In the matter of Combined Projects (Arncliffe) Pty Ltd [2019] NSWSC 1070

Background

1. There are two sets of proceedings in which the protagonists to the present application are involved: the Broadway proceedings (2016/00282940) and the Arncliffe proceedings (2017/00180712). The present application concerns only the second set of proceedings. The general background to the disputes between the parties has been outlined in my earlier interlocutory decision relating to subpoenas that had been issued in the first set of proceedings (see Broadway Plaza Investments Pty Ltd v Broadway Plaza Pty Ltd [2019] NSWSC 410) (and is summarised and updated in a second judgment to be delivered today - Broadway Plaza Investments v Broadway Plaza Pty Ltd; In the matter of Combined Projects (Arncliffe) Pty Ltd [2019] NSWSC 1082). I do not need here to repeat much of that background. Suffice it to note briefly, as follows, the history to the Arncliffe proceedings which forms the procedural context in which objection to the present application is taken.
2. The Arncliffe proceedings were commenced on 16 June 2017 by Sayour Holdings, by originating process in the Corporations List seeking, inter alia, orders pursuant to s 247A of the Corporations Act 2001 (Cth) (Corporations Act) for access to the books and records of the first defendant (Combined Projects Arncliffe). (Hence the description of the Arncliffe proceedings in some of the submissions as the 247A proceedings.) The application for access to the company's books and records was made on the basis that Sayour Holdings was (as the ASIC register records) a 50% shareholder of Combined Projects Arncliffe. The director of Sayour Holdings is Mr Moustafa Sayour. As noted above, the second defendant (Deiri Nominees) is also a shareholder of Combined Projects Arncliffe and the third defendant (Mr Deiri) is the sole director of Deiri Nominees. As its name indicates, Combined Projects Arncliffe was involved in a property development in Arncliffe (the Arncliffe project). Mr Moustafa Sayour's late son, Jamil Sayour, was involved in dealings with Mr Deiri in relation to the Arncliffe project. The precise nature of those dealings is in dispute. The Arncliffe proceedings also include claims for relief against oppression.
3. After Jamil Sayour's death in late 2015, Sayour Holdings made various requests in 2016 for the provision of documentation by Combined Projects Arncliffe. Those requests were initially denied but in 2017 and 2018 Combined Projects Arncliffe did voluntarily produce documents (indeed it is said by Mr Deiri and Deiri Nominees that there was extensive production of documents) to Sayour Holdings. (Sayour Holdings says that the production of that (and other later) documentation is what ultimately led to the formulation of the first cross-claim.)
4. On 21 December 2018, Mr Deiri and Deiri Nominees filed an interlocutory process seeking to defer the final hearing and determination of Sayour Holding's claim in the Arncliffe proceedings until the hearing of the Broadway proceedings; and to have those proceedings heard together. This was initially opposed by Sayour Holdings (it says on the basis that, inter alia, it would cause substantial delay). That application came before Parker J, sitting in the Corporations List, in February 2019. Orders were made by consent on 28 February 2019, inter alia listing the hearing of both matters together for six weeks commencing on 4 November 2019 (and for evidence in the one proceeding to be evidence in the other proceeding). Sayour Holdings says that it was "common ground" on that occasion that the derivative proceedings that had by then been foreshadowed by it were to be included in that listing (including a dispute as to payments described as a "site identification fee" made by Combined Projects Arncliffe to two companies not then joined as parties to the Arncliffe proceedings - Konstructions Pty Ltd (Konstructions) and Zapphire Investments Pty Ltd (Zapphire)).
5. Also on 28 February 2019, orders were made by consent in favour of Sayour Holdings, for access by it to all the records of Combined Projects Arncliffe (with the exception of properly privileged matter).
6. These orders were made in the following terms: By consent, the Court orders: 1. The first defendant shall on reasonable notice and during business hours give the plaintiff access to all of the books and records of the first defendant, save for any such documents that are properly the subject of a claim of legal professional privilege, and shall permit the plaintiff to inspect, and to make and take copies of, such documents, provided that any reasonable expenses of the first defendant of the plaintiff's inspection and copying of documents shall be borne by the plaintiff. 2. Without admissions, and until further order, that the First Defendant be restrained from paying, and the Second Defendant and Third Defendant from causing or procuring the First Defendant to pay: (a) unless otherwise agreed in writing by the Plaintiff, any commissions other than commissions on sales of properties that are payable pursuant to bona fide written arm's length commission agreements; or (b) any other amount to or for or at the direction of: (i) the Second Defendant, or (ii) the Third Defendant, or (c) any entity controlled by the Third Defendant, including Deicorp Constructions (NSW) Pty Ltd ACN 138 180 337, Deicorp Pty Ltd ACN 090 799 885, Deicorp Construction Pty Ltd ACN 117 191 885 and Deicorp Projects (Arncliffe) Pty Ltd ACN 610 030 414, without at least 14 days' prior notice to the Plaintiff by its solicitors in writing of the amount, purpose and payee of the proposed payment and particulars of the liability proposed to be discharged thereby, with copies of any written contract, loan agreement and or invoice relied upon as the basis for such liability. 3. Notes that the Plaintiff gives to the Court the usual undertaking as to damages in respect of Order 2.
7. The second and third defendants (Deiri Nominees and Mr Deiri) did not at that time put in issue that Sayour Holdings was a shareholder in (and hence member of) Combined Projects Arncliffe. They say, on the present application, that no issue as to the distribution of entitlements of shareholders was relevant to the relief that Sayour Holdings there sought.
8. On 24 April 2019, by which time I had assumed the case management of both sets of proceedings, directions were made for the defendants in the Arncliffe proceedings to give notice to Sayour Holdings by 8 May 2019 as to whether they opposed leave being granted to Sayour Holdings under s 237 of the Corporations Act to bring proceedings on behalf of Combined Projects Arncliffe. As it transpired, they did not oppose such leave (for reasons, it is said, of pragmatism).
9. On 9 May 2019, I made orders by consent as follows: 1. By 4pm on 10 May the Plaintiff in the name of the first defendant file a statement of cross-claim in this proceeding in the form provided to the defendants on 7-9 May 2019. 2. The time for service of the statement of cross-claim be abridged to 5pm on Monday, 13 May 2019. 3. The statement of cross-claim be returnable for directions before Ward CJ in Eq on Thursday, 16 May 2019 at 11.30am at which time the Court will hear argument as to the appropriate undertakings (if any) to be given in relation to the bringing of the statement of claim in the name of the first defendant and the form of the statement of cross-claim.
10. There was then a notation to the orders in the following terms: 4. Orders 1 and 2 are made without prejudice to the defendants to contend that leave to bring the proceedings on behalf of the first defendant should not be granted without the appropriate undertakings and in the form of the statement of cross-claim which has been filed.
11. On 10 May 2019, pursuant to the leave so granted, Sayour Holdings filed (in the name of Combined Projects Arncliffe) an amended statement of first cross-claim against Mr Deiri (as first cross-defendant) and Deiri Nominees (as second cross-defendant). Also joined as cross-defendants to the first cross-claim were the following entities: Konstructions (the third cross-defendant); Zapphire (the fourth cross-defendant); Deicorp Properties Pty Ltd (Deicorp Properties) (the fifth cross-defendant); and Deicorp Construction Pty Ltd (Deicorp Construction) (the sixth cross-defendant). Each of those additional cross-defendants is separately represented in the Arncliffe proceedings. Deicorp Properties and Deicorp Construction are both properties controlled by and associated with Mr Deiri.
12. The first cross-claim seeks to impugn a number of transactions made by Combined Projects Arncliffe and seeks declaratory relief and other orders. Claims are made against Mr Deiri of breach of fiduciary and equitable duties, as well as breach of statutory duties owed to Combined Projects Arncliffe in his capacity as an officer of that company. Relief is sought against Mr Deiri and his corporate entities for some $42 million. The claims made against Konstructions and Zapphire are limited to the particular impugned payments made to them (of a lesser, but not inconsequential, amount).
13. On 17 June 2019, directions were made for Deiri Nominees and Mr Deiri to file and serve any defence to the first cross-claim, and any cross-claim, by 24 June 2019. They did not comply with those directions. (Had they done so, the question of leave being necessary for the filing of the proposed pleadings would not necessarily have arisen; or at least would not have arisen in the present context, noting that Sayour Holdings here submits that leave is necessary in any event on the basis that the proposed pleadings seek to withdraw admissions that have earlier been made - see further below.)
14. On 3 July 2019, Mr Deiri and Deiri Nominees served on Sayour Holdings a proposed defence and a third cross-claim (those being the pleadings the subject of the present application) (see Exhibit 1 on the present application).
15. In their proposed defence, among other things, allegations are made as to the formation and control of Combined Projects Arncliffe (see from [2]). In particular, it is sought to be alleged that Deiri Nominees was the sole shareholder of Combined Projects Arncliffe from at least 30 January 2014 up to and including April 2018 (see at [3(a)]); and that no shares in Combined Projects Arncliffe were validly issued to Sayour Holdings and it was never a member of Combined Projects Arncliffe (see at [6(i)(ii)], which appears to contain a typographical error at [6(i)(iii)]). It is further sought to be alleged that at all material times during the period from 16 December 2013 to date, Sayour Holdings has had no directors (see [109]ff).
16. In the alternative, it is sought to be alleged (see from [126]ff) that Sayour Holdings is bound by an agreement (the Arncliffe Agreement) under which (as varied on 8 January 2015 and again in late September or early October 2015) Sayour Holdings would receive no greater share of any profits or distributions from Combined Projects Arncliffe than its proportionate share of financial contributions, relative to the total financial contributions made by shareholders to the company, plus the return of any financial contributions it made to the company (see, in particular, [133]).
17. The proposed third cross-claim by Deiri Nominees and Mr Deiri against Sayour Holdings, its directors (Mr Moustafa Sayour and Ms Yesmine Sayour, Moustafa's daughter and the late Jamil Sayour's sister), and Combined Projects Arncliffe, makes similar allegations as to the membership of the company and the alleged Arncliffe Agreement.

Summary

1. As adverted to above, Sayour Holdings opposes the filing of the proposed defence and third cross-claim. In summary, it contends that the pleadings: are precluded by way of issue estoppel or Anshun estoppel; involve withdrawal of admissions made in pleadings filed in relation to the s 247A application; would cause prejudice by wasted costs; lack bona fides; and are an abuse of process.
2. Deiri Nominees and Mr Deiri maintain that Sayour Holdings' objections are unfounded. They say that there is no issue estoppel or Anshun estoppel; that they are not required to withdraw any admissions made in the s 247A proceedings in defending the new claims pleaded in the first cross-claim; and that there can be no prejudice to Sayour Holdings (since it would have needed to prepare the first cross-claim in order to seek leave to file it in any event and, if the proposed defence and cross-claim had been raised earlier, the question of leave would have been deferred to the final hearing).
3. For the reasons set out below, I consider that leave should be granted for the filing of the proposed defence to the first cross-claim and the third cross-claim and I will make directions for the time frame within which that is to occur (noting that the respective sets of proceedings are listed for hearing before Slattery J for six weeks commencing on 4 November 2019). Costs should follow the event.

The proposed third cross-claim

1. Before turning to the respective submissions, some further detail is relevantly to be noted in relation to the proposed pleadings.
2. The relief proposed to be sought in the third cross-claim is based on a primary case (Part A) in which declarations and orders are sought as to the membership and directorship of each of Sayour Holdings (prayers 1 to 9) and Combined Projects Arncliffe (prayers 10 to 13); and an alternative case (Part B), predicated on the basis (which is disputed by Deiri Nominees and Mr Deiri) that Jamil Sayour did have authority to act for and on behalf of Sayour Holdings in relation to the Arncliffe development, in which declaratory relief is sought in relation to the alleged Arncliffe Agreement (prayers 14 to 18); together with other relief (Part C) predicated on a finding that the share issue resolutions in Combined Projects Arncliffe were invalid (prayers 19 to 21).
3. As part of the relief sought on the primary case there propounded, an order is sought that the leave granted on 9 May 2019 to Sayour Holdings to file a statement of cross-claim in this proceeding in the name of Combined Projects Arncliffe be withdrawn nunc pro tunc, on the basis that Sayour Holdings cannot act, and never authorised or consented to the filing of such a claim (prayer 8) and an order dismissing the first further amended originating process and the second further amended statement of claim filed in these proceedings on 10 December 2018 on the same basis (prayer 9). (Sayour Holdings maintains that this is, in effect, a retainer challenge after the making of final orders for the bringing of the first cross-claim.)
4. In relation to the relief sought in respect of the shareholding of Sayour Holdings in Combined Projects Arncliffe (prayers 10 to 3), this includes a declaration sought (prayer 13) that the agreement purportedly entered into by Jamil Sayour on 29 January 2014 and purported variations to that agreement on 8 January 2015 and late September or early October 2015, allegedly agreed to by Jamil Sayour for and on behalf of Sayour Holdings, did not give rise to any valid or enforceable agreement and were of no legal effect. Alternatively, if it is found that Jamil Sayour did have authority to act for and on behalf of Sayour Holdings in relation to the Arncliffe development (the alternative case), the relief sought includes declarations as to the alleged Arncliffe Agreement, as varied (see prayers 16 to 18); and, in particular, that Sayour Holdings is entitled to no greater than 5% of the total amount available for distribution from Combined Projects Arncliffe (representing its 5.1% contribution to the total moneys contributed to Combined Projects Arncliffe) or in the alternative, that Sayour Holdings holds its entire shareholding in Combined Projects Arncliffe, or alternatively 89.8% of the shares it holds in Combined Projects Arncliffe, on trust for Deiri Nominees (prayer 18).

Sayour Holdings' submissions

1. Turning to the parties' respective submissions on the present application, it is convenient first to summarise the submissions made by Sayour Holdings in opposition to the grant of the leave sought by Deiri Nominees and Mr Deiri.
2. Sayour Holdings submits at the outset that the proposed third cross-claim would give effect by way of relief to positions that are also expressed as a basis of defence and that, as adverted to above, because each document involves the withdrawal of admissions made for the purpose of these proceedings those documents cannot be filed without leave (reference being made to Commonwealth Bank of Australia v Xiong; Landmax Developments Pty Ltd v Commonwealth Bank of Australia [2010] NSWSC 1518). (Leave, or an extension of time, for the filing of the pleadings is necessary in any event as there was non-compliance with the orders made on 17 June 2019.) Deiri Nominees and Mr Deiri cavil with the proposition that any withdrawal of admissions is necessary.
3. The position of Sayour Holdings, in essence is that the proposed pleadings would amount to an abuse of process. It is said that they: are inconsistent with other pleadings of the same parties; challenge the basis of final orders; seek without a proper basis to withdraw admissions and to depart from concessions repeatedly made; are seriously and unfairly burdensome and prejudicial; lack bona fides; and are not supported by a sufficient explanation to justify the indulgence here sought.
4. In particular, it is submitted that the proposed pleadings seek impermissibly to traverse: first, the issue as to Sayour Holdings' membership of Combined Projects Arncliffe, which was the necessary basis of final consent orders made on two occasions (this being raised by reference to the principle of res judicata or issue estoppel); and, second, the underlying issue as to the control of Sayour Holdings (said essentially to be a retainer challenge) that it is said ought to have been raised and decided before those final orders were made (here invoking the principles of Anshun estoppel and noting that these proceedings have been on foot for two years and have been fixed for hearing later this year).
5. It is submitted that the points now sought to be raised would involve a "collateral attack" on the grant of leave for the first cross-claim to be brought; and that the result of permitting the filing of the proposed pleadings is that the Court might proceed to hear the first cross-claim (and find its allegations to be made out), but might nonetheless dismiss it for want of authority to bring it; an outcome that it is said would be highly prejudicial to the plaintiff and to Combined Projects Arncliffe, both in terms of the work already undertaken to formulate the claim and the effort already expended in obtaining the s 247A relief. It is submitted that if this point was to have been taken then it should have been taken at an early stage.

Issue estoppel

1. Insofar as Sayour Holdings raises a contention of res judicata (namely, that the pleadings sought to be filed raise the issue of whether or not it was a shareholder of Combined Projects Arncliffe and, because that issue was necessary to the basis of final consent orders made on two occasions, doing so is precluded), Deiri Nominees and Mr Deiri (while accepting that consent orders can give rise to issue estoppel), maintain that the relevant question is what, if any, issues were "necessarily decided" by the consent order (referring to Isaacs v Ocean Accident and Guarantee Corp Ltd [1957] 58 SR (NSW) 69 (Isaacs) at 75 per Street CJ and Roper CJ in Eq). They note that, in this regard, reference may be made to the terms of the order as well as to the pleadings or other material showing the issues raised and decided (referring to Trustees for the Roman Catholic Church for the Diocese of Bathurst v Mine [2016] NSWCA 213 at [23] (per Meagher JA, Leeming and Simpson JJA agreeing, citing Isaacs).
2. As to the first consent order relied upon by Sayour Holdings (the order made by Parker J on 28 February 2019 involving access to documents), it is submitted that (although Sayour Holdings had commenced proceedings seeking relief under s 247A of the Corporations Act), contrary to Sayour Holdings' submissions, Parker J did not make "a s 247A order" (see the orders extracted above at [7]).
3. It is noted that the order made by Parker J was not expressed to be pursuant to s 247A of the Corporations Act; that there was no hearing as to whether or not the requirements of s 247A were satisfied; and that Parker J did not make any findings in that regard. It is said that the consent order merely reflected a resolution of the dispute between the parties. Reference is made to what was said by Austin J in Glazier v Australian Men's Health (No.2) [2001] NSWSC 6 at [73], namely that: ... the record only shows that the defendants consented to the orders, and there is nothing to indicate that they consented to any aspect of the plaintiff's case. It is not appropriate to look behind the orders and construct a chain of implied consents to various parts of the plaintiff's evidence and submissions.
4. Deiri Nominees and Mr Deiri say that the approach taken by them in this regard was "a pragmatic one to resolve the production issue", referring to Barnden v Zulian; Barnden v Commissioner of Taxation [2018] NSWSC 1980 at [43], where Parker J said: In my view, the settlement of interlocutory applications by the making of a consent order should be encouraged. Sometimes that may lead to a point, which could otherwise have been deployed, being shelved. If that means that at a later stage the point may be raised and have to be dealt with, so be it. The Court should be slow to adopt an approach which would lead to arguments that parties are fettered in the line they can take in procedural applications because of their consent to earlier procedural orders. Such an approach would only increase disputation and costs, and reduce the flexibility which is an important element of modern case management.

Anshun estoppel

1. As to the contention by Sayour Holdings that the issues as to whether Mr Sayour is a shareholder and director of Sayour Holdings and whether Sayour Holdings is a shareholder of Arncliffe ought to have been raised and decided before the two consent orders were made (and hence the pleadings sought to be filed are precluded by Anshun estoppel), Deiri Nominees and Mr Deiri note that the relevant inquiry when Anshun estoppel is invoked is whether the matter relied on is so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it (referring to Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 602; [1981] HCA 45 - Gibbs CJ, Mason J and Aickin J (Anshun)). It is noted that that analysis "is not to be made mechanistically, but rather there is a value judgment to be made referable to the proper conduct of modern litigation" (referring to Champerslife Pty Ltd v Manojlovski (2010) 75 NSWLR 245; [2010] NSWCA 33 (Champerslife v Manojlovski) at [3] per Allsop P, as his Honour then was).
2. Deiri Nominees and Mr Deiri say that, in the present case, proceedings were brought by Sayour Holdings for access to the books and records of Combined Projects Arncliffe, and for the appointment of a person to its board; and that, in those circumstances, it was not unreasonable for the defendants not to have put in issue Sayour Holdings' membership of Arncliffe or Sayour Holdings' membership and directorship. It is said that, in so doing, the scope of the dispute was minimised. Reference is made to the observation of Gibbs CJ, Mason and Aickin JJ in Anshun at 600 that "[to] require that the defendant always raise his cross-claim or set-off at the first available time could cause great inconvenience". It is submitted (and I agree) that it would also undermine the overriding purpose under s 56 of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act) if parties were "required to raise or dispute every issue in every case".
3. Deiri Nominees and Mr Deiri say that there is now a very different situation in that Deiri Nominees and Mr Deiri are presently being sued in Combined Projects Arncliffe's name for some $42 million. It is submitted that in such a case it is reasonable that all legal and factual defences available to them would be raised, including those in the proposed defence and third cross-claim. It is noted that, in Anshun, Gibbs CJ, Mason and Aickin JJ said at 603: there are a variety of circumstances ... [in which] a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings e.g. expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few.

Allegations of "bad faith"

1. Insofar as Sayour Holdings contends that the pleadings sought to be filed are "lacking in bona fides" because the case sought to be advanced concerning the Arncliffe Agreement pleaded is "strange" and "preposterous", Deiri Nominees and Mr Deiri say (and, again, I agree) that this contention amounts to no more than an "emphatic assertion about the merits of the case", and that the merits are "a matter for trial".
2. It is noted that Sayour Holdings makes no submission that there is no reasonable defence or cause of action disclosed in the proposed defence and third cross-claim; and it is submitted that nor could Sayour Holdings reasonably do so, since such a contention would fail to meet the threshold identified in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129-130; [1964] HCA 69 (Barwick CJ); reference also here being made to Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 at [57]. It is submitted that the Court would be particularly cautious in accepting such a contention (and the other objections raised by Sayour Holdings) where to do so would effectively involve a summary disposal of the defence and third cross-claim, noting that in Spencer v Commonwealth (2010) 241 CLR 118; [2010] HCA 28 at [24], French CJ and Gummow J said: The exercise of powers to summarily terminate proceedings must always be attended with caution. That is so whether such disposition is sought on the basis that the pleadings fail to disclose a reasonable cause of action or on the basis that the action is frivolous or vexatious or an abuse of process.
3. It is further said that there is no requirement for Mr Deiri to swear an affidavit to persuade the Court of his bona fides; that the pleaded claims are clearly arguable; and that if Sayour Holdings wishes to contend that the pleadings are brought in bad faith, it bears that onus. Deiri Nominees and Mr Deiri submit that the reliance placed by Sayour Holdings on Batiste v Gilmour-Latham at [28] is misplaced, in that that case involved an application to set aside a default judgment and has no bearing on the present circumstances.

Withdrawal of admissions

1. Finally, as to the complaint that the pleadings sought to be filed would involve departure from "express formal admissions on the pleadings that Sayour Holdings is a member of Arncliffe and that Moustafa Sayour is a member and director of Sayour Holdings", and that no leave has been sought to withdraw such admissions under r 12.6 of the UCPR, Deiri Nominees and Mr Deiri disavow any intention to seek to withdraw any admissions. They say that they do not need to do so because there is no rule precluding them from taking a different position in relation to the membership of Combined Projects Arncliffe or Sayour Holdings in different pleadings or proceedings.
2. It is submitted that there is ordinarily no reason why a party must admit a fact in one pleading or proceeding and maintain the same admission in a wholly different pleading or proceeding.
3. Moreover, Deiri Nominees and Mr Deiri say that the first cross-claim, the defence to it and the third cross-claim are in substance part of a separate proceeding to the s 247A proceeding. It is submitted that the fact that the proceedings have been allocated the same proceeding number "is a happenstance because they have been brought by cross-claim". It is submitted that ordinarily, when leave is granted to commence a derivative claim under s 237, fresh proceedings are commenced; and that in this case, the first cross-claim was brought by cross-claim in the same proceedings because the proceedings had been set down for hearing commencing November 2019, together with the Broadway Proceedings. They argue that the proceeding brought by the first cross-claim in the name of Combined Projects Arncliffe, should properly be considered and treated as separate proceedings to the s 247A proceedings.
4. Deiri Nominees and Mr Deiri contend that it is not an abuse of process for them to take a different position in pleadings in relation to the derivative action against them for some $42 million, in circumstances where the earlier s 247A proceedings involved a fundamentally different set of claims, in different pleadings, about access to documents and the board of Combined Projects Arncliffe.

Res judicata or issue estoppel and Anshun estoppel

1. The principles relating to res judicata or issue estoppel and Anshun estoppel have been set out in numerous authorities and are well known. (See, for example, the explanation by Diplock LJ in Thoday v Thoday [1964] 1 All ER 341 at 351-352; [1964] 2 WLR 371 of the concept of issue estoppel as a species of estoppel res judicatam, and the principle underlying Anshun estoppel, as articulated by Sir Wigram VC in Henderson v Henderson (1843) 3 Hare 100 at 115.)
2. For issue estoppel, the principle as explained by Dixon J in Blair v Curran (1939) 62 CLR 464 at 531-532; [1939] HCA 23 (cited recently by Leeming and White JJA at [8] in Williamson v Elders Rural Services Australia Ltd [2019] NSWCA 137) is that: A judicial determination directly involving an issue of fact or of law disposes once [and] for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment … necessarily established as the legal foundation or a justification of its conclusion …
3. In Champerslife v Manojlovski at [106], Handley AJA said: The test for an issue estoppel or a cause of action estoppel is objective. For issue estoppel it is whether the precise question of fact or law sought to be litigated in the later proceedings was decided in the earlier as a fundamental basis for the decision. For cause of action estoppel it is whether the cause of action in the later proceedings is in substance the same as that litigated to judgment in the former.
4. Writing extra-judicially in "Res Judicata: General Principles and Recent Developments" ((1999) 18 Aust Bar Rev 214), Handley AJA, as his Honour then was, noted (at 216) that the doctrine of issue estoppel extends to issues that were assumed or conceded in the prior litigation.
5. As to Anshun estoppel, as mentioned above, in Anshun at 602-3 Gibbs CJ, Mason and Aickin JJ said: … there will be no estoppel unless it appears that the matter relied upon … was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a [matter] if, having regard to the nature of the plaintiff's 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 e.g. expense, importance of a particular issue, motives extraneous to the actual litigation, to mention but a few.

Withdrawal of admissions/adoption of inconsistent positions

1. Turning then to the question whether the proposed pleadings would require the withdrawal of admissions, the matters the subject of express admissions are as to Sayour Holdings being a member of Combined Projects Arncliffe (i.e., see at [3]-[4] of the existing defences, where it is admitted that Sayour Holdings is the registered holder of shares in Combined Projects Arncliffe and has been a 50% shareholder in that company since the day of its incorporation - 29 January 2014). (The defendants denied the allegation that "at all times from 21 August 2014 until his death, Jamil Sayour was also a director of the plaintiff" (see [270] of the existing defences)). Sayour Holdings also submits, as referred to earlier, that inherent in the consent to the grant of leave for the filing of the first cross-claim on 9 May 2019 (subject only to the express reservations that were made at the time on a limited basis) there was express acceptance (by Deiri Nominees and Mr Deiri) that the first cross-claim was a reasonable claim and an implied acceptance by them that it was in the interest of Combined Projects Arncliffe to bring it.
2. Thus it appears to be said that there is an implied admission (based on the status of membership of the company being a necessary predicate for the making of orders for access to books and records pursuant to s 247A or for the grant of leave to bring derivative proceedings) as well as an express admission as to the status of Sayour Holdings as a member of Combined Projects Arncliffe. It is relevant here to note the definition of 'admission' in the Dictionary to the Evidence Act 1995 (NSW) (see also the discussion by the Australian Law Reform Commission (ALRC) (ALRC Report 38, Appendix C at [19]) and Stephen Odgers, Uniform Evidence Law (14th edn, 2019, Thomson Reuters) at [EA.81.60]).
3. There is also an issue as to inconsistency of pleading in relation to the reliance or otherwise to be placed by Deiri Nominees and Mr Deiri on the alleged Arncliffe Agreement and/or the alleged variations thereof.
4. As to the express admission of Sayour Holdings' status as a shareholder, there may be an issue as to whether this goes further than an admission as to what appears on the ASIC register (and has appeared on the ASIC register since incorporation of the company) as opposed to whether the entries on the ASIC register were validly recorded at the time. As to the question of any withdrawal of the admission (though, as Sayour Holdings notes, no such application is here made), there are said to be two competing policies at least in relation to the withdrawal of formal admissions (first, that an admission should not be permitted easily to be withdrawn, so as to make the procedure for formal admissions meaningless, but, second, on the other hand not to discourage parties from making admissions out of fear that once given they cannot be withdrawn - see Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738 (Panfida Foods) per Rogers CJ). In McFadden v Snow (1952) 69 WN (NSW) 8, Kinsella J said: The question of a party's right to withdraw an admission was discussed in Ell v Hunter District Water Supply & Sewerage Board. Although in that case the court was concerned with admissions of fact made pursuant to the District Courts Act 1912, and rules thereunder, its decision was based not upon the interpretation of that Act and the rules but on general principles which are to be applied at the discretion of the tribunal according to the facts of each case in order to do substantial justice between the parties. Street CJ, after citing from a number of cases, including the following passage from Bowen LJ in Cropper v Smith: "Speaking for myself, and in conformity with what I have heard laid down by the other division of the Court of Appeal and by myself as a member of it, I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or of grace", proceeded at 441: - "We are not told how it was that this admission came to be made, or, if a mistake was made, why it was that this was not discovered sooner, but there can, of course, be no question of bad faith or anything of that kind in the matter … Is there any reason therefore why it should not be allowed to repair the error which it made? I can see none. The mistake has not brought about any alteration in the position of the plaintiffs, which will prevent them from getting justice done, and any injury that they may have sustained by reason of it can be compensated for by costs. I think therefore that the Board should be allowed to withdraw its admissions …" [footnotes omitted]

Other complaints

1. Insofar as complaint is made as to lack of bona fides in the raising of particular arguments at this stage of the proceedings or as to the merits of the allegations here sought to be made, those are matters to be ventilated at the final hearing. There is certainly no basis on which at an interlocutory stage I could conclude that the proposed pleadings are not propounded on a bona fide basis, whatever their ultimate merits might be.
2. As to the complaint that Mr Deiri has filed no affidavit deposing to the circumstances in which these allegations are now being raised or as to why they were not raised before, or as to why leave or an extension of time is sought for the filing of the proposed pleadings, and reliance is placed on what was said in Aon Risk v ANU by the High Court, it must here be remembered that the delay in the filing of the proposed pleadings (having regard to the time at which the proposed pleadings were served) was then only a matter of days.
3. In Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303; [2013] HCA 46, in a dispute as to the inadvertent disclosure of documents, the High Court considered what had been said earlier in Aon v ANU, noting that the decision in Aon v ANU (concerned with the relevant court rules in the ACT as they applied to amendments to pleadings) confirmed as correct an approach to interlocutory proceedings which has regard to the wider objects of the administration of justice. The High Court there emphasised that the dictates of justice referred to in s 58 of the Civil Procedure Act require that, in determining what directions or orders to make in the conduct of the proceedings, regard is to be had in the first place to how the overriding purpose of the Civil Procedure Act can be furthered, together with other relevant matters, including those referred to in s 58(2).
4. In the present case, the complexity of the two sets of proceedings (i.e. both the Arncliffe and the Broadway proceedings) derives in no little measure from the expansion of the allegations raised by Sayour Holdings itself. I say this without criticism of Sayour Holdings (which was not privy at the outset to the extensive documentation which has now been produced in relation to the dealings between Mr Deiri and others in relation to the respective property developments and Jamil Sayour) but simply to note that the ambit of the proceedings has to some extent been a moveable feast. I am not persuaded in those circumstances that Sayour Holdings can assume the moral high ground in terms of additions to the pleadings or the scope of the matters to be determined in the final hearing.

Orders

1. For the above reasons, I make the following orders: 1. Grant leave to the first and second cross-defendants to the first cross-claim in these proceedings to file their defence dated 3 July 2019 and to file their proposed third cross-claim of the same date. 2. Direct that the first and second cross-defendants to the first cross-claim in these proceedings file the said pleadings within two business days of the making of these orders and file and serve any additional evidence on which reliance is to be placed for the purposes of the third cross-claim within seven days of the making of these orders. 3. Direct the cross-claimant to the first cross-claim to file and serve within 14 days any reply to the first and second cross-defendants' defence to the first cross-claim. 4. Direct the cross-defendants to the third cross-claim to file and serve their defence to the third cross-claim and any evidence on which they rely by way of defence to the third cross-claim within 28 days of the filing and service of the third cross-claim. 5. Order that the costs of the application for leave to file the said pleadings be costs in the cause. 6. Grant the parties liberty to apply on three days' notice for any variation of the above timetable or if any issues arise in the implementation of the above orders. 7. Stand the matter over to directions before the trial judge on a date to be fixed.

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DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 August 2019