Cirillo v Consolidated Press Property Pty Ltd [2007] FCA 60 | Case summary

Cirillo v Consolidated Press Property Pty Ltd [2007] FCA 60 | Case summary | Zoe

[2]

Background 2 The application filed in this matter by Vincenzo Cirillo seeks to traverse the events surrounding a series of court proceedings involving the five respondents stretching over twenty years. The following chronology provides a thumbnail sketch of relevant events. 3 (i) In April 1983, the fourth respondent, CW Construction Pty Ltd (Receiver and Manager appointed) (In Liquidation) ("CWC") issued a debenture to Citicorp Australia Ltd ("CAL") securing by way of fixed and floating charge a loan made to it by CAL as the first respondent was then named. 4 (ii) On the same date Mr Cirillo entered into a deed of guarantee with CAL in respect of advances made to CWC and moneys paid under a performance guarantee given by CAL. 5 (iii) In February 1985, John Heard and Stephen Young, the second and third respondents were appointed receivers and managers of the assets and undertaking of CWC pursuant to the above debenture. 6 (iv) On 11 March 1985, the Supreme Court of South Australia ordered that CWC be wound up. 7 (v) On 2 May 1985, CAL, CWC and Heard and Young instituted proceedings in the Supreme Court of South Australia against Mr Cirillo and a company asserting that a major item of earthmoving equipment (referred to in this proceeding as "the Poclain") was the property of CWC; was subject to a charge in favour of CAL; and they were entitled to immediate possession of it. 8 (vi) On 3 May 1985, Cox J granted an interim injunction ex parte to the plaintiffs in the above proceedings restraining Mr Cirillo from dealing with the Poclain, the plaintiffs having given the usual undertaking as to damages. On 24 May 1985 that injunction was continued as an interlocutory injunction on the same undertaking. 9 (vii) On 4 June 1992, Mr Cirillo was declared bankrupt and his estate was sequestered. 10 (viii) On 4 February 1993, the proceeding commenced on 2 May 1985 was discontinued and the injunction lapsed. 11 (ix) On 20 June 1995 Mr Cirillo was discharged from bankruptcy by operation of law. 12 (x) In January 1996 he offered to buy from the Official Receiver every chose in action which the Official Trustee, as trustee of his estate, may have against CAL, Heard and Young. The Official Trustee having applied to the Court for directions in this matter, Branson J granted leave under s 135(1) of the Bankruptcy Act 1966 (Cth) for the proposed assignment of the choses in action held by the Official Trustee except in relation to proceedings to set aside the appointment of Heard and Young as receivers and managers of CWC. 13 (xi) On 4 April 1997, Mr Cirillo sought an inquiry as to damages as a consequence of the award of the injunction on 3 May and continued on 24 May 1985 until its discontinuance on 4 February 1993. 14 (xii) On or around 12 May 1997, according to his Statement of Claim in the present proceedings, Mr Cirillo alleges that CAL entered into an agreement with Mr Kerry Packer and/or his various corporate interests with the effect that shares in CAL were sold ("the Packer agreement"). While denying any agreement with Mr Packer, the first to fourth respondents in this proceeding admit that an agreement was entered into by CAL to sell its shares to another company. 15 (xiii) On 3 and 26 July 1997 pleadings were filed in the inquiry as to damages proceeding by the plaintiff and defendants respectively. 16 (xiv) On 18 July 2000 a Master of the Supreme Court ordered the preliminary hearing of five issues from the apparently substantial numbers that had arisen between the parties. In summary form these were: (1) whether Cirillo had standing to pursue his claim for relief against Citicorp, in light of the events which have occurred; (2) whether Cirillo was the owner of the Poclain as at, or subsequent to, 18 April 1983, or was a person in actual and/or apparent possession of the Poclain from and after 19 June 1976 and had all rights and remedies of a person entitled to a right of possession in respect of the equipment; (3) whether Cirillo was estopped from asserting that he was the owner of the Poclain; (4) whether Cirillo transferred or assigned his interest in the Poclain; and (5) whether Cirillo abandoned his interest in the Poclain. 17 (xv) On 28 February 2003, Olsson AJ of the Supreme Court of South Australia held (inter alia) that: (a) Mr Cirillo had no standing to seek or obtain the relief sought in the inquiry; (b) he was not at any relevant time the legal or beneficial owner of the Poclain nor did he have possession nor any entitlement to possession of it; and (c) he was estopped from asserting he was the beneficial owner of the Poclain at any relevant time. His application for an inquiry as to damages was dismissed. 18 (xvi) On 17 September 2004, the Full Court of the Supreme Court of South Australia dismissed Mr Cirillo's appeal against the judgment of Olsson AJ. 19 (xvii) On 3 March 2005, the first to fourth respondents applied to the Supreme Court for costs in respect of Mr Cirillo's application for an inquiry as to damages in the sum of $1.1 million. 20 (xviii) Special leave to appeal to the High Court from the Full Court's decision was refused on 17 June 2005. 21 (xix) On 28 July 2005, Olsson AJ made order by consent: "1. The Defendant, Vincenzo Giovanni Cirillo, pay to the Plaintiffs, Citicorp Australia Limited, CW Construction Pty Ltd (Receivers and Managers Appointed) (In Liquidation), John Harold Heard and Stephen Elliott Young, the costs (including reserved costs) of and incidental to the Defendant's application dated 4 April 1997 relating to the enquiry as to damages on the Plaintiffs' undertaking as to damages in these proceedings, such costs being agreed and fixed in the sum of $500,000.00." 22 (xx) On 19 June 2006 the first to fourth respondents issued a bankruptcy notice against Mr Cirillo claiming a debt of $500,000 pursuant to the costs order. Mr Cirillo applied to this Court in its bankruptcy jurisdiction to have the bankruptcy notice set aside. 23 (xxi) On 2 November 2006, Mr Cirillo instituted the present proceedings in which he claims damages including exemplary damages against all five respondents.

[4]

Reasons 27 As best I can understand the claim that Mr Cirillo seeks now to make - it is not revealed in his Statement of Claim - it is that in defending the application he made for an inquiry as to damages, CAL (seemingly with the knowledge of the other respondents) sought to avail of a ground of defence not open to it in consequence of the "Packer agreement"; that defence (which never had to be considered given the answers to the preliminary questions) was one not open to CAL and yet it is said to have added very significantly to the costs incurred by Mr Cirillo in prosecuting his application; the respondents allegedly abused the processes of the court in this and in a way (unspecified) that gives rise to the tort of abuse of process: cf Williams v Spautz (1992) 174 CLR 509. 28 It is unnecessary for me to speculate further about such a possible claim because there is, in my view, an insuperable obstacle to it as the chronology reveals. 29 The order for costs of $500,000 made by Olsson AJ involved a determination of the rights and liabilities of the parties to the inquiry application in respect of the costs of and incidental to that application that were incurred by them. Mr Cirillo has not sought to have this order set aside. In consequence it stands as a valid and conclusive order of a superior court of record unless and until it is set aside: see Siminton v Australian Prudential Regulation Authority [2006] FCAFC 118 at [27]-[30]. 30 As best I can understand the changing picture presented by counsel for Mr Cirillo in submissions - it has no reflection in the present pleadings - the damages claimed for the proposed tort of abuse of process include, it would seem, at least that part of his own solicitor and client costs in the inquiry as to damages which were incurred in consequence of the conduct of the respondents alleged to give rise to the tort. I am uncertain what else the damages would include although it again seems likely that, as in the present application, Mr Cirillo would also be attempting to be relieved indirectly of the obligation to pay some, or part of, the monies he has been ordered to pay under the consent order. 31 Nonetheless, as I have noted, the consent order as to costs determined the incidence of costs as between Mr Cirillo and the first to fourth respondents in respect of all issues of costs in the inquiry as to damages application. For Mr Cirillo to make the claim he now foreshadows without first seeking to have that costs order set aside constitutes, in my view, an indirect challenge to the costs order itself. It is well accepted that a consent order is as efficacious as those pronounced after a contest and can support a plea of res judicata: see Spencer Bower, Turner and Handley, Res Judicata at [38]-[39](3rd ed, Butterworths, 1996); Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 at 508. Though the costs order itself reflected the usual rule that costs follow the event, it represented an agreement by the parties that had both judicial sanction in relation to its subject matter and coercive authority: see Spencer Bower et al [39] (1996). For as long as that order stands - I do not understand that Mr Cirillo seeks to challenge the substantive judgment of Olsson AJ given on 28 February 2003 - the principle of finality embodied in the doctrine of res judicata precludes an examination of the incidence of costs, albeit indirectly, in a tort action such as foreshadowed: see Cabassi v Vila (1940) 64 CLR 130 at 139; Cachia v Westpac Financial Services Ltd [2005] NSWCA 239 at [2]; Markisic v Department of Community Services of New South Wales (No 2) [2006] NSWCA 321 at [45] ff; see also D'Orta-Ekenaike v Victorian Legal Aid (2005) 214 ALR 92 at [83]. What is envisaged, as I understand it, involves a form of collateral attack on the order made. 32 Counsel for Mr Cirillo has sought to avoid this conclusion by relying on the decision of Hunt J in Hanrahan v Ainsworth (1985) 1 NSWLR 370 where His Honour refused to strike out an action for abuse of process in which costs and expenses associated with an earlier instituted proceeding against the now plaintiff by the now defendant were held to be recoverable in the latter proceeding if proved. 33 That case is clearly distinguishable from the present. The earlier proceeding had never been set down for trial and in consequence no costs order had been made in it. In consequence, no issue of res judicata or of collateral attack on a final order arose in that case. 34 For the above reasons, I am satisfied that the application should be dismissed as against the first to the fourth respondents. 35 In relation to Finlaysons' motion, I am equally satisfied that to allow the application to remain on foot would in the circumstances be manifestly unfair to that firm and would itself constitute an abuse of process. The foreshadowed claim would in substance be seeking (amongst other things) to reverse the effect of the consent order and the agreement underpinning it: cf R v Balfour; Ex parte Parkes Rural Distributions Pty Ltd (1987) 17 FCR 26 at 34. If successful it would result in a judgment that conflicted with Olsson AJ's consent order. 36 I have considered the proposed claim notwithstanding the opaque manner in which it has come forth in the course of the hearing before me. I would dismiss the application against all five respondents for the reasons I have given. 37 However, I would in any event dismiss the application without attempting to divine what the proposed claim might comprehend and for this reason: the present application and Statement of Claim are so removed from the type of claim proposed and are so vexatious in character, as to constitute an entirely inappropriate vehicle for possibly giving life to that claim. 38 I will order that the application be dismissed against all respondents and that the applicant pay the respondents' costs. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn J.

Cirillo v Consolidated Press Property Pty Ltd

At a glance

Court

Decision date

Before

Source

Judgment (8 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (10)

Cited By (4)