal held ([2013] NSWCA 263; (2013) 278 FLR 310 at [63]-[96]) that, by reason of a contravention of s 41 of the Registered Clubs Act, Mr Whittingham was not capable of being appointed to act in the capacity of voluntary administrator of the Club or of acting in that capacity. The Court of Appeal also held (at [97]-[106]), in respect of an issue that had not been raised at first instance, that s 447A of the Corporations Act did not authorise the Court to validate the invalidity of an administrator's appointment arising from a contravention of s 41 of the Registered Clubs Act. The Court of Appeal (at [107]-[169]) upheld my finding that Mr Whittingham was entitled to rely on the statutory assumptions in ss 128-129 of the Corporations Act in respect of a failure by the Club to comply with the requirements of its constitution in respect of the minimum number of directors or quorum requirements for directors' meetings in respect of his purported appointment as administrator. By its orders made on 15 August 2013, the Court of Appeal directed that:
"… The proceedings be remitted to the primary judge to determine [Mr Whittingham's] claim in para[graphs] 4, 5 and 6 of the Amended Interlocutory Process filed 20 February 2012, that [Mr Whittingham] is entitled to be paid out of the assets of the Club his reasonable remuneration, costs and expenses, including legal expenses for work performed pursuant to his purported appointment as voluntary administrator and as deed administrator of the Club, on a quantum meruit basis."
The Court of Appeal subsequently delivered a further judgment in respect of costs on 23 December 2013 ([2013] NSWCA 471).
After the proceeding was remitted to me, by his Amended Points of Cross-Claim, Mr Whittingham further set out the basis of his quantum meruit claim. He pleaded (Amended Points of Cross-Claim [4]) the steps by which he was purportedly appointed as the Club's administrator and that:
"Between 17 November 2008 and 16 March 2009, Whittingham provided professional services to the Club whilst acting in his purported capacity as administrator and incurred expenses in so providing, which services and expenses are described, in various categories, in paragraph 20 below."
He pleaded (Amended Points of Cross-Claim [5]) the passage of a resolution by a meeting of the Club's creditors to execute a proposed deed of company arrangement and the execution of that deed of company arrangement so as to bring about his purported appointment as deed administrator. He also pleaded (Amended Points of Cross-Claim [8]-[10]) the circumstances involved in a subsequent sale of the Club's property and the return of control of trading of the Club and payment of creditors of the Club. He pleaded (Amended Points of Cross-Claim [13]) that, in the period in which he was purportedly the deed administrator, he:
"… provided professional services to the Club whilst acting in his purported capacity as deed administrator and incurred expenses in so providing, which services and expenses are described, in various categories, in paragraph 18 below."
Paragraph 14 of Mr Whittingham's Amended Points of Cross-Claim in turn pleaded that:
"Whittingham, not being entitled to remuneration under s 449E of the Corporations Act, nonetheless presses his claim for payment of the entirety of his professional fees and expenses, subject to paragraph 20 below, on the basis that the Club had expressly or impliedly requested those services and Whittingham's retainer was ineffective, not for any want of validity in the actions of the Club in purportedly appointing Whittingham, but only because of a failure by Whittingham to comply with s 41 of the Registered Clubs Act."
Paragraph 20 of Mr Whittingham's Amended Points of Cross-Claim in turn set out the categories of tasks performed by Mr Whittingham with estimates of remuneration, legal costs and other costs referable to each category as at February 2014, under ten categories including administration, assets, creditors and members, dividends, employees, investigations, taxes, trade-on and legal. Those categories included attendances such as realisation of assets and addressing fire safety issues and repair and maintenance of the Club's assets, attending to employee matters, superannuation matters and workers compensation, repairing and lodging forms to comply with tax obligations and, within the category of "trade-on":
"Day-to-day running of the Club including preparation and authorisation of purchase orders, reconciling invoices, discussions with trade-on creditors, dealings with Office of Liquor and Gaming Authority, correspondence and attendances on Spanish Embassy regarding grants; dealing with member issues, regular site inspections, liaising with OSR [Office of State Revenue] regarding payroll tax issues."
In the alternative, in paragraph 22 of his Amended Points of Cross-Claim, Mr Whittingham sought payment of professional fees and expenses on the basis that the services otherwise provided by him conferred specified "incontrovertible benefit[s]" to the Club. Mr Whittingham submits that he has formulated his claim in unjust enrichment, by reference to observations of Young J in Monks v Poynice Pty Ltd (1987) 8 NSWLR 662 at 663-664, as a claim for quantum meruit in its "basal form", arising where there was an express or implied request for performance of the relevant work, and also on the basis of a further category of claim for quantum meruit, where the relevant service conferred incontrovertible benefit on a defendant, and it would be unconscionable for it to keep the benefit of that service without paying a reasonable sum for it.
By paragraph 2 of their Third Further Amended Points of Defence filed on 10 September 2014, the Plaintiffs in turn relied, in answer to Mr Whittingham's claim, on principles of res judicata or issue estoppel said to arise out of my judgment at first instance, namely that there were on 14 and 17 November 2008 insufficient directors of the Club to establish a valid board; there could not be a valid directors' meeting to appoint Mr Whittingham, and particularised that allegation by reference to certain of my findings and on the basis that:
"These matters having been adjudicated upon by a Court of competent jurisdiction, the subject matter thereof has been rendered res judicata or there is an issue estoppel as between the parties to these proceedings with the consequence that it is not open to [Mr Whittingham to allege specified matters]."
They also raised an allegation, not previously raised in the proceeding, that there were then no directors of the Club; and also alleged that Mr Whittingham knew or suspected the board of the Club was invalidly constituted and that Mr Whittingham could not be appointed as administrator by reason of s 41 of the Registered Clubs Act. The Plaintiffs also pleaded the invalidity of the deed of company arrangement, by reference to matters determined by the Court of Appeal and plead various other matters by reference to my findings at the earlier hearing. The Plaintiffs also pleaded, in a very complex pleading in paragraph 14 of the Third Further Amended Points of Defence, numerous answers to Mr Whittingham's claim to unjust enrichment based on an express or implied request for the services by the Club and, in paragraphs 20 and 22 of the Third Further Amended Points of Defence, denied that tasks undertaken by Mr Whittingham conferred incontrovertible benefit on the Club.
By his Points of Reply to the Third Further Amended Points of Defence to the Cross-Claim, Mr Whittingham in turn repeated certain of my findings at first instance, which had been upheld by the Court of Appeal, and pleaded that it was not open to the Club to allege specified matters or that, alternatively, the raising of matters not raised by the Club in the earlier hearing of the proceeding was an abuse of process. As I noted above, the Plaintiffs now seek to strike-out that Points of Reply or that it be summarily dismissed in its entirety.
[4]
Application to strike out or summarily dismiss Mr Whittingham's restitutionary claims
The Plaintiffs summarised the first aspect of their application, in their opening outline of submissions, as seeking to dismiss or strike out Mr Whittingham's cause of action to recover reasonable remuneration on a quantum meruit basis for services allegedly provided at the "request" of persons purporting to act as directors of the Club. The Plaintiffs summarised the second aspect of their application, in their opening outline of submissions, as seeking to dismiss or strike out Mr Whittingham's restitutionary claim in respect of services alleged to have been "incontrovertibly beneficial" to the Club. These claims by Mr Whittingham are not new claims since they were brought in the initial hearing before me, although not decided for the reasons noted in paragraph 9 above, and no application to strike them out was made before me at that time nor (as I noted above) was it contended in the Court of Appeal that they were unarguable, before they were remitted to me for determination.
The Plaintiffs submit, first, that paragraphs 4(a) and 4(b) of Mr Whittingham's Amended Interlocutory Process should be dismissed for reasons of public policy since Mr Whittingham claims to recover reasonable remuneration on a quantum meruit basis or in restitution in respect of services that s 41 of the Registered Clubs Act prohibited him from performing. That section, which was in issue in the earlier hearing, and in the Court of Appeal, relevantly provides that:
"A person is not capable of being appointed to act in the capacity of the administrator … of a registered club that is a company within the meaning of the Corporations Act … or of acting in any such capacity unless the person has been:
(a) appointed to act in that capacity by the Supreme Court, or
(b) approved to act in that capacity by the authority."
The Plaintiffs submit that the policy of the Registered Clubs Act, and the function of Pt 4 (management of registered clubs) in which s 41 of that Act appears, is incompatible with the relief sought in paragraphs 4(a) and 4(b) of Mr Whittingham's Amended Interlocutory Process. They submit that an award of restitution would stultify the intent of the legislature, violate a rule of law which prohibits a person from taking advantage of his own wrong, and:
"make a nonsense of the consequences of [Mr Whittingham's] conduct in breach of s 41 of the Registered Clubs Act - being conduct relevantly amounting to trespass".
The Plaintiffs draw attention to the decision of the High Court of Australia in Equuscorp Pty Ltd v Haxton [2012] HCA 7; (2012) 246 CLR 498 where the High Court, by majority, held that money given to investors in breach of s 170(1) of the Companies Code, which prohibited the offer of prescribed interests without a prospectus, could not be recovered under a restitutionary claim for money had and received, so that investors were not liable to pay funds advanced under relevant loan agreements. That decision is not authority that restitution will never be available in respect of a contract which is unenforceable for illegality, even in the wider sense of non-compliance with a statutory requirement to the entry into that contract. The plurality there observed (at [34]) that:
"The outcome of a restitutionary claim for benefits received under a contract which is unenforceable for illegality, will depend upon whether it would be unjust for the recipient of a benefit under the contract to retain that benefit. There is no one-size-fits-all answer to the question of recoverability. As with the question of recoverability under a contract affected by illegality the outcome of the claim will depend upon the scope and purpose of the relevant statute. The central policy consideration at stake, as this court said in Miller, is the coherence of the law. In that context it will be relevant that the statutory purpose is protective of a class of persons from whom the claimant seeks recovery. Also relevant will be the position of the claimant and whether it is an innocent party or involved in the illegality."
The Plaintiffs draw attention to the observations in the plurality judgment (at [37]-[38]) in respect of "coherence in the law" and "self-stultification of the law", adopting a term used by Professor Birks. The plurality there also refer to the observations of Lord Radcliffe in Boissevain v Weil [1950] AC 327 at 341 and observe that a restitutionary claim will not lie where to allow that claim would defeat or frustrate the policy of the underlying prohibition. The plurality also observe (at [45]) that, had a right to claim restitution for money had and received been available in that case, the appellant would there have been able to recover "what the policy of the law denied" it in respect of the loan agreement. Gummow and Bell JJ concurred in the plurality's conclusion and observed (at [103]-[104]) that the relevant principles may extend to where the statute requires compliance with formalities that have not been observed by the parties, or restricts legal capacity. In Polish Club Ltd v Gnych [2014] NSWCA 321, the Court of Appeal also pointed to several circumstances where legal and equitable rights would not be enforceable, by reason of unlawful conduct including a breach of statute.
Mr Ashhurst, who appears with Mr Ng for Mr Whittingham, submits that the position in this case is distinct from that considered by the High Court in Equuscorp Pty Ltd v Haxton above. In that case, as the High Court observed, the restitutionary relief which was sought was identical to the result which was prohibited by statute, and it was there plainly correct to say that the provision of that relief would give rise to self-stultification or incoherence in the law. Mr Ashhurst also points to the approach adopted by Mason and Wilson JJ in Pavey and Matthews Pty Ltd v Paul (1986) 162 CLR 221 at 229, which recognises that the unenforceability of a contract, for lack of compliance with a statutory requirement, does not necessarily require the draconian consequence that the recipient of a benefit should be under no liability to pay for it and that "[a]n interpretation that serves the statutory purpose yet avoids a harsh and unjust operation is to be preferred". Similarly, Deane J observed (at p 262) that there was no apparent reason in justice why a person who was precluded from enforcing an agreement, in that case by statute, should also be deprived of the ability to bring a restitutionary claim for "fair and reasonable remuneration for work which he has actually done" and which has been accepted by the other party, and that approach would not, in the particular circumstances, conflict with any discernible legislative policy. Their Honours' reasoning seems to me to suggest that it could not be said that there is no seriously arguable alternative view to that put by the Plaintiffs, in respect of the effect of a contravention of s 41 of the Registered Clubs Act on a claim for restitution.
The Plaintiffs point out that the Court of Appeal (at [91]) construed s 41 of the Registered Clubs Act as a prohibition on Mr Whittingham acting without the requisite approval and held that Mr Whittingham was neither capable of being appointed to act in the capacity of voluntary administrator or of acting in that capacity. The Plaintiffs identify the relevant issue as whether restitutionary relief is available to compensate Mr Whittingham "for doing that which the Court of Appeal said he was not capable or able to do". It seems to me that the relevant question needs to be reformulated, in a more neutral manner, as whether restitutionary relief is available to compensate Mr Whittingham for doing work which he was not capable of doing, in the capacity of a validly appointed administrator, although he may well have been capable of doing that work in other capacities.
I proceed, of course, on the basis that I am bound by the Court of Appeal's observations as to the purpose of s 41 of the Registered Clubs Act. In particular, in addressing the purpose of s 41 of that section, Gleeson JA observed (at [87]) that:
"The evident purpose of s 41 is to require that a change in the control of a registered club's business, property and affairs, brought about upon the appointment of an administrator under Pt 5.3A of the Corporations Act, only occurs where the identity and qualities of the person to occupy such position (in place of the secretary of the registered club previously approved by the Authority), has been approved by the Authority. The Authority's functions include deciding which persons are fit and proper to be given responsibility for management of registered clubs."
The Plaintiffs in turn submit that:
"The objectives of the [Registered Clubs Act] and, in particular, the purposes behind the prohibition in s 41, are plainly negated if unapproved administrators can be given responsibility for the supervision and management of registered clubs, including the conduct of gaming machines and the supply and sale of liquor, and then be paid for their services."
I accept that the objectives of the Registered Clubs Act would be negated if unapproved administrators could be given responsibility for the supervision and management of registered clubs, including the conduct of gaming machines and the supply and sale of liquor. However, the further proposition that a claim for restitution, whether for particular services provided by reason of an implied request by the Club, or for particular services that provided an incontrovertible benefit for the Club, will undermine that prohibition, irrespective of the nature of the services provided, does not seem to me to be sufficiently certain to warrant a strike-out or summary dismissal order. Mr Whittingham also distinguishes, on the one hand, the appointment of a voluntary administrator pursuant to the statutory scheme and, on the other, any associated arrangement for the provision of services by the purported administrator to the Club on the basis that he would be remunerated for those services. It does not seem to me that that distinction can be said to be not reasonably arguable.
The Plaintiffs also submit, inter alia, that the purpose of s 41 of the Registered Clubs Act is to protect Club members, staff and the community by preventing improper or unfit persons from managing and supervising the activities of registered clubs. Mr Whittingham, responds, with some force, that such a purpose would make little sense, where only a registered liquidator may be appointed as an administrator, and such persons are subject to exacting requirements both as to their experience and as to their fitness and propriety to be registered as a liquidator under s 1282 of the Corporations Act. There is also some force in Mr Whittingham's submission that s 41 of the Registered Clubs Act has a narrower purpose, namely to secure the Authority's ability to have an input into the appointment of an administrator of a registered club. Mr Whittingham also submits that the policy of s 41 of the Registered Clubs Act, as identified by the Court of Appeal, is served by the invalidity of his appointment, as found by the Court of Appeal, and that result is not undermined by a claim for restitution or by the fact that additional financial detriment is not imposed on Mr Whittingham.
In oral submissions, Mr Ashhurst submits that the statutory purpose under s 41 of the Registered Clubs Act is given effect by the Court's recognition that an appointment, which is not in accordance with that section, is invalid and that any acts carried out by the person who was so appointed were also invalid, and does not require that the administrator who was appointed in contravention of that section also be deprived of any claim for restitution in respect of that appointment (T34). He submits that permitting remuneration in that context does not in any way stultify or negative the operation of s 41 of the Registered Clubs Act, albeit that it may not give rise to the deterrent effect of imposing a penalty of depriving an administrator of fair remuneration in that context. In oral submissions, Mr Ashhurst also submits that the statutory purpose of ensuring that the Club was not bound by acts of a purported administrator was not undermined by allowing a claim on a quantum meruit basis by that administrator. To the extent that those submissions are seriously arguable, as they seem to me to be, they undermine the probability of the outcome for which the Plaintiffs contend, which is necessary to a strike-out or summary dismissal application.
In their submissions in reply, the Plaintiffs contend that, if Mr Whittingham was by law incapable of being an administrator, it is logically incoherent to award him remuneration for performing services that Parliament decreed he was incapable and unable to perform. I am not persuaded by that proposition, at least to the level of certainty required for summary dismissal or striking out, at that level of generality. It may be logically incoherent to award Mr Whittingham remuneration for, for example, preparing an administrator's report for a second meeting of creditors, which would only be performed during an administration, if he is incapable of being appointed an administrator, but it does not follow that it is logically incoherent with the purpose of s 41 of the Registered Clubs Act to award him remuneration for performing other services, such as attending to the preparation of tax returns or addressing fire safety issues, which the Club would have had to address irrespective of whether he were appointed as an administrator, and which paid management would otherwise have addressed.
In their submissions in reply, the Plaintiffs also submit that denying restitutionary relief would be more likely to encourage compliance with s 41 of the Registered Clubs Act and, accordingly, would be more likely to further the purpose which the section seeks to promote. It seems to me that that submission proves too much, at least for the purposes of a strike-out application or summary dismissal application. No doubt, denying restitutionary relief to a person who is incapable of appointment to a particular position, or whose appointment to a particular position contravenes a statutory provision, would always promote compliance with the statutory provision, and the harsher the result, the more likely that it would promote that compliance. However, Courts, including the High Court in Pavey and Matthews Pty Ltd v Paul above and Equuscorp above, have not accepted the proposition that a contravention of a statutory provision will always exclude the availability of restitutionary relief.
In oral submissions, Mr Walker, who appeared with Mr Gray and Mr Stevens for the Plaintiffs, initially went so far as to submit that self-stultification would be established if an administrator who lacked the capacity to be appointed or to act in that capacity, by reason of s 41 of the Registered Clubs Act, was allowed any recompense under a claim for restitution (T13), although he ultimately withdrew somewhat from that position. In particular, Mr Walker fairly accepted, in oral submissions, that the proposition as to incoherence or self-stultification arising from a restitutionary claim was weaker if a person was doing an act, albeit in his capacity as a purported administrator, that could also be done by a person in a capacity other than as administrator (T15), for example as manager, and that different issues there arose and there was a spectrum of possibilities (T16). Mr Walker provided the example, which is a helpful illumination of the issue, that if a person who was not validly appointed as administrator attended to the provision of a better lock to replace a broken lock at the Club's premises, then the provision of an allowance by way of restitution may not lead to self-stultification or incoherence with s 41 of the Registered Clubs Act (T16). It seems to me that Mr Walker's concession in this regard was correct, since a quantum meruit claim in that regard - where the act done has no particular connection with the administrator's status - would arguably no more undermine the objectives of the Registered Clubs Act than the replacement of that lock by a passing locksmith, who had been requested to attend to it by an employee of the Club, but had not entered a contract to do so. However, once that matter is conceded, the question whether particular services are such that a claim for restitution would not undermine the policy of s 41 of the Registered Clubs Act is a matter of fact, to be determined by reference to the particular services, and possibly also by whether they had a necessary connection with Mr Whittingham's purported appointment as administrator or deed administrator, or could have been provided to the Club by a person who was not appointed as administrator or deed administrator and who did not require any relevant approval to his or her providing those services.
Mr Walker also fairly acknowledged in oral submissions that the question of self-stultification arising from a claim for restitution may involve a case by case determination, and to that extent is factual, but contended that was accomplished in this case by the way in which Mr Whittingham's case was put (T17). The former proposition seems to me to be plainly correct. The latter was not correct, as the nature of the services provided by Mr Whittingham as pleaded in his Amended Points of Cross-Claim (to which I refer below) will demonstrate. Mr Walker also pointed to the plenitude of powers given to an administrator under s 437A of the Corporations Act. I accept, of course, that that section confers wide powers upon a validly appointed administrator. However, it does not seem to me to follow, at least for the purposes of a summary dismissal or strike-out application, that because a wide range of activities could be undertaken by a person in his or her capacity as an administrator, a prohibition on a person being appointed or acting as administrator will be stultified by allowing a claim for restitution in respect of activities which, although they were provided by a person in his or her capacity as a purported administrator, could also have been provided by that person or another person in the capacity as manager, employee or, to use Mr Walker's example, as locksmith.
As I have noted above, s 41 of the Registered Clubs Act is directed to appointment of a person to act "in the capacity of the administrator", and to acting in "such capacity". The Plaintiffs' claim for summary dismissal or strike out depends on a characterisation of all actions taken by Mr Whittingham as actions taken "in the capacity of" an administrator, and they point to Mr Whittingham's pleading of his claims in that regard. It seems to me that that pleading arguably identifies no more than that the occasion for provision of the services which Mr Whittingham claims to have provided was his purported appointment as an administrator and later deed administrator. The pleaded identification of the services provided by Mr Whittingham arguably indicates that many of those services were not unique to an administrator or necessarily characteristic of an administrator, although they were on this occasion provided by a person who had purportedly been appointed as administrator and later deed administrator. For example, attendance on insurance matters, administration of bank accounts, attendances on real estate agents and others in respect of the sale of assets, dealings with employees, superannuation matters and workers compensation, lodgement of tax returns, and day-to-day running of the Club are arguably matters that would have had to be done by the Club in any event, and would arguably have been done by paid management, if they had not been done by Mr Whittingham.
That point is also emphasised by the Plaintiffs' Third Further Amended Points of Defence, which itself identifies work done by Mr Whittingham that the Plaintiffs accept was productive of incontrovertible benefit to the Club, namely making the Club's statutory filings accurate and current; overseeing the audit of the Club's financial accounts; making the Club's employment and membership records current and accurate; complying with fire safety orders made by the City of Sydney Council and dealing with matters in the Land and Environment Court and with occupational health and safety issues and with the repair of properties; arranging annual general meetings; paying creditors and attending to the Club's tax reporting obligations. That work is arguably not of a character that it could only have been performed by an administrator or purported administrator. I am not satisfied that there is no reasonably arguable basis by which it could be claimed that the provision of restitution for any of those services would not undermine the policy of the Registered Clubs Act.
It therefore does not seem to me so plain as to warrant a strike-out order or order for summary dismissal that the coherence of the law, even put in its broadest and most expansive terms, would be offended by a quantum meruit claim by a person who had, the Club accepts, undertaken work of a character that provided incontrovertible benefit to the Club, notwithstanding that he or she was prohibited from being appointed to act in the capacity of an administrator or of so acting by s 41 of the Registered Clubs Act. Once it is recognised that some work falls within that category, then an application to strike out or for summary dismissal of the claim in its entirety on the basis of self-stultification or inconsistency with the policy of that section must fail.
In summary, the Club's contentions as to the policy of s 41 of the Registered Clubs Act and its consequences for a claim for restitution are plainly reasonably open, but it does not seem to me that they could be said to be certain to succeed. It follows that it also does not seem to me that Mr Whittingham's claim for unjust enrichment as articulated in the Amended Points of Cross-Claim has been shown to be frivolous or vexatious, or to disclose no reasonable cause of action, or to amount to an abuse of the process of the Court for the purposes of UCPR r 13.4; or to disclose no reasonable cause of action or other case appropriate to the nature of the pleading, or to have a tendency to cause prejudice, embarrassment or delay in the proceeding, or otherwise to be an abuse of the process of the Court for the purposes of UCPR r 14.28.
[5]
Application to strike out restitutionary claim based on request
The Plaintiffs also submit that paragraph 4(a) of the Amended Interlocutory Process and paragraph 14 of the Amended Points of Cross-Claim, which I set out in paragraph 12 above, are defective in that the essential element of a "valid request" required for a quantum meruit is neither pleaded nor established by the evidence. Mr Whittingham's solicitors have provided further particulars of the matters relied upon to advance the allegation pleaded in paragraph 14 of the Amended Points of Cross-Claim on 11 July 2014, namely that the Club expressly or impliedly requested his services, on the basis that:
"Pursuant to s 129 of the Corporations Act 2001 (Cth), [Mr Whittingham] was entitled to assume, and [the Club] is precluded from disputing, that the resolution purportedly appointing him as administrator was validly passed, and that the Club had thereby requested him to provide professional services of the sort that he did in fact provide during the purported administration and deed administration of the Club."
The Plaintiffs submit that, in pleading an alleged request, Mr Whittingham has not provided precise details as to the request or whether it was oral, in writing or how it was constituted. The Plaintiffs also contend that a claim for a quantum meruit based on a request, made in paragraph 4(a) of the Amended Interlocutory Process and paragraphs 2 and 14 of the Amended Points of Cross-Claim should be struck out because a request for the performance of services cannot be shown.
The Plaintiffs submit, and I do not understand it to be in contest, that a claim for restitution is not available to a mere volunteer and that a claim for quantum meruit based on a request will require evidence that the act was done at the defendant's request: Rover International Ltd v Cannon Film Sales Ltd [1987] BCLC 540 at 545; Progressive Pod Properties Pty Ltd v A&M Green Investments Pty Ltd [2012] NSWCA 225 at [62]-[63]. The Plaintiffs in turn submit that a claim for quantum meruit in a case of this kind will depend on the authority of the officers of the Club to make the relevant request: Quarante Pty Ltd v The Owners Strata Plan No 67212 [2008] NSWCA 258 at [119]; Darkinjung Local Aboriginal Land Council v Darkinjung Pty Ltd (in liq) [2010] NSWCA 351 at [4], [76]; The Dominion Insurance Company of Australia Ltd (subject to scheme of arrangement) [2013] NSWSC 898 at [43].
Paragraph 14 of the Amended Points of Cross-Claim and the particulars identify the relevant request as being the resolution purporting to appoint Mr Whittingham as administrator of the Club under s 436A of the Corporations Act. The Plaintiffs point out that the resolution provides that:
"It was further resolved that the [Club] appoint Ken Whittingham as Administrator pursuant to s 436A of the Corporations Act 2001."
The Plaintiffs submit that nothing in that language could constitute a request that Mr Whittingham do anything. The Plaintiffs point to what they describe as the "fallacy" of "supposing that there is no difference between being appointed and being requested to do something in relation to the appointment". It is by no means clear to me that a failure to recognise such a distinction is necessarily a fallacy, so that a statement that, for example, a person is appointed as a lifeguard does not carry an implication that he or she should then act in that capacity so as to seek to rescue swimmers who are in difficulty. Conversely, it is by no means obvious that a lifeguard who had not so acted could reasonably respond that he or she had only been told of his or her appointment to the position of lifeguard and had not been asked to do anything.
Mr Whittingham responds that the Plaintiffs' submission that the resolution of appointment of Mr Whittingham was not framed as a request for services involves either "an excess of pedantry" on the part of the Plaintiffs or a failure to recognise that a quantum meruit may be established by either an express or implied request: Monks v Poynice Pty Ltd above at 664. He submits that:
"It cannot seriously be suggested that when an officer representing a company provides a registered liquidator with a resolution of appointment and an instrument of appointment as an administrator, it is not reasonably arguable that such conduct contains, at the very least, an implied request that the registered liquidator provide services in the nature of acting as an administrator for the company."
Whatever the ultimate merit of a submission that a purported appointment as an administrator does not carry an implication that Mr Whittingham should have taken any actions in that regard, it seems to me far from supporting a strike-out order or summary dismissal. It also seems to me that the existence of an implied request is a factual question which is not properly addressed in a strike out application or by summary dismissal.
The Plaintiffs also submit that the validity of the alleged request depends upon the application of the statutory assumption in s 129 of the Corporations Act. The Plaintiffs submit that (notwithstanding their objection to Mr Whittingham's reliance on the principle of issue estoppel or res judicata in his Points of Reply, to which I will refer below) my finding that the number of directors of the Club was, at the relevant time, less than the constitutional minimum has the consequence that there could be no valid request by the Club for Mr Whittingham to perform services. That submission depends upon the premise that Mr Whittingham cannot assert the existence of a valid request, relying upon the statutory assumptions under s 128 and 129 of the Corporations Act that were addressed in my judgment and in the Court of Appeal. The Plaintiffs submit that the availability of the statutory assumptions do not operate to validate transactions and also that the statutory assumptions are not available to Mr Whittingham if the Club does not assert non-compliance with its own constitution. They also submit that Mr Whittingham must assert, and cannot merely assume, the existence of a valid request.
Mr Whittingham points to the fact that the validity of the resolution purportedly appointing him as administrator of the Club was agitated at length in the proceeding (to which he refers, imprecisely, as the "prior proceedings" when it is in fact the same proceeding) and on appeal. He also points to the findings that I had reached, and that the Court of Appeal had relevantly upheld, in respect of challenges to his appointment on the basis that the Club had not complied with requirements in its constitution as to the number of directors and the quorum at a meeting of its board. He points out, in his submissions, that:
"[Mr Whittingham's] present claim for relief is being prosecuted in what is, in effect, a continuation of proceedings in which s 128 has successfully been invoked to preclude any challenge by the Club to the validity of the steps taken by its officers in purportedly appointing [Mr Whittingham] as administrator. Put simply, s 128 continues to operate in respect of [Mr Whittingham's] claim, as it applies to proceedings rather than to individual causes of action."
That submission should, of course, be read subject to the implicit qualification that Mr Whittingham's success was in respect of aspects of the proceeding, and was displaced to some extent by his failure in respect of s 41 of the Registered Clubs Act in respect of other aspects of the proceeding. That qualification is not, however, relevant for present purposes.
It seems to me that these matters also do not warrant a strike-out order or summary dismissal in respect of these aspects of the case. It does not seem to me that it could be said that Mr Whittingham's approach to the relevant legal principles is obviously untenable or groundless. So far as the Plaintiffs contend that Mr Whittingham cannot rely on the statutory assumptions, unless the Club asserts the invalidity of the relevant requests, it faces the significant difficulty that it did so, in the proceeding that has now been returned to me for determination of the claim for quantum meruit. That is, of course, why the question of the application of the statutory assumptions was determined by me at first instance and by the Court of Appeal. It seems to me to be seriously arguable that the application of the statutory assumptions cannot both be in issue in this proceeding, and not in issue in this proceeding, merely because different parts of the proceeding are heard at different times. In any event, the contrary is not sufficiently certain to support a strike-out order or summary dismissal.
Because the issue of the validity of the request was in fact raised in this proceeding by the Plaintiffs, so as arguably to bring ss 128 and 129 of the Corporations Act into operation, it is not necessary for me to address Mr Ashhurst's further submission that those assumptions would have been available to Mr Whittingham even if he were bringing a claim against the Club in other proceedings in which that matter had not been raised, by reference to Story v Advance Bank Australia Ltd (1993) 31 NSWLR 722; (1993) 10 ACSR 699 at 708.
The Plaintiffs also point to the Court of Appeal's finding that Mr Whittingham was not validly appointed as administrator, because he had not given his consent to act prior to the directors of the Club purportedly resolving to appoint him as administrator. It is not immediately apparent that that submission is directed to the validity of any request to Mr Whittingham to provide services, as distinct from the validity of his appointment. That matter also does not seem to me to be sufficiently certain to support a strike out order or summary dismissal. The Plaintiffs also submit that if a resolution could convey a request, it is only for Mr Whittingham to act as administrator, and any request to provide services in that capacity would cease to have effect when the deed of company arrangement was purportedly executed on 16 May 2009. Mr Whittingham responds that the claim that any request for services could only operate in respect of the period of voluntary administration is a submission that would more appropriately be considered at a final hearing, after receipt of the evidence, than in the course of a strike-out application, and also refers to the statutory context by which a company in administration may become subject to a deed of company arrangement. I accept the former submission, and it is not necessary to address the latter. The Plaintiffs' submission in this regard faces the further complexity that, as the Plaintiffs recognise, the effect of the Court of Appeal's decision is that no deed of company arrangement took effect. Putting aside that complexity, it seems to me that this is also a matter that is scarcely sufficiently certain that it could support a strike-out order or summary dismissal.
It therefore does not seem to me that Mr Whittingham's claim for unjust enrichment based on an express or implied request for services made by the Club has been shown to be frivolous or vexatious, or to disclose no reasonable cause of action, or to amount to an abuse of the process of the Court for the purposes of UCPR r 13.4; or to disclose no reasonable cause of action or other case appropriate to the nature of the pleading, or to have a tendency to cause prejudice, embarrassment or delay in the proceeding, or otherwise to be an abuse of the process of the Court for the purposes of UCPR r 14.28.
[6]
Application to strike out Mr Whittingham's reliance on estoppel and abuse of process
The Plaintiffs summarised the third aspect of their application, in their opening outline of submissions, as seeking to dismiss or strike out Mr Whittingham's claim that the Club was estopped as to issues decided against it, including in particular, the Court's finding that he could assert reliance on the statutory assumption in s 129(1) of the Corporations Act. The Plaintiffs submit that the Points of Reply is defective, so far as it alleges issue estoppels or abuse of process against the Plaintiffs arising from the decision at first instance or in the Court of Appeal, notwithstanding the fact that their Third Further Amended Points of Defence to the Amended Points of Cross-Claim also alleges issue estoppels arising from each of those decisions.
Both the Plaintiffs and Mr Whittingham advanced elaborate submissions in respect of the application of principles of issue estoppel and abuse of process in respect of the matters pleaded by Mr Whittingham in his Points of Reply. The parties' written submissions had to some extent approached these issues as if the question was whether there existed an issue estoppel arising from an earlier set of proceedings which bound the Court in respect of the claim for quantum meruit now remitted to me. However, in his submissions in this application, Mr Whittingham had also recognised a critical matter, namely that:
"Acceding to the Club's allegations concerning the validity of its actions in purportedly appointing [Mr Whittingham] as administrator would require that this Court depart from the conclusions of the Court of Appeal in respect of findings made in what is, subject only to the fact of remitter, the one and the same proceeding." [emphasis added]
It is important to recognise, for the purposes of the analysis that follows, as Counsel largely did in oral submissions, that any issue estoppel or abuse of process raised by the Points of Reply is not directed to the position as between two proceedings, but arises within the one proceeding and an appeal from an earlier judgment in it. There has now been remitted to me, by the Court of Appeal, one remaining issue to be determined in the same proceeding as that in which I have previously made factual and legal findings, as to the application of the statutory assumptions, which have been relevantly upheld by the Court of Appeal. The further aspect of the proceeding which I will now hear, in respect of Mr Whittingham's claims for quantum meruit, is the same proceeding that I have previously heard and in which I had previously reached those findings.
The principles that are applicable in that situation are well-established, and are largely consistent with the basis on which Counsel approached the issue in oral submissions. In Spencer Bower and Handley, The Doctrine of Res Judicata, 4th ed, 2009, [5.28] Handley JA (as his Honour then was), writing extra-judicially, observed that issue estoppels operate in later stages of the same suit and referred to Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630 and O'Toole v Charles David Pty Ltd (1990) 171 CLR 232 in that regard. The learned author referred to a qualification where a judge published findings of fact and law without making any orders and there was no appealable decision and no res judicata: Landsal Pty Ltd (in liq) v REI Building Society (1993) 41 FCR 421. That qualification is not applicable in this proceeding, where my earlier judgment was a final judgment, and was appealed from, notwithstanding that the same proceeding has now been remitted to me to determine an issue that was not previously determined in it.
In Fidelitas Shipping Co Ltd v V/O Exportchleb above at 642, Diplock LJ observed that:
"In the case of litigation the fact that a suit may involve a number of different issues is recognised by the Rules of the Supreme Court which contain provision enabling one or more questions (whether of fact or law) in an action to be tried before others. Where the issue separately determined is not decisive of the suit, the judgment upon that issue is an interlocutory judgment and the suit continues. Yet I take it to be too clear to need citation of authority that the parties to the suit are bound by the determination of the issue. They cannot subsequently in the same suit advance argument or adduce further evidence directed to showing that the issue was wrongly determined. Their only remedy is by way of appeal from the interlocutory judgment and, where appropriate, an application to the appellate court to adduce further evidence: but such application will only be granted if the appellate court is satisfied that the fresh evidence sought to be adduced could not have been available at the original hearing of the issue even if the party seeking to adduce it had exercised due diligence.
This is but an example of a specific application of the general rule of public policy, nemo debet bis vexari pro una et eadem causa. The determination of the issue between the parties gives rise to what I ventured to call in Thoday v. Thoday [1964 P 181, 198] an "issue estoppel." It operates in subsequent suits between the same parties in which the same issue arises. A fortiori it operates in any subsequent proceedings in the same suit in which the issue has been determined. The principle was expressed as long ago as 1843 in the words of Wigram V.-C. in Henderson v. Henderson [(1843) 3 Hare 100, 114] which were expressly approved by the Judicial Committee of the Privy Council in Hoystead v. Commissioner of Taxation [1926] AC 155, 170]. I would not seek to better them: "I believe I state the rule of the court correctly when I say, that where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.""
In O'Toole v Charles David Pty Ltd above, Mason CJ observed (at 245) that the position expressed in Fidelitas equally applied where a matter had been determined by an appellate court on a case stated to it; Brennan J similarly observed at (259-260) that where an answer given by an appellate court concluded an issue, the effect of that answer was binding on the parties at all subsequent stages of the proceeding unless set aside on an appeal; and Dawson J (at 298) noted that, where the rights of the parties to an arbitration were determined by a Court on the statement of a special case upon a particular issue, the parties were bound by the decision by reason of an "issue estoppel" arising under the principles noted in Fidelitas.
In Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334, a majority of the High Court (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ) in turn observed at [57], albeit in respect of an interlocutory rather than a final judgment, that:
"[o]nce an issue is determined at the interlocutory stage, and the trial continues, the primary judge's hand is tied in respect of all matters of fact and law involved in that determination."
The Defendants also draw attention to s 22 of the Civil Procedure Act 2005 (NSW), which relevantly provides that a cross-defendant that is not already party to a proceeding is bound by any judgment or decision in the primary claim for relief. Mr Ashhurst recognises that that section does not apply where a cross-defendant is already a party to the proceeding. However, he points out, and I accept, that that rule reflects an assumption that a party to a proceeding is already bound by findings within the proceeding, without the need for such a rule (T34). That assumption is consistent with the principles to which I have referred above.
The effect of the authorities seems to me to be that, unless an application to reopen my judgment is successful, when made more than two years after that judgment was given and after an appeal from it has been determined, it is not open to me, having reached factual and legal findings in a final judgment in the proceeding, to the extent those findings have not been upheld on appeal, now to reach different or contrary factual and legal findings as to the same issues in the same proceeding. Still less as it is open to me, as a trial judge, to reach findings contrary to those which the Court of Appeal has reached in the same matter, albeit the matter had a different proceeding number in the Court of Appeal. Mr Walker accepted as much in oral submissions.
Mr Walker fairly accepted in oral submissions that, subject to appeal, the determination of a matter in a proceeding is binding for the purposes of that proceeding. Mr Walker sought to qualify that proposition by postulating that the Court could properly be "invited to find A for one purpose but not A for another purpose" (T27). Mr Walker fairly accepted that "the same thing can't be true and false at the same time" (T27) but also contended that it would not be absurd to find "A" at the earlier stage of the proceeding, and "not A" in a remittal of the proceeding as to a matter that had previously not been determined. The qualification suggested by Mr Walker seems to me to be arguable, but not so plainly correct that it could support a strike-out or summary dismissal of Mr Whittingham's Points of Reply, at least so far as they are directed to factual matters in the context of this proceeding. First, it is by no means clear that, for example, the Court could sensibly find both that a resolution was passed by the Club's board that purported to appoint Mr Whittingham as administrator (although that appointment was not legally effective by reason of s 41 of the Registered Clubs Act) for one purpose, because it was not open to the Club to contend to the contrary, and also that that resolution was not passed by the Club's board, where that question involved the same facts and the same statutory provisions for all relevant purposes. Second, it is also not clear to me that any different purposes arise in this proceeding, since the earlier hearing before me was directed to determining, inter alia, whether Mr Whittingham could maintain a claim for remuneration under s 449E of the Corporations Act or by way of quantum meruit and the remittal of the proceeding is directed to the second of those matters, which was not determined at the earlier hearing by reason of my determination of the first of those matters at that hearing.
The Plaintiffs' submissions were also directed to establishing the proposition that there could not be an estoppel against the Club, as a successful party, on an issue on which it lost, and that no estoppel arose from a decision that was ancillary to the ultimate result. The Plaintiffs also submitted that the statutory assumption issue, which was determined against it in my principal judgment, and where my decision was upheld by the Court of Appeal, was not essential to the Court of Appeal's judgment that Mr Whittingham was not capable of being appointed to act in the capacity of the Club's voluntary administrator. The Plaintiffs also submitted that it could not be an abuse of process for them to re-litigate the issue of the availability of the statutory assumption in s 129 of the Corporations Act, where the Club was the successful party in the proceeding. The Plaintiffs' submission in this respect appears to have the premise that the relevant estoppel or matter giving rise to abuse of process by re-litigation arises only from the Court of Appeal's judgment, since this underpins the Plaintiffs' submission that they were the successful party and therefore, on their submission, they had no right of appeal from the judgment of the Court of Appeal (I interpolate, partly) in their favour and no estoppel or abuse of process could arise.
A first difficulty with this submission is that the estoppel and abuse of process pleaded by the Points of Reply is not limited to matters determined by the Court of Appeal, but instead relies both on matters determined by the earlier hearing before me and by the Court of Appeal. By way of example, paragraph 1(a) of Mr Whittingham's Points of Reply pleads matters determined before me, although that paragraph is particularised by reference to both my judgment and the Court of Appeal's judgment; paragraph 1(b) of the Points of Reply pleads that those matters were legally indispensable both to my judgment and the Court of Appeal's judgment and particularises a further reference to the Court of Appeal's judgment; paragraph 1(c) of the Points of Reply again pleads both matters determined before me and in the Court of Appeal; and paragraph 2(a) of the Points of Reply again pleads a matter determined before me.
Second, the fact that Mr Whittingham's Points of Reply relies on the matters determined in the earlier hearing before me potentially has a significant implication for the Plaintiffs' submission that no issue estoppel could arise from the Court of Appeal's judgment, on the basis that the Plaintiffs were successful in the ultimate outcome in the Court of Appeal (I interpolate, at least in respect of the issue as to s 41 of the Registered Clubs Act, and possibly excepting those findings adverse to them at first instance that were upheld on appeal and the fact that Mr Whittingham's claim in quantum meruit was permitted to go forward) and had no occasion to appeal from the Court of Appeal's judgment. That proposition arguably does not assist the Plaintiffs to the extent that Mr Whittingham's Points of Reply rely on the matters which were determined in the earlier hearing before me. The Plaintiffs were not successful in several significant aspects of that earlier hearing; they had occasion to appeal from the judgment before me, and did so; and were successful in some aspects of that appeal and not successful in other aspects of that appeal. It seems to me seriously arguable, in those circumstances, that the principles to which the Plaintiffs refer would not avoid their being bound by the findings at first instance, to the extent that they had appealed from those findings and they had been upheld by the Court of Appeal. At the least, the contrary is not sufficiently certain that it could support an order for summary dismissal or a strike-out of the Points of Reply.
If the Points of Reply are not capable of being struck out or summarily dismissed in respect of the issue of estoppel, to the extent that it arises from the first instance judgment in this proceeding, then it does not seem to me that they could be struck out or summarily dismissed. The Plaintiffs did not put any submission that sought to suggest, for example, that there should be a partial strike-out or partial summary dismissal in respect of references to, for example, those parts of the Court of Appeal's decision in which the Plaintiffs had been successful, and there seems to me to be little utility in such a course.
The parties also advanced detailed submissions as to the extent to which findings made by the Court of Appeal, in making a costs order, could give rise to an issue estoppel, by reference to the decision in State of Norway's Application (No 2) [1990] AC 723. The Plaintiffs point, with some force, to the scepticism expressed by Ashley J in Clancy v Santoro [1999] 3 VR 783 as to whether the determination of matters in a costs hearing could give rise to an issue estoppel. It does not seem to me necessary to determine this question, to the extent that the continuance of the hearing before me is confined by the findings I have previously made, to the extent they have not been overturned, and the Court of Appeal's observations in its costs judgment accord with those findings by which I am already bound.
The Plaintiffs also submit, in reply, that:
"The Plaintiffs' entitlement to argue or reargue matters does not depend on whether [Mr Whittingham's] claim for a quantum meruit is by way of cross-claim in the original proceeding or by way of a second proceeding - the answer would not be different depending on the Court file number given to the proceeding in which the issue was determined."
That submission may not be correct, to the extent that the same proceeding number allocated to a proceeding identifies a matter of substance, namely that it is not a new and different proceeding to an earlier hearing in the same proceeding. As I have noted above, it is not open to a trial judge to reach inconsistent findings as to the same facts and same legal issue in the same proceeding, even if one finding is reached at an early point in the proceeding and another at a later. Once that matter is recognised, it is not necessary to determine whether the ability to re-litigate matters, in the one proceeding, so as to controvert factual findings already made in that proceeding, is narrower than might be available, if the matters were in fact raised in different proceedings between the same parties.
Both the Plaintiffs, in their Third Further Amended Points of Defence to the Amended Points of Cross-Claim, and Mr Whittingham, in his Points of Reply, characterise this matter as an issue estoppel, and Mr Whittingham's Points of Reply also characterise it as a question of abuse of process. It seems to me that those characterisations are properly arguable, although what is involved is not the re-litigation of a matter in a second proceeding, which had previously been determined in a first proceeding, but a suggested re-litigating in this proceeding of matters that have already been determined in this proceeding. For these reasons, the Points of Reply should not be struck out or summarily dismissed in respect of this issue.
The Plaintiffs also emphasise in submissions that, even if Mr Whittingham's Points of Reply based on estoppel was not struck out, they would contend that he suspected that his appointment was invalid from a later point of time. It does not seem to me that this possibility is relevant to the matters which I now need to determine. Whether the Plaintiffs will require leave to reopen to lead any further evidence in that regard, and should have such leave, is a matter to be determined in the further hearing before me in due course and not in this application.
Accordingly, the Plaintiffs' application for summary dismissal and to strike-out the relevant pleadings should be dismissed with costs.
[7]
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Decision last updated: 04 June 2015