the principles
17 The logical starting point for the present proceedings is whether the applicant is precluded from pursuing the matters remitted to this Court by reason of the res judicata doctrine or the Anshun principle. The decision of the Full Court in Gamaethige v Minister is relevant only if the applicant is not otherwise precluded from advancing his claims in the remitted proceedings.
18 In Gibbs v Kinna [1999] 2 VR 19, Kenny JA (with whom Ormiston and Phillips JJA agreed) said (at 26) that the
"rule of res judicata is that, generally speaking, no proceedings can be maintained as a cause of action upon which judgment has been entered. The cause of action is said to merge in the judgment, in the sense that it no longer has an existence independent of the judgment."
The distinction between res judicata and issue estoppel was expressed by Dixon J in a well-known passage in Blair v Curran (1939) 62 CLR 464, at 532:
"in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order."
This passage was adopted in the joint judgment of Gibbs CJ, Mason and Aicken JJ in Anshun, at 597.
19 The present case is one where the applicant failed to establish his claim to judicial review in the proceedings determined by Madgwick J. In a case where the applicant has failed in the earlier proceedings, as Clarke JA (with whom Priestly JA agreed) observed in Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 40 NSWLR 543, at 546, there is nothing to merge in the judgment and "the doctrine of res judicata operates as a true estoppel". The doctrine is said to rest on the rule of public policy expressed in the Latin maxim "nemo debet bis vexari pro si constat curiae quod sit una et eadem causa" ("no one ought to be molested twice, if it appears to the Court that it is for one and the same matter"): Anshun, at 597.
20 Anshun endorsed the "extended principle" expressed by Wigram VC in Henderson v Henderson (1843) 3 Hare 100, at 115; 67 ER 313, at 319:
"where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of a matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time."
21 Anshun involved a claim by the owner of a crane to enforce a contractual indemnity against the hirer. In previous proceedings a worker had obtained damages against both the owner and the hirer. The owner and hirer had made claims for contribution against each other and, as between themselves, had been ordered to pay 90 per cent and 10 per cent, respectively, of the damages. The High Court held that the owner's claims to an indemnity in the second proceedings had been correctly stayed, by reason of the extended principle in Henderson v Henderson. The joint judgment reformulated the test, as follows (at 602-603):
"[W]e would prefer to say that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding. In this respect, we need to recall that there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings e.g. expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few."
22 Their Honours pointed out (at 603) that it had generally been accepted that a party is estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment. In their view, the likelihood that the omission to plead a particular matter as a defence will contribute to the existence of "conflicting judgments" is an important factor to take into account in deciding whether the omission can found an estoppel against the assertion of the same matter as the foundation for a cause of action in the second proceeding. By "conflicting judgments" their Honours included (at 604):
"judgments which are contradictory, though they may not be pronounced on the same cause of action. It is enough that they appear to declare rights which are inconsistent in respect of the same transaction."
23 The owner's claim to an indemnity failed because, taking into account all relevant factors, the claim was so closely connected with the subject matter of the first proceedings that "it was to be expected that it would be relied on as a defence" to the claim for contribution made in those proceedings. It was unreasonable for the owner to refrain from raising its case of indemnity for disposition in the first proceeding.
24 The Anshun principle also applies to cases where an applicant asserts a claim in proceedings unsuccessfully and subsequently institutes fresh proceedings based on a different cause of action which relies substantially on the same facts as the first proceedings: Rahme v Commonwealth Bank of Australia (NSWCA, unreported, 20 December 1991), discussed in Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287 (FC), at 297. It has also been held that the Anshun principle is capable of applying to successive proceedings in which the applicant seeks judicial review of an administrative decision: Stuart v Sanderson (2000) 100 FCR 150, at 156-157, per Madgwick J. Mr Killalea did not dispute that these authorities correctly stated the position applicable to the present case.
25 In Macquarie Bank v National Mutual, Clarke JA pointed out that, although there are similarities between "estoppel by record" (including res judicata) and the Anshun principle, there are "fundamental differences" (at 558).
"In the former, proof that a party is seeking further to litigate a cause of action which has previously been taken to judgment operates as a complete bar to the later action. In the latter, the estoppel operates only where the new litigation involves a point or points which properly belonged to the first proceeding (Henderson) or unreasonably was or were not included in it (Anshun), and the appropriate order is a stay of proceedings. However, even where it is found that the point was unreasonably omitted from the first case, the court retains a discretion not to stay the second proceedings if special circumstances exist."
See also Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502, at 511; Effem Foods Pty Ltd v Trawl Industries of Australia Pty Ltd (1993) 43 FCR 510, at 512. Even so, the categories may overlap. It has been said, for example, that Anshun itself may be explained as a case of issue estoppel: see Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332, at 345, per Brennan and Dawson JJ; K R Handley, "Anshun Today" (1997) 71 ALJ 934, at 935.
26 The authorities emphasise that the Anshun principle, since it shuts out a litigant from pursuing a cause of action, should be applied only after a "scrupulous examination of all the circumstances": Bryant v Commonwealth Bank, at 296, citing Yat Tung Investments Co Ltd v Dao Heng Bank Ltd [1975] AC 581, at 590; Ling v Commonwealth (1996) 68 FCR 180, at 182, per Wilcox J; Gibbs v Kinna, at 29, per Kenny JA. Moreover, the Anshun principle is subject to the "special circumstances" exception. In Bryant v Commonwealth Bank, the Full Court seemed to accept (at 296, 298-299) that the exception
"comprehend[s] situations where, for broad discretionary considerations related to notions of justice, [the principle] should not be applied with full rigour".
See also Stuart v Sanderson, at 159-160, per Madgwick J; Port of Melbourne Authority v Anshun Pty Ltd (No 2) [1981] VR 81, at 89, per curiam.