Anshun Estoppel
49What has been described as "Anshun" estoppel rests on the principle that a party to litigation should bring forward his, her, or its, whole case, so that the court will not permit that party to reserve a claim and make it later when that claim could, and should, have been made in earlier proceedings.
50In Henderson v Henderson (1843) 3 Hare 100, at 115; 67 ER 313, at 319, Sir James Wigram VC said:
"... 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."
51In Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589, at 598, Gibbs CJ, Mason and Aickin JJ approved that statement of principle.
52At 602, their Honours said that to ask whether "the issue in question was so clearly part of the subject matter of the initial litigation and so clearly could have been raised that it would be an abuse of process to allow a new proceeding" was "not one of great utility".
53Rather, the test their Honours stated at 602-603 was:
"... there will be no estoppel unless it appears that the matter 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 have relied on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiffs' claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding.
In this respect, we need to recall that there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings eg expense, importance of a particular issue, motives extraneous to the actual litigation, to mention but a few."
54In Equuscorp Pty Ltd v Acehand Pty Ltd [2010] VSC 89, Hollingsworth J, discussing Anshun estoppel (albeit in the context of an amendment of pleadings) said:
"[23] An Anshun estoppel may arise where a matter sought to be raised by way of claim or defence in a later proceeding is so closely connected with the subject matter of an earlier proceeding, that it was to be expected that it would have been relied upon in that earlier proceeding. No such estoppel arises unless it appears that the matter relied upon in the later proceeding was "so relevant to the subject matter of the first action that it would have been unreasonable not to rely upon it."
[24] Although Anshun itself involved a failure to raise a defence in an earlier proceeding, the principle applies equally in respect of a proceeding on a cause of action which should have been raised in a previous proceeding.
[25] A significant factor in determining the unreasonableness of refraining from pursuing a claim relates to whether there arises the potential for conflicting judgments.
[26] In considering whether an Anshun estoppel arises, the question is not whether it would have been reasonable for the person in the present plaintiffs' position to have taken a different course, but whether it was unreasonable for that person to pursue the course of action which they in fact took.
(Omitting citations)
55In the present case, the Defendant submitted that an Anshun estoppel may arise though the subsequent action is against a party who was not a party to the earlier action: K Handley, et al: Res Judicata, 4th ed (2009) LexisNexis UK, at 316, [26.14].
56In Johnson v Gore Wood & Co [2002] 2 AC 1, Lord Bingham, at 32, said:
"Two subsidiary arguments were advanced ... in the courts below and rejected by each. The first was that the rule in Henderson v Henderson ... did not apply to Mr Johnson since he had not been the plaintiff in the first action ... In my judgment this argument was rightly rejected. A formulaic approach to application of the rule would be mistaken. [The company] was the corporate embodiment of Mr Johnson. He made decisions and gave instructions on its behalf. If he had wished to include his personal claim in the company's action, or to issue proceedings in tandem with those of the company, he had power to do so."
57In Redowood Pty Limited v Link Market Services Pty Limited (formerly Known As Asx Perpetual Registrars Limited) [2007] NSWCA 286, Hodgson JA (with whom Mason P and Bryson AJA agreed) said at [45]:
"[45] In cases where the earlier proceedings and the later proceedings are between the same parties, as in Anshun itself, a finding of unreasonableness in not raising a matter in the earlier proceedings would almost inevitably mean that the later proceedings were oppressive and an abuse of process. Where the parties are different, the test of unreasonableness is still relevant; but in my opinion it must either be considered not conclusive, or else must be understood as involving unreasonableness of such a nature that the later proceedings against different parties are an abuse of process."
58At [50], his Honour commented:
"[50] In my opinion also, the approach of the primary judge to the somewhat analogous case of a breach of warranty of authority was too sweeping. In cases such as that, and more generally where a plaintiff may have alternative remedies against different parties, to suggest that a plaintiff should generally sue all of them, barring exceptional circumstances, would be to encourage complex and lengthy litigation, and promote the incurring of costs where there is no certainty that a Bullock or Sanderson order would be obtained. In my opinion, plaintiffs should be permitted reasonable latitude in deciding whether to sue just one defendant, or to join a number of defendants in alternative claims."
59Davies J in Solak v Registrar of Titles No 2 [2010] VSC 146, at [12], said:
"The guiding consideration where an action is commenced against a party that was not a party to the earlier action is whether there is such a close connection between the actions, albeit against different defendants, that it would be expected that the claims would all be dealt with in the one proceeding, thereby avoiding multiplicity of legal proceedings and the possibility of conflicting or inconsistent judgments." (Footnotes omitted)
60In Champerslife Pty Ltd v Manojlovski [2010] NSWCA 33; (2010) 75 NSWLR 245, Giles JA, said:
"[39] Anshun estoppel is sometimes referred to as an extended res judicata doctrine. As was succinctly stated by Handley AJA, with whom Allsop P and Tobias JA relevantly agreed, in Meriton Apartments Pty Ltd v Industrial Court of New South Wales [2009] NSWCA 434 at [60], "[t]he Anshun test is based on the reasonableness or otherwise of the conduct of a litigant in earlier proceedings". The statement may need to be supplemented to allow for the conduct of a person who was not a litigant in earlier proceedings, but its point is the test of unreasonableness."
61In Charben Haulage Pty Ltd (in liq) V Beilby [2010] NSWSC 510, Hislop J at [57] concluded that "the Anshun principle may be applied where the later proceedings are against a different defendant, at least, where conflicting judgments may result".
62In Equuscorp Pty Ltd v Acehand Pty Ltd, Hollingsworth J also said:
"[27] It seems that an Anshun estoppel may arise even though the parties to the second proceeding are not the same as the first. However, as McColl JA (with whom Giles and Campbell JJA agreed) said in the recent decision of the NSW Court of Appeal in Habib v Radio 2UE Sydney Pty Ltd:
Although there may be "no question ... of oppression and unfairness" where the parties in the second action "were not parties to the earlier action", the new proceedings may threaten the integrity of the administration of justice if they raise the prospect of conflicting judgments."
63In Solak v Registrar of Titles [2011] VSCA 279, Warren CJ (with whom Neave JA and Hargrave AJA agreed), after referring to a number of the authorities mentioned above, said, at [70] - [71]:
"[70] All of the Australian cases to which the court was referred where a defendant who was not a party to the first proceeding was able to successfully rely on Anshun estoppel in the second proceeding involved the estopped plaintiff attempting to assert in the second proceeding some proposition inconsistent with the judgment in the first proceeding. Even if such a collateral attack by the plaintiff is not a necessary precondition for Anshun estoppel, its absence is a significant factor militating against a finding that Anshun estoppel has arisen.
[71] It is not necessary in this case to decide whether special principles or a different test applies where the person asserting Anshun was not a party to the first proceeding. It is clear that the test is at least as strict as the test applicable in a case where the parties are the same. Applying that test, I am satisfied that no Anshun estoppel arises in this case."
64It follows, from these authorities that, even though the cases are replete with references to "the same parties", the Defendant's submission that an Anshun estoppel may arise though the subsequent action is against a party who was not a party to the earlier action should be accepted.
65As stated, the test whether an Anshun estoppel arises is one of unreasonableness - deciding whether there is such a close connection between the actions, albeit against different defendants, that it would be expected that the claims would all be dealt with in the one proceeding, thereby avoiding multiplicity of legal proceedings and the possibility of conflicting or inconsistent judgments.
66As Allsop P said in Champerslife Pty Ltd v Manojlovski at [3], this involves "a value judgment to be made referable to the proper conduct of modern ligation" or "an evaluative element based upon what a litigant could reasonably have been expected to do in the earlier proceeding": Solak v Registrar of Titles (No 2) at [8]-[12].
67The answer to the question should not be made "mechanistically": see also, C G Maloney Pty Ltd v Noon [2011] NSWCA 397, per Campbell JA at [60]-[62] (with whom Tobias AJA agreed) and Handley AJA at [142]-[143]. It requires the court to consider all the circumstances, not simply to identify common facts in, or subject matter of, both proceedings.
68In Whelan Kartaway Pty Ltd v Mark Donnelly and Ors [2012] VSC 45, Davies J, at [23], noted that "[T]he authorities establish that a finding of Anshun estoppel should not be made lightly and a consideration of all the relevant facts bearing on the question of "unreasonableness" is required. This may include the character of the previous proceeding, the scope of any pleadings, the length and complexity of any trial, any real or reasonably perceived difficulties in raising the relevant claim earlier, and any other explanation for the failure to raise the claim previously".
69A similar statement had been made in Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231, by McColl JA (with whom Giles and Campbell JJA agreed) at [84]-[85]:
"84 A strict approach is necessary in an Anshun estoppel case to the inquiry whether there exists the requisite identity between the proceedings; the mere fact that the proceedings are closely related is insufficient; a technical approach is not helpful, the doctrine being concerned with substance and not form: see Bazos and Anor v Doman and Ors [2001] NSWCA 347 (at [44]) per Stein JA (Priestley and Beazley JJA agreeing) and the authorities to which his Honour refers. In determining whether an Anshun estoppel has been established, the court inquires into realities and not mere technicalities: R v Humphrys [1977] AC 1 (at 41) per Lord Hailsham; cited with approval by Handley JA (Young CJ in Eq agreeing) in Cleary v Jeans [2006] NSWCA 9; (2006) 65 NSWLR 355 (at [19]). The Court can look at "any material that shows what issues were raised and decided": Rogers v R (at 263) per Brennan J.
85 In considering whether an Anshun estoppel has been established it is necessary to bear in mind that "shut[ting] out a claim ... a party wishes to pursue, without determination of its intrinsic merit, on the ground that it ought to have been raised in earlier litigation...is a serious step, [and] a power not to be exercised except 'after a scrupulous examination of all the circumstances' ": Ling v Commonwealth [1996] FCA 1646; (1996) 68 FCR 180 (at 182) per Wilcox J, approved in Bazos (at [45]) per Stein JA (Priestley and Beazley JJA agreeing); see also Brisbane City Council v Attorney-General (Qld) [1979] AC 411 (at 425) per Lord Wilberforce."
70The mere fact that the matter could have been raised and the defendant could have been joined does not mean that it should have been raised or the defendant should have been joined for the operation of the estoppel. It will be for the Defendant to establish that it could, and should, have been raised or that the defendant should have been joined. Then, the question will be whether it was unreasonable to defer reliance upon the cause of action against a different defendant.
71In Tanning Research Laboratories Inc v O'Brien [1990] HCA 8; (1990) 169 CLR 332, at 346, Brennan and Dawson JJ said:
"a plaintiff who has an unadjudicated cause of action which can be enforced only in fresh proceedings cannot be precluded from taking fresh proceedings merely because he could have and, if you will, should have counterclaimed on the cause of action ... We do not read the majority judgment in ... Anshun as holding the contrary, except in a case where the relief claimed in the second proceedings is inconsistent with the judgment in the first."
72In Port of Melbourne Authority v Anshun Pty Ltd Gibbs CJ, Mason and Aickin JJ, at 603, also explained that:
"there are a variety of circumstances ... why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings eg expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few."
73As stated, one circumstance bearing on "unreasonableness" is the potential for the judgment in the later proceeding to "conflict" with the judgment in the earlier proceeding. On this question, Gibbs CJ, Mason and Aickin JJ referred, at 603, to Brewer v Brewer [1953] HCA 19; (1953) 88 CLR 1, the discussion in which they described as "illuminating". In that case, Fullagar J (with whom Dixon CJ agreed), at 15, made clear that the nature of a conflicting judgment was one that contradicts an assumption that is "fundamental" to the earlier decision, "in the sense that, if the assumption had not been made, the decision must have been different".
74In Port of Melbourne Authority v Anshun Pty Ltd, their Honours, continued, at 603-604:
"By "conflicting" judgments we include judgments which are contradictory, though they may not be pronounced on the same cause of action. It is enough that hey appear to declare rights which are inconsistent in respect to the same transaction."
75In Triantafillidis v National Australia Bank Ltd (1995) V ConvR 54-536, at p 66-367, which case involved a permanent stay, Ormiston JA held that unless the alleged unreasonableness is "manifest", (e.g. if the potential judgment would be plainly inconsistent), the party is entitled to have both the questions of principle and the issues of fact resolved upon a trial. His Honour said at 66-367 (omitting citations):
"Even if it were not appropriate to agree with Toohey J that the precise scope of Anshun is not yet settled, the majority judgment in Anshun's Case appears to require a determination whether the plaintiff in the second action would have been unreasonable not to rely upon its later claims in the first action and for that purpose the resolution of each case 'depends upon a meticulous scrutiny of its own facts'. In part the majority in Anshun's Case relied upon the absence of any explanation by the appellant to adduce evidence as to why it failed to raise the relevant issue in the first action. If this be the kind of necessary enquiry which Anshun's Case requires, then it is not ordinarily appropriate that it be dealt with upon an application for a summary judgment or stay. Unless the alleged unreasonableness is manifest (e.g. if the potential judgment would be plainly inconsistent), the appellant is entitled to have both the questions of principle and the issues of fact resolved upon a trial and upon the basis of precisely pleaded defences."
76As to a finding of unreasonableness, Bryson AJ in R&J Lyons Family Settlement Pty Ltd v 155 Macquarie Street Pty Ltd [2008] NSWSC 232 said:
"23 In my opinion a finding that it was unreasonable not to bring a claim in some earlier litigation is not a finding to be made lightly. In this context unreasonableness is a severe test, to be distinguished from a test of inconvenience, even severe inconvenience. Consideration starts at the point that there is free access to courts and that it is not compulsory to bring forward all claims on related subjects at the same time. This is well illustrated by the outcome in Cromwell v County of Sac [1876] USSC 62; (1876) 94 US 351 cited in Anshun at 599."