Hana v Shad Legal Services Pty Ltd

Abuse of Process?

The interrelationship between res judicata, estoppels arising from judicial determinations, abuse of process and double recovery was described in Tomlinson v Ramsey Food Processing Pty Limited (2015) 256 CLR 507; [2015] HCA 28 at [20] to [27] per French CJ, Bell, Gageler and Keane JJ ("Tomlinson"). As res judicata arises from the judicial quelling of controversies between the same parties (at [20]) it can be put aside as can any suggestion that the plaintiff in these proceedings might obtain double recovery (at [27]).
In relation to estoppel, the plurality in Tomlinson described its three relevant forms being cause of action estoppel, issue estoppel and an estoppel of the kind described in Henderson v Henderson (1843) 3 Hare 100, 67 ER 313 and Anshun, specifically the assertion of a claim or the raising of an issue that could have and should have been raised in earlier proceedings (at [22]; "Anshun estoppel"). Although it was observed that "considerations similar to those which underpin [Anshun] estoppel may support a preclusive abuse of process argument" the plurality stated that all three forms of estoppel including Anshun only operate "between parties to a proceeding or their privies" (at [23]).
The plurality in Tomlinson then addressed the interrelationship between these forms of estoppel and abuse of process. Of some significance to this matter, their Honours observed that, like estoppel, "the doctrine of abuse of process is informed in part by similar considerations of finality and fairness" (at [24]). In D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1; [2005] HCA 12 at [34], Gleeson CJ, Gummow, Hayne and Heydon JJ addressed the principle of finality in stating that "[a] central and pervading tenet of the judicial system is that controversies, once resolved, are not to be reopened except in a few, narrowly defined, circumstances."
In Tomlinson, the plurality observed as follows in relation to abuse of process (at [25] to [26]): "25 Abuse of process, which may be invoked in areas in which estoppels also apply, is inherently broader and more flexible than estoppel. Although insusceptible of a formulation which comprises closed categories …, abuse of process is capable of application in any circumstances in which the use of a court's procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute…. It can for that reason be available to relieve against injustice to a party or impairment to the system of administration of justice which might otherwise be occasioned in circumstances where a party to a subsequent proceeding is not bound by an estoppel. 26 Accordingly, …. it has been recognised that making such a claim or raising such an issue can constitute an abuse of process where the party seeking to make the claim or to raise the issue in the later proceeding was neither a party to that earlier proceeding, nor the privy of a party to that earlier proceeding, and therefore could not be precluded by an estoppel…". (emphasis added)
On this motion the defendant seeks to invoke the principle stated in the emphasised passage. The defendant in these proceedings was neither a party nor the privy of a party to the probate proceedings. Nevertheless, the defendant contends that these proceedings are an abuse of process in that they are in substance an attempt to relitigate the probate proceedings.
The footnote to Tomlinson at [26] referred to the discussion of abuse of process involving the relitigating of earlier proceeding between different parties by Beazley P in O'Shane v Harbour Radio Pty Ltd (2013) 85 NSWLR 698; [2013] NSWCA 315 at [99] to [111] ("O'Shane"). In O'Shane, her Honour concluded that discussion with the admonition that the "onus of satisfying the court that there is an abuse of process lies upon the party alleging it and the onus is a 'heavy one'" (at [111] citing Williams v Spautz (1992) 174 CLR 509 at 529). One of the decisions cited by her Honour was State of Bank New South Wales Ltd v Stenhouse Ltd & Ors (1997) Aust Tort Reports 81-423 in which Giles CJ Comm Div discerned the following from the cases concerning this form of abuse of process (at 64,089): "It is apparent from this brief review of the decisions that whether proceedings are, or an aspect of proceedings is, an abuse of process because a party seeks to relitigate an issue already decided depends very much on the particular circumstances. The guiding considerations are oppression and unfairness to the other party to the litigation and concern for the integrity of the system of administration of justice, and amongst the matters to which regard may be had are - (a) the importance of the issue in and to the earlier proceedings, including whether it is an evidentiary issue or an ultimate issue; (b) the opportunity available and taken to fully litigate the issue; (c) the terms and finality of the finding as to the issue; (d) the identity between the relevant issues in the two proceedings; (e) any plea of fresh evidence, including the nature and significance of the evidence and the reason why it was not part of the earlier proceedings; all part of - (f) the extent of the oppression and unfairness to the other party if the issue is relitigated and the impact of the relitigation upon the principle of finality of judicial determination and public confidence in the administration of justice; and (g) an overall balancing of justice to the alleged abuser against the matters supportive of abuse of process."
A consideration of these factors points strongly to a finding that the defendant has satisfied the heavy onus cast upon it of proving an abuse of process. The entire predicate of the plaintiff's statement of claim is that it was Ms Mekhail's intention in exercising the 2014 Will to leave the entirety of her estate to Ms Hana. In substance, that raises the same issue as the ultimate issue upon which Ms Hana failed in the Court of Appeal namely whether the 2014 Will reflected Ms Mekhail's "real intention" (Mekhail v Hana; Mekhail v Hana [2019] NSWCA 197 at [131]) (ie factors (a) and (d) from Stenhouse). In the probate proceedings, Ms Hana had the opportunity to fully litigate that issue and it was finally disposed of in a manner that was adverse to her (ie, factors (c) and (d) from Stenhouse). In terms of "fresh evidence", Ms Hana's case does not appear to be that there is any fresh evidence of events that happened which were not revealed in the probate proceedings but instead asserts that if the defendant had taken certain steps then further evidence would have been available to prove those events (ie, Ms Mekhail's "real intention"). When it is borne in mind that that (counterfactual) additional evidence is only sought to contradict the critical finding made in Mekhail v Hana; Mekhail v Hana [2019] NSWCA 197 and the relief that was granted then it follows that considerations (e) and (f) from Stenhouse tend strongly in favour of the defendant. As for consideration (g), I struggle to see any injustice flowing to Ms Hana from denying her the ability to contend that, but for the defendant's negligence, she might have some additional evidence to prove now what she could not in the probate proceedings.
I return to the considerations of "finality" and "fairness" that inform, at least "in part", the doctrine of abuse of process (Tomlinson at [24]). As stated, the pleaded cause of action is premised on the establishment of a fact that is directly inconsistent with the Court of Appeal's finding on the ultimate issue, namely whether the 2014 Will reflected Ms Mekhail's "real intention[s]". The pleaded cause of action could only succeed by establishing that, contrary to the releif granted by the Court of Appeal, probate should have been granted under the 2014 will. At its highest, the statement of claim contends that, but for the pleaded breaches, further evidence would have been available to prove Ms Mekhail's knowledge and approval and the challenge to the 2014 Will would have failed. To allow this to continue would undermine the principle of finality as it attaches to the Court of Appeal's decision which did not uphold that Will. It involves a challenge to precisely the same ultimate finding made in those proceedings. As noted, given the full opportunity that Ms Hana had to litigate this issue I do not accept that Ms Hana would suffer from any relevant form of unfairness from being denied a further opportuntiy to once again litigate whether Ms Mekhail's testamentary intentions were for Ms Hana to be the sole beneficiary of her estate. I am satisfied that, as formulated, Ms Hana's statement of claim is an abuse of process.
This result can be contrasted with a circumstance in which, as a result of a solicitor's negligence, a court determines that a will was not executed properly and declines to grant probate. Subsequent proceedings against the solicitor concerning the default in execution would take as their premise the correctness of the earlier finding and posit a counterfactual whereby a differently executed or drafted will would have obtained a grant of probate. Such a proceeding would not involve any challenge to the correctness of any ultimate finding of fact made about the manner of execution of the will that was made in the earlier decision or any finding of law about its validity. The counterfactual inquiry in the claim against the solicitor would not be an inquiry into the same events with additional evidence as this case proposes but an inquiry into different (hypothetical) set of events and their legal consequences. By contrast, these proceedings posit a counterfactual whereby the same will that was not granted probate in the earlier proceedings is granted probate; in this case, precisely the same cause of action that previous failed succeeds in the counterfactual.
This distinction is borne out by considering a case relied on by Mr Lee, namely Harris for and on behalf of the estate of Harris and Harris v Rapisarda [2019] NSWSC 1088 ("Harris"). In Harris, Stevenson J declined to strike out proceedings by the estate of the proprietor of a home (the "proprietor") against a firm of architects. The architects contended that the proceedings were an abuse of process in circumstances where the proprietors had previously sued a builder for defective building work and the builder cross‑claimed for amounts under the building contract (at [15]). In the proceedings against the architects the proprietor alleged they, inter alia, failed to properly prepare and adminster the building contract under which the builder was engaged (at [19]). The proprietor contended that, due to the architects' breaches, the work that was performed by the builder was of lower quality and the dispute arose with the builder (at [20]).
Stevenson J did not accept that the proprietor's action involved either an abuse of process or was precluded by an Anshun estoppel (at [54]). His Honour did not accept that the proprietor was seeking findings inconsistent with the findings made in the earlier proceedings against the builder (at [36]), stating (at [40]): "Determination of the [proprietor's] claim against the Architects will involve consideration of the quality of the work that would or should have been undertaken by the Second Builder, had the Contract have provided for a "high standard" of workmanship on the part of the …. Builder, and had the Architects supervised the …… Builder's work and ensured that a "high standard" was achieved. In effect, the Executor will run an "alternative transaction" case which will proceed on this hypothesis."
Thus, in Harris the counterfactual inquiry that would be undertaken in the second proceedings concerned the result that would have ensued under a differently drafted and supervised building contract to that which was the subject of the earlier proceedings against the builder. It follows that undertaking that inquiry would not imperil the finality of what was determined in the proceedings against the builder which concerned the contract that was in fact executed. By contrast, in this case, Ms Hana's claim against the defendant requires a counterfactual inquiry into the validity of precisely the same will and the same state of mind of the testator in respect of which a grant of probate was refused in the probate proceedings. Ms Hana's claim against the defendant requires a counterfactual inquiry into Ms Mekhail's actual intentions for the purpose of achieving an opposite finding to that which the Court of Appeal made.
I note two further matters about this conclusion.
First, as noted, one aspect of the defendant's notice of motion endeavoured to invoke Anshun. The defendant referred to a number of decisions of intermediate Courts of Appeal which have extended Anshun so that it applies to proceedings subsequently brought against entities that were not parties to the original proceedings but where it can be said that the claim against that entity "were so relevant to the subject matter of the first action that it was unreasonable for the purchasers not to rely upon them in that action" (Rippon at [23]; Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231; Ekes v Commonwealth Bank of Australia [2014] NSWCA 336 at [131]).
In Redowood Pty Limited v Link Market Services Pty Limited (formerly known as ASX Perpetual Registrars Limited) [2007] NSWCA 286 at [45], Hodgson J stated that, in cases that seek to invoke Anshun where the parties to the later proceedings are not the same as the earlier proceedings, then a finding of unreasonableness in not raising the matter in the earlier proceedings is still "relevant; but ... 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". In Ekes at [131], Bathurst CJ observed that a factor of importance in such cases is that the second action may give rise to inconsistent judgments.
The application of Anshun to a second proceeding not involving the parties to the first proceeding has not to date been adopted by the High Court. As noted, the discussion in Tomlinson characterised Anshun as one of "three forms of estoppel" operating "between parties to a proceeding or their privies" (Tomlinson at [23]). The finding I have made is that, as formulated, these proceedings are an abuse of process because they seek to directly relitigate precisely what was lost in the probate proceedings. Success for the plaintiff would yield inconsistent findings about Ms Mekhail's intentions and whether probate should have been granted under the 2014 Will in these proceedings compared to the probate proceedings.
To the extent it may be relevant, I am not satisfied that it was unreasonable for Ms Hana not to bring a cross‑claim against the defendant in the probate proceedings. That said, a moments reflection on what such a cross‑claim might have looked like only reinforces the finding of an abuse of process. The putative cross‑claim would have only arisen if probate was not granted under the 2014 Will because the Court was not satisfied that Mrs Mekhail knew and approved of its contents. The cross‑claim would have then sought a finding that the Court would have found the opposite had Mr Liondos asked Ms Hana and her son to leave the conference when the Will was discussed or request that a medical practitioner attend. Such a line of reasoning is contradicted by its premise, namely that it was not shown that Ms Mekhail knew and approved of the contents of the 2014 Will.
Second, Mr Ng also sought to rely on Egri v DRG Australia Ltd (1988) 19 NSWLR 600 ("Egri") for the proposition that a finding that an ultimate fact was not established creates an issue estoppel that the fact did not happen (at 601F, 604D and 608D and see K R Handley AQ CStj QC, Spencer Bower and Handley: Res Judicata, Lexis Nexus, 5th edition, 2019 at p 42). However, in Kuligowski v Metrobus (2004) 220 CLR 363; [2004] HCA 34, the High Court disapproved of Egri and held that "[a] failure to find a matter alleged does not establish the truth of the contrary of that which is alleged" (at [59] to [61]). It suffices to state, the above conclusion does not rest upon Egri which is directed to issue estoppel. Instead, it concerns the undermining of the principle of finality engaged by Mekhail v Hana; Mekhail v Hana [2019] NSWCA 197 that would ensue if Ms Hana's case as pleaded were allowed to go forward.

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