Aldous v State of New South Wales

The Crown Employees (Police Officers Death and Disability) Award 2005

1. The plaintiff's employment as a police officer was subject to, inter-alia, the Crown Employees (Police Officers Death and Disability) Award 2005. Clause 4 of the Award defined the officers to whom it applied. The plaintiff fell within the definition. Clause 5 required that officers who were eligible for coverage under the Award should contribute 1.8% of their salary to NSW Police. The plaintiff duly made contributions, from 2005 until his employment ceased. Clause 7 provided that officers who contributed under cl 5 would be entitled to a lump sum payment calculated under Schedule A to the Award "in the event that an on duty injury results in […] a police officer suffering total and permanent disablement". Clause 8 provided for lump-sum benefits, on a different scale, for total and permanent disablement resulting from an "off duty" injury.
2. Clause 9 of the Award made provision for a police officer who suffered either an on duty or an off duty injury that caused "partial and permanent disability" to receive rehabilitation and retraining and to be offered placement in a suitable position as a "permanent restricted duties police officer". Alternatively, with the officer's consent, he or she could be considered for redeployment to an "administrative officer position". If it should not be possible to place the officer in a restricted duties position and if he or she should not consent to redeployment as an administrative officer, then the officer's employment would be terminated and NSW Police would pay, in the case of partial and permanent disability resulting from an on duty injury, a lump-sum benefit calculated in accordance with Schedule B to the Award.
3. Clause 10 provided that NSW Police would establish an insurance scheme to cover the lump-sum benefits payable under cll 7 and 8. Metlife Insurance Limited (Metlife) was the underwriter with which NSW Police took out this cover. The NSW Police Force itself would fund any benefits for partial and permanent disability under cl 9. Clause 10.6 provided as follows: 10.6 Members can only receive one benefit either a "partial and permanent disability benefit" or "total and permanent disablement benefit". Receiving a "partial and permanent disability benefit" or "total and permanent disablement benefit" discharges the liability of the alternative party for the relevant benefit payable. […] The reference to "alternative party" is to either NSW Police or Metlife, being the funders of cl 9 benefits and cll 7 and 8 benefits, respectively.

The Deed-Undertaking of 25 July 2007

1. The plaintiff ceased to perform duties from late 2005 because he was suffering psychiatric symptoms. At some time over the next two years he must have been declared under cl 9 of the Award to be suffering a partial and permanent disability. I infer that no suitable alternative position could be found for him because his employment was terminated on 13 July 2007. By July 2007 NSW Police had determined that the plaintiff was entitled to payment of a benefit under cl 9 for partial and permanent disability. In anticipation of paying that benefit, the plaintiff was required to enter into a Deed-Undertaking with the Commissioner of Police.
2. The Deed-Undertaking was signed by the plaintiff on 25 July 2007 and contained the following, referring to the plaintiff as "the Recipient": RECITALS A. The Recipient has become entitled to a benefit under clause 9 the Crown Employees (Police Officers Death and Disability) Award 2005 ("the Award") for partial and permanent disability. B. Clause 10.6 of the Award provides that members can only receive one benefit, either a "partial and permanent disability benefit" or "total and permanent disablement benefit". Clauses 7 and 8 of the Award provide for entitlements to a lump sum payment for either an "on duty" or an "off duty", death or total and permanent disablement, respectively. C. The Parties have agreed, in accordance with the terms of this Deed, that the Recipient will repay NSW Police Force all moneys paid to him/her by NSW Police Force under the Award in the event the Recipient becomes entitled to a benefit under clause 7 or clause 8 of the Award and receives payment for that benefit. IT IS AGREED AS FOLLOWS: 1. The Recipient (which, for the purposes herein, includes his/her estate or lawful assigns): (a) hereby irrevocably authorises Metlife Insurance Limited to deduct and remit to NSW Police Force, or (b) in the event that such deduction is not remitted to NSW Police Force, agrees to and hereby undertakes to repay to NSW Police Force, an amount equal to the amount received by the Recipient pursuant to clause 9 of the Award, in the event the Recipient or his or her estate becomes entitled, at some future time, to receive benefits under clause 7 or clause 8 of the Award (for an "off duty" or an "on duty" death or total and permanent disablement). 2. The Recipient (including his/her estate or lawful assigns) agrees to and hereby undertakes to pay the amount referred to in clause 1(b) above to NSW Police within 24 days from receipt of benefits paid under clause 7 or clause 8 of the Award. 3. The Recipient, both personally and on behalf of his or her estate and lawful assigns, hereby: (a) undertakes, and (b) irrevocably authorises Metlife Insurance Limited, to notify NSW Police Force that the Recipient (or his or her estate) has subsequently become eligible to receive or has received benefits pursuant to clause 7 or clause 8 of the Award (for an "off duty" or an "on duty" death or total and permanent disablement), - in the case of Recipient (including his/her estate or lawful assigns) with 14 days becoming aware of such eligibility, - in the case of Metllife Insurance Limited as soon as practicable And that such notification is to include information as to any approval or authorisation in relation to payment pursuant to clause 7 or clause 8 of the Award, including : (i) the amount to be or which has been paid and (ii) the date on which the amount is to be or has been paid to the Recipient (or his/her estate) And to that end, and also to facilitate deduction and remittal under clause 1(a) above, the Recipient hereby irrevocably consents and authorises and permits NSW Police Force to provide information to Metlife Insurance Limited in respect of the receipt, by the Recipient, of the amounts, paid pursuant to clause 9 of the Award.

Payments to the plaintiff for partial disability and for total disablement

1. On 23 October 2008 a partial and permanent disability benefit of $434,957.88 was paid by NSW Police pursuant to cl 9 of the Award. The payment was taxable as an employment termination payment. NSW Police remitted the tax component directly to the Australian Taxation Office (ATO) and the balance of $301,985.95 was transferred to the plaintiff.
2. By May 2009 Metlife had accepted the plaintiff's claim for a total and permanent disablement benefit under cl 7 of the Award, calculated at $633,488. This was also taxable and again the tax component was remitted to the ATO. Metlife paid the net amount of $582,557.95 to the plaintiff on 20 May 2009. Under cl 10.6 of the Award and by the express terms of the Deed-Undertaking of 25 July 2007, the payment of the permanent and total disablement benefit rendered the plaintiff liable to repay to the NSW Police the permanent and partial disability benefit of $434,957.88 that had been paid on 23 October 2008.

Plaintiff's claim for damages in negligence - Deed of Release 1 June 2009

1. In the meantime, on 26 February 2009 the plaintiff's solicitors had served on NSW Police a pre-filing statement of a work injury damages claim for his PTSD, alleging that it was caused by negligence of the Police Force as his employer. The statement was served in accordance with s 315 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW). The claim was successfully mediated on 1 June 2009. The terms of settlement were recorded in a Deed of Release made that day. In this instrument the plaintiff was referred to as the employee and NSW Police Force was referred to as the employer.
2. The recitals of the Deed of Release make it very clear that its subject matter is the plaintiff's claim in negligence at common law, as preserved by s 151 of the Workers Compensation Act 1987 (NSW), for work injury damages. That claim was identified at Recitals 2 and 3, as follows: 2 On or about 15 November 2005 employee sustained a psychological injury, namely a post traumatic stress disorder (PTSD). 3 The Employee has made a claim against the employer for work injury damages in respect of the injury/injuries referred to above.
3. In Recitals 4 and 5 reference was made to the plaintiff's assessed percentage of whole person impairment and to the 15% threshold that he had to meet in order to be entitled to damages in negligence: ss 313 and 314 of the Workplace Injury Management and Workers Compensation Act. At Recital 6 the plaintiff's pleading of his cause of action in damages for negligence was set out in full, including full particulars of alleged breach of duty. Recitals 7 and 8 were in the following terms: 7 The employer has denied the allegations made by the employee in the claims and proceedings, and otherwise. 8 The employer and the employee have agreed to resolve these proceedings and all other claims or possible claims for damages by or on behalf of the employee against the employer and its officers, employees; successors, heirs and assigns on the basis set out in this Deed.
4. Further recitals appeared at cll 9-12, followed by operative provisions, of which the following are presently relevant, with emphasis added in cll 20 and 22: 13 In full and final satisfaction of the injury and/or injuries as set out in this Deed of Release the employer agrees to pay to the employee an amount of $540,000 inclusive of costs under schedule 7 of the Workers Compensation Regulation 2003 and clear of Workers Compensation payments made to date. 14 The parties agree that the payment referred to in clause 13 does not constitute an admission of liability by the employer in respect of any claim or allegation of negligence made by the employee. 15 In consideration of the payment referred to in clause 13 the employee releases and will release the employer and each of its related bodies corporate/ officers, employees, successors, heirs and assigns from all claims and liabilities of any nature (including any costs) connected with or incidental to:- (a) the proceedings and any possible proceedings; (b) the circumstances or allegations referred to in the proceedings and any possible proceedings or upon which the proceedings and any possible proceedings were, are or could be based; (c) the employment of the employee and any matter, act, or thing occurring during the course of that employment, including but not limited to the circumstances of the termination/resignation of that employment (d) any entitlements to damages of any kind including but not limited to any entitlement to work injury damages or damages under any Anti Discrimination Legislation, Occupational Health legislation and/or Industrial Relations legislation consequent upon the injuries referred to in paragraph 2 of the Recital above, including, but not limited to, injuries to the back, neck, head, upper and lower limbs, psychological injury, whole body system, respiratory, nervous system, […] 19 This Deed contains the entire agreement between the parties with respect to its subject matter. 20 The parties acknowledge that they enter into this Deed fully and voluntarily on their own information and investigation and that it is their intention to and they do fully, finally, absolutely, and forever settle according to the provisions of this Deed any and all liabilities, claims, disputes, and differences which now exist or may exist or have ever existed between them relating in any way to the matters the subject of this Deed. […] 22 This Deed may be pleaded as a bar to any action, suit, or proceedings commenced, continued or taken by any party to this Deed or on its behalf in connection with any of the matters referred to in this Deed except for breach of a provision of this Deed. […] 24 The release set out in Clause 3 [scil15] of this Deed is for the benefit of and may be enforced by each of the related bodies corporate and officers, employees, successors, heirs and assigns despite those persons not being a party to this Deed.

The State's action against the plaintiff in the District Court

1. On 28 August 2009 an officer of NSW Police Financial Services made demand upon the plaintiff for repayment, in accordance with cl 10.6 of the Award and the Deed-Undertaking of 25 July 2007, of the partial and permanent disability benefit that had been paid on 23 October 2008. He replied on 1 September 2009 expressing surprise that he was obliged to make the repayment and saying that he needed time to liquidate investments and to marshal funds. On 18 September 2009 the Financial Services officer advised him in writing that as soon as he had repaid the full amount of $434,957.88, NSW Police would advise the ATO that this had occurred so that the plaintiff could submit an amended return and obtain a refund of the tax component of this benefit. Thereafter, the plaintiff paid $158,000 by instalments towards refund of the partial and permanent disability benefit. No further repayments were made and by April 2010 NSW Police found it necessary to commence, in the name of the State, recovery action in the District Court. A statement of claim was filed on 7 April 2010.
2. The plaintiff defended the District Court proceedings and filed a cross claim seeking relief, under the Contracts Review Act 1980 (NSW), in respect of the Deed-Undertaking of 25 July 2007. There was a long delay in bringing the State's recovery action to hearing. It was determined by her Honour Judge Balla on 24 November 2017. The following orders were made: 1. Verdict for the plaintiff [State] against the defendant [Mr Aldous] in the sum of $276,957.88 together with interest of $186,791.78 totalling $463,749.66. 2. Verdict for the cross-defendant [State] against the cross-claimant [Mr Aldous]. The figure of $276,957.88 in order 1 was the amount of the partial and permanent disability benefit that had been paid, including the tax component, less the agreed total of repayments that had been made by the plaintiff, by instalments. Costs were ordered against Mr Aldous on both the statement of claim and his own cross claim.
3. The plaintiff appealed this decision. The Court of Appeal dismissed the appeal with costs: Aldous v State of New South Wales [2018] NSWCA 261. The bases upon which the plaintiff had in the District Court unsuccessfully resisted the State's claim for repayment under the Deed-Undertaking of 25 July 2007 are summarised in the judgment of Payne JA at [28]-[38]. It is necessary to repeat those paragraphs in full: [28] The primary judge found that Mr Aldous had signed the [Deed-Undertaking of 25 July 2007]. His wife, Belinda Aldous, had witnessed his signature. The primary judge found that the evidence established that Mr Aldous, at the time he signed the Deed, was capable of understanding the general nature of what he was doing and that he understood that he could not keep both the total and permanent disablement benefit and the partial and permanent disability benefit should he receive both. The primary judge found that: (1) the law does not prescribe any fixed standard of sanity as a requisite for the validity of all transactions. It requires, in relation to each particular matter or piece of business transacted, that each party shall have such soundness of mind as to be capable of understanding the general nature of what he or she is doing by his or her participation: Gibbons v Wright (1954) 91 CLR 423; [1954] HCA 17 at 438; and (2) ordinarily, the nature of the transaction means the "general purport" of the instrument, but in some cases it may mean the effect of a wider transaction which the instrument is a means of carrying out: Gibbons v Wright at 438. [29] The primary judge also found that the contemporaneous medical evidence, including expert evidence adduced at trial, did not cast doubt on Mr Aldous' ability to understand the general nature of the issue addressed by the Deed. The primary judge found that there was no evidence to show that the NSW Police knew or ought to have known there was an issue as to Mr Aldous' competence at the time he signed the Deed. The medical evidence did not suggest that Mr Aldous' condition would have impaired his ability to comprehend the Deed. [30] Mr Aldous gave evidence that he assumed that any total and permanent disablement benefit payment would be adjusted by the NSW Police and the insurance company to deduct the difference between that benefit and the prior partial and permanent disability benefit payment. He stated that he did not understand the total and permanent disablement benefit payment was not his in full when he banked the cheque. [31] The primary judge did not accept that Metlife should have deducted the amount repayable by Mr Aldous and sent it directly to the NSW Police because Mr Aldous had authorised that arrangement by signing the Deed. This was because the Deed authorised, but did not require, Metlife to make the repayment to the NSW Police. Secondly, Mr Aldous had signed the Deed undertaking to make repayment to the NSW Police, and the fact that he had asked Metlife to pay the NSW Police directly did not relieve him of the obligation to refund it himself if Metlife failed to do so. [32] The primary judge found, applying Maund v Crown in right of the State of New South Wales [2013] NSWCA 226, that Mr Aldous must repay to the NSW Police the gross amount of the partial and permanent disability benefit he received. [33] The primary judge rejected Mr Aldous' reliance on an alleged promise made by a police lawyer, Mr Reid, about the sale of Mr Aldous' property. The primary judge found that the conversation with Mr Reid […] that Mr Aldous deposed to in his 20 December 2016 affidavit did not set out any such agreement, and secondly, the property in question was sold for approximately $770,000 in September 2011 and the money was not repaid by Mr Aldous. [34] The primary judge did not accept Mr Aldous' submission that the NSW Police and Metlife had engaged in entrapment, creating the prospect of financial disaster and imposing unnecessary stress upon him. [35] Her Honour found that Mr Aldous did not lead any evidence about the relationship between the NSW Police and Metlife. The primary judge was not satisfied that there was any evidence of any irregularity in the dealings between the NSW Police and Metlife. The primary judge declined to find that this allegation, if made good, gave rise to a defence to the NSW Police's claim or that it gave rise to a cause of action by Mr Aldous against the NSW Police. [36] The primary judge rejected Mr Aldous' claim of unconscionability. Her Honour found that Mr Aldous was not operating under some special disability or disadvantage and found, in any event that there was no evidence that the NSW Police knew of and unconscientiously took advantage of any relevant disability or disadvantage suffered by Mr Aldous. [37] The primary judge rejected Mr Aldous' case that he was unfairly exploited, disadvantaged and victimised by the NSW Police, and that they ignored their fiduciary duty to him to ensure Metlife made the deduction allowed by the Deed. Her Honour found that at the time of payment of the total and permanent disablement benefit Mr Aldous was no longer a police officer and was not owed a fiduciary duty. Secondly, even if he was owed a duty, her Honour concluded that Mr Aldous did not demonstrate how it was that the NSW Police could ensure that Metlife made the deduction. [38] Mr Aldous' cross-claim pleaded that the Deed was unjust and sought "Relief Under the Contracts Review Act". The primary judge was not persuaded that Mr Aldous demonstrated any relevant injustice. Her Honour did not accept that there was relevant unfairness in requiring repayment of a benefit to which Mr Aldous had no entitlement.
4. Notably, the plaintiff did not contend in the District Court that by the terms of the Deed of Release of 1 June 2009 he had been released from the obligation to repay to NSW Police the partial and permanent stability benefit that the State was seeking to recover from him. For the purposes of determining the present appeal from Harrison AsJ's decision, nothing would be gained from listing the plaintiff's grounds of appeal from the judgment of Judge Balla or the additional arguments that the plaintiff was permitted to advance orally in the Court of Appeal. No error was found and all grounds were rejected. There was no attempt to raise in the Court of Appeal any argument of release under the Deed of 1 June 2009.

Pleading of a release under the Deed of 1 June 2009

1. The first five paragraphs of the plaintiff's statement of claim in the present case are as follows: 1 The proceedings are commenced against the Defendant in accordance with s 5 of the Crown Proceedings Act 1988 (NSW) in respect of the acts, omissions and conduct of the New South Wales Police Force ("NSWPF"). 2 On 1 June 2009, the Plaintiff and the Defendant executed a Deed of Release ("the Deed"). 3 Paragraph 20 of the Deed was in the following terms: "The parties acknowledge that they enter into this Deed fully and voluntarily on their own information and investigation and that it is their intention to and they do fully, finally, absolutely, and forever settle according to the provisions of this Deed any and all liabilities, claims, disputes, and differences which now exist or may exist or have ever existed between them relating in any way to the matters the subject of this Deed." 4 The subject matter of the Deed related to personal injury sustained by the Plaintiff in the course of his service with the NSWPF. 5 As at 1 April 2010, any claim for $334,957.88 had been settled by reason of paragraph 20 of the Deed.
2. The figure of $334,957.88 in par 5 is the amount of the partial and permanent disability benefit paid to the plaintiff on 23 October 2008, $434,957.88, less $100,000 that had been repaid by the date of commencement of the NSW Police recovery action in the District Court. The plaintiff clearly intends by par 5 to allege that the State's entitlement to repayment of that benefit, on the basis of cl 10.6 of the Award and the Deed-Undertaking of 25 July 2007, was "settled", or, more accurately, released, by the Deed of Release made on 1 June 2009. As a matter of construction of the Deed of Release I find this contention untenable, manifestly insupportable and amenable to being struck out pursuant to r 14.28 of the UCPR.
3. The inescapable conclusion from Recitals 1-8, from the compromise expressed in cl 13 and from the terms of the plaintiff's release of the NSW Police in cl 15 is that the "the matters the subject of this Deed", as referred to in cl 20, and the "matters referred to in this Deed", as that expression is used in cl 22, are the matters of the plaintiff's common law claim for damages in negligence for alleged breach of duty of care owed to him by NSW Police as his employer. There is no reference anywhere in the Deed to the plaintiff's liability to repay the permanent partial disability benefit, on the basis of cl 10.6 of the Award and/or in contract under the Deed-Undertaking of 25 July 2007. At the date of the Deed of Release, NSW Police had made no claim or demand on the plaintiff with respect to that liability. The plaintiff had not raised any issue or dispute about his obligation to repay.
4. There is nothing in the wording of the Deed or in the surrounding circumstances to indicate that the parties had in contemplation, as a matter that was in any sense a subject of the Deed, the repayment obligation. That obligation does not fall within the description of "all liabilities, claims, disputes, and differences which now exist or may exist or have ever existed between them relating in any way to the matters the subject of this Deed", as those words are used in cl 20 of the Deed. Clause 20 therefore does not purport to "settle" that obligation. The action in the District Court to enforce the obligation to repay the benefit was not a proceeding "in connection with any of the matters referred to in this Deed" and cl 22 therefore did not operate as a bar to the claim.
5. At pars 6-9 the plaintiff pleads the commencement of the action against him in the District Court, the entry of judgment on 24 November 2017 and the dismissal of his appeal on 9 November 2018. The pleading continues as follows: 10 The Defendant breached the terms of the Deed [of Release]. Particulars of Breach i) Making demands upon the Plaintiff after 1 June 2009 to repay money; ii) Issuing proceedings in the District Court of NSW for the recovery of money; iii) Prosecuting proceedings against the Plaintiff in the District Court and Court of Appeal; iv) Enforcing judgment obtained in the District Court and commencing debt recovery proceedings. 11 Further and in the alternative, the Defendant owed the Plaintiff a duty of care to comply with its obligations under the Deed in circumstances where it knew the Plaintiff lacked legal expertise, was psychologically vulnerable and had suffered personal injury in its employ. 12 The Defendant breached its duty of care owed to the Plaintiff by breaching the terms of the Deed as particularised above. 13 The Defendant further breached its duty of care by failing to disclose the terms of the Deed to: i) The District Court; and ii) The New South Wales Court of Appeal. 14 As a consequence of the Defendant's breach of the Deed and breaches of duty, the Plaintiff has suffered loss and damage. Particulars of Loss and Damage i) Payments made by the Plaintiff to the Defendant as a consequence of the Defendant's demands and entry of judgement in the District Court of NSW; ii) Legal Costs; iii) Consequential distress and anxiety.
6. The cause of action for breach of contract pleaded in par 10 depends entirely upon the allegation that the Deed of 1 June 2009 released the plaintiff from his obligation to repay the partial and permanent disability benefit. That cause of action is doomed to fail because the Deed clearly did not work any such release. There has not been identified any evidence concerning surrounding circumstances that if adduced could relevantly bear upon the construction of the deed in such a way as to lead to a different conclusion.

Estoppel against pleading a cause of action for breach of Deed

1. The State submits that plaintiff is in any event estopped from advancing an allegation that the Deed of 1 June 2009 released him from the obligation to repay the benefit, because that allegation is so connected with the claim that was brought against him in the District Court that it was unreasonable for him not to have raised it there as a defence. In Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45 at p 598, Gibbs CJ, Mason and Akin JJ adopted the following statement of the applicable principle, taken from the judgment of the Vice Chancellor in Henderson v. Henderson (1843) 3 Hare 115; 67 ER 319: [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.
2. At pp 602-604 their Honours added the following. The words that I have italicised appear to be inapposite: In this situation [that is, where a plaintiff's new proceeding is said to be estopped because the plaintiff omitted to plead a defence in an earlier action] we would prefer to say that there will be no estoppel unless it appears that the matter relied upon as a defence [sic] in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding. In this respect, we need to recall that there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings eg expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few. […] It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment. […] […] The likelihood that the omission to plead a defence will contribute to the existence of conflicting judgments is obviously an important factor to be taken into account in deciding whether the omission to plead can found an estoppel against the assertion of the same matter as a foundation for a cause of action in a second proceeding. By "conflicting" judgments we include judgments which are contradictory, though they may not be pronounced on the same cause of action. It is enough that they appear to declare rights which are inconsistent in respect of the same transaction.
3. In Tomlinson v Ramsey Food Processing Pty Limited (2015) 256 CLR 507; [2015] HCA 28 French CJ, Bell, Gageler and Keane JJ reiterated the principle at [22], in these terms (citations omitted): The third form of estoppel is now most often referred to as "Anshun estoppel", although it is still sometimes referred to as the "extended principle" in Henderson v Henderson. […] Estoppel in that extended form operates to preclude the assertion of a claim, or the raising of an issue of fact or law, if that claim or issue was so connected with the subject matter of the first proceeding as to have made it unreasonable in the context of that first proceeding for the claim not to have been made or the issue not to have been raised in that proceeding. The extended form has been treated in Australia as a "true estoppel" and not as a form of res judicata in the strict sense. Considerations similar to those which underpin this form of estoppel may support a preclusive abuse of process argument.
4. The State submits that it was unreasonable for the plaintiff to have failed to raise as a defence to its recovery action in the District Court the release under the Deed of 1 June 2009 that he now seeks to assert as the foundation of a cause of action for breach of that Deed. If the plaintiff were permitted to proceed on his statement of claim and if he should succeed, judgment in his favour for damages on the basis that the State breached the terms of the Deed by suing him in the District Court would be in direct conflict with the judgment of that Court that has been upheld on appeal. In those circumstances it is argued that the plaintiff is estopped from prosecuting a case that depends upon an assertion that liability to repay the permanent and partial disability benefit was released by the terms of the Deed.
5. Counsel for the State cited Charafeddine v Morgan [2014] NSWCA 74 at [22]-[33]. He submitted that the judgment of the President in that case casts doubt upon whether there exists any qualification of special circumstances to the extended principle of estoppel recognised in Port of Melbourne Authority v Anshun Pty Ltd. He also submitted that, if there is such a qualification, Charafeddine v Morgan limits it to narrow categories of circumstances. I do not accept that analysis of the case. I read the President's judgment as concerned only with whether a special circumstances exception qualifies the narrower doctrine of issue estoppel, strictly so-called. Anshun estoppel did not arise in Charafeddine v Morgan. The formulation by Gibbs CJ, Mason and Akin JJ of the wider estoppel principle expressly incorporates the qualification of special circumstances, by reason of which a party "may justifiably refrain from litigating an issue" in an earlier proceeding. In the passage extracted at [27] above their Honours gave examples of such circumstances: "expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few".
6. Differing views have been expressed by the courts as to whether the decision to dismiss proceedings on the basis of Anshun estoppel is an exercise of judicial discretion. In Wong v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 242 the Court (Emmett, Conti and Selway JJ) said this: [38] […] As foreshadowed in Anshun, there will be instances where, even though there is every reason why the matter should have been raised earlier but was not, there are special circumstances that prevail to permit a party to raise the issue in a subsequent proceeding. The Court therefore has a discretion, if it determines that special circumstances exist, to allow an issue to be raised, even where it is found that the point was unreasonably omitted from the earlier proceeding: see Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 40 NSWLR 543 at 558. However, the circumstances in which that would be permitted must, because of the principles referred to above, be exceptional, constituting "special circumstances": see BC v Minister for Immigration & Multicultural Affairs [2002] FCAFC 221 at par [30]. What will be sufficient to constitute special circumstances is by no means fixed and may involve consideration of a wide range of factors, all of which bear upon the general discretion of the Court where justice requires the non-application of the general principle: see BC v Minister for Immigration & Multicultural Affairs [2001] FCA 1669 (Sackville J) at [50] referring to Port of Melbourne Authority v Anshun (No 2) [1981] VicRp 9; [1981] VR 81; see also Bryant v Commonwealth Bank [1995] FCA 1299; (1995) 57 FCR 287 at 296,298-299, citing Yat Tung Investments Co Ltd v Dao Heng Bank Ltd [1975] AC 581.
7. In CG Maloney Pty Ltd v Noon [2011] NSWCA 397 there was a question of what materials might be referred to by the Court in determining whether an Anshun estoppel arose, in particular whether submissions of counsel in the earlier proceedings might be referred to. Campbell JA held as follows (Handley and Tobias AJJA agreeing): [68] I agree that the evidence relevant to an Anshun estoppel is wider than the evidence relevant to res judicata or issue estoppel, and that "a broad merit-based judgment" that "takes account of all the facts of the case" would permit the court to receive the submissions of counsel in the [earlier proceedings]. When the essential question in an Anshun estoppel case concerns the reasonableness of the manner in which litigation has been conducted, any facts that bear upon that reasonableness are relevant. […] [69] [Counsel] submits that the judge's upholding of the Anshun defence was an exercise of discretion, and could be overturned only in accordance with the principles in House v The King (1936) 55 CLR 499. [70] I do not accept that submission. The concepts upon which any application of Anshun depends are those of relevance, and unreasonableness. Each of those concepts involves application of a legal standard. In relation to a particular case, there can only be one right answer to a question of whether A is relevant to B, and only one right answer to a question of whether certain conduct is unreasonable. I recognise that answering each question requires evaluation and judgment. Notwithstanding that, such decisions do not involve the exercise of a discretion: Certain Lloyds Underwriters v Kathy Giannopoulos [2009] NSWCA 56 at [1], [91]-[97] and cases there cited. […].
8. The divergence of judicial opinion as to whether engagement of the Anshun principle is to be determined as an exercise of discretion or by the application of a legal standard is not, of itself, important to the resolution of the case now before the Court. What is significant is that these and other authorities recognise that matters relevant to the operation of the principle are wider than merely the pleadings in each of the sequential proceedings and the judgment in the earlier one.
9. The wider circumstances relied upon by the plaintiff in the present case are the following matters deposed to in his affidavit sworn 12 November 2020: 33 At the time of signing the [Deed of 1 June 2009] I was informed that the deed and the settlement was confidential and I was not allowed to speak to other people about it. 34 I was informed by my solicitor, Ms Ryan, and my barrister, Mr McSpedden words to the effect: Once both sides have signed the deed, that will end your involvement with the New South Wales Police Force. 36 At the time of signing the deed, I was looking forward to having nothing to do with the New South Wales Police Force from then on. 39 At the time of receiving the [email demand for repayment of the partial and permanent disability benefit on 28 August 2009, I was suffering from anxiety and shock. I was extremely distressed by receiving this email as it appeared I would never get rid of the New South Wales Police Force from my life. 40 I recall reading [the] email. I recall thinking they would not write without reason but I did not agree with their demands. [The author] did not mention the deed of 1 June 2009 in her email to me or in subsequent correspondence from her. 55 […] At the filing of my defence [in the District Court], I did not know or understand the effect of the deed of 1 June 2009. [Counsel appointed by the NSW Bar Association pro bono scheme] who prepared my defence did not ask me about the deed of 1 June 2009 and did not ask to see a copy of it. 56 [At the hearing] I represented myself in the District Court […]. 58 I did not give her Honour Judge Balla a copy of the deed from 1 June 2009 as I had been told by my former solicitors it was confidential and I was not allowed to show it to anybody. […] 59 I was not aware that deed from 1 June 2009 was relevant and had I so realised I would have given it to her Honour Judge Balla. 62 […] I represented myself in the […] Court of Appeal. […] I tried to tell them about the 1 June 2009 mediation and settlement but I did not understand the importance of the deed even though I was asked questions of it. Again, I did not give the Court a copy of the deed from 1 June 2009 as I had been told was confidential and I was not allowed to show it to anybody. I was not aware that deed from 1 June 2009 was relevant and had I so realised I would have given it to the Court of Appeal.
10. Accepting all of the above evidence at its highest, it does not reasonably justify the plaintiff's failure to raise the Deed as a release in bar of the State's claim in the District Court. It is manifestly unreasonable that the plaintiff should have understood that any obligation of confidentiality with respect to the settlement could preclude him from submitting it to his own counsel for advice as to its effect. In representing himself in the District Court it is equally unreasonable that he should have thought that any obligation of confidentiality would preclude reference to the Deed where the only other party to the litigation, against whom the Deed would be deployed, was the counterparty to the Deed. The proceedings were conducted in the District Court and in the Court of Appeal by the plaintiff as a person of full legal capacity. No tutor was appointed. Evidence in the District Court concerning the plaintiff's mental illness was directed only to his state of mind when the Deed-Undertaking of 25 July 2007 was entered into.
11. By pars 34, 36 and 39 of his affidavit the plaintiff appears to suggest that when he received the demand for repayment of the permanent and partial disability benefit he thought the demand was inconsistent with the finality of his dealings with NSW Police that had been obtained under the Deed of 1 June 2009. That part of his evidence makes it all the more unreasonable that he failed to obtain advice on the question and/or failed to plead the release that he now alleges, when the District Court proceedings were commenced against him.
12. Thus, the grounds upon which the plaintiff submits that his present claim should be spared from Anshun estoppel do not amount to special circumstances and the estoppel applies. This is a matter to be finally determined upon the present application. In answer to the State's notice of motion the defendant has been required to bring forward whatever evidence he is able to rely upon to substantiate special circumstances. His evidence falls well short of providing reasonable justification for having failed to raise the Deed of 1 June 2009 in the District Court.

Estoppel of claim in negligence and other defects of that cause of action

1. The plaintiff's causes of action in negligence pleaded in pars 11, 12 and 13 also critically depend upon the allegation that the Deed of 1 June 2009 released him from the obligation to repay the benefit. On the premise of that allegation he alleges that the State's recovery action constituted a breach of a duty of care owed to him (pars 11 and 12) and that the State was obliged to disclose the Deed to the District Court and to the Court of Appeal (par 13). For the reasons already given, the critical premise is untenable and the causes of action in negligence must be struck out. Further, the plaintiff is estopped under the Anshun principle from alleging the premise of a release under the Deed of 1 June 2009.
2. In addition to the above considerations, the count of negligence in pars 11-12 is demonstrably insupportable on its face. The common law does not recognise a duty of care, owed to a counterparty to an agreement such as the Deed of Release, to observe its terms. Failure to perform the terms of a deed gives rise to an action in contract, not in tort. The count pleaded in par 13 is likewise untenable. A party to litigation, such as the State in the District Court, does not owe a common law duty of care to the opposing party to disclose relevant documents to the Court. Provision of documents to the Court is a matter of tender, not disclosure. It is regulated by the forensic decision making of the parties under the rules of adversarial procedure, not by the law of tort.

Orders

1. Applying the tests laid down in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69, the plaintiff's statement of claim discloses no reasonable cause of action because the Deed of 1 June 2009 is not open to the construction that it released the plaintiff from his obligation to repay the permanent partial disability benefit and because the claims in negligence are founded upon an alleged duty of care that is not recognised by the common law. Further, the plaintiff is estopped with respect to all causes of action, upon the principle of Port of Melbourne Authority v Anshun Pty Ltd. Harrison AsJ was right to strike out the statement of claim and to order that the plaintiff pay the defendant's costs. Her Honour's orders will stand.
2. With reference to the plaintiff's appeal ground, quoted at [3] of these reasons, it is not apparent from the judgment of the Court of Appeal that the provisions and interpretation of the Deed of 1 June 2009 "were considered in detail by both the primary judge and the Court of Appeal". However, it is not necessary to determine finally whether Harrison AsJ was in error in so finding because the question is of no significance in the rehearing of the State's application to strike out the statement of claim, which I have undertaken in accordance with the law cited at [2] above.
3. For the above reasons the following orders were entered at the conclusion of the hearing on 20 May 2022: 1. The plaintiff's appeal from the orders of Harrison AsJ made 9 June 2021 is dismissed. 2. The plaintiff is to pay the defendant's costs of the appeal.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 May 2022