The Judgment Appealed From
43The primary judge observed, at [24], that paragraphs 7-31 of the 2011 Statement of Claim "were in almost identical terms to the allegations of fact with respect to the Zipor claim in the Amended Statement of Claim in the 2007 proceedings." Mr Gleeson submits that that statement is erroneous, because it overlooks the significant difference that arises from the 2011 pleading making specific claims, concerning the Additional Zipor Dividends, that had not been made in the 2007 pleading. Mr Gleeson is right in saying that the addition of claims concerning the Zipor Additional Dividends is a significant difference between the 2007 Amended Statement of Claim and the 2011 Statement of Claim. However, in light of the other textual similarities between the two documents, and the imprecision of the statement that the paragraphs in question from the 2011 Statement of Claim were "almost identical", I would not conclude that the judge's statement was erroneous.
44The judge referred to familiar and uncontentious authority for the propositions that:
(1) A judgment entered by consent can give rise to a res judicata, though the fact that the judgment is entered by consent "may on occasion make it hard to say what was necessarily decided by the judgment": Chamberlain v Deputy Commissioner of Taxation [1988] HCA 21; (1987-1988) 164 CLR 502 at [15] per Deane, Toohey and Gaudron JJ.
(2) When a judgment of a court is obtained on a cause of action, the rights that make up that cause of action merge in the judgment, and cease to exist for as long as the judgment stands, making it impossible to bring later proceedings on the same cause of action for so long as the judgment continues in existence: Chamberlain at [21], [24].
45The primary judge noted a concession by counsel for Tami that the 2011 Proceedings were too broad "in the sense that they include an attempt by [Tami] to re-litigate the issues relating to the Zipor dividends, which issues were the subject of the 2007 Proceedings". The concession, as contained in the written submissions of Tami's counsel, was that it was arguable that the 2011 Proceedings were too broad, in that they "apparently include an attempt by Tami to re-litigate the issues relating to the two Zipor dividends, which issues were definitely the subject of the 2007 proceedings". Counsel had submitted that the consequence of the 2011 Proceedings being too broad in that respect was that the applicants would have a partial defence to the 2011 Proceedings, and that having that partial defence did not provide a basis for striking out or staying the 2011 Proceedings relating to the Additional Zipor Dividends. The judge continued, at [37]-[38]:
"If the 2011 proceedings are too broad they ought to be struck out. Otherwise costs will be incurred by [Ami] and the other defendants to meet an application for leave to re-open the 2007 proceedings with respect to the issues raised in paragraphs 34 to 46 of the amended statement of claim and judgment on those issues.
Likewise, costs will be incurred unnecessarily in preparing to meet paragraphs 7 to 31 of the statement of claim in the 2011 proceedings mirroring almost exactly the factual allegations to support the Zipor claim in the 2007 proceedings."
46If by these remarks the judge meant that it was inappropriate for the 2011 Proceedings to make allegations and seek relief relating to the 2003 and 2006 dividends, if Tami was not seeking any further relief concerning those dividends than she had already obtained in the Consent Orders, the judge's remark is unexceptional. However, a striking out on that basis would properly be accompanied by leave to re-plead, so that the allegations made in the 2011 Proceedings related only to the real matters that continued to be in dispute. The basis on which the primary judge struck out the paragraphs in question without leave to re-plead was that he found that there was a res judicata that prevented the claims made in the paragraphs from being litigated.
47At the time that Hamilton AJ was asked to make the Consent Orders, Tami's then counsel said to him that the Consent Orders "resolve or deal with the resolution of the other issues in the case", apart from the questions relating to the redeemable preference shares ([31] above). Gzell J held that that statement was irrelevant:
"If the consent orders did not settle all issues between the parties apart from the redeemable preference question, what counsel said would not prevent further litigation with respect to the non-settled issues in the absence of reliance upon what was said to the detriment of another party."
48Mr Jackman SC, counsel for the Respondents in this Court, takes no issue with that proposition.
49The order in paragraph 1(c) of the Consent Orders would to some extent require Ami to take action concerning dividends paid on Zipor shares. There is a live question of construction about the extent of the obligation that it imposes upon Ami concerning dividends paid by Zipor. The question of construction has been raised by para 2 of Tami's Amended Notice of Motion in the 2007 Proceedings ([38] above), which the Respondents accept must be decided by the Court following a hearing. Save for that at present unresolved dispute about the scope of operation of clause 1(c) concerning dividends paid by Zipor, the only provisions contained in the Consent Orders relating to Zipor dividends are paragraphs 5-8 inclusive.
50Many of the provisions of the Consent Orders took the form of the Court ordering that certain things be done, or the Court pronouncing an order that was in itself effective to achieve a result (such as the order that the grant of probate of the Leo Estate to Ami "is revoked effective from the date these orders are made"). However, paragraphs 5-8 inclusive all took the form of the Court noting agreements. Insofar as clause 5 noted an agreement on the part of Consolidated, it was noting an agreement by a company that was not a party to the litigation.
51Further, the agreements recorded in paras 5-8 were all in terms that a court could not have ordered if the 2007 Proceedings had been litigated on the pleadings as they then stood. Nothing in the claims for relief in the 2007 Proceedings sought that Consolidated pay anything to Zipor, or that Leo's estate pay anything to Zipor, or that Hedy's estate pay anything to Zipor. Nothing like the warranty in clause 8 of the Consent Orders was sought in the Amended Statement of Claim. As well, the order made in terms of clause 1(c) of the Consent Orders, requiring that Ami "account" to Leo's estate concerning certain benefits and money, was a type of order that had not been sought in the 2007 Proceedings.
52At [40], the judge noted a submission from Tami's counsel "that the applicants were relying upon an agreement of the parties rather than the dismissal of that aspect of the proceedings". The judge said, at [42]-[43]:
"... I do not accept the ... proposition. The cause of action merged in the judgment and it is immaterial that the judgment was obtained by consent orders, as the plurality said in Chamberlain at [15]; 508. The principle of res judicata holds good with respect to a judgment entered by consent.
It was submitted that, while the consent orders were intended to dispose of the specific issues raised by [Tami] in the 2007 proceedings, that did not necessarily mean that the parties also intended that [Tami] would be prevented from litigating the issues relating to the additional Zipor dividends disclosed before the consent orders were made. I reject that proposition. In the absence of an application to set aside, the entry of the consent orders foreclosed [Tami's] entitlement to commence proceedings with respect to those dividends."
53The primary judge also said, at [46]:
"[Counsel for Tami] asks where do the consent orders deal with the additional Zipor dividends? That is beside the point. Some of them are contained in Annexure "B". The ones that are not, the trial judge may be persuaded are covered by clause 1(c). They may be the subject of redress in the warranty claim under clause 8. But if the trial judge decides they are not covered under the consent orders, the claim for redress with respect to them merged in a judgment denying that redress."
54In my respectful view, the primary judge was mistaken in holding that there was any judgment in which any cause of action relating to dividends declared by Zipor had merged, and which denied the redress that Tami was seeking.
55It has been the long-standing practice of courts to include in documents that are entered in the court's record and entitled "judgments" or "orders", matters which are not, strictly speaking, judgments or orders. Seton's Judgments and Orders, 7th ed (1912) Stevens & Sons Limited says in the introduction at cccxliv:
"In point of form, a judgment or order of the Court, as ultimately drawn up, consists usually of two parts: one, preliminary or introductory, and the other containing the actual adjudication or pronouncement of the Court.
The function of the first or preliminary part of the order is to show the circumstances attending the making of it. Accordingly, in this part is stated briefly the form of the application to the Court, who are the parties appearing, and any consents, waivers or undertakings given by them ...
Judgments and orders in the Chancery Division are, in their second or substantive part, of so varied and often complex a character that no specific rules as to the arrangement of them can be given. There is, however, a generally defined natural order of clauses which is usefully adopted. Thus, any declarations made by the Court as to the rights of the parties naturally precede the accounts and inquiries which are directed in order to ascertain the nature or extent of such rights, or to give effect to them, and these again are followed by consequential directions or specific adjudications inter partes, as for the recovery of money or land, delivery of property, directing the performance of or abstention from any act, any sale, conveyance or other dealing with property, or the lodgment in Court or dealing with funds, and taxation and payment of costs. Where accounts or inquiries are directed, the order concludes by making provision for the further consideration by the Court of any part of the subject-matter which may, on the result of such accounts or inquiries, require such consideration."
56That practice of including in documents that are entered in the Court's records, and referred to as judgments or orders, matter that was not an actual adjudication or pronouncement of the Court was followed in New South Wales before the enactment of the Supreme Court Act 1970. Parker's Practice in Equity (NSW), 2nd ed (1949) Law Book Co of Australasia Pty Ltd at 241 says, in discussing the formal parts of decrees or orders:
"Any undertaking by a party which is intended to be included should be expressed to be made by the party 'by his counsel,' and should in general precede the mandatory part of the decree or order."
57The distinction between such preliminary matters and the "mandatory part" of the decree or order continued to be observed in New South Wales after the introduction of the Supreme Court Act. Neville & Ashe, Equity Proceedings With Precedents (NSW) (1981) Butterworths, gives the following specimen form of order at page 333:
"UPON the plaintiff by his counsel undertaking to the Court that he will use his best endeavours to (describe).
THE COURT NOTES THAT-
1 The parties agree that they will (describe).
2 The defendant by his counsel undertakes to the Court to etc.
THE COURT DECLARES that-
3 (Name) holds the premises known as (describe) upon trust for (name).
THE COURT BY CONSENT ORDERS that -
4 (Names) have possession of the said premises.
THE COURT ORDERS that-
5 The defendant pay the plaintiff's costs.
6 There be liberty to apply."
58Sometimes, if a dispute that has become the subject of litigation is settled, the settlement takes the form of an agreement that the court will make certain orders. Such an agreement is implemented by the parties jointly requesting the court to make those orders, and the court actually making those orders by consent. But disputes are sometimes settled by different mechanisms. One is an agreement between the parties whose commercial substance is not embodied in court orders, and the litigation is brought to an end by a consent order that is quite uninformative about the real commercial basis on which the dispute has been brought to an end, such as an order there be judgment for the defendant with no order as to costs.
59There is a middle course, which was adopted in the present case. If parties to litigation request the court to make certain orders by consent, they can also request the court to note the terms of an agreement between the parties but for that agreement not to result in the court actually ordering anything concerning the subject matter of the agreement. There can be advantages for the parties in having the court note such an agreement - the note in the court records provides excellent evidence of the terms of the agreement, and the fact that the note appears accompanying certain orders of the court can assist in making clear that the agreement bears a relationship to those orders (though the precise nature of any such relationship might need to be established by other evidence).
60However, the fact that a judge notes the agreement, and that note is entered in the court's records, does not change its essential status - it is still an agreement between the parties, not an order of the court. Indeed, sometimes a court is prepared to note an agreement in circumstances where the court would decline to make an order to similar effect, such as when the court notes an agreement that terms of settlement not be disclosed. That distinction between agreements that the court will, if asked, give effect to by itself pronouncing an order, and agreements that the court is willing to note but will not turn into an actual order is recognised in UCPR 36.1A, which provides:
(1) The court may give judgment, or order that judgment be entered, in the terms of an agreement between parties in relation to proceedings between them.
(2) Unless the court, for special reasons, otherwise orders, the court must refuse to give judgment, or order that judgment be entered, in terms that restrict, or purport to restrict, any disclosure of the terms of the judgment or order.
(3) Subrule (2) does not limit the effect of any agreement between the parties that contains provisions that restrict the parties, or purport to restrict the parties, from disclosing the terms of the agreement or of the judgment or order.
61A characteristic of judgments and orders of a court that belong in the mandatory part of the court order is that they take effect through the authority of the court. A court order produces legal consequences through the very fact that it is made by the court. That happened in the present case, when the court made orders that revoked the grants of probate that had been made in Leo and Hedy's estates. It happens when the court gives a judgment that A pay $X to B, where the judgment itself is a source of the liability to pay the $X. A court order that commands that some act be done is itself a source of an obligation to perform that act. Special enforcement procedures appropriate to judgments and orders can be invoked to achieve the effect that the judgment or order is obeyed. By contrast, an agreement inter partes that the court has noted creates obligations that are merely contractual ones, not obligations based in any way on the authority of the court. The enforcement mechanisms available concerning it are the same as would have been available if the agreement had been made, but not noted by the court.
62The basis of res judicata was explained by Gibbs CJ, Mason and Aickin JJ in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 597, in terms later approved by Deane, Toohey and Gaudron JJ in Chamberlain at 507-8:
"The distinction between res judicata (in England called 'cause of action estoppel') and issue estoppel was expressed by Dixon J in Blair v Curran (1939) 62 CLR 464 at 532 in these terms: '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. '
The distinction was restated by Fullagar J in his dissenting judgment in Jackson v Goldsmith (1950) 81 CLR 446 at 466. His Honour expressed the rule as to res judicata by saying: 'where an action has been brought and judgment has been entered in that action, no other proceedings can thereafter be maintained on the same cause of action. This rule is not, to my mind, correctly classified under the heading of estoppel at all. It is a broad rule of public policy based on the principles expressed in the maxims 'interest reipublicae ut sit finis litium' and 'nemo debet bis vexari pro eadem causa'.' His Honour went on to discuss issue estoppel, citing the comment of Dixon J in Blair v Curran at 531: 'A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies.'
...
The rule as to res judicata comes into operation whenever a party attempts in a second proceeding to litigate a cause of action which has merged into judgment in a prior proceeding."
63An agreement that is noted by a court, but does not result in a court order being made that gives the court's authority to the agreement does not result in a res judicata. The first edition of Spencer-Bower, The Doctrine of Res Judicata (1924), Butterworth & Co London, states as follows:
"14. A res judicata is a judicial decision, pronounced by a judicial tribunal. It is of no avail to prove that the alleged res judicata was a decision, or even that it was a judicial one, in the sense that it was pronounced according to judicial principles, unless it be also established that it emanated from a judicial tribunal in the exercise of its judicial functions; nor, on the other hand, is it sufficient to shew that it was pronounced by a judicial tribunal, unless it be also shown that it was a decision, and a judicial one, as distinguished from a termination of the proceedings otherwise than by a judicial decision. ...
23. In order to establish a res judicata on which an estoppel may be founded, it must appear ... that what was pronounced amounted to a judicial decision. There must have been ... a judicium, which for purposes of estoppel means a decision or determination or adjudication of some question of law or fact, whether such decision takes the form of an express judicial declaration, or is necessarily involved in the command or prohibition which constitutes the judgment or judicial in its coercive or operative aspect.
...
33. Any judgment or order which in other respects answers to the description of a res judicata is none the less so because it was made in pursuance of the consent and agreement of the parties. It is true that, in such cases, the court is discharged from the duty of investigating, or (where the consent is given at a late stage in the proceedings) further investigating, the matters in controversy, and is not asked to, and does not, pronounce a judicial opinion upon any of such matters; but it is none the less true also that, at the joint request of the parties, the tribunal gives judicial sanction and coercive authority to what those parties have settled between themselves, and in that way converts a mere agreement which, except in certain special cases the subject of express statutory provision in that behalf, could only operate as an agreement, and not as a bar, into a judicial decision on which a plea of res judicata may be founded. Accordingly, judgments, orders, and awards by consent have always been held no less efficacious as estoppels than other judgments, orders, or decisions, though doubts have been occasionally expressed whether, strictly, the foundation of the estoppel in such cases is not representation by conduct, rather than res judicata.
34. But, though consent judgments and orders are undoubtedly in every case decisions in the sense that the actual mandatory or prohibitive parts of the judgment or order is conclusively binding upon, not only the parties , but the rest of the world, it may often be a matter of legitimate doubt and debate as to what, if any, particular questions or issues of right, title, or liability were, expressly or impliedly, the subject of the consent, and of the decision. For this purpose, as for all other purposes connected with the ascertainment of the subject-matter of a decision, the court will closely examine all such evidence, if any, as is available and admissible, and, by the aid of such materials, will ascertain whether any and what adjudication of matters in dispute was expressed, or necessarily involved, in the actual decision assented to. Any issue or question which is thus shown to have been recognized or taken by the parties as the subject of the litigation, and of the judgment or order agreed to, is deemed to have been thereby conclusively determined, so as to preclude any subsequent challenge. Where, however, there are no such materials, available as are above indicated, there is nothing which can operate as a decision of any particular question or issue, and neither party is estopped from disputing anything but the actual judgment or order itself." (italics in original, underlining added)
These passages repeatedly recognise the difference between the mandatory or prohibitory part of a judgment, and other parts. What the author meant by "except in certain special cases the subject of express statutory provision in that behalf", in the portion I have underlined from [33] is shown by a footnote to that passage, which gives as an example a provision of the Workmens Compensation Act 1906 (UK). That provision provides that a memorandum of an agreement for compensation, recorded in the prescribed register of the county court, shall be enforceable as a county court judgment. There is no such statutory provision that is relevant to the present case.
64The passages I have just quoted also appear in Spencer-Bower and Turner, Res Judicata, 2nd ed (1969) Butterworths London at [21], [30], [41] and [42]. The passages do not all appear in the more compressed text of Spencer Bower, Turner and Handley The Doctrine of Res Judicata, 3rd ed (1996) Butterworths, but that text at [38] says:
"A judgment or order by consent of the parties may be a res judicata. In such cases the court is discharged from the duty of investigating or further investigating the matters in controversy and does not pronounce a judicial opinion on them; but at the joint request of the parties it gives judicial sanction and coercive authority to what they have agreed and thus converts an agreement which, except by statute, could never operate as a bar into a judicial decision on which a plea of res judicata may be founded. Judgments, orders and awards by consent are as efficacious as those pronounced after a contest, in creating cause of action estoppels and effecting a merger of the causes of action sued on." (underlining added)
65The fourth edition at [2.16] is in substance the same as the passage just quoted from the third edition, though with some stylistic changes.
66The more elaborate discussion in the first and second edition has the advantage of pointing out the way in which not all parts of a document called a judgment or order are "the mandatory or prohibitory part". The quoted extracts from all four editions accept that an agreement that has not been given "judicial sanction and coercive authority" is insufficient to give rise to a res judicata. When an agreement is merely noted by a court, the noting does not give any "judicial sanction and coercive authority" to the agreement.
67If a court makes some orders by consent, notes an agreement between the parties, and one of the orders made by consent is that the proceedings are otherwise dismissed, the order that the proceedings are "otherwise dismissed" can be effective to give rise to a res judicata. The effect of the res judicata arising from that order is that, concerning any cause of action asserted in the proceedings, the plaintiff will have no rights other than those conferred by consent orders that the court has been requested to make and agreements that the court has noted. In the present case, there was no express order that the proceedings be "otherwise dismissed".
68In Dinch v Dinch [1987] 1 WLR 252 Lord Oliver of Aylmerton (with whom the other four Law Lords agreed) considered a divorce case, in which some consent orders had been made for maintenance and financial provision. The question at issue was whether the former wife could seek a property adjustment order of a type that had been sought in her petition but had not been made by the consent orders. His Lordship had accepted, at 260 that:
"subject to the provisions of that section, once the court has either exercised or declined to exercise its power to make such an order in relation to particular property, no further application for an order in respect of that property at least, whether original or by way of variation of an existing order, can be obtained."
69He had also said:
"The issue between the parties is simply and solely one of the proper construction of the consent order." (260),
and
"What is in dispute is whether the consent order in this case was one by which the court either exercised or declined to exercise its jurisdiction under section 24 of the Act to make a property adjustment order." (at 261)
70At 263 Lord Oliver rejected a proposition that "as a matter of general principle and in every case, if an application is made for ancillary relief and, whether consensually or otherwise, no order is made, it is necessarily implicit that the application is dismissed." The reason for this rejection was, at 263:
"It must, in each case, be a question of construction of the particular order under consideration, and whilst I do not dissent from the proposition that a proper caution should be exercised before reaching a conclusion that will effectively preclude a wife from making a further claim for relief, I do not, for my part, derive much help from consideration of where the burden lies. One has, as it seems to me, simply to look at the order and any admissible material available for its construction, and determine what the court intended, or, in the case of the consent order, what the parties intended, to effect by the order. If the conclusion is that what was intended was a final and conclusive once-for-all financial settlement, either overall or in relation to a particular property, then it must follow that that precludes any further claim to relief in relation to that property."
71His Lordship did not say how that preclusion arises, and his statement of principle follows hard upon citations from Henderson v Henderson (1843) 3 Hare 100 at 115, and In re South American and Mexican Co, ex parte Bank of England [1895] 1 Ch 37 at 50. Each of those cases depends on a principle other than res judicata, so the "preclusion" to which his Lordship referred cannot be taken to be one based on res judicata. Particularly is that so when the notion that a court orders something implicitly, rather than by expressly pronouncing the order, is not an easy one to grasp.
72Henderson v Henderson is, of course, the ancestor of the principle confirmed by the High Court in Anshun. That type of preclusion from raising an issue in litigation is based upon avoiding abuse of process, rather than upon any cause of action having merged in a court order. The test laid down in Anshun, at 602, was that this type of preclusion would not arise unless the matter sought to be relied upon 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."
73As Deane, Toohey and Gaudron JJ said in Chamberlain at 509:
"In truth Henderson v Henderson was not concerned with res judicata in its strict sense but rather with its implications when an issue is sought to be raised 'which could and should have been litigated in the earlier proceedings'."
In deciding that question, any facts which bear upon the reasonableness of the conduct in question are admissible, and thus the scope of admissible evidence is wider than the scope of evidence relevant to deciding whether there is a res judicata: C G Maloney Pty Ltd v Noon [2011] NSWCA 397 at [64]-[68].
74In re South American and Mexican Co is, properly understood, a case of issue estoppel rather than true res judicata. It arose when the plaintiff contended that there was an agreement for a debt to be payable by instalments. The first instalment was paid, but the second instalment was not, whereupon the plaintiff began an action for the second instalment. The defendant contended that the agreement in question was subject to a condition that had not been fulfilled, denied liability to pay the second instalment, and cross-claimed for the return of the first instalment. Judgment by consent was entered for the full amount of the second instalment, and for dismissal of the cross-claim. The defendant then went into liquidation without having paid the second instalment. The plaintiff sought to prove for its entire debt, minus the first instalment and some interest received. The liquidator rejected its proof of debt, on a basis that was the same as the debtor had advanced in the defence to the action. The litigation that is the subject of the report concerned a successful appeal against the liquidator's rejection of the proof of debt. Importantly, there was a concession during argument that the plaintiff was entitled to prove for the second instalment ([41]). Thus, the live dispute related only to the third and fourth instalments, ie the instalments that had not been the subject of the first action. The outcome of that dispute depended on whether the consent judgment prevented the liquidator from disputing that the agreement was the one that the plaintiff had alleged. The Court held that an estoppel arose from the judgment that had been consented to because it could only have been given if the agreement that the plaintiff alleged had existed. There could not, however, have been a res judicata, because the cause of action that had been sued on, and concerning which judgment had been obtained, was only for the second instalment.
75As well as situations where it is appropriate to find that there is an Anshun estoppel, or an issue estoppel arising from consent orders, there may well be situations where negotiations between the parties for the settlement of litigation are found to result in an agreement not to sue concerning certain subject matters. There can be such an agreement not to sue even though it is not found that there is an agreement that there be any implicit court order that certain proceedings are otherwise dismissed. If there is such a contractual agreement not to sue, it might be enforceable by injunction, but not through res judicata.
76Whether the Consent Orders should be treated as implicitly containing an order that dismisses all claims made in the 2007 Proceedings, save to the extent that the Consent Orders provide otherwise, is itself a matter of construction of the Consent Orders. Construction of consent orders is a task concerning which, at least sometimes, surrounding circumstances may be called in aid: Kirkpatrick v Kotis [2004] NSWSC 1265; (2004) 62 NSWLR 567; Athens v Randwick City Council [2005] NSWCA 317; (2005) 64 NSWLR 58 at [28]-[29], [36]-[37] per Hodgson JA; [129]-[140] per Santow JA, [141] per Tobias JA; Nokia Corporation v Liu [2009] FCAFC 138; (2009) 179 FCR 422 at [29]-[30] per Finn, Sundberg and Edmonds JJ; Masterton Homes Ltd v Palm Assets Pty Ltd [2009] NSWCA 234; (2009) 261 ALR 382 at [109] per Campbell JA (Allsop P and Basten JA agreeing); Lee v NSW Crime Commission [2012] NSWCA 262 at [14]-[15] per Bathurst CJ (Macfarlan JA and Barrett JA agreeing). Mr Gleeson SC fairly stated that he did not know whether there were any surrounding circumstances that could be used as an aid to construction of the Consent Orders - but that is because the question of using surrounding circumstances to construe the Consent Orders has not been litigated. The proper construction of the Consent Orders will need to be litigated for the purpose of deciding the proper construction of order 1(c). It is premature to assume the answer to that enquiry at this stage of the litigation, in the way that is implicit in striking out paragraphs of the Amended Notice of Motion in the 2007 Proceedings, and of the 2011 Statement of Claim, on the basis that they are precluded by a res judicata.
77In Chamberlain at 508 their Honours also referred to the statement of Brennan J in Anshun at 610, that the words "cause of action" are:
"Sometimes used to mean the facts which support a right to judgment ... sometimes to mean a right which has been infringed ... and sometimes to mean the substance of an action as distinct from its form ..."
There are significant difficulties in ascertaining what was the "cause of action" that was being asserted in the 2007 Proceedings so far as dividends paid by Zipor are concerned. The only facts that were asserted in the body of the Amended Statement of Claim to support a right to judgment concerning dividends paid by Zipor were facts relating to the dividends alleged to have been declared in the year ended 30 June 2004 and on 10 May 2006. However, prayer for relief number 8 in the 2007 Amended Statement of Claim ([29] above) is cast in words that are capable of applying to each of the Zipor Additional Dividends, that are now known to have been paid. There is room for argument about whether the "cause of action" asserted concerning Zipor dividends, was a single cause of action constituted by the alleged breach of fiduciary duty in transferring Hedy's "A" share to Helen, with the consequent declaration of dividends as analogous to particulars of damage of that one wrong, or whether there was a separate cause of action concerning each dividend. However, whatever the cause of action might be, one cannot say at this stage of the proceedings that there is a judgment in which it has merged. The only possible candidates seem to be Clause 1(c) of the Consent Orders (whose scope has not yet been determined, but fairly clearly requires payments to Leo's estate rather than the payments to Tami personally, or to Hedy's estate in the way claimed by prayers for relief 3 and 8 in the 2007 Amended Statement of Claim), or perhaps an implicit order for the proceedings to be otherwise dismissed (a decision about the existence of which also requires a construction exercise that has not yet been carried out).
78In the written submissions to this Court relating to the 2007 Proceedings, there was a submission, unsupported by any further reasoning, that "the Respondents contend that it is an abuse of process for the Applicant to seek to litigate the same breach of fiduciary duty claim now in this proceeding and in the 2011 proceeding." As previously mentioned, any contention that the proceedings that Tami now seeks to bring are an abuse of process could be decided only after an examination of the facts surrounding the entering of the Consent Orders. At least one matter that would bear upon whether it was unreasonable for Tami not to have brought the claim concerning the Zipor Additional Dividends in the 2007 Proceedings, would be the time at which and circumstances in which she came to know that there had been any Zipor Additional Dividends paid. The surrounding circumstances have not been investigated. At the hearing of the present applications, Mr Jackman rightly did not seek to support the contention that this Court could now decide that there had been an abuse of process.
79I should also mention that Mr Jackman makes no submission that it was inappropriate for any of the relief that is now sought in the Amended Notice of Motion in the 2007 Proceedings to be sought by notice of motion in those proceedings, rather than by being brought in separate proceedings.
80For the foregoing reasons, the paragraphs in question should not have been struck out on the basis that there was a res judicata. As their striking out will affect the future course of the action, it is appropriate to grant leave to appeal, and allow the appeal.
81Mr Henley had been named as a fourth respondent in the summons seeking leave to appeal in the 2007 proceedings. However, he took no active part in the appeal. No costs order should be made against him.