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[2002] FCAFC 403
respondent. Application for extension of time to apply for leave to appeal dismissed; applicant and Mr Blakeley ordered to pay costs of first and second respondents (majority). Lee J dissenting would have...
HPM (in liquidation) sought leave and an extension of time to appeal from a Federal Court judge's interlocutory order dismissing its proceedings as an abuse of process. The Full Court (majority: Carr and RD Nicholson JJ) held the dismissal was interlocutory but refused extension of time and leave because there was no arguable ground of error and the history of repeated, substantially identical proceedings in the Supreme Court supported the primary judge's conclusion that litigating in another forum was an abuse of process. Lee J dissented, finding the material did not plainly establish circumvention or abuse and that summary dismissal caused substantial injustice; he would have granted leave and extended time. Costs were ordered against the applicant and its representative.
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HPM Pty Ltd (in liquidation) sought to litigate claims arising from the appointment of a receiver (Mr Fear) and the subsequent sale of the Hotel Peninsula at Mandurah. Those claims had a long and contested procedural history in the Supreme Court of Western Australia: multiple writs and actions were commenced between 1994 and 2001 (CIV 2236/94; CIV 1314/96; CIV 1985/00; CIV 1256/01), with orders for security for costs made against the applicant in 1996, discontinuances, dismissals and appeals. Relevant events summarised in the Full Court reasons include a June 1996 security-for-costs order, the liquidation of HPM in December 1995, assignment transactions between the liquidator and Mr Blakeley, and repeated attempts by Mr Blakeley (either personally or purporting to act on behalf of the company) to litigate the same causes of action in different proceedings and forums [6]–[16], [39]–[56].
On 23 November 2001 the applicant filed in the Federal Court a proceeding seeking relief on essentially the same causes of action that had been litigated in the Supreme Court. The Federal Court judge (French J) dismissed the Federal Court proceeding on 6 March 2002 as an abuse of process, concluding the proceeding was being used to circumvent adverse decisions of the Supreme Court and, in particular, the effect of the earlier security-for-costs order [58]. The applicant filed a Notice of Appeal and sought leave and an extension of time to appeal that interlocutory dismissal. The Full Court (Lee, Carr & RD Nicholson JJ) heard the application for extension of time and leave to appeal, and delivered differing reasons. By majority (Carr and RD Nicholson JJ) the extension of time was dismissed and costs ordered against the applicant and Mr Blakeley; Lee J dissented and would have extended time, granted leave and allowed the appeal, setting aside the dismissal order [2], [34], [65], [73].
There are three interlocking questions the Full Court addressed: (1) the character of the Federal Court judge's order (final or interlocutory); (2) whether leave to appeal and an extension of time should be granted; and (3) whether the Federal Court proceeding was an abuse of process.
Interlocutory character: All three judges agreed the dismissal was interlocutory because it did not finally dispose of the parties' rights, there had been no adjudication on the merits of the underlying causes of action, and the practical effect was not to finally determine rights [2], [37]. Lee J expressed the point succinctly: the dismissal did not finally determine the rights and therefore should be treated as interlocutory [2]. Carr J and RD Nicholson J concurred on the interlocutory character [37], [66].
Leave to appeal and extension of time: The established test, as Carr J set out, is whether the decision below is attended with sufficient doubt to warrant reconsideration on appeal and whether substantial injustice would result if leave were refused, assuming the decision below were wrong (the Décor two-limb test) [60]. Lee J, applying that test, concluded there was an arguable case of error and that substantial injustice would result from allowing the summary dismissal to stand where no merits determination had occurred, and so he would have granted leave and extended time [3], [33], [34]. Carr J and RD Nicholson J, by contrast, concluded there was no arguable ground of error given the history of repeated, substantially similar proceedings and the way prior courts had dealt with them; they concluded refusal of leave would not produce substantial injustice in those circumstances and refused the extension and leave [61]–[63], [72]–[73].
Abuse of process: The majority relied on principle that courts may stay or dismiss proceedings as an abuse of process, especially where parallel proceedings in courts of coordinate jurisdiction would amount to misuse of the court's process and a waste of judicial resources (drawing on authorities such as Hughes; Yooralla; Sea Culture) [67]–[71]. RD Nicholson J emphasised that the notion of abuse of process is fact-specific but can be satisfied by the parallel character of proceedings, even where no merits determination has been made in each forum; the focus is on preventing multiplicity and tactical forum-shopping [70]. The primary Judge's conclusion (that the Federal Court proceeding sought to circumvent adverse Supreme Court decisions, including the security-for-costs consequence) was, in the majority's view, supported by the repetitive procedural history and the prior dismissals and findings of irregular commencement in the Supreme Court appeals [58], [63], [69].
Lee J dissented. He accepted the interlocutory character but found the material did not plainly show the requisite circumvention or that summary dismissal was appropriate without factual findings. He emphasised that no determination had been made on the merits, and that the respondents had not established facts showing the applicant discontinued earlier proceedings for the purpose of avoiding security-for-costs orders; consequently, summary dismissal would produce substantial injustice and he would have allowed the appeal and set aside the dismissal [19], [31]–[34].
Before this decision the established principles governing abuse of process and interlocutory appeals were settled in the authorities cited in the reasons: courts have power under procedural rules (O 20 r 2(1)(c)) and inherent jurisdiction to prevent misuse of process; interlocutory orders require leave to appeal and leave is discretionary, applied by the Décor two-limb test (whether the decision is attended with sufficient doubt, and whether substantial injustice would result if leave were refused) [60]–[61], [67]–[71].
This Full Court decision applies those established principles to a fact pattern of repeated, substantially identical proceedings across Supreme Court and Federal Court forums, highlighting two practical points:
A dismissal as an abuse of process in the Federal Court can be interlocutory even where it terminates a party's pending attempt to litigate an issue in the Federal Court; the interlocutory character does not preclude it being a proper basis for refusal of leave to appeal if no arguable ground of error is shown [2], [37], [60]–[63].
The Full Court's 2-1 split underscores judicial caution: abuse-of-process dismissals should be exercised sparingly and depend on the full procedural history and whether the second forum is being used to circumvent or re-litigate issues already resolved in a coordinate court [70]–[71], [33]. Lee J’s dissent warns courts against disposing summarily where the material does not plainly show abuse.
In practical terms, the law as applied: where a litigant repeatedly pursues substantially the same claims in different forums, the courts will be ready to find abuse of process and refuse leave to appeal from interlocutory dismissals unless there is an arguable error or clear injustice from refusal.
Lee J, para 2: "Although ... the dismissal of the proceeding did not finally determine the rights ... Accordingly ... interlocutory and not final." Plain English: The judge's order ended this particular Federal Court case but did not finally decide the underlying legal rights between the parties, so it is an interlocutory decision.
Lee J, para 33: "The proceeding should not have been summarily dismissed as an abuse of process and substantial injustice would be caused to the applicant if the order is allowed to stand." Plain English: Lee J thought the summary dismissal was wrong on the material before the court and would unfairly harm the company because the merits were never decided.
Carr J, para 60: "… when considering whether to grant leave to appeal, the court normally has regard to two factors ... whether the decision below is attended with sufficient doubt ... and whether substantial injustice would result if leave were refused ..." Plain English: To decide whether to allow an appeal from an interlocutory order, the court looks at whether the original decision might be wrong and whether refusing the appeal would cause unfairness.
RD Nicholson J, para 70: "The notion of 'abuse of process' ... is capable of being satisfied by the parallel character of proceedings in courts of coordinate jurisdiction." Plain English: Running the same case in different courts at the same time, or repeatedly trying the same issues in different courts, can itself be an abuse of the legal process.
This Full Court's reasoning is triggered where:
A litigant has a long series of substantially similar proceedings across different courts and over a prolonged period, including orders for security for costs, discontinuances and dismissals, and where one court considers the new proceeding an attempt to re-litigate or avoid the consequences of earlier orders [9]–[16], [45]–[54].
A party attempts to continue litigation in a coordinate court after adverse procedural rulings (e.g., security for costs) or after findings of abuse/irregularity in the same or related matters, thereby risking tactical forum-shopping and multiplicity [58]–[63], [69]–[71].
Applications to the court are made in the name of a company in liquidation, where questions exist about the applicant's standing, the liquidator's position, or the procedural propriety of commencement (e.g., leave to bring proceedings by non-solicitors), these features were part of the factual matrix even if not determinative [21], [28], [64].
If you see substantially identical claims being resurrected in a new forum without a clear answer to the procedural bar that defeated them previously, the precedent signals a high risk the court will treat the new suit as an abuse of process.
This is a 2002 Full Court decision. The judges relied on established authorities (Hughes, Sea Culture, Décor) to apply abuse-of-process and interlocutory-appeal principles to the multi-proceeding procedural facts. The split decision itself illustrates that later courts will examine carefully whether summary dismissal for abuse of process is appropriate in the absence of a merits determination, and will balance the two-limb leave test in light of the litigation history. Practitioners should expect courts to treat repetitive attempts to litigate the same matters in multiple forums skeptically, especially where prior orders (such as security for costs) are implicated.
(Consequence for practitioners: when advising clients who have previously had proceedings dismissed or subject to procedural orders, consider the risk that re-filing in a different court will be characterised as abuse of process. Ensure factual points showing lack of circumvention are documented and be prepared to address the leave-to-appeal test on interlocutory orders.)
Precise limits of dismissal on abuse of process without merits findings: Lee J's dissent emphasises situations where insufficient factual findings exist to support summary dismissal. How granular must the material be to permit summary disposal on abuse grounds? The decision leaves scope for later guidance.
Status of ss 236/237 for companies in liquidation: Lee J discussed whether officers or former officers may rely on those sections in respect of a company in liquidation and whether s 471A(1A)(c) supplies the necessary approval mechanism [28]–[29]. The Full Court majority declined to decide the issue. Subsequent authority would be required for a firm resolution.
Effect of irregular commencement in one forum on abuse-invocation in another: the Full Court accepted that proceedings irregularly commenced in the Supreme Court affected the broader contextual assessment, but did not set out a precise formula for weighing procedural irregularity against substantive rights to litigate elsewhere [16], [21], [64].
Interaction with access-to-justice concerns: the majority treated repeated litigation attempts unfavourably, but where a litigant has genuine but previously unarguable procedural routes (e.g., inability to obtain a solicitor), how should courts balance abuse-of-process control against access-to-justice? Lee J's concern about substantial injustice touches this but does not resolve it.
Conclusion: HPM v Fear is a practical Full Court authority reinforcing that repetitive, forum-shopping litigation can be curtailed by abuse-of-process doctrine and that interlocutory dismissal in that context will attract close scrutiny when leave to appeal is sought, but that summary dismissal without sufficient factual basis risks causing substantial injustice. Practitioners must carefully evaluate the litigation history and be ready to demonstrate either the absence of circumvention or a compelling arguable error to obtain leave to appeal.
INTRODUCTION 35 On 6 March 2002, a Judge of this Court made orders that the applicant's application be dismissed as an abuse of process and that he pay the costs of the first respondent and the second respondent. On 25 March 2002, the applicant lodged a document headed "Notice of Appeal". 36 The first and second respondents contend that the "appeal" should be dismissed as incompetent because the applicant has not sought or obtained leave to appeal pursuant to Order 52 rule 10. 37 In my view, the judgment of 6 March 2002 was interlocutory in accordance with well-settled authority. But it is of a type of interlocutory judgment which has, subject to the application of the usual discretionary considerations, perhaps more than the usual potential to be the subject of a grant of leave. By that I mean to say that the orders are not to do with practice and procedure. 38 The applicant did not, until the appeal was called on, seek leave to appeal. It has maintained that it does not require such leave. But when the hearing started Mr H T J Blakeley (a former managing director and principal shareholder of the applicant who was granted leave to appear on its behalf) asked that leave to appeal be granted to the applicant. Implicitly (by asking for whatever leave he needed) he asked that time be extended to apply for leave. The first and second respondents opposed the grant of such leave.
Supreme Court of Western Australia Action No CIV 2236 of 1994 39 On 14 September 1990 the first respondent (a chartered accountant) was appointed to be receiver and manager of the applicant under the terms of a mortgage and charge held by the second respondent over the applicant's property. Eventually the first respondent sold to the third respondents one of the applicant's assets, being a property known as the Hotel Peninsula at Mandurah. 40 On 20 December 1994 the applicant commenced proceedings in the Supreme Court of Western Australia in action number CIV 2236 of 1994 against BPM Pty Ltd, trading as Bird Cameron, Accountants. Their role in the matter is described below. The first respondent and the third respondents were named as defendants to that action together with The Bank of Melbourne. On 17 October 1995 the second respondent was substituted for The Bank of Melbourne by order of a Master and an amended statement of claim dated 18 October 1995 was filed. 41 In that statement of claim the applicant alleged that the appointments of the first respondent as receiver and manager were invalid as the applicant was not in default under the terms of the mortgages when the appointments were made. The bases for that contention were that, first, notices of demand issued by the mortgagee did not specify the amounts owing to it under the relevant securities, and, secondly, that those notices of demand were "nullified" by an agreement made between the applicant and the second respondent on 23 August 1990. The substance of that agreement was said to be that the applicant would continue to trade, on certain conditions. The first respondent was said to have failed to make certain of the validity of his appointment, to have acted without power, to have failed to act in good faith and to have breached a statutory duty under s 229(2) of the Companies (Western Australia) Code to exercise a reasonable degree of care and diligence in exercising his power of sale. He was said to have been negligent and in breach of his duties in failing to take reasonable care to obtain either a proper price or the true market value of the hotel and other property sold under the relevant mortgages. The applicant alleged that the first respondent had allowed its hotel business to degenerate through lack of proper management, care and maintenance, thereby reducing its saleability and value. He was also said to have failed to advertise and present the property in a proper and adequate manner prior to public auction. There were a number of other respects in which he was said to have failed to discharge his duty of care. 42 The claim against BPM Pty Ltd related to its alleged failure to act carefully and diligently in the provision of advice to the applicant pursuant to an oral agreement said to have been made between it and Mr Blakeley, as a director of the applicant. 43 Then it was alleged that the first respondent entered upon the applicant's lands and took possession of its property and caused it to be sold thereby converting it to his own use or to that of the mortgagee. The applicant claimed to have suffered loss and damages as a result. The second respondent was alleged to be liable jointly with the first respondent for that loss and damage. Both the first and second respondents, so the applicant pleaded, were said to have knowledge of the defect in the first respondent's appointment and thereby to have become constructive trustees for the applicant and liable to account to the applicant for all the proceeds of the sale. It was also alleged that the first respondent acted fraudulently in effecting that sale. This was based upon an allegation of his collusion with the third respondents pursuant to which he conspired to sell the hotel at a grossly undervalued price. The applicant claimed damages (including exemplary damages for fraud against the second defendant) against the first respondent, the second respondent and the third respondents, declarations, an account and interest. 44 On 21 December 1995 the applicant was wound up by order of the District Registrar of this Court. Mr Gary John Trevor of Messrs Ferrier Hodgson & Co was appointed liquidator. On 14 March 1997, the liquidator entered into a deed with Mr Blakeley by which he assigned to Mr Blakeley all of the applicant's rights in the action in the Supreme Court. This was done pursuant to a resolution of a meeting of creditors held on 5 September 1996 and a direction given by Lee J in this Court on 25 February 1997. 45 In the meantime, on 14 June 1996 an order was made by a Master that the applicant provide $75,000 as security for its costs in relation to its claim against the first respondent and the second respondent. $10,000 was to be paid within 30 days of service of the order upon the applicant and the balance upon entry for trial. The action was to be stayed if the applicant failed to pay either sum by the specified date. The applicant made no payments pursuant to that order. 46 On 3 June 1997, Mr Blakeley was substituted for the applicant as plaintiff in the action by order of a Master of the Supreme Court. Mr Blakeley applied for a variation of the orders for security for costs previously made, but that application was dismissed by Wheeler J on 2 February 1998. Mr Blakeley did not appeal against that order. 47 On 25 September 1998 Mr Blakeley obtained leave to discontinue the proceedings against the first respondent and the second respondent and was ordered to pay their costs of that action. On a date which does not appear from the papers (nor did the applicant inform us of the date) the applicant's claim against BPM Pty Ltd was dismissed by consent. 48 On 10 November 1998, Mr Blakeley filed a chamber summons in the discontinued proceedings seeking to reinstate them against the first respondent and the second respondent. That application was dismissed by Wheeler J on 18 November 1999.
Supreme Court of Western Australia Action No CIV 1314 of 1996 49 On 2 April 1996 Mr Blakeley commenced proceedings in the Supreme Court of Western Australia in his own name against BPM Pty Ltd, the first respondent, the second respondent and the third respondents. The claims made were similar to those made in Action No CIV 2236 of 1994. The defendants applied for summary disposition of the proceedings or for the statement of claim to be struck out. That application was never heard, but the action was discontinued as against BPM Pty Ltd, the first respondent and the second respondent on 8 July 1996. We were told that orders were subsequently made that the action be dismissed for want of prosecution and for failure to provide security for costs. We were also told that those orders were the subject matter of an appeal to the Full Court of the Supreme Court of Western Australia which was dismissed and that there is currently pending an application to the High Court of Australia for special leave to appeal from the Full Court's decision.
Supreme Court of Western Australia Action No CIV 1985 of 2000 50 On 27 July 2000, Mr Blakeley commenced new proceedings in the Supreme Court of Western Australia against the first respondent, the second respondent and the third respondents. Again the claims made were similar to those made in the earlier actions. On 12 January 2001, Templeman J ordered that the statement of claim in that action be struck out and that the action be dismissed. Mr Blakeley was ordered to pay the costs of the first respondent, the second respondent and the third respondents on a solicitor/client basis. He was refused leave to appeal against those orders. Nevertheless, a notice of appeal was filed against the orders of Templeman J and the appeal was heard on 12 June 2001. On 23 July 2001, the Full Court of the Supreme Court of Western Australia dismissed that appeal. The applicant applied to the High Court of Australia for special leave to appeal against the judgment of the Full Court. That application was dismissed on 24 October 2002 (since the hearing of this application).
Supreme Court of Western Australia Action No CIV 1256 of 2001 51 On 16 February 2001, on Mr Blakeley's application, he was granted leave by a Master to commence proceedings on behalf of the applicant purportedly under s 236 of the Australian Corporations and Securities Legislation (2000). One of the bases upon which Mr Blakeley had failed in action CIV 1985 of 2000 was that the first respondent, as receiver and manager, owed no duty to Mr Blakeley but rather to the applicant. 52 Following that grant of leave, Mr Blakeley commenced fresh proceedings in the name of the applicant in action CIV 1256 of 2001. The writ named the applicant as plaintiff and the first respondent, the second respondent and the third respondents as defendants. Once again the causes of action pleaded were substantially the same as in the three previous Supreme Court actions. 53 On 7 May 2001, Wheeler J ordered that the statement of claim be struck out and the action dismissed. Mr Blakeley was ordered to pay the costs of all of the defendants. Her Honour held that the statement of claim and the action were an abuse of the process of the Court, having regard to the previous proceedings. Its aim, she said, was: "… to avoid previous decisions of this Court in respect of identical matters by bringing a fresh action without the need to challenge the correctness of those previous decisions by way of appeal." 54 A notice of appeal to the Full Court of the Supreme Court of Western Australia was filed on 25 May 2001. At the hearing of this appeal, Mr Blakeley told us that the Full Court had heard that appeal about two weeks previously and had reserved judgment. After we reserved judgment in this matter, the solicitors for the first and second respondents forwarded to us a copy of the judgment and reasons for judgment of the Full Court of the Supreme Court of Western Australia in that appeal. The Full Court unanimously dismissed the appeal on the grounds that the proceedings both at first instance and on appeal had been irregularly commenced otherwise than by a solicitor, contrary to Order 4 rule 3(2) of the Rules of the Supreme Court (WA). Their Honours held that that requirement could not be waived. In a letter dated 23 September 2002 addressed to the associate to the presiding Judge in this matter, Mr Blakeley informed us that the Full Court's decision "… is being appealed to the High Court of Australia ...".
the present proceedings at first instance 55 On 23 November 2001 Mr Blakeley caused an application to be filed in this Court. The applicant was named as applicant. The respondents were the defendants in the various Supreme Court proceedings referred to above, save that BPM Pty Ltd is not a party to these proceedings. 56 The statement of claim filed in this application and the relief sought are in substance the same claims and relief sought in action CIV 2236 of 1994. There are also allegations that the respondents used financial oppression or engaged in unconscientious dealing to nullify that action. 57 On 30 January 2002, the solicitors for the first and second respondents filed a motion for summary dismissal of the application, under Order 20 of the Federal Court Rules, as disclosing no reasonable cause of action, as frivolous or vexatious or as an abuse of process. Alternatively, orders were sought for the statement of claim to be struck out under Order 11 or for the application to be stayed generally until solicitors were appointed by the applicant. At the time of the decision at first instance the third respondents had not been served.
The decision at first instance 58 The learned primary Judge set out in his reasons the procedural history of the matter. He observed that the present proceedings were nothing less than an attempt to re-open in this Court proceedings which have been instituted and had thus far failed in the Supreme Court of Western Australia. His Honour noted that it was apparent from the applicant's written submissions that he was seeking to avoid, by proceeding in this Court, the effect of the adverse decisions of the Supreme Court of Western Australia. Amongst other things, the applicant argued that the imposition of the security of costs order was unconscionable conduct. His Honour concluded: "In my opinion the application invokes the jurisdiction of this Court in order to circumvent or avoid the effect of decisions of the Supreme Court of Western Australia. As I explained to Mr Blakeley at the hearing of the motion to dismiss this application, the Court and the Supreme Court are both superior courts of co-ordinate jurisdiction. It is no part of the function of either court to review, expressly or by implication, decisions of the other in matters of which the other court is seized. The history of the proceedings in the Supreme Court make it plain that the present application is an abuse of the process of this Court. In so finding, I make no determination on the question whether the proceedings are time barred as contended by the respondents. I have no doubt, in any event, that the leave granted in the Supreme Court does not cover this action. In my opinion the application should be dismissed as an abuse of process. Mr Blakeley should pay the respondents' costs of the application." 59 Mr Blakeley filed lengthy written submissions on behalf of the applicant. He also made short oral submissions at the hearing of the appeal. It is not necessary to review to them in any detail. The submissions included a contention that the application was not an action to review, expressly or by implication, matters which have been heard by the Supreme Court of Western Australia but was, so it was submitted, "… an action to allow this matter to progress, by assessing appropriate security for costs, assess relief for unconscientious dealing/financial oppression which is in the public interest, and assess the statute of limitations".
my reasoning 60 It is well-established by the authorities that when considering whether to grant leave to appeal, the court normally has regard to two factors. They are, first, whether in all the circumstances the decision below is attended with sufficient doubt to warrant its reconsideration on appeal; and, secondly, whether substantial injustice would result if leave were refused, supposing the decision to be wrong: Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 400. 61 I have formed the clear view that the decision is not attended with any doubt. It is certainly not, in my opinion, attended with sufficient doubt to warrant its reconsideration on appeal. 62 Mr Blakeley acknowledged that the proceedings in respect of which the Full Court of the Supreme Court has recently delivered judgment are substantially the same as the claims which he seeks to agitate in these proceedings. He told us that if he were successful in that appeal, he would seek to transfer those proceedings to this Court. 63 The situation is that the applicant's identical claims have been dismissed by a Judge of the Supreme Court on 7 May 2001. The appeal from that decision has been decided on a procedural point. Nevertheless, in my view, those proceedings at first instance in that court were clearly an abuse of process. Similarly, in my opinion, it is equally clear that the applicant by seeking to litigate the same claims in this Court is engaging in an abuse of process. 64 It is not, in my view, necessary to explore the possible defect in the leave granted to Mr Blakeley on 16 February 2001 purportedly under s 236 of the Australian Corporations and Securities Legislation 2000. Steytler J, in the course of giving his reasons for dismissing the appeal from Wheeler J, referred to the fact that the proceedings which were the subject of the order granting leave were not identified as being a problem which he put to one side, and then referred to what his Honour considered to be a real question whether s 236 and s 237 of what is now the Corporations Act 2001 have any application to a company in liquidation. [The other members of the Full Court expressed no view on the point, but Malcolm CJ said that he was in entire agreement with the reasons published by Steytler J. Murray J agreed that for the reasons given by Steytler J the appeal was not competent and should be dismissed.] I do not think that this is an appropriate occasion to visit that question. I note that French J, in the passage set out above, had no doubt that the terms of the grant of leave did not extend to the application which was before him. 65 I would refuse the application for an extension of time on the basis that there is no arguable ground on which leave to appeal might be granted. The purported appeal should be struck out as incompetent. I would order the applicant and Mr Blakeley to pay the first and second respondents' costs of the appeal. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of Justice Carr.
APPLICATION FOR LEAVE TO APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN: HPM PTY LTD (IN LIQUIDATION) (ACN 008 679 481)
RESI STATEWIDE MORTGAGE CORPORATION (ACN 005 083 394)
ROBERT CLAUDE COOK, TERENCE CORNELIUS McMANUS, ROBERT HENRI DE BUF, PATRICIA ANNE DE BUF, REGINALD SARSFIELD FINN, ELIZABETH ROSE FINN, DONALD GEORGE LYSTER, LEONE BEATRICE LYSTER, JOHN SELSMARK, ROGER LLOYD GEORGE RICHARD-COOMBES, IDA ELEANOR RICHARD-COOMBES, GRAEME CAMPBELL REYNOLDS, LESLEY HANNAH REYNOLDS, JOSEPH COCI, HELEN JOY COCI, ERNEST RAMPELLINI, JENNIFER ANNE RAMPELLINI, PETER JOE CHITTENDEN, MICHAEL SKUBA, MICHAEL CYRIL HALPIN, GEORGE HUGH MARGETTS, GWENDOLINE MARY MARGETTS, TOLEEN NOMINEES PTY LTD, LAVIN NOMINEES PTY LTD, TUDOR COURT INVESTMENTS PTY LTD, MacDOUGALL PTY LTD and OREGON NOMINEES PTY LTD
RD NICHOLSON J: 66 I have had the benefit of reading in draft the reasons of Lee J and of Carr J. Those reasons make it unnecessary for me to restate the relevant facts. They reach differing conclusions on this application for leave to appeal (and, implicitly, for an extension of time) from the order of French J made on 6 March 2002 dismissing an application by the applicant. Thereby, French J allowed a motion to strike out the proceedings on the ground that they were an abuse of process. 67 The power to stay or dismiss a proceeding generally or a claim of relief in a proceeding on the ground that it is an abuse of process of the Court arises pursuant to O 20 r 2(1)(c) of the Federal Court Rules. In Hughes Motor Service Pty Ltd v Wang Computer Pty Ltd (1978) 35 FLR 346, at 355 Bowen CJ said: "It appears to me that justice and good sense require that there should so far as practicable be an end to litigation and that the law should strive against permitting multiplicity of proceedings in relation to similar issues." Although Bowen CJ was there addressing the issue of a stay, it is apparent that the reasoning is equally applicable in relation to the concept of abuse of process. 68 That reasoning was reflected in similar reasoning of Smithers J in Yooralla Sponsors Club v JABI Nominees Pty Ltd (1980) 49 FLR 86 at 89 where he said: "… in some sense the public interest may be involved in deciding whether two cases claiming the same damages and involving substantial issues of fact, which are the same in each case, should be allowed to proceed simultaneously in the State and federal systems of justice. This would certainly open the way to tactical manoeuvres in which the appearance might well be presented to the public of two court systems competing to see who determined the common facts first. It would be unfortunate if we adopted practices and procedures which facilitated this." In his reasoning Smithers J expressly relied upon the principles enunciated by Bowen CJ in Hughes at 355. 69 Of the power to stay or dismiss a proceeding as an abuse of process French J said in Sea Culture International v Scoles (1991) 32 FCR 275 at 279: "The court is empowered by O 20, r 2 to stay or dismiss a proceeding where it appears to the court that it is an abuse of its process. Even without the benefit of that rule there is little doubt that the court has an implied incidental power to control its own process and to prevent misuse of it. It is a power which ought to be very sparingly exercised and only in exceptional case: see Lawrance v Lord Norreys (1890) 15 App Cas 210 at 219, per Lord Herschell; Burton v Shire of Bairnsdale (1908) 7 CLR 76 at 95, per Isaacs J. The possible varieties of abuse of process are only limited by human ingenuity and the categories are not closed. An unmeritorious claim brought merely in order to put pressure on a respondent for commercial or other reasons would no doubt be treated as an abuse. Such a claim might also be attacked as frivolous or vexatious or as disclosing no reasonable cause of action. Those designations are not mutually exclusive. An attempt to litigate in the court a dispute or issue which has been resolved in earlier litigation in this or another court or tribunal may also, according to the circumstances, constitute an abuse of process even if not attracting the doctrines of res judicata or issue estoppel." He continued: "Underlying the power that courts have assumed to stay or dismiss proceedings for abuse of process is a policy of preventing waste of judicial resources and their use for purposes unrelated to the determination of genuine disputes. There is, in my opinion, another element to be considered and that is the necessity to maintain confidence in and respect for the authority of the courts. If a party in litigation in this Court makes a formal and public allegation by way of its pleading which is inconsistent with a formal and public allegation in another forum, then such an issue may arise." 70 It follows for me that the notion of "abuse of process", while dependent entirely upon the particular circumstances of the particular proceeding, is capable of being satisfied by the parallel character of proceedings in courts of coordinate jurisdiction. It is not necessary to satisfy the notion of abuse of process that there should have been a determination on the merits of the claims made in each of the parallel proceedings or that avoidance of orders in one of the proceedings is sought by institution of the other proceeding. Those will be relevant circumstances to the exercise of the discretion in relation to the dismissal of the proceeding but they will not be determinative factors. Nor does the qualification of the cause of action in the second coordinate jurisdiction as a reasonable cause of action (O 20 r 2(1)(a)) save the proceeding from constituting an abuse of process if factors otherwise make it such. 71 French J found in the present proceeding that there was an abuse of process because it was no part of the function of either this Court or the Supreme Court to review, expressly or by implication, decisions of the other in matters of which the other court was seized. In my view that foundation of his decision is supported by the above authority. 72 Consequently I do not consider the decision below is attended with sufficient doubt to warrant its reconsideration on appeal and nor do I consider that substantial injustice would result if leave were refused, supposing the decision to be wrong: Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 400. 73 If follows, therefore, that I agree with the conclusion reached by Carr J and would refuse the application for an extension of time on the basis there is no arguable ground on which leave to appeal might properly be granted. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice RD Nicholson
H T J Blakeley appeared for the applicant by leave.
Counsel for the 1st & 2nd Respondents: S K Shepherd
Solicitors for the 1st & 2nd Respondents: Mallesons Stephen Jaques
Counsel for the 3rd Respondents: A C McIntosh
Solicitor for the 3rd Respondents: Craig McIntosh
Date of Hearing: 19 August 2002
Date of Judgment: 9 December 2002
HPM Pty Ltd
Fear
REASONS FOR JUDGMENT LEE J: 1 The applicant, a company in respect of which an order for winding-up was made by this Court on 21 December 1995, seeks to appeal from the order of a Judge of this Court (HPM Pty Ltd v Fear [2002] FCA 202) that proceedings instituted by the applicant on 23 November 2001 against the first respondent ("Fear"), the second respondent ("the mortgagee's successor") and the third respondents ("the owners") be dismissed "as an abuse of process". 2 Although, in practical terms the order of the learned primary Judge terminated the applicant's attempt by a proceeding in this Court to obtain orders that the respondents compensate the applicant for damage the applicant claimed to have suffered by reason of alleged wrongs committed by the respondents, the dismissal of the proceeding did not finally determine the rights of parties to that proceeding. Accordingly the orders made by his Honour should be treated as interlocutory and not final. (See: Licul v Corney (1976) 8 ALR 437; Carr v Finance Corporation of Australia Limited (No 1) (1981) 147 CLR 246, 248; Brouwer v Titan Corporation Ltd (1997) 73 FCR 241, 242; Wilson v Official Trustee in Bankruptcy [2000] FCA 304 (Full Court) at [18]; Palm Springs Ltd v Darling (2002) 192 ALR 763 at [5].) 3 A "Notice of Appeal" was lodged by the applicant within the time provided by O 52 r 15 of the Federal Court Rules ("the Rules") but no application for leave to appeal from an interlocutory order was filed within the time provided in O 52 r 10(2)(b). The "Notice of Appeal" was taken to include such an application and, therefore, the extension of time sought by the applicant was until the filing of the "Notice of Appeal". An extension of time to bring an application for leave to appeal would normally be granted in the circumstances described, subject to it being demonstrated that there was an arguable case that the decision below involved error and that the applicant would suffer prejudice if leave were refused. 4 The applicant was not represented by a solicitor at either the hearing before the learned primary Judge or at the hearing of this application. On each occasion, pursuant to O 4 r 14(2) of the Rules, leave was granted to Mr Blakeley, as major shareholder and managing director of the applicant, to appear on behalf of the applicant.
(1976) 8 ALR 437
(1981) 147 CLR 246
(1997) 73 FCR 241
(2002) 192 ALR 763
(1991) 33 FCR 397
(1978) 35 FLR 346
(1980) 49 FLR 86
(1991) 32 FCR 275
(1908) 7 CLR 76
Application for extension of time to apply for leave to appeal dismissed; applicant and Mr Blakeley ordered to pay costs of first and second respondents (majority). Lee J dissenting would have extended time and granted leave and allowed the appeal, setting aside the dismissal order [34], [65].