Representative proceedings and absence of interest in subject matter of claims
41 Under this further head of attack, the NRMA Parties focused in particular on the orders the subject of paragraphs 2 and 5(f) of the AAMI application, and perhaps also paragraph 5(c) thereof, whereby AAMI was said by the NRMA Parties to be seeking relief which would in effect direct the NRMA Parties to repay, to each of the NRMA Insured in whose favour judgments had already been respectively entered against an AAMI Insured on a Local Court demurrage claim, that amount of the judgment sum already awarded against the AAMI Insured which may have been subsequently paid to NRMA, upon the basis that because NRMA was not subrogated to the rights of the NRMA Insured in relation to claims paid out by NRMA pursuant to the Courtesy Car Programme, the NRMA Insured were entitled to have those sums in their own right respectively. These orders were considered by NRMA to be perhaps based by AAMI on its unjust enrichment cause of action the subject of para 25 of the amended statement of claim. To cite the text of the NRMA submission, "[t]his is to invite the Court to make a final and binding adjudication with respect to private rights otherwise than at the suit of a person (in this case each NRMA Insured) claiming his or her rights were infringed, [though] none of the NRMA Insureds is even a party to the proceedings. The Court should not countenance such a claim, absent a properly constituted group or representative proceedings…".
42 The NRMA Parties further contended that AAMI did not have an interest in the subject matter of the claims in question, such as to warrant the relief which is sought by the AAMI application filed in the present proceedings. Reliance was placed by the NRMA Parties upon the principle of locus standi enunciated in Australian Conservation Foundation Incorporated v The Commonwealth (1978-1980) 146 CLR 493, where Aickin J, sitting as a single justice of the High Court, said as follows (at 511):
"In my view the authorities to which I have referred above establish that it is an essential requirement for locus standi that it must be related to the relief claimed. The 'interest' of a plaintiff in the subject matter of an action must be such as to warrant the grant of the relief claimed… in the statement of claim."
The application of the locus standi principle in the circumstances of that litigation was upheld by the Full High Court (Gibbs, Stephen and Mason JJ, Murphy J dissenting), the report of which immediately followed the report of the first instance hearing. Gibbs J (as he then was) at 530 stated the applicable principle as follows:
"I would not deny that a person might have a special interest in the preservation of a particular environment. However, an interest, for present purposes, does not mean a mere intellectual or emotional concern. A person is not interested within the meaning of the rule, unless he is likely to gain some advantage, other than the satisfaction of righting a wrong, upholding a principle or winning a contest, if his action succeeds or to suffer some disadvantage, other than a sense of grievance or a debt for costs, if his action fails."
That statement of the principle in Australian Conservation Foundation was applied in Bateman's Bay Local Aboriginal Land Council and Another v The Aboriginal Community Benefit Fund Pty Limited and Another (1998) 194 CLR 247, in circumstances however where a different outcome was found to be required, because it was highly probable, if not restrained from commencing and conducting their funeral benefit funding activities, that the appellants would cause severe detriment to the respondents' contributory life insurance business, that business constituting a sufficient special interest upon which to seek relief based upon conduct undertaken purportedly in exercise of statutory power. More recently in Re McBain; Ex parte Australian Catholic Bishops Conference [2002] HCA 16, Hayne J at [244] cited the locus standi principle, and in that context observed as follows:
"Thus, if relief is not available that will relate to the wrong which the applicant for relief alleges, there is no immediate right, duty or liability which will be established by the court's determination. As Gleeson CJ and McHugh J pointed out in [Abebe v The Commonwealth of Australia (1999) 197 CLR 510 at 527], "If there is no legal remedy for a 'wrong', there can be no 'matter'."
43 The NRMA Parties submitted that the only parties with any relevant interest in the "claim" of AAMI the subject of the present controversy are each of the NRMA Insureds, and also the NRMA Parties (ie NRMA and Smith), and that "[i]n truth, AAMI is an intermeddling busybody seeking to litigate an abstract question of law as to which there is no controversy to be quelled between the parties who have any real interest in the claim", and that "[p]robably there is no 'matter' before the Court within s 22 of the Federal Court Act". Moreover, it was contended by the NRMA Parties that the proceedings were not purportedly constituted, as the same should be, as a representative action under Part IVA of the Federal Court Act or under Order 6 rule 13 of the Federal Court Rules, and in any event, AAMI is not a member of the relevant group comprising the NRMA Insured persons, nor does it have the same interest as the NRMA Insured. The NRMA Parties further submitted in this context that it is vexatious and an abuse of process for AAMI to make rolled up allegations of misleading and/or unconscionable conduct and/or negligent misrepresentation and/or breach of fiduciary duty on the part of the NRMA Parties vis a vis hundreds of different NRMA Insureds, being conduct which must have occurred on different occasions in circumstances where the allegations would have to be separately considered in respect of each NRMA Insured individually, and that the abuse of process is compounded by the very generality of the declarations of wrongdoing and consequential orders for injunctive relief which are sought by AAMI from the NRMA Parties in the amended statement of claim presented to the Federal Court. Thus, so the NRMA parties' submissions continued, the Federal Court should not countenance any such AAMI claims for resolution in the Federal Court, absent a properly constituted group or representative action under Part IVA of the Federal Court Act 1976 (Cth) or Order 6 rule 13 of the Federal Court Rules, or a separate pleading of the cause of action made in respect of each NRMA Insured, which of course would render the proceedings unworkable and uncontrollable in any event.
No reasonable cause of action in relation to the conduct of Ms Smith because no conduct relevantly in trade or commerce
44 Whilst recognising the stringency of the threshold requirements of the General Steel test, which were subsequently restated in the following dicta of the High Court (Mason CJ, Deane and Dawson JJ) in Webster v Lampard (1993) 177 CLR 598 at 602-603 as follows:
"It is important to note at the outset that the issue before the learned Master on the application for summary judgment was not whether Mr and Mrs Webster would probably succeed in their action against Sergeant Lampard. It was whether the material before the Master demonstrated that that action should not be permitted to go to trial in the ordinary way because it was apparent it must fail. The power to order summary judgment must be exercised with 'exceptional caution' and 'should never be exercised unless it is clear that there is no real question to be tried'… Nowhere is that need for exceptional caution more important than in a case where the ultimate outcome turns upon the resolution of some disputed issue or issues of fact."
the NRMA Parties submitted that it was not reasonably arguable that the conduct undertaken and/or representations made by Ms Smith to AAMI and its lawyers, in the course of prosecuting the demurrage claims in the Local Court, and in obtaining the retainer agreements, occurred in trade and commerce within the requirements of the TP Act (and FT Act), for the reason that for a lawyer to conduct litigation in court on behalf of a client is not to engage in an activity having a trading or commercial character. Significance was subsequently assigned by the amended statement of claim to those representations in paras 23, 23A (in the context of the FT Act) and 24 thereof. It is unclear from the submissions of the NRMA Parties as to whether a similar application is made in relation to paras 30 to 34 of the amended statement of claim, and no submission appears to have been made in relation to para 35A thereof. I should add for completeness that I have referred to more recent authorities of this Court on the subject of strike-out applications in [14-15] above.
45 In support of the submissions of the NRMA Parties which I have sought to summarise above, I was referred to the well known dicta of the High Court (Mason CJ, Deane, Dawson and Gaudron JJ) in Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594 at 603-604, which included the following:
"…Alternatively, the reference to conduct "in trade or commerce" in s 52 can be construed as referring only to conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character. So construed, to borrow and adapt words used by Dixon J in a different context in Bank of NSW v The Commonwealth, the words "in trade or commerce" refer to "the central conception" of trade or commerce and not to the "immense field of activities" in which corporations may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business.
…
Indeed, in the context of Pt V of the Act with its heading 'Consumer Protection', it is plain that s 52 was not intended to extend to all conduct, regardless of its nature, in which a corporation might engage in the course of, or for the purpose of, its overall trading or commercial business. Put differently, the section was not intended to impose, by a side-wind, an overlay of Commonwealth law upon every field of legislative control into which a corporation might stray for the purposes of, or in connection with, carrying on its trading or commercial activities. What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character…"
I would add that at 614, Toohey J said as follows:
"…The question is not whether the conduct engaged in was in connexion with trade or commerce or in relation to trade or commerce. It must have been in trade or commerce."
I was thereafter referred to the subsequent decision of Santow J in Prestia v Aknar (1996) 40 NSWLR 165, especially at 187-191, where his Honour explained that the Trade Practices Act governs dealings, including professional activities, undertaken in the course of both commercial and consumer transactions, but nevertheless only those transactions which bear a trading or commercial nature or character (an application for special leave to appeal to the High Court from his Honour's decision was dismissed). I was additionally referred by the NRMA Parties to Little v Law Institute of Victoria (1990) VR 257, where in the joint judgment of Kaye and Beach JJ at 273, and in the context of proceedings in tort for malicious abuse of civil proceedings, misfeasance in public office and civil conspiracy, the following was said upon an issue whether a statement made by a solicitor had been so made in trade and commerce for the purpose of constituting a representation under the FT Act (of Victoria):
"In our opinion, this aspect of the appellant's claim is quite untenable. For the appellant to succeed he must first establish that the statement upon which he relies was a statement made in trade and commerce. The statement relied upon was made to Southwell J during the course of the proceedings brought by the second-named respondent against the appellant seeking to restrain the appellant from acting or practising as a solicitor. In our opinion, statements made during the course of litigation cannot be categorised as statements made in trade or commerce nor can they be categorised as representations."
Ormiston J at 292 found to similar effect as follows:
"Notwithstanding the broad interpretation which has been properly afforded to the expression 'in trade or commerce', I agree that it cannot include the present circumstances, that is where the allegedly misleading and deceptive statements are made in the course of evidence, whether on affidavit or otherwise, for the purpose of persuading a judge of this or any other superior court to exercise his judicial functions in making an order in favour of a litigant."
46 In line with those authorities, the NRMA Parties submitted that to conduct litigation in court on behalf of a client is not to engage in an activity having a trading or commercial character, and moreover that the further conduct on their part involved in the obtaining of retainer agreements from the NRMA Insured for the purposes of pursuing the demurrage claims lacked the necessary or relevant trading or commercial character required to constitute conduct in trade or commerce for the purposes of the TP Act(and additionally of course the FT Act). The NRMA Parties sought further support from the reasons for judgment of von Doussa J in Chapman v Luminis Pty Ltd [2001] FCA 1106, where at [187-188], his Honour applied the distinction formulated by Santow J in Prestia in relation to representations conveyed by an anthropological report prepared for use in connection with an application to a Commonwealth Government Minister, albeit in the context of proceedings to recover losses sustained by the developers of a marina complex, following upon action undertaken by the then Federal Minister for Aboriginal and Torres Strait Islander Affairs said to have the effect of banning the construction of a bridge which would have commercially benefited that complex.
47 In reliance upon those authorities, the NRMA Parties therefore submitted that communications between each of the NRMA Insured and Ms Smith concerning recovery proceedings commenced in the names of the NRMA Insured purportedly pursuant to NRMA's rights of subrogation as a motor vehicle insurer, though calculated to facilitate the successful prosecution of the proceedings, and irrespective of those proceedings being in fact conducted by NRMA pursuant to its misconceived right of subrogation (ie misconceived in the light of the Court of Appeal's decision in Anthanasopoulos), could not have been undertaken in trade and commerce, but had been undertaken instead in the course, and for the purpose, of the administration of justice. Those communications were not made by Ms Smith, the submission continued, in order to solicit retainers from any of the NRMA Insured, and were not made in order to derive fees, or to promote or enhance her professional services as a solicitor, NRMA alone being liable for payment of her fees (AAMI did not suggest, I should add in that context, that the individual NRMA Insured persons would be responsible for Ms Smith's fees).
Generally as to pleadings and particulars
48 The NRMA Parties presented incidental or ancillary submissions, in support of their strike-out or stay motion to the Court, as summarised below:
(i) Para 2 of AAMI's application to the Federal Court and para 25 of its amended statement of claim constituted the assertion of a cause of action for unjust enrichment which was not actionable at the instance of AAMI.
(ii) The allegations in paras 16 and 18 of the amended statement of claim are meaningless and in any event devoid of material facts and particularity. Furthermore, it was said that there has not been pleaded the conduct complained of by AAMI, or when, where, and in what manner the representations were said to have been made by the NRMA Parties to the NRMA Insured, nor the basis for what the NRMA Parties described as the "crucial allegations", being so characterised having regard to certain particulars contained in paras 6 to 10 of the letter of AAMI's solicitors of 12 March 2002 addressed to the NRMA Parties' solicitors.
(iii) The representations pleaded in para 42 of the amended statement of claim are particularised in para 15.2 of AAMI's solicitors' letter of 12 March 2002, which reads as follows:
"Each of the representations are to be implied from the forwarding of the Retainer Agreement to the named plaintiff for his or her signature and from the terms of the Retainer Agreement and from the following circumstances:
(a) the named plaintiff's vehicle was insured by NRMA Insurance;
(b) that vehicle had been damaged in a collision caused by the negligence of the other driver;
(c) the named plaintiff had made a claim on NRMA Insurance under the insurance policy in respect of that damage and whilst that vehicle was being repaired, NRMA Insurance had arranged for a replacement vehicle to be made available to the named plaintiff pursuant to the NRMA Courtesy Car Scheme at the expense of NRMA Insurance and at no expense to the named plaintiff;
(d) Ms Smith was a solicitor carrying on practice as such and was the solicitor engaged by NRMA Insurance in relation to proceedings in which the cost to NRMA of the courtesy car was claimed;
(e) in some cases, Ms Smith had communicated with the named plaintiff, on NRMA Insurance's instructions and for NRMA Insurance's purposes, to obtain a statement from the named plaintiff for use in the proceedings;
(f) at the time of forwarding the Retainer Agreements, Ms Smith had already commenced proceedings in the name of the named plaintiff against the negligent driver to recover the cost of the replacement vehicle on the instructions of NRMA Insurance."
Those representations, said to be implied, are asserted by the NRMA Parties to be contradicted by the express terms of each retainer agreement alleged to give rise to the implication, and are not reasonably maintainable (a pro forma retainer agreement is extracted in [11] above).
(iv) Para 50 of the amended statement of claim contains allegations that are said by the NRMA Parties not to be arguable, but instead mischievous and frivolous.
Alternatively to strike-out, the Federal Court proceedings should be stayed pending the outcome of the claims in the Local Court
49 The NRMA Parties submitted that if the AAMI application and amended statement of claim do not evince a vexatious process or abuse of process, or are otherwise to be vitiated, the Court should nevertheless order a temporary stay of the proceedings for the reason that the issues the subject of the Federal Court proceedings already arise in the context of the numerous proceedings of the individual NRMA Insured against the individual AAMI Insured currently being undertaken in the Local Court, quite apart from those intended to be, but not yet commenced, in the Local Court. I was referred to Sterling Pharmaceuticals Pty Ltd v The Boots Company (Australia) Pty Ltd (1992) 34 FCR 287 at 291, where Lockhart J listed the following considerations of relevance to the exercise of power to order a stay of proceedings, whether pursuant to Order 20 rule 2 (extracted in [14] above), or the implied power of a superior court to control its own proceedings:
"· Which proceeding was commenced first.
· Whether the termination of one proceeding is likely to have a material effect on the other.
· The public interest.
· The undesirability of two courts competing to see which of them determines common facts first.
· Consideration of circumstances relating to witnesses.
· Whether work done on pleadings, particulars, discovery, interrogatories and preparation might be wasted.
· The undesirability of substantial waste of time and effort if it becomes a common practice to bring actions in two courts involving substantially the same issues.
· How far advanced the proceedings are in each court.
· The law should strive against permitting multiplicity of proceedings in relation to similar issues.
· Generally balancing the advantages and disadvantages to each party."
50 In support of this submission, the NRMA Parties contended as follows:
(i) The proceedings in this Court were commenced after the demurrage claims had been already brought in the Local Court; moreover in many instances, judgment has been entered in the Local Court, and in some instances already satisfied.
(ii) The conclusion of the presently incomplete proceedings in the Local Court would have a material effect or impact upon many of the issues arising in the proceedings which have been commenced by AAMI in the Federal Court, by rendering the same otiose or moot, or potentially so. To the extent that the AAMI Insured were to succeed in the Local Court upon challenges to Ms Smith's retainer, or upon defences of absence of a right of subrogation, or third party claims for damages, the extent of significance of resolution of the issues placed before this Court by the amended statement of claim would largely disappear. Conversely, if AAMI was to fail in this Court, the outstanding demurrage claims of the NRMA Insured in the Local Court would have remained outstanding and denied finalisation for a long time.
(iii) So far as the public interest is concerned, notwithstanding that claims of contravention of the TP Act have been advanced by AAMI against the NRMA Parties, the reality is that the Federal Court proceedings involve disputes between substantial commercial insurers engaged in the pursuit of their respective private interests. It is not in the public interest concerning the administration of justice that the time and resources of the Federal Court be utilised in adjudicating upon issues of fact, or of mixed fact and law, in hundreds if not thousands of claims, each involving relatively miniscule amounts, which properly belong for individual resolution in the Local Court. The significance of that factor is said to be not lessened by what has been described by NRMA as AAMI's device of seeking in the Federal Court unspecific declaratory and/or injunctive relief involving, for example, corrective advertising, when the issues about which such advertising is sought are the very issues which the Local Court would need to determine individually in the case of each one of the demurrage claims.
(iv) Given that in the normal course, a multiplicity of discrete disputes having common elements should desirably be heard in the one forum, that place should be the Local Court, not only because of the very large number of parties individually involved at least potentially as witnesses in each instance, but also because of the relatively small amounts involved in each instance. It was unnecessary on true and complete analysis for AAMI to have commenced the proceedings in this Court, and it should not be rewarded for doing so. Particularly was that said by the NRMA Parties to be so, in the light of the extent to which the Local Court is already properly seized of the issues in the Local Court proceedings.
51 The NRMA Parties characterised AAMI's resort to the Federal Court proceedings, against the context of the Local Court proceedings being already in train, by analogy to what was observed criticallyby Ormrod J (with whom Cumming-Bruce J agreed), sitting in the Probate Division, in Lanitis v Lanitis (1970) 1 WLR 503 at 510-511 as follows:
"In my judgment, the magistrates in this class of case should be wary and on the lookout for this tactical manoeuvring which I have mentioned before; and they should be alert to see that they are not used, and do not permit themselves to be used in this fashion by parties filing petitions in the High Court at the last minute with the major object of frustrating the magistrates' jurisdiction. For the reasons which I have given, in my judgment they failed to frustrate the magistrates' jurisdiction, and in these cases the magistrates should (as I have already said) consider whether in public policy, the interests of justice and of both parties requires them to proceed with the case."
The immediate context of that litigation were matrimonial disputes, and earlier in his judgment, Ormrod J had observed at 505 that "[i]t is my experience… that this sort of thing is going on, and that it is recognised as good tactics on the part of husbands who are summoned to appear before magistrates in matrimonial matters to file a petition at the last minute… with the prime object of blocking the hearing in the magistrate's court…", where that hearing relates to maintenance of deserted married women.
52 The approach adopted in the context of the circumstances described in Lanitis was cited with approval in Boyd v Halstead; Ex parte Halstead [1985] 2 Qd R 249 at 252, a case referred to in turn with approval by Handley JA in Tiufino at 107, in the following terms:
"In Boyd v Halstead; Ex parte Halstead [1985] 2 Qd R 249, McPherson J declined to order a stay of ejectment proceedings in the Magistrates court at Cairns because proceedings for a declaration had been commenced by the tenant in the Supreme Court. His judgment contains a careful review of the relevant authorities here and in England. He concluded (at 252):
"…it is, however, now quite clear that the existence of such concurrent proceedings in a superior and inferior court does not itself operate to "oust" or to deprive the inferior court of jurisdiction in a matter in which, apart from the pendency of the concurrent proceeding in the [superior] court, the inferior court would certainly have jurisdiction to determine the matter before it. That appears from the decision in Kaye v Kaye [1965] P 100 and in Lanitis v Lanitis [supra] where, after an extensive review of the authorities, Ormrod J held that the magistrates had, in the case where proceedings are pending in the divorce court, a discretion whether to proceed with the case before them or to refuse to hear it; and that they had to decide which course to take as a matter of public policy and general convenience, paying due regard to the interests of the applicant before them in having a speedy hearing of the application." (emphasis added by the NRMA Parties)
53 The NRMA Parties further submitted that while the Local Court may not have the breadth of the interlocutory powers of a superior court such as the Federal Court of Australia, the Local Court is nevertheless clothed with jurisdiction to determine finally the rights and obligations of the numerous parties involved in the present disputes. For example, as the NRMA Parties particularised, notices to produce requiring the production of documents may be given (Local Courts (Civil Claims) Rules 1988 (NSW) (Part 23 rr 9 and 10); the Local Court has the power to issue subpoenas (LCR Part 24), and can order the making of admissions (LCR Part 14 r 4); the Local Court takes evidence orally and by affidavit, which may involve cross examination (LCR Parts 23 and 25). Moreover an appeal lies to the Supreme Court for errors of law (section 69 of the Local Courts (Civil Claims) Act 1970 (NSW)). The submission in summary made by the NRMA Parties in this context is that in practical reality, AAMI would not be materially disadvantaged by being required to litigate in the Local Court the issues it would seek to agitate in the Federal Court, thereby avoiding the need for a multiplicity of proceedings upon the same or similar issues to be litigated in the Federal Court.
54 The NRMA Parties next submitted that the Federal Court does not have jurisdiction to deal with actual disputes between the respectively insured parties involved in the demurrage claims, at least for the reason that they are not parties to the Federal Court proceedings. The NRMA Parties submitted however that the likelihood is that if the Federal Court proceedings are permitted to effectively put the Local Court proceedings "on hold", which is what AAMI necessarily seeks to achieve, that situation may well remain in force for a substantial period of time, possibly many years. Moreover, as the NRMA Parties further pointed out, many of the demurrage claims have already been deferred for a not insubstantial period of time, pending the resolution of the four test cases involved in the Anthanasopoulos proceedings in the Supreme Court of New South Wales Court of Appeal.
55 It was therefore contended in summary by the NRMA Parties that there is a substantial disadvantage to each of the NRMA Insured (and of course to NRMA itself) if the Local Court claims do not proceed to early determination because of any preference for the prior finalisation of the Federal Court proceedings. Each of the Local Court claims is for a sum of less than $1000. Part 13 rule 1 of the Local Court Rules provides that subss 39A(1) and (2) of the Local Court Act, which empower the award of interest on verdicts, do not apply to an action in which the amount claimed is less than $1000. The large number of existing and potential Local Court actions has already been estimated in [38] above.
56 It was lastly pointed out on behalf of the NRMA Parties that so far as AAMI's claim in this Court for injunctive relief is concerned, despite the allegation in the amended statement of claim as to continuing contraventions on the part of the NRMA Parties since November 2001, NRMA has offered to its motor vehicle policyholders and prospective motor vehicle policyholders in the meantime, upon payment of an additional premium, to insure in the traditional sense the cost of hiring a replacement vehicle in accordance with the terms of the NRMA insurance policies for motor vehicles in force since November 2001 (as to which see again the policy provisions extracted in [2] above). In other words, the vitiating element identified by the New South Wales Court of Appeal in Anthanasopoulos in relation to the Courtesy Car Programme has been removed, so far as NRMA's ongoing insurance transactions are concerned.
Tendency to cause prejudice, embarrassment or delay
57 The NRMA Parties lastly submitted that the amended statement of claim should be struck out for the reason that it tends to cause prejudice, embarrassment or delay, and because of shortcomings in any event in compliance with the fundamental rules of pleading designed to ensure procedural fairness and an efficient trial.
58 The starting point for this head of submissions is the well known dicta of the High Courtin Banque Commerciale SA (in Liquidation) v Akhil Holdings Ltd (1989-1990) 169 CLR 279 at 286 (Mason CJ and Gaudron J) as follows:
"The function of pleadings is to state with sufficient clarity the case that must be met… In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision."
59 Allied to that principle is the requirement that the definition of the issues in a proceeding be pleaded with appropriate particularity, so that the parties may know in advance the case they have to meet; as was further said by the High Court in Dare v Pulham (1982) 148 CLR 658 at 664 (Murphy, Wilson, Brennan, Deane and Dawson JJ):
"Pleadings and particulars have a number of functions: they furnish a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it… they define the issues for decision in the litigation and thereby enable the relevance and admissibility of evidence to be determined at the trial… and they give a defendant an understanding of a plaintiff's claim in aid of the defendant's right to make a payment into court."
60 The NRMA Parties submitted that the amended statement of claim contains many instances of general conclusions or rolled up allegations, where material facts have not been pleaded. The NRMA contend, for example, that the material facts, upon the basis of which the representations alleged in each of paragraphs 16 and 42 are said to have been made to the NRMA Insureds, have not been pleaded, and accordingly it is not possible for the NRMA Parties to know when or by what means each of the alleged representations were made in relation to any of the NRMA Insured. In short, it was said by the NRMA Parties that there has been an omission to plead, in addition to the content of each alleged representation, the material facts relating to the making thereof in respect of each NRMA Insured person, being an omission which is not capable of being cured by the so-called "mantra of letters" written by the Solicitors for AAMI in response to requests for particulars to the effect that prior to discovery and interrogatories, AAMI has no other detail presently to provide. It is therefore said by the NRMA Parties that there exists a fundamental failure to comply with Order 11 rule 2(a) of the Federal Court Rules, as well as with Order 12 rule 2 thereof, and reference was made by the NRMA Insured to the unreported decision of Lindgren J in Allstate Life Insurance Co v ANZ Banking Group Limited (18 August 1995), where at [19] his Honour said as follows:
"It is obviously inappropriate and unfair that a respondent should be required to divine, from a study of an applicant's witness statements and affidavits (not all of which may be relied upon at the hearing) which, out of possibly the numerous facts referred to in them, are the material ones relied on by an applicant as constituting such cause or causes of action or other ground or grounds of relief. Moreover, the "material facts" may not be formulated in the witness statements or affidavits in a manner conforming to the law's definition of the necessary elements of a cause of action, and may even arise by way of inference from the primary facts which appear in those documents. It is necessary that the material facts be pleaded in a statement of claim so that the other party can understand the case made against him, and decide whether to apply for a striking out or summary dismissal or to plead to the statement of claim in a way which will appropriately define the issues for ultimate decision. It is an applicant which is obliged, in its pleading, to identify the material facts on which it relies."
61 It was thereafter contended by the NRMA that the material facts, upon the basis of which it is pleaded that the conduct of the NRMA Parties was undertaken "in trade or commerce" (for instance paras 4 to 20, 21A, 44 and 52 of the amended statement of claim), have not been disclosed by AAMI. Reference was also made by the NRMA Parties to Giraffe World Australia Pty Limited v Australian Competition and Consumer Commission (1999) ATPR 41-669 at 42,527, where Lindgren J said as follows (at 42,540):
"Even if there should be some respect in which the ACCC engages in trade or commerce, it is inadequate for Giraffe World simply to plead that the ACCC published the words in Schedules A and B "in trade or commerce". It must identify the "material facts" constituting the particular trade or commerce in question and the connection (said to satisfy the word "in") between the publishing of the words in Schedules A and B and that trade or commerce (see O 11 r 2).
If this cause of action is to be pressed, Giraffe World would also need to particularise the statements which it alleges are misleading and deceptive and the respects in which they are so. Finally, it would be necessary for Giraffe World to plead and particularise loss or damage caused by the allegedly misleading or deceptive conduct. The current pleading is wholly inadequate to put the ACCC on notice of the case which Giraffe World seeks to make."
The allegations of AAMI as to the conduct of the NRMA Parties complained of having occurred in trade or commerce are to be found in paras 20, 21A, 21B, 33, 44 and 52 of the amended statement of claim.
62 The "conduct" by way of misleading and deceptive representations alleged in paras 16 and 18 of the amended statement of claim is said by the NRMA Parties to be devoid of pleading of appropriate material facts. Appropriate particulars are claimed by the NRMA Parties not to have been provided in respect thereof, though repeatedly requested. There has been tendered in evidence a comprehensive bundle of correspondence in that regard. It was further submitted by the NRMA Parties that Order 12 rules 1 and 2 require those particulars to be included in the amended statement of claim, and not something to be haphazardly gleaned from the course of correspondence between the parties, even if provided thereby at all, which is not accepted. It is further asserted by the NRMA Parties that misleading and deceptive or unconscionable conduct should not be pleaded without full particulars of the components of that cause of action, and that it is not sufficient for AAMI to assert merely that it was not privy to relevant communications, and therefore cannot provide the same prior to discovery. It is additionally contended by the NRMA Parties that the Court should require AAMI to demonstrate that it has a reasonable basis for the pleaded allegations by filing an appropriate affidavit, or otherwise to furnish proper and adequate particulars, failing which the proceedings upon the causes of action in particular for misleading and deceptive and unconscionable conduct, should be stayed.
63 It was further submitted by the NRMA Parties that the issues and matters raised in these proceedings by AAMI by its amended statement of claim include issues and matters previously raised by AAMI in the Local Court, or in any event which could have been raised by AAMI in the Local Court for some considerable time. The NRMA Parties therefore submitted that if AAMI is not presently in a position to properly articulate or particularise its case, AAMI should not be allowed to engage in a 'fishing expedition' in order to determine whether it has a viable case to go to trial in the Federal Court. In any event, so the submissions of the NRMA Parties continued, communications to and from the individual plaintiffs and their solicitor on the record for those plaintiffs (ie Ms Smith) in the demurrage claims, referable to the proceedings in the Local Court, albeit that she was appointed by the NRMA Parties, were privileged from production upon the grounds of legal professional privilege, the same as having been made for the dominant (if not sole) purpose of the Local Court proceedings. It was therefore unrealistic for AAMI to postulate, so the submission continued, merely that it would be in a position in due course to particularise its case in response to the legitimate requests of the NRMA Parties.
64 The NRMA Parties have therefore submitted that the consequences of continuation of the Federal Court proceedings would be both to increase costs and delays, and to result in irreparable prejudice to the NRMA Insured as persons entitled to bring demurrage claims in the Local Court, and thus of course damage to NRMA, yet by way of contrast, putting an end to the Federal Court proceedings, pursuant to the present strike-out proceedings brought by the NRMA Parties, would not deny either AAMI or the AAMI Insured the opportunity to agitate in the Local Court the same issues of substance which they would seek to agitate in this Court. I observe that such reference to "irreparable prejudice to the NRMA Insured" must be in reality, I would imagine, to NRMA alone, since NRMA's practice has been to meet Hertz's invoices for vehicle hiring by NRMA Insured promptly, those invoices apparently having been "billed" to NRMA direct by prior arrangement.
Submissions made on behalf of AAMI in response to the submissions of the NRMA Parties for the strike out or stay of the Federal Court proceedings, and my conclusions upon the submissions of both parties
Observations upon AAMI's causes of action
65 AAMI advanced the threshold submission that the issues which have thus far been determined by the Local Court in the concluded demurrage claims had "nothing to do" with the conduct of NRMA and/or Ms Smith (ie the NRMA Parties) the subject of the causes of action pleaded by AAMI in the present Federal Court proceedings, those issues as so determined thus far by the Local Court being whether the named plaintiff (the emphasis of AAMI), being of course an NRMA Insured in each instance, was entitled to the sum claimed for demurrage in each of the Local Court proceedings, whereas the issues raised in the Federal Court proceedings in relation to the demurrage claims were said to be different, namely:
(i) whether NRMA and Smith engaged in conduct in contravention of the TP Act (and correspondingly the FT Act) in and about the commencement and conduct of those demurrage claims in the Local Court;
(ii) whether AAMI sustained or is likely to sustain loss or damage as a result of those contraventions.
Upon that basis, AAMI contended that no issue estoppel or res judicata arose in relation to its pursuit of the Federal Court proceedings, and that those proceedings do not relate to matters of fact or law which were fundamental or "legally indispensable" (to cite the expression used in Blair v Curran appearing in [21] above)to the Local Court's resolution of the numerous demurrage claims brought by the NRMA Insured against the AAMI Insured.
66 The causes of action pleaded by the amended statement of claim are not confined to misleading and deceptive conduct and unconscionable conduct, although those causes of action represent the dominant or principal themes of the pleading. The contraventions of the TP Act by way of misleading and deceptive conduct on the part of NRMA are pleaded principally in paras 16 to 20, 22, 23, 23A and 24 of the amended statement of claim, and by way of unconscionable conduct on the part of NRMA principally in paras 21A and 21B thereof, and thereafter also in paras 23A, 24, 35A and 36 thereof. Ms Smith's involvement in that misleading and deceptive and unconscionable conduct, and the consequences thereof, are pleaded in paras 30 to 36 of the amended statement of claim. Allied to those principal causes of action are claims for unjust enrichment pleaded in para 25, breach of warranty by NRMA of Ms Smith's authority pleaded in paras 26 to 29 of the amended statement of claim, and claims for false and untrue and misleading and inaccurate representations on the part of NRMA and Ms Smith concerning the retainer agreements entered into between Ms Smith and numerous of the NRMA Insured, pleaded in paras 41 to 45 and 55 of the amended statement of claim. Additional causes of action are pleaded in the sequence of breach of the duty of care on the part of the NRMA Parties said to be owed by the NRMA Parties to the NRMA Insured in and about informing the NRMA Insured of matters relevant to their decision to enter into the retainer agreements (paras 46 to 48), misleading and deceptive conduct on the part of the NRMA Parties relating to the formation of the retainer agreements in circumstances of conflict of the interests of the NRMA Parties with those of the NRMA Insured not disclosed to the NRMA Insured (paras 49 to 53), aiding and abetting by Ms Smith of the conduct of NRMA complained of (para 54), and invalidity of the retainer agreements in so far as the same purport to constitute ratification by the NRMA Insured of conduct of the NRMA Parties previously undertaken in the name of the NRMA Insured but without the authority of the NRMA Insured (paras 56 to 58). Claims of loss and damage in relation to all causes of action are pleaded in para 55. In so far as I have referred and will continue to refer to the TP Act in isolation, it may be assumed that reference to the corresponding provisions of the FT Act is also included.
67 I would make the preliminary observation that although the NRMA Parties have not submitted that no causes of action are disclosed for misleading and deceptive conduct or unconscionable conduct in contravention of the TP Act, otherwise than on the basis that the conduct complained of did not occur in trade or commerce, there are certain unusual features apparent in the pleading of those causes of action, to which it is first appropriate to refer. The NRMA Parties have acknowledged the stringency of the principles governing summary strike-out applications which have been earlier summarised in [14] of these reasons.
68 As to the causes of action for misleading and deceptive conduct pleaded principally in paras 16 to 20 and 22 to 24 of the amended statement of claim, whilst it has been established that s 52 of the TP Act applies across the spectrum of the public conduct of competing traders (for example as in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1981-1982) 149 CLR 191) to that of the conduct of private negotiations between individuals, the circumstances pleaded by AAMI to constitute misleading and deceptive conduct are not readily comparable to what has been the subject of reported authority. Although NRMA and AAMI are major competitors in the field of motor vehicle insurance, particularly in relation to vehicles used for private or domestic purposes (see in particular the respective market shares set out in [38(iii)] above), the principal causes of action propounded by AAMI do not purportedly bear upon AAMI's capacity to gain new motor vehicle insurance business, or to retain existing motor vehicle business, in competition with NRMA (or with any other insurer for that matter), but upon AAMI's exposure to indemnity in respect of its insured motor vehicle owners to the demurrage claims of other motor vehicle owners (ie motor vehicle owners insured by NRMA who participated in the Courtesy Car Programme, such as the four persons the subject of the Court of Appeal's judgment in Anthanasopoulos), being an exposure which AAMI would seek to avoid indirectly by the causes of action propounded by the amended statement of claim. The conduct of NRMA complained of is different in nature to the circumstances of unfair competition between trade rivals, such as was involved for instance in Puxu, where the misleading and deceptive conduct was claimed to be causative or capable of being causative of damage by way of business opportunities lost to the offending competitor engaged in similar business activity. The conduct of NRMA complained of by AAMI is related to NRMA's pursuit in the Local Court of proceedings in tort in the name of the NRMA Insured as plaintiffs against the AAMI Insured as defendants being conduct involving the obtaining from the NRMA Insured of retainer agreements in the form set out in [11] above.
69 There is also a measure of novelty involved in AAMI's principal causes of action for unconscionable conduct as pleaded in paras 21A, 21B, 24 and 35A of the amended statement of claim. The meaning of unconscionable conduct proscribed by s 51AA of Part IVA of the TP Act, upon which both paras 21A and 21B are founded (though para 21A is also said to be founded upon s 51AB) derives from the unwritten notion of unconscionability at common law and in equity, being a notion which presents substantial difficulty for AAMI to demonstrate from the circumstances raised by AAMI. In Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 461, Mason J (as he then was) described unconscionable conduct actionable at common law as follows:
"Relief on the ground of unconscionable conduct will be granted when unconscientious advantage is taken of an innocent party whose will is overborne so that it is not independent and voluntary, just as it will be granted when such advantage is taken of an innocent party who, though not deprived of an independent and voluntary will, is unable to make a worthwhile judgment as to which is in his best interest."
I refer also to dictum of Deane J in Amadio at 474, in particular where his Honour referred to a "special disability" which "was sufficiently evident to the stronger party to make it prima facie unfair or 'unconscientious' that he procure, or accept, the weaker party's assent to the impugned transaction in the circumstances in which he procured or accepted it". More recently in Hurley v McDonald's Australia Ltd (2000) 22 ATPR 41-741, a Full Federal Court (Heerey, Drummond and Emmett JJ) observed that it was undesirable to attempt an exhaustive definition of the statutory concept of "unconscionable conduct", as used in ss 51AB (and 51AC) of the TP Act, and added as follows (at 40,585):
"For conduct to be regarded as unconscionable, serious misconduct or something clearly unfair or unreasonable must be demonstrated… Whatever 'unconscionable' means in sections 51AB and 51AC, the term carries the meaning given by the Shorter Oxford England Dictionary, namely, actions showing no regard for conscience, or that are irreconcilable with what is right or reasonable… The various synonyms used in relation to the term 'unconscionable' import a pejorative moral judgment."
70 As may be seen from my brief overview of the amended statement of claim undertaken in [66] above, there are a number of additional causes of action pleaded by AAMI relating to the conduct of the NRMA Parties, which are allied to the principal causes of action for misleading and deceptive conduct and unconscionable conduct. Those additional causes of action encounter their own respective conceptual difficulties, arising as they purport to do out of essentially the same or similar factual matrices to those of the two principal causes of action I have just outlined. The causes of action pleaded by AAMI, generally speaking, seek to address NRMA's endeavours to redress the implications of NRMA's lack of rights of subrogation, and Ms Smith's consequential absence of retainers, relating to the demurrage claims of the NRMA Insured arising out of the Courtesy Car Programme, as found in Anthanasopoulos, and to circumvent AAMI's omission to plead such lack of rights of subrogation as defences to those Local Court proceedings in relation to which judgments have been already entered in favour of NRMA Insured individually against AAMI Insured individually. The amended statement of claim is not readily comprehensible nor easy to summarise, largely because of so many additional or alternative causes of action which incorporate earlier paragraphs forming part of preceding causes of action.
Issue estoppel and res judicata
71 As foreshadowed in [65] above, AAMI has contended that no issue estoppel or res judicata has crystallised in relation to any of the causes of action the subject of the amended statement of claim, for the reason that the issues raised thereby are different to those the subject of the Local Court proceedings, and do not relate to matters of fact or law which are fundamental or legally indispensable to the Local Court's resolution of what I have described for convenience as the demurrage claims. For present purposes, issue estoppel and res judicata may be treated as the same, since res judicata also creates an estoppel, being constituted by "a judicial decision of a final nature upon a matter which [a court] has jurisdiction to decide" (re Jackson cited in [22] above). As already recorded, in virtually all of the cases thus far concluded in the Local Court by the entry of judgment for damages for demurrage, negligence on the part of the defendant (ie the AAMI Insured) in the care and control of his or her motor vehicle has been conceded or not denied, and the quantification of damage has been mutually agreed. However there was available to each of the AAMI Insured a ground of defence, which has not thus far apparently been pleaded in any of the finalised Local Court proceedings, namely the defence as to the absence of the right of subrogation vested in NRMA as insurer, being a defence required to be pleaded if the issue is to be raised by a defendant (as held in Woodside and subsequently in Anthanasopoulos). At least whether judgment entered in the Local Court in circumstances of a failure to plead that defence gives rise to issue estoppel or res judicata upon the issue which would have arisen, if the defence has been pleaded, presently falls for determination, though NRMA seemingly sought as well to raise the question in the wider context of pending as well as finalised Local Court proceedings.
72 In support of the foregoing contention, AAMI advanced the following references to Tiufino in particular:
"31. Dr Morrison did not argue that the parties in the two proceedings were different. The parties were nominally the same, but identity of parties is arguably to be decided as a matter of substance, rather than form : see K.R. Handley, 'Note: Res Judicata in the European Court' (2000) 116 Law Quarterly Review 191. As Barwick CJ said in Ramsay v Pigram (at 276) the parties in the two proceedings must litigate 'in the same interest or capacity'. This Court may be taken to know that the defence of the Supreme Court action is being conducted by Miss Warland's compulsory third-party insurer and that she has no financial interest in the result.
…
33. …Res judicata estoppels must be mutual (Ramsay v Pigram (at 276, 282); Hunter v Chief Constable of the West Midlands Police [1982] AC 429 at 540-541) but there is no authority that a compulsory third-party insurer cannot take advantage of issue estoppels available to its insured and there is authority that it can: see Wall v Radford [1991] 2 All ER 741 at 750, Craddock's Transport Ltd v Stuart [1970] NZLR 499 at 524, Talbot v Berkshire County Council [1994] QB 290, Bollen v Hickson [1981] Qd R 249and Webb v Darcy [1982] Qd R 356. This Court should follow these decisions in the absence of argument to the contrary."
73 Largely upon the basis of those authorities, AAMI submitted, in the context of the resort by the NRMA Parties to the doctrines of issue estoppel and res judicata, that (to adopt the precise words of the submission) "[t]he issues determined in the concluded Demurrage Claims had nothing to do with the conduct of NRMA and/or Ms Smith, which is the subject of these proceedings. The issue determined in those matters was whether the named plaintiff was entitled to the sum claimed. The issues raised in these proceedings in relation to the concluded Demurrage Claims are different, namely:
(a) whether NRMA and Ms Smith engaged in conduct in contravention of the Trade Practices Act in and about the commencement and conduct of the Demurrage Claims;
(b) whether AAMI has sustained or is likely to sustain loss or damage as a result of the contraventions."
AAMI further submitted, again to adopt the precise words used, that "[t]here is no relevant issue estoppel because the issues are different. The matters being litigated here are not matters of fact or law which were fundamental or legally indispensable to the judicial decisions made in relation to the issues raised in the concluded Demurrage Claims…".
74 The circumstances that NRMA has not been the "named" plaintiff, and AAMI has not been the "named" defendant, in any of the Local Court proceedings would not necessarily render inapplicable the principles of issue estoppel or res judicata, given the status of NRMA and AAMI respectively as insurers of the vehicles of the named plaintiff and of the named defendant to those proceedings. An imputation of issue estoppel or res judicata in favour, or to the detriment, of an insured entity may equally apply in principle in relation to that entity's insurer of the risk involved in a litigious dispute, as an incident to the operation of the doctrine of subrogation. The expression "privy", where used in Blair v Curran in the passage extracted in [21], has been said to engage three classifications of persons or entities, namely those of "blood, of title and of interest" (Ramsay v Pigram (1967-1968) 118 CLR 271 at 279 per Barwick CJ), and accordingly, in the light of the inclusion of the classification of "interest", there would normally be imputed, for the purpose of the doctrines of issue estoppel and res judicata, a privity of interest between an insurer and the insured in relation to the risk the subject of the policy of insurance, as demonstrated from what has been cited from Tiufino in [32] above). The circumstance that the Courtesy Car Programme did not create rights of subrogation would not in my opinion operate to deny privity to the relationship between the NRMA and the NRMA Insured, because of the degree of analogy between the Courtesy Car Programme and a contract of insurance. Moreover AAMI's purported reliance upon Ramsay v Pigram is misplaced. In that case, the Government which owned a motor vehicle involved in a collision with another vehicle, and the driver of the Government owned vehicle, were held by the High Court not to be privies for the purposes of the doctrine of issue estoppel, because each owed a discrete duty of care to the driver of the privately owned vehicle. Barwick CJ observed in Ramsay at 279 that "[t]he basic requirement of a privy in interest is that the privy must claim under or through the person of whom he is said to be a privy", being a requirement found not to have been satisfied in Ramsay. An insurer and the entity insured per se is on the other hand perhaps the most common example of a privy, and may be further contrasted with the principle that a surety is not a privy of either the principal creditor or the principal debtor (Lloyds Bank Plc v Independent Insurance Co Ltd [1999] 2 WLR 986), where the respective interests involved do not sufficiently coincide.
75 As the reasons for judgment in Tiufino further indicated (at 111), the fact that causes of action are different does not exclude the imputation of an issue estoppel. As Barwick CJ also pointed out in Ramsay at 276, an issue is to be distinguished from the cause of action in relation to which the issue arises. The causes of action of AAMI for misleading and deceptive conduct on the part of NRMA, as pleaded by paras 16 to 20 of the amended statement of claim, are predicated wholly upon representations made by NRMA, its servants and agents including Ms Smith, first to the NRMA Insured, to the effect in substance that NRMA had rights of subrogation as an insurer in respect of the demurrage claims of the NRMA Insured (para 16), and secondly to AAMI and "to each of the Other Insurers", to the effect in substance that Ms Smith was authorised by the NRMA Insured to act as solicitor for them as plaintiffs in the Local Court proceedings, and as a consequence to receive and disburse the Local Court judgment moneys at their direction (para 18). That second representation inherently embodies or reflects the assertion of AAMI that NRMA misrepresented the existence of any right of subrogation in relation to the causes of action of the NRMA Insured, and that as a consequence, the disposal of the judgment moneys was outside the scope of the retainer of Ms Smith as solicitor for the NRMA Insured. In the events which have thus far happened, namely the entry of a significant number of judgments in the Local Court in favour of the NRMA Insured against the AAMI Insured upon causes of action for damages for negligence, and in the light of the likely "privity" existing between NRMA and the NRMA Insured on the one hand and AAMI and the AAMI Insured on the other hand, there are not insignificant obstacles confronting AAMI's broadly framed contention that "[t]here is no relevant estoppel because the issues are different", and also its earlier contention set out in [65] above.
76 The immediate context to the commencement of the present proceedings in the Federal Court were the findings by the Court of Appeal of the Supreme Court of New South Wales in Anthanasopoulos, on the one hand in favour of the four NRMA Insured as to their entitlement to judgment upon their demurrage claims based upon "The Greta Holme" tortious principle, and on the other hand in favour of the four AAMI Insured as to the absence of rights of subrogation held by NRMA in relation to those claims. The latter finding in favour of the AAMI Insured was pyrrhic in the context of those four claims, so far as AAMI and the AAMI Insured were concerned, because it was further found by the Court of Appeal that a defence as to the absence of rights of subrogation of an insurer is required to be pleaded, being a requirement which had not been implemented by the AAMI Insured in those four proceedings in the Local Court (see again the summary of the reasons for judgment in Anthanasopoulos, including the citation from Woodside, in [5-6] above).
77 The issue therefore arises, in relation to NRMA's contentions as to issue estoppel and res judicata, as to whether in each of the concluded proceedings in the Local Court where judgment has been entered in favour of the NRMA Insured, the very right put in suit in the Local Court proceedings has passed into judgment, so that it is merged and no longer has an independent existence, or as to whether for the purpose of some other claim or cause of action, the existence of a state of fact or law alleged or denied in the pending Local Court proceedings has been necessarily decided by the prior judgments, decrees or orders of the Local Court pronounced or given in the numerous cases thus far concluded (adopting thereby phraseologies used in the passages in Blair v Curran extracted in [21] above).
78 Alternatively, in line with further dictum in Blair v Curran (extracted in [21] above),the issue may be framed as to whether NRMA may rightly contend that one matter which was legally indispensable to the resolution of each of the now concluded proceedings in the Local Court was the existence or otherwise of rights of subrogation in favour of NRMA in relation to the demurrage claims of each of the NRMA Insured respectively against the AAMI Insured, with the consequence that such matter, being "cardinal" to the claim or contention in the Local Court proceedings, cannot now be raised in the Federal Court proceedings, since to raise it is necessarily to assert that the former decisions of the Local Court were erroneous. Or as postulatedin Re Jackson (cited in [22] above), was the subject as to the existence of rights of subrogation necessary to be determined in order to found the decisions in each of the Local Court cases which have been thus far the subject of entry of judgment?
79 In any examination of the ingredients of the multiplicity of causes of action pleaded by the amended statement of claim, for the purpose of determining whether AAMI is estopped or barred from pursuing the same upon grounds of issue estoppel or res judicata, the task is complicated by four factors. The first is that the NRMA Insured (as plaintiffs) and AAMI Insured (as defendants) have been the only parties to the Local Court proceedings, whereas the NRMA Parties (as respondents) and AAMI (as applicant) are the only parties to the present Federal Court proceedings; nevertheless for the purposes of estoppel doctrines, the NRMA Insured and the NRMA Parties are in my opinion sufficiently in the same interest as to be 'privies', and the AAMI Insured and AAMI are in any event in the same interest as "privies". The second is the status of Ms Smith as NRMA's solicitor on the record for the NRMA Insured in the Local Court proceedings. Though Ms Smith's retainer had originally emanated solely from NRMA, and she may also be described in a general sense as an agent of NRMA, it is a moot point as to whether she may correctly be described as a privy of NRMA for the purpose of estoppel doctrines, at least in relation to the circumstances where she has been sued in her own right. The third is the unique principle of pleading to the effect that although NRMA has been found by the New South Wales Court of Appeal to have had no right of subrogation in relation to the causes of action brought in the Local Court in the name of the NRMA Insured as plaintiffs, the Court of Appeal has also determined in the same curial context that if the right of subrogation of an insurer of a claimant is to be put in issue in legal proceedings, a defence to that effect must be pleaded. That principle seemingly applies, even though by virtue of pleading any such defence, the insurer against whom that defence is for practical purposes directed does not, without fulfilment of that insurer's obligations to the insured (Page v Scottish Insurance Corporation (1929) 140 Law Times (CA) 571 at 577 (2nd column)), thereby become an actual party to the proceedings, in which case the issue as to the existence or otherwise of the right of subrogation remains to be resolved between the controversially insured plaintiff and the defendant who has raised the plea of absence of the right of subrogation. The circumstances in which an insurer may become a party to proceedings, and related complexities, are conveniently digested in Mitchell, Dr C.M., "Defences to an insurer's subrogated action" (1996) Lloyd's Maritime and Commercial Law Quarterly 343. Incidentally, a challenge on the part of the defendant to the retainer of the solicitor for the plaintiff may well follow in the context of any such defence being raised, since logically that solicitor would not be retained by the plaintiff on the record but by the plaintiff's insurer. The fourth is the circumstance that although judgment has been entered in many of the Local Court proceedings, there are more numerous prospective Local Court proceedings, either awaiting a hearing or yet to be commenced, in relation to which it is presumably not too late for AAMI to cause the AAMI Insured to plead the absence of rights of subrogation in those proceedings, and also to challenge Ms Smith's right of retainer, though in the latter instance, there is long established authority to say that any challenge to a retainer must be undertaken by a substantive application, and not merely by way of defence (Richmond v Branson (1914) 1 Ch 968 at 974). It is for that reason of course that NRMA has sought to counter AAMI's prospective challenge to the retainer of Ms Smith in relation to pending Local Court proceedings by the mechanism of retainers obtained from the NRMA Insured directly in favour of Ms Smith, which also purport to confer rights somewhat similar to rights of subrogation. In that regard, it is well established that at least a right of retainer can be ratified retroactively (Adams v London Improved Motor Coach Builders Limited [1921] 1 KB 495 at 502).
80 Added to the complications of those four matters are the multiplicity of causes of action pleaded by AAMI in the amended statement of claim, being causes of action boiling down to two broad categories, the first being conduct proscribed by legislation (ie the TP Act and the corresponding provisions of the FT Act), and the second being causes of action in tort or for equitable relief. The remedies sought in AAMI's application, earlier extracted in full at [9] of these reasons, are partly declaratory and partly injunctive in nature, and in addition there has been sought by that application orders to account and damages. AAMI appears to have structured the amended statement of claim with at least two forensic objectives in mind. The first is to endeavour to obviate the principle enunciated in Anthanasopoulos, in line with that previously expressed in Woodside, that any challenge to an insurer's right of subrogation must be undertaken by way of defence filed in the action brought in the name of the purported insured as plaintiff (in that regard, although judgment has been entered in the Local Court in relation to significantly lesser numbers of claims than NRMA has since filed and still proposes to file, AAMI would wish to claw back the moneys already outlaid in satisfaction of the Local Court judgments which have been already entered). The second is to neutralise any commercial advantage to NRMA in pursuing all outstanding or remaining claims originating from its Courtesy Car Programme by obtaining authorities and ratifications from the NRMA Insured, whose Local Court proceedings have not been finalised by entry of judgment, in circumstances where NRMA has nevertheless fulfilled already its obligations to the NRMA Insured under the Courtesy Car Programme.
81 There are difficulties of a conceptual kind, apart from estoppel, in the path of AAMI ultimately making good its principal causes of action for misleading and deceptive conduct and unconscionable conduct on the part of NRMA. For instance, the alleged deception by NRMA the subject of paras 16, 17, 20, 22, 23A and 24 of the amended statement of claim is said to have been not of AAMI, or of the AAMI Insured, but of the NRMA Insured, and as a consequence, the reliance pleaded by para 22 is attributed not to AAMI but to the NRMA Insured. Moreover as I have earlier pointed out in [68] above, the present proceedings are not comparable to the usual dispute between business rivals directed to the gaining of new business by one at the expense of the other, even though the origin of the present disputes was doubtless NRMA's promotion of the Courtesy Car Programme in order to gain or retain motor vehicle insurance business, being a business field in which of course NRMA and AAMI compete. Those difficulties do not directly arise for consideration in the present strike-out/stay application, except as to the issue whether the conduct complained of occurred in trade and commerce (post).
82 The first question therefore presently arising for consideration is whether, in the case of the Local Court proceedings which have already crystallised in the entry of judgments in favour of the NRMA Insured, an issue estoppel or res judicata has arisen, such as to prevent AAMI from pursuing the two principal causes of action for misleading and deceptive conduct pleaded in paras 16 to 20, 22, 23, 23A and 24 of the amended statement of claim. Those two causes of action need not be separately considered for present purposes. Although in the case of the first, it is pleaded by para 22 that the NRMA Insured were misled into assisting NRMA's pursuit of the demurrage proceedings, whereas in the case of the second, it is pleaded by para 23 that AAMI was misled into retaining its own solicitors and paying the moneys the subject of the Local Court judgments to Ms Smith, the basis or foundation of each cause of action propounded by AAMI is NRMA's absence of rights of subrogation emanating from the NRMA Insured, as found by the New South Wales Court of Appeal in Anthanasopoulos.
83 The thrust of NRMA's case in response is that the entry of judgments in the Local Court in favour of the NRMA Insured, to the extent which has thus far occurred, disposed "once and for all" (to adopt one description earlier cited from Blair v Curran) of the issue whether NRMA, as a privy of the NRMA Insured, had a right of subrogation in respect of the causes of action for demurrage which have merged or crystallised in those judgments. That result is said by NRMA to follow because it was incumbent upon AAMI to have caused the AAMI Insured (being AAMI's privies) to have raised in those Local Court proceedings now concluded by judgment a defence of absence of that right of subrogation, but since AAMI did not do so, the consequence must be that such issue was disposed of in favour of each NRMA Insured by default on AAMI's part of pleading that defence, in accordance with Woodside and Anthanasopoulos. AAMI is therefore said to be faced with an issue estoppel or res judicata (sometimes referred to as res judicata estoppel), more precisely in my view the latter if a choice is required to be made, from raising in the Federal Court proceedings the issue as to NRMA's absence of entitlement to the right of subrogation, in so far as those proceedings purport to extend to the concluded Local Court proceedings.
84 Subject to the question as to whether an issue estoppel or res judicata estoppel can be imputed in circumstances where judgment has been entered in favour of a plaintiff by reason of a defendant's failure to plead a particular defence which would have answered the plaintiff's cause of action, I think that the contention of NRMA is correct. If NRMA had held rights of subrogation in consequence of payments made pursuant to the Courtesy Car Programme, the representations pleaded in pars 16 and 18 of the amended statement of claim would have been true, and not misleading or deceptive.
85 Other phraseologies earlier cited from Blair v Curran provide a degree of support for the position tentatively reached in the previous paragraph. Thus it may be postulated that the entry of each Local Court judgment to date in favour of an NRMA Insured as plaintiff against an AAMI Insured as defendant "necessarily established, as the legal foundation or justification of its conclusion" that NRMA held rights of subrogation effective in law, to the extent of each of the claims which crystallised in those judgments, and that the presence or otherwise of a right of subrogation vested relevantly in NRMA was a matter "cardinal… to the claim or contention" of the NRMA Insured the subject of each of those finalised Local Court proceedings, and that therefore to raise in the Federal Court proceedings causes of action based upon the absence of NRMA's right of subrogation "is necessarily to assert that the former [decisions were] erroneous". Moreover the references in the amended statement of claim to NRMA's "servants and agents including Smith" is in my opinion to privies of NRMA for the purposes of estoppel doctrines.
86 It is next appropriate that I address the remaining causes of action the subject of the amended statement of claim, following upon those for misleading and deceptive conduct primarily pleaded in paras 16 to 20, 22, 23, 23A and 24 of the amended statement of claim, in order to determine whether the same, or some different result, should follow from that which I have reached in relation to the two primary causes of action.
87 The two counts of unconscionable conduct (pleaded in paras 21A, 21B, 23A and 24 of the amended statement of claim) may be addressed together, given their similarity of expression, except for the omission of reference in the second count to s 51AB of the TP Act. I have referred in [69] above to authority on the notion of unconscionable conduct at common law, and what has been said by a Full Federal Court in Hurley by way of supplement or qualification to that meaning created by ss 51AB and 51AC, though neither para 21A nor para 21B of the amended statement of claim is purportedly extended in scope to s 51AC in any event. Paras 21A and 21B are respectively framed partly on he basis of the representations of NRMA which I have already addressed, namely those the subject of the preceding paras 16 and 18 respectively concerning misleading and deceptive conduct, and partly on the basis of the obtaining by the NRMA Parties of the retainer agreements from the NRMA Insured (taking the form set out in [11] above) in the circumstances set out in paras 41 to 58 of the amended statement of claim. Entry into the retainer agreements purportedly created the relationship of solicitor and client between Ms Smith and each of the NRMA Insured, and conferred comprehensive authority upon her having consequences akin to the creation of rights of subrogation, namely authority to pay Local Court judgment proceeds to NRMA. Prior to those retainer agreements being procured, the only existing solicitor and client relationship relevantly was that formed between NRMA and Ms Smith, which was predicated implicitly upon the basis of NRMA's rights of subrogation erroneously thought to be held by NRMA derivatively from the NRMA Insured.
88 In my opinion, both of those causes of action for unconscionable conduct are similarly potentially vulnerable to an application of the principles of issue estoppel and res judicata, though again to the potential extent only of the subject matter of the Local Court proceedings which have crystallised by entry of judgment in favour of the NRMA Insured against the AAMI Insured, predicated as those causes of action for unconscionable conduct are in part upon the representations the subject of paras 16 and 18 of the amended statement of claim which I have just addressed. The circumstance that the unconscionable conduct the subject of paras 21A and 21B is said to relate to the representations, not just the subject of the preceding causes of action, but also to the conduct the subject of paras 41 to 58 of the amended statement of claim (being conduct concerning the obtaining by the NRMA Parties of the retainer agreements from the NRMA Insured), does not require any different conclusion. The implications relevantly of paras 41 to 58 will in any event be shortly addressed.
89 The causes of action the subject of paras 25 to 40 the amended statement of claim are vulnerable to a similar extent and for similar reasons as those of the causes of action for misleading and deceptive conduct and unconscionable conduct which I have already identified. Thus the cause of action for unjust enrichment contained in para 25 is implicitly predicated upon the circumstances the subject of the immediately preceding causes of action for unconscionable conduct, though the reason why in any event, the NRMA Insured should be entitled to restitionary relief presently escapes me (see also in that regard para 2 of the application extracted in [9] above). Moreover NRMA has been scarcely unjustly enriched in circumstances where NRMA, and not of course the NRMA Insured, had already paid the car rentals to Hertz in response to the claims of the NRMA Insured. On the contrary, if AAMI was to pay the car rental damages direct to the NRMA Insured, in circumstances where NRMA had already paid out the same to Hertz, the NRMA Insured would be vulnerable to NRMA upon the cause of action for moneys had and received. Obviously the NRMA Insured could not be entitled to duplicate demurrage pay-outs.
90 Moreover the circumstances said to give rise to the cause of action for breach of warranty contained in paras 26 to 29 of the amended statement of claim are essentially similar to those the subject of the causes of actions for misleading and deceptive conduct, albeit omitting of course allegations as to conduct occurring relevantly in trade and commerce. Thereafter in paras 30 to 40 of the amended statement of claim, AAMI has framed various causes of action against Ms Smith as second respondent to the Federal Court proceedings. Until that stage of the pleading, the references to Ms Smith had been confined to her conduct as a "servant or agent" of NRMA. Those paras 30 to 40 relate to Ms Smith's involvement in the conduct the subject of the preceding causes of action, in particular for misleading and deceptive conduct and unconscionable conduct, pleaded against NRMA, being an involvement allegedly by way of aiding, abetting etc NRMA, or being conduct as a principal in her own right, in the circumstances of the misleading and deceptive representations identified principally in the preceding paras 16 and 18, and additionally in the circumstances of unconscionable conduct identified principally in the preceding paras 21A and 21B. In relation therefore to each of the causes pleaded against Ms Smith personally, there is involved the element of NRMA's absence of rights of subrogation in relation to the causes of action the subject of the proceedings brought by the NRMA Insured in the Local Court against the AAMI Insured, being an absence which, as has been earlier indicated, should not in principle prevail to the extent that judgments have been already entered in favour of the NRMA Insured against the AAMI Insured in the Local Court, and moreover should not henceforth prevail in relation to presently uncompleted or future Local Court proceedings, at least in the absence of the right of subrogation being specifically pleaded as a defence.
91 The remaining paras 41 to 58 of the amended statement of claim, appearing therein under the heading "Claim relating to Retainer Agreements", have already been referred to in the context of the causes of action for unconscionable conduct, in relation to which those paras 41 to 58 have been incorporated as a component or aspect thereof (see again the text of paras 21A and 21B). Those paragraphs comprise the majority of the additions made by way of amendments to the original statement of claim filed by AAMI. Paras 41 to 58 contain numerous matters which, by para 52, are said to constitute misleading and deceptive conduct in trade or commerce in contravention of the TP Act. Within the scope of paras 41 to 58 are contained several causes of action, each of which is apparently intended to form the basis for the claim for loss and damage, stipulated in para 55 to be equal to the Local Court judgment sums (including costs) which AAMI has paid or is liable to pay to the NRMA Insured, and the legal costs which AAMI has paid or is liable to pay to its own lawyers. Thus para 44 reflects a discrete pleading, or the foundation of a discrete claim, of misleading and deceptive conduct, para 48 a discrete pleading of an economic tort, and para 49 a discrete pleading of breach of fiduciary duty. Para 50 introduces further causes of action into the amended statement of claim by pleading some twenty circumstances appertaining to the obtaining by the NRMA Parties from the NRMA Insured of the retainer agreements. Many of such circumstances are asserted by para 51 to have been withheld by the NRMA Parties from disclosure to the NRMA Insured. The significance assigned to those circumstances is pleaded by paras 52, 53 and 55 to constitute further misleading and deceptive conduct, on the faith of which the NRMA Insured entered into retainer agreements in favour of Ms Smith, thereby allegedly occasioning loss and damage to AAMI, being loss and damage which presumably flowed from the Local Court judgments entered in default of any defence by AAMI as to absence of the right of subrogation. Ms Smith is alternatively pleaded to have been involved in the conduct of the NRMA complained of in paras 42 and 52, being conduct proscribed by provisions of the TP Act. Alternatively or further, it is pleaded by paras 56 to 58 that the retainer agreements are invalid and ineffective, to the extent that the retainer agreements purported to ratify unauthorised conduct of the NRMA Parties elsewhere pleaded, whereof the NRMA Insured are said not to have knowledge. In relation to all causes of action for misleading and deceptive conduct framed under the TP Act, there are repeated identical causes of action framed under the FT Act. In the result, material to each of the plethora of causes of action pleaded, directly or indirectly, are the representations allegedly made by and on behalf of the NRMA Parties to the NRMA Insured that NRMA is entitled to exercise rights of subrogation appertaining to the causes of action of NRMA for the recovery of payments made by NRMA to Hertz for car rentals for the benefit of course of the NRMA Insured. As I have mentioned earlier, the retainer agreements stipulate for the provision by the NRMA Insured to NRMA per medium of Ms Smith of rights or entitlements similar in effect or operation (see clauses 4 and 5 thereof in particular in [11] above).
92 By way of summary therefore of my findings to date in relation to the present segment of my reasons for judgment relating to issue estoppel and/or res judicata, there is an arguable case in favour of the NRMA Parties for a prevailing issue estoppel or res judicata, in relation to the causes of action pleaded by the amended statement of claim, to the extent of those circumstances said to be productive of alleged loss and damage to AAMI at the instance of each of the NRMA Parties, and being referrable to those Local Court proceedings which have resulted already in the entry of judgment in the Local Court. As I have already foreshadowed however, in the light of the dicta in Blair v Curran and Re Jackson to which I have referred, I am hesitant to hold that the doctrines of issue estoppel and/or res judicata apply to circumstances where an issue, potentially material to the viability of a cause of action raised by way of a defence in the preceding litigation, but not otherwise, has not been in fact raised by the defendant by way of defence, prior to the conclusion of the earlier proceedings. It therefore becomes necessary to address the implications of the related, but more widely framed, doctrines of Anshun estoppel, and abuse of process generally to the circumstances pleaded by the amended statement of claim.
Anshun estoppel and/or abuse of process
93 As already indicated in [30] above, the principles of Anshun estoppel have been described in Bryant as allied to, but not co-existence with, the principles of issue estoppel and res judicata. Moreover as appears from the reasons for judgment in Anshun, that estoppel may apply where although the circumstances do not give rise to an issue estoppel, "their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has been already disposed of by earlier proceedings". Or as formulated by the High Court in Anshun at 602, "…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 Walton, another description of the principle was "to litigate anew a case which has already been disposed of by earlier proceedings". Those judicial pronouncements may be thought to advance the principles relating to issue estoppel and res judicata effectively into the realm of the related concept of abuse of process, and in any event to provide the remedy sought by the NRMA Parties which the authorities relating to issue estoppel and res judicata, do not sufficiently yield. AAMI has not submitted any reason by way of justification for the absence of a defence in each of the Local Court proceedings thus far resolved to the effect that NRMA did not have rights of subrogation in relation to the demurrage claims arising from the Courtesy Car Programme, except to the extent set out below.
94 AAMI has submitted, in the context of estoppel, and in particular Anshun estoppel, that it would have been inappropriate for the AAMI Insured to have raised, and to hereafter raise, in the Local Court, the issues propounded in the Federal Court proceedings by the amended statement of claim, for the following reasons:
(i) Certain of the relief now sought against the NRMA Parties was not available in the Local Court, namely injunctive relief and corrective advertising.
(ii) The causes of action for misleading and deceptive conduct and unconscionable conduct, pleaded by AAMI's amended statement of claim, were not complete prior to the filing thereof in the Federal Court, in the sense that some of the conduct complained of had not earlier arisen; in particular, it was said that the NRMA Parties did not procure the retainer agreements in favour of Ms Smith from the NRMA Insured the subject of the amended statement of claim until after the decision of the Court of Appeal in Anthanasopoulos.
(iii) It would have been necessary for each of the plaintiffs in the Local Court proceedings (ie the NRMA Insured) to join AAMI to those proceedings as a defendant, and for AAMI to have thereafter joined NRMA and Ms Smith as third parties. For AAMI to have taken that course would have been obviously inappropriate, since the issues raised in the Federal Court proceedings never "properly belonged to the subject of [the Local Court] litigation", the issues arising in the Local Court litigation being whether the NRMA Insured in each case had sustained a recoverable loss (ie pursuant to his or her "The Greta Holme" cause of action or so-called demurrage claim), whereas the principal issues raised in the Federal Court proceedings are whether NRMA and/or Smith engaged in misleading or deceptive conduct and unconscionable conduct, in contravention of the TP Act, being conduct which has caused or is likely to cause loss to AAMI.
(iv) AAMI has not raised in the Federal Court proceedings an issue as to the effective subrogation or otherwise in favour of NRMA of the rights of recovery of the NRMA Insured against the AAMI Insured in relation to the tortious conduct of the AAMI Insured, "except to the extent that the question of a right of subrogation may arise when considering the [TP Act] claims, and AAMI is not challenging subrogation in the sense that AAMI [does not challenge] the validity of the judgments obtained in the concluded [d]emurrage [c]laims".
(v) There was no possibility of "conflicting judgments" in the sense envisaged in Anshun, because AAMI accepted the validity of the Local Court judgments in favour of the respective NRMA Insured in relation to the concluded demurrage claims, and does not seek to set those judgments aside; instead, not having been joined as a party to the Local Court proceedings, AAMI seeks relief against NRMA and Smith, who were also not parties to those proceedings, on causes of action which are "quite distinct".
95 Moreover as to the principle of abuse of process, to the extent that it contrasts with Anshun estoppel, AAMI submitted that there is no abuse of process involved on its part by way of "relitigating" issues raised by the amended statement of claim, in accordance with the principles enunciated in Haines (see [31] above), for the following reasons:
(i) the issues sought to be litigated in the Federal Court proceedings were not litigated in the Local Court, nor in the New South Wales Court of Appeal in Anthanasopoulos;
(ii) accordingly, unlike the circumstances involved in Haines, AAMI is not attempting to relitigate in the Federal Court against a new party an issue which AAMI has already lost against another party.
What AAMI contends that it is now seeking to do is to litigate the implications of the absence of subrogation in the Federal Court, in the broader context of NRMA's endeavours to circumvent the consequences of that absence, in the context of the findings of the New South Wales Court of Appeal in Anthanasopoulos.
96 I do not think that AAMI can avoid or circumvent the consequences of the non-existence of defences having been raised by the AAMI Insured in the Local Court as to the absence of the right of subrogation of NRMA, to the extent that judgments have been entered in the Local Court in favour of the NRMA Insured against the AAMI Insured. The submissions of AAMI which I have just recorded do not come to grips with the implications of that critical circumstance. Those consequences constitute the imputation of Anshun estoppel in favour of NRMA arising out of the privity of NRMA's relationship with the NRMA Insured, in conformity with the authorities to which I have earlier referred. The absence of rights of subrogation was an important issue open to be raised by the AAMI Insured in the now concluded Local Court proceedings, and the opportunity was available to AAMI to cause that defence to be raised by the AAMI Insured in those proceedings. My identification of the issues raised by the amended statement of claim demonstrates in my opinion that an essential element in each of the causes of action, the subject of the amended statement of claim was that of absence of rights of subrogation held by NRMA. Whether the retainer agreements which have been obtained by NRMA from the NRMA Insured since Anthanasopoulos will answer any future challenges in the Local Court advanced on behalf of the AAMI Insured, particularly in the light of clauses 4 and 5 thereof, will be matters to be resolved by the Local Court at the hearing of each proceeding yet to be resolved in the Local Court.
97 It follows that the analysis of the amended statement of claim, and the causes of action the subject thereof, which I have earlier examined in the foregoing segment as to issue estoppel and res judicata, though not attracting the application of those doctrines, directly applies in the context of the doctrine of Anshun estoppel, so as to estop AAMI from pursuing each and every one of those causes of action in the Federal Court to the extent that the same would purportedly apply or relate to the subject matter of proceedings already finalised by entry of judgment in the Local Court. I cannot accept that any of the matters advanced by AAMI, as summarised in [94-95] above, gainsay the effective application of Anshun estoppel to that limited extent. The same result may be alternatively or additionally founded upon the related doctrine of abuse of process, to which reference appears in the passage earlier cited from Haines; see also in that regard Rippon at 204.
98 That is not to conclude of course that those matters so advanced by AAMI and recorded above are not potentially material to the numerous unresolved claims being still advanced or proposed to be advanced by the NRMA Insured in the Local Court. So much depends upon the resolution of the remaining grounds of attack advanced by NRMA in relation to the amended statement of claim which I will next address. It suffices to point out, in relation to each of the propositions advanced by AAMI as set out in [94] above, that even if valid, the same can have no bearing in relation to the operation of Anshun estoppel, to the limited extent which I have determined. That is the disadvantage which I think that AAMI must inevitably sustain for not having raised the defence of absence of the right of subrogation in the Local Court proceedings since concluded by judgment. Even then, as to those propositions advanced by AAMI, it may be said that the same tend to equate remedies with issues, or to confuse causes of action with the substance of the issues in relation to which causes of action may be framed.
Vexatious nature of the proceedings
99 The thrust of this ground of complaint on the part of NRMA has been foreshadowed in [20] above. The statistical information to which the NRMA Parties point in [38] above has relevance to the question whether the numerous proposed and pending proceedings in the Local Court can be effectively overtaken by the single event of the proceedings initiated by AAMI's opening of what may be described as a "second front" in the Federal Court. There is already jurisdiction vested in the Local Court to determine causes of action for misleading and deceptive conduct and unconscionable conduct conferred by subs 86(2) of the TP Act (and by subs 63(2) of the FT Act). Moreover by virtue of s 12 of the Local Courts (Civil Claims) Act 1970 (NSW), the Local Court has jurisdiction up to a statutory limit of $40,000 for any one action, which is more than adequate for each demurrage claim in contemplation. AAMI placed substantial emphasis on the absence of jurisdiction in the Local Court to grant injunctive relief, including in particular mandatory injunctions for corrective advertising of the kind sought by para 5 of AAMI's application filed in the Federal Court. That submission is predicated implicitly upon the assumption that if AAMI establishes to the satisfaction of the Federal Court the existence of misleading and deceptive conduct etc in at least some instances, there would be constituted a sufficient basis for inference that the same conduct would have occurred in literally thousands of instances. I strongly doubt that inferences can be drawn from conduct surrounding or involved in a relatively small number of instances, such as to prevail in thousands of instances. The present proceedings do not to my understanding relate to representations made in writing, but oral or even representations implied from conduct. Alternatively, it may be that AAMI might seek to rely on the objective circumstances set out in its letter of 12 March 2002, which has been extracted in [48(iii)] above, for the purpose of establishing representations on the part of the NRMA Parties solely by implication, and thereby undertake the formidable risk that those alleged implied representations are contradicted in essence by the terms of the retainer agreements reproduced in [11] above.
100 AAMI's further response to the attack of the NRMA Parties upon this vexation ground was stated in its written submissions which merit reproduction for convenience as follows:
"whether successful or unsuccessful in the Local Court proceedings, AAMI is entitled to pursue in the Federal Court proceedings its claim for damages caused by the misleading and deceptive or unconscionable conduct alleged on the part of NRMA and Smith. For example, even if successful on the issue of subrogation in the Local Court proceedings, AAMI is still entitled to make its claim for misleading and deceptive or unconscionable conduct. Damages in respect of such a claim would include legal costs and disbursements which would greatly exceed those recoverable in the Small Claims Division of the Local Court.
If the Local Court proceedings were resolved against AAMI on the issue of a right of subrogation, no doubt NRMA and Smith would argue in the Federal Court proceedings that there was an Anshun estoppel in relation to the other matters AAMI wishes to prosecute, because AAMI should have joined NRMA and Smith as third parties in the Local Court."
101 That submission may be predicated implicitly upon the intention of AAMI to establish, in the context of the Federal Court proceedings, some instances of misleading and deceptive and/or unconscionable conduct etc, from which the inference might conceivably be drawn that such conduct would be likely to have occurred in the remaining thousands of cases, or at least the majority thereof, or else to establish the existence of such conduct by the implications set out in the abovementioned letter of particulars of 12 March 2002, or to rely on a combination of a small number of NRMA Insured as witnesses, in combination with the implications said to arise from the circumstances set out in that letter of particulars. The complaints which AAMI advance do not permit some form of sampling of testimonies, in manner akin to establishing manufactured product lability, because AAMI's case is not that the retainer agreements embody misleading or deceptive material, but that the same have been procured by representations made by or on behalf of the NRMA Parties. The Local Court is better placed to resolve those kind of issues which AAMI would seek to pursue, given that the same would appear to need to be resolved in a multitude of individual instances, and not simply by some form of generally applicable implication.
102 It is not without a degree of relevance that although by sub-paragraph 1(a) of its application filed in this Court on 7 December 2001 extracted in [9] above, AAMI has foreshadowed an application for an injunction to restrain the NRMA Parties from commencing or conducting recovery proceedings "in any Court" in the name of any of the NRMA Insured, no interlocutory relief has yet been sought by AAMI, and hence no affidavit testimony in support of its causes of action has been revealed. In the meantime, NRMA has been pursuing the obtaining of retainer agreements from what appears to have been literally thousands of the NRMA Insured (see again the detailed evidence summarised in [38] above). As a consequence, there has already come into existence a large number of parallel proceedings, thereby creating the potential for inconvenience and embarrassment of the kind spoken of in Henry and Johnson Tiles. I think that the NRMA Parties are correct in their contention that AAMI would not be seriously prejudiced by the existing and prospective Local Court proceedings continuing at the initiative of NRMA for the several reasons already summarised in [39] above, and in any event, that seems to me to be the appropriate course in the light of all of the circumstances placed before me.
103 As I have already foreshadowed, I am unable to comprehend how inferences of knowledge, reliance etc on the part of all of the NRMA Insured could be imputed by the leading of testimony from a select number of the NRMA Insured in relation to each of those matters, yet that is what is perhaps envisaged by AAMI as at least one of several courses of action. I am conscious of the circumstance that AAMI seeks a mandatory injunction by para 5 of the application, and that it is not necessary for an applicant for an injunction that there be demonstrated the existence of a proprietary interest which will be adversely affected, particularly in relation to causes of action based upon the TP Act (Miller, R, Miller's Annotated Trade Practices Act 23rd ed. 2002, page 658, para 1.80.20). It is true that if matters proceed in the Local Court as presently intended by NRMA, AAMI will face prospective awards of damages for demurrage at the suit of numerous NRMA Insured, in conformity with the Greta Holme principle, and by reason of the negligence of the AAMI Insured. Such claims for damages would presumably occur however in the normal course of AAMI's business as a substantial motor vehicle insurer, where "knock for knock" arrangements do not exist. Moreover given that in the events which may happen, the NRMA Insured may be cross-examined upon their knowledge of and reliance upon the matters pleaded by the amended statement of claim, it is plainly preferable for that potentially large body of individual testimonies to be given in the context of discrete Local Court proceedings, rather than in the context of Federal Court proceedings. The large number of existing and pending claims have been detailed and categorised in [38] above.
104 The Local Court has demonstrated, from the material in evidence before me, that it is more likely to be the appropriate forum to hear and determine the potentially thousands of instances of alleged misleading misrepresentations and deceptive conduct and unconscionable conduct, and the other complaints of AAMI the subject of the related causes of action, and the consequences of all such matters in terms of loss and damage sustained by AAMI. Conversely, it would be surely unthinkable for the Federal Court to become exposed to the potential circumstances of a myriad of small claims involving individual NRMA Parties, and the possibility of numbers of NRMA Insured giving viva voce testimony, whether called as witnesses by the NRMA Parties or by AAMI. In the result, there exists significant justification for the grant of a stay of the Federal Court proceedings, albeit with appropriate liberty to restore. In any event, it is necessary that I give consideration to the other grounds of attack advanced by the NRMA Parties in relation to the amended statement of claim, and to the stay of the Federal Court proceedings on any further available grounds.
Want of parties
105 AAMI have contended that the submissions of the NRMA Parties have failed to address the nature of the relief sought by AAMI's application, as reproduced in [9] above, namely injunctive and declaratory relief against NRMA and Smith (ie the so-called NRMA Parties) alone, and that '[t]he injunctions sought would not prevent any NRMA insured from seeking damages for loss of use of his or her vehicle according to ordinary principles upon which damages for such loss of use can be awarded, nor would they prevent Smith acting in such a claim". Obviously however, none of the NRMA Insured would initiate that course, since their respective demurrage claims have been met already by NRMA pursuant to the Courtesy Car Programme, and what remains is only NRMA's attempts to recoup the monetary value of the demurrage claims, which it has paid out to the NRMA Insured, from the AAMI Insured who negligently caused the vehicle damage in the first place.
106 I do not think that NRMA Parties are correct in their contention that there is a want of parties involved in the Federal Court proceedings, by reason of the absence therefrom of the NRMA Insured. Given that the NRMA Insured have received payment of their respective entitlements under the Courtesy Car Programme, they have no further interest in the outcome of the Federal Court proceedings. In my opinion, contrary to NRMA's submission, no rights or liabilities of the NRMA Insured are relevantly affected by the causes of action propounded by AAMI in the amended statement of claim, in the sense postulated in News, except to the extent of what I have earlier pointed out to be the misconceived notion implicitly inherent in AAMI's submissions of some kind of actual or potential entitlement of the NRMA Insured in effect to double recovery of their respective demurrage claims (see also subparagraphs 5(e) and (f) of the application). Since the NRMA Insured have received the totality of their entitlements from NRMA under and pursuant to the Courtesy Car Programme, the NRMA Insured would necessarily hold any duplicated payment as moneys had and received to the use of NRMA according to applicable principles of equity. Unless and until any of the NRMA Insured might assert otherwise, none of them are in my opinion required or appropriate to be joined as parties to the Federal Court proceedings.
107 I am therefore of the opinion that NRMA has not established any compelling basis for relief upon the ground of want of parties to the Federal Court proceedings.