ANALYSIS
22 Since the dismissing the application, judgment has been delivered by the High Court in which repeated claims were held by the majority (4:3) to be an abuse of process: UBS AG v Tyne (2018) 92 ALJR 45. The analysis turned very much on the particular facts of that litigation which were very different from the situation now under consideration.
23 In UBS AG v Tyne, Kiefel CJ, Bell and Keane JJ observed (at [45], [52] and [55]):
[45] The courts must be astute to protect litigants and the system of justice itself against abuse of process. It is to hark back to a time before this Court's decisions in Aon and Tomlinson and the enactment of s 37M of the FCA to expect that the courts will indulge parties who engage in tactical manoeuvring that impedes the "just, quick and efficient" resolution of litigation. To insist, for example, on "inexcusable delay" as a precondition of the exercise of the power to stay proceedings as an abuse of process is to fail to appreciate that any substantial delay is apt to occasion an increase in the cost of justice and a decrease in the quality of justice. And other litigants are left in the queue awaiting justice. Further, there is no reason why the courts should tolerate attempts to manipulate other parties and the courts themselves by the deployment, by a single directing mind and will, of different legal entities under common control for such a purpose. The concern is as to whether the processes of the court are being abused. Given that this is the central concern, the circumstance that the abuse is effected by the use of multiple entities orchestrated by a single mind and will is no reason to tolerate it.
…
[52] Where discontinuance of proceedings brings the proceedings to an end, the later commencement of fresh proceedings may work no unfairness to the defendant. Here, the discontinuance of the Trust's claim did not bring the SCNSW proceedings to an end. Those proceedings were prosecuted to a final determination on the issues before the Court by a plaintiff controlled by Mr Tyne to recover the loss that the Trust claims as its loss in these proceedings. Mr Tyne provided an explanation for the decision not to maintain the Trust's claim in the SCNSW proceedings. The primary judge considered that it was not a "proper" explanation. To explain that finding it is necessary to refer to Mr Tyne's affidavit.
…
[55] Mr Tyne perceived a forensic advantage to the Tyne-related parties in holding back the Trust's claim. This was a decision that, were Telesto's claim to be stayed, would lead to duplication of resources and increased cost, and would delay the resolution of the dispute between the Tyne-related parties and UBS. Hiving off the Trust's claim, with a view to bringing it in another court after the determination of the SCNSW proceedings, was the antithesis of the discharge of the duty imposed on parties to civil litigation in the Supreme Court of New South Wales and in the Federal Court. That duty is to conduct the proceedings in a way that is consistent with the overriding/overarching purpose.
(Citations omitted.)
24 In a judgment agreeing with the joint reasons of Kiefel CJ, Bell and Keane JJ, Gageler J noted (at [78] and [81]):
[78] The hearing of the appeal to this Court was hijacked by a contention put forcefully at the forefront of the submissions made orally on behalf of Mr Tyne that discontinuance of the trustee's claims in the SCNSW proceedings constituted no bar to the trustee bringing the same claims in other proceedings. The contention was plainly correct, but beside the point. The primary judge's conclusion that bringing the Trust's claim against UBS in the Federal Court proceedings constituted an abuse of process was based neither in whole nor in part on the consideration that the trustee's claims had been brought in the SCNSW proceedings and had been discontinued. The conclusion was based on the very different assessment that the trustee's claims should have been pursued in the SCNSW proceedings, to which Telesto remained a party, if they were to be pursued at all.
…
[81] What was not reasonable having regard to the totality of the private and public interests involved was for Mr Tyne to take it upon himself to hold the claims of the Trust in abeyance with a view to pursuing them in separate proceedings if it turned out that Telesto's claims were for some reason not successful.
25 Mr Pedley's application was brought pursuant to r 16.21 of the Federal Court Rules 2011 (Cth). Whether it is still pursued pursuant to r 16.21 or to r 26.01 of the Rules is unclear, but it is clear that the ground of the application is that there was an abuse of process by the Commissioner.
26 I accept the Commissioner's submission that the rules contained in Div 3(6) of Pt 4 of the DCR, including r 44G(1), are properly to be categorised as rules regulating or prescribing matters of practice and procedure. A hardly contentious submission given Pt 4 of the DCR is entitled 'Case Management'. They do not alter the substantive rights of the parties. That is evident from the analysis in Rowe (at [45]), being a passage on which Mr Pedley relies.
27 Importantly, the dismissal of an action under r 44G(1) for want of prosecution does not bar a fresh action for the same relief: Hughes v Gales (1995) 14 WAR 434 per Malcolm CJ (at 438, with whom Kennedy and Pidgeon JJ agreed). The commencement of a second action based upon the same cause of action does not of itself constitute an abuse of process: Hughes (at 438-439). As Buss JA observed (at [16]) in Brocx, whether the second action constitutes an abuse of process will depend on the particular facts and circumstances of the case.
28 Clearly, there may be circumstances where the commencement of a second action would be an abuse of process. But it is not invariably so. Each case needs to be examined on its own facts. In Brocx, Buss JA stated (at [15]):
In my opinion, the Supreme Court's power to prevent an abuse of process may be exercised in these circumstances if, relevantly, the commencement and prosecution of the second action would cause or be likely to cause:
(a) improper vexation or oppression to the defendant; more particularly, if the second action would be seriously and unfairly burdensome, prejudicial or damaging to the defendant; or
(b) the administration of justice to be brought into disrepute.
29 The central issue will always be whether to allow the case to proceed would inflict unnecessary injustice on the respondent. That would bring the system of justice into disrepute. In Smith v Bank of Western Australia Ltd [2010] WASCA 15 Pullin JA (with whom Owen JA and Newnes JA agreed) said (at [18]):
In Monaveen Pty Ltd v ABB Service Pty Ltd [2007] WASCA 273 at [66] I said in referring to the Hancock and Batistatos cases, that it may be necessary to reconsider the principles set out in Hancock's case insofar as Steytler P and Owen JA said that it is relevant to take into account whether any default by a plaintiff has been "intentional and contumelious". I referred to Gleeson CJ, Gummow, Hayne and Crennan JJ's reasons at [70] and to those of Kirby J at [138] in Batistatos' case. In my view, Hancock's case and Batistatos' case can be reconciled in this way. The plaintiff's conduct, particularly if it has been of an intentional and contumelious kind, will be a relevant point for consideration, but Batistatos makes it clear that it is not a condition which must be shown before proceedings are struck out or stayed. Whether the plaintiff has been guilty of misconduct or not, the critical issue is whether to allow the plaintiff's case to proceed would inflict unnecessary injustice on the defendant. It is likely that in many cases that intentional or contumelious disobedience to orders of the court will inflict unnecessary injustice on the defendant.
(Emphasised added.)
30 I turn then to the Current Proceeding.
31 First and foremost, no order of any description has been disobeyed by the Commissioner at any time. There is therefore no evidence of any breach of any order by the Commissioner in the 2014 Proceeding. Indeed, there is no evidence that any orders were made in the 2014 Proceeding. If it is Mr Pedley's submission and I am not certain that it is, that a failure to file a document in accordance with r 44E of the DCR in the 2014 Proceeding is of itself a breach or an abuse, no authority is advanced for that proposition. Under the DCR, the consequences for failing to file a document pursuant to r 44E of the DCR, are simply those prescribed in r 44G(1) of the DCR.
32 Secondly, it is quite clear on any account of the evidence (Mr Pedley himself has tendered the internal records from the Commissioner) that the decision not to prosecute the 2014 Proceeding was directly attributable to the existence of a payment arrangement between Stellar and the Commissioner and the Commissioner's agreement to not pursue the claim whilst that payment arrangement remained on foot. It can hardly be argued that the Commissioner should be criticised for not pursuing and exposing Stellar and its directors to costs and other stresses of litigation in circumstances where there was a successful instalment arrangement on foot.
33 As noted above, the 2014 Proceeding remained entirely dormant. For that reason the 2014 Proceeding was, quite properly, subject to the processes of the District Court Inactive Cases List. However, in the meantime, Stellar, Mr Pedley's co-director and Mr Pedley himself, were gaining the benefit of the payment arrangement while no other legal costs were being incurred. No pleadings were filed, no determination of any substantive right, or indeed any right whatsoever, occurred because no party sought any such determination. There has been no relevant limitation issue arising and, indeed, the claim remains within its limitation period. This is a simple case, essentially based on documents arising from a statutory debt, which occasions limited oral evidence. As appears to be clear, much of the evidence has already been filed by way of affidavits filed for each party in the District Court. There is no suggestion that any of those witnesses is elderly or apparently infirm such that any injustice is inflicted on Mr Pedley by reason of compromised testimony due to lapse of time.
34 In the circumstances of this case, it appears that the Commissioner could either have continued with the 2014 Proceeding and amended it or issued fresh proceedings. It was open, of course, for the Commissioner to seek to enliven the 2014 Proceeding, but there is no requirement for that course to be followed. In the circumstances of this case the view was taken, at least apparently on sound procedural and costs reasons, that a second writ would be preferable. Although the Commissioner has not caused an affidavit to be filed to explain why that course was taken, I am not satisfied in the circumstances of this case that it was necessary for him to do so. The evidence of the internal records obtained months ago by Mr Pedley on a FOI request, tendered by Mr Pedley himself, shows that the officer making the decision regarded the 2014 Proceeding as dormant and noted that there were additional amounts to claim. The Current Proceeding was regarded as being the preferable or appropriate course to take to recover those amounts. It is difficult to see that this decision is wrong in any sense in the circumstances of this case, let alone an abuse of process. Given the differences in the claims in the 2014 Proceeding and the Current Proceeding in light of the payments made under the payment arrangement, enlivening the 2014 Proceeding would have required an application to amend with additional costs and further delay.
35 Further, several of the claims in the Current Proceeding are new causes of action which arose after the commencement of the 2014 Proceeding. It is true, as Mr Pedley argues, that these are smaller claims, but the size of the claim is hardly the test. Also, there would be further amendments required because certain amounts particularised in the statement of claim in the 2014 Proceeding are no longer claimed. Having regard to the fact that the 2014 Proceeding was in the Inactive Cases List, the pursuit of that action would have required the Commissioner to file a summons for an order under r 44F of the DCR, serve it personally, seek that Mr Pedley enter an appearance and then proceed to a directions hearing on that summons, in turn, giving rise to further costs. Rule 44E of the DCR does not permit the applicant to unilaterally file a notice of discontinuance when the action is on the Inactive Cases List. There is no reason to think that the Commissioner would not have proceeded with a summary judgment application on the 2014 Proceeding, given that he did on the Current Proceeding. That cost was also saved by pursuing the Current Proceeding.
36 The reason the case was in abeyance, as expressly recorded by Judge Petrusa in Pedley (No 2) (at [7]), was that there had been ongoing attempts to settle the dispute. The internal documents from the Commissioner also make it clear that at all relevant times Mr Pedley was entirely aware of that reason.
37 In the two summary judgment applications in the District Court (at first instance and on appeal), the Commissioner sought to argue, but was unsuccessful, that Mr Pedley could not succeed in establishing that he had taken 'reasonable steps' as director during the relevant period for the purposes of s 269-35(2) of the Taxation Administration Act 1953 (Cth). It was not held on either occasion that he had, simply that that was an arguable issue which should go to trial.
38 I do not accept there has been a disregard of a springing order, let alone that the Commissioner's conduct in any way constitutes 'contumacious' conduct. There was no springing order at all.
39 It is clear that Mr Pedley was made aware of the status of the 2014 Proceeding in April 2015 with the notifications from the District Court. I accept that Mr Pedley is stressed by this litigation as he deposes. It appears that he thought he may have completely succeeded when the Commissioner's summary judgment application was dismissed, as was the Commissioner's appeal from that dismissal. The stress and cost of litigation is regretful, but that does not mean the Commissioner is not entitled to pursue the claim.
40 There has been an unnecessary amount of heat in this interlocutory application. A suggestion that the Commissioner acted duplicitously has been withdrawn. There was no foundation for such a suggestion, even though counsel attempted to explain it on the basis that he meant only that the filing of two proceedings was a duplication: see, for example, PT Sandipala Arthaputra v STMicroelectronics Asia Pacific Pte Ltd (2015) 5 SLR 873 per George Wei J (at [69], [112]-[113] and [142]). Reasonably read, the reference to 'duplicitous' in the context of asserting 'contumacious' conduct and abuse of process by the Commissioner certainly did not convey merely duplicated filing. However, that submission and ground was, as I have noted, withdrawn.
41 There was no proper explanation for the delay in bringing this interlocutory application. The existence of the 2014 Proceeding has been known to Mr Pedley for three or more years. The documents were produced by the Australian Taxation Office under a FOI request in November 2017. There was no explanation for waiting a further eight months and until the eve of the trial to bring the interlocutory application. The appropriate time to raise any complaint about proceeding with the Current Proceeding, rather than the 2014 Proceeding, was in 2016 at the time of the summary judgment hearing.
42 That an abuse of process giving rise to issue estoppel may be raised as late as trial is irrelevant to this case. There is clearly no issue estoppel. In any event, the fact that in certain circumstances such an issue may be raised as late as trial, does not explain in this case why there was such a delay in raising the issue after the FOI material became available in November 2017 and in circumstances where the Commissioner would be taken at all times to have known of the existence of the 2014 Proceeding. Not only did the Commissioner know, but Mr Pedley was aware of the existence of the 2014 Proceeding well before the FOI material was obtained.