Relevant principles
34 The respondents submit that the key issues in the present proceeding, commenced on 4 September 2014, include the extent of Winnebago's reputation in Australia in the Winnebago name and the Winnebago logos over an extended period of time. The respondents submit that the present proceeding will also involve consideration of the history and circumstances of the adoption and continuing use by Knott of the Winnebago name and the Winnebago logos, and its reputation therein.
35 The respondents base their case for summary dismissal primarily on the ground that an estoppel operates to prevent Knott from agitating these issues afresh and pursuing its claims for relief in the present proceeding: Port of Melbourne Authority v Anshun Proprietary Limited (1981) 147 CLR 589 (Anshun). In essence, the respondents say that Knott should have brought its present claims in the first proceeding.
36 In Anshun, the Port of Melbourne Authority (the Authority), as plaintiff, claimed an indemnity from Anshun Pty Ltd (Anshun), as defendant, in relation to damages awarded in an earlier proceeding in which the Authority and Anshun were both sued by a worker who had suffered significant injuries in an industrial accident. In the earlier proceeding, the Authority and Anshun, as defendants, each claimed contribution from the other pursuant to s 24 of the Wrongs Act 1958 (Vic). Importantly, the notice claiming contribution served by the Authority did not claim an indemnity from Anshun, even though Anshun was contractually bound to give an indemnity under a previous agreement into which the Authority and Anshun had entered. In the earlier proceeding, judgment was entered in favour of the injured worker against both the Authority and Anshun, with Anshun recovering contribution from the Authority to the extent of 90% of the damages and costs awarded and the Authority recovering from Anshun contribution to the extent of 10% of the damages and costs awarded. The Authority paid 90% of the damages and costs and Anshun paid the remaining 10%. However, subsequently, the Authority commenced its action against Anshun claiming by way of indemnity the amount that it (the Authority) had paid pursuant to the judgment in the earlier proceeding. The claim was based on the indemnity in the agreement. Anshun claimed that the Authority was estopped from bringing its claim.
37 The plurality in the High Court (Gibbs CJ, Mason and Aickin JJ) viewed the case as falling within the following principle expressed by Sir James Wigram V-C in Henderson v Henderson (1843) 3 Hare 100 at 115:
[W]here a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.
38 Their Honours considered how the principle in Henderson v Henderson had been applied in later cases and, at 602-603, expressed their preference for stating that principle in the following terms (Anshun estoppel or the Anshun principle):
In this situation we would prefer to say that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action 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 defence 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 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 the particular issue, motives extraneous to the actual litigation, to mention but a few.
39 Their Honours also referred to the principle that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment: see at 603-604. Their Honours said:
The likelihood that the omission to plead a defence will contribute to the existence of conflicting judgments is obviously an important factor to be taken into account in deciding where the omission to plead can found an estoppel against the assertion of the same matter as a foundation for a cause of action in a second proceeding. By "conflicting" judgments we include judgments which are contradictory, though they may not be pronounced on the same cause of action. It is enough that they appear to declare rights which are inconsistent in respect of the same transaction.
40 Their Honours concluded that the judgment which the Authority sought to obtain against Anshun in the second proceeding was one which would conflict with the judgment in the earlier proceeding, even though the new judgment would be based on a different cause of action - a contractual indemnity. The conflict would arise because the judgment in the earlier proceeding was that Anshun should recover contribution from the Authority to the extent of 90% of the damages and costs awarded and that the Authority should recover from Anshun contribution to the extent of 10% of the damages and costs. The judgment which the Authority sought to obtain in the second action was one whereby it recovered from Anshun the whole of the damages and costs in the earlier proceeding.
41 It is important to note the "double negative" used in the formulation of Anshun estoppel. Noting that double negative, Ormiston JA in Gibbs v Kinna [1999] 2 VR 19 at [1] said:
[1] The question, shortly stated, arising out of the facts set out in the judgment of Kenny J.A., is whether the respondent was properly precluded from suing the appellants in the Magistrates' Court by reason of the principles stated in Port of Melbourne Authority v. Anshun Pty. Ltd. (1981) 147 C.L.R. 589. The issue which the parties said arose before the magistrate and the primary judge was whether the subject matter of the later proceeding in the Magistrates' Court was "so relevant to the subject matter" of the action heard by a judicial registrar of the former Industrial Relations Court that "it would have been unreasonable not to rely on it": at 602. The double negative is here significant because the question is not whether it would have been reasonable to take the course of relying on a particular defence or cause of action in the first proceeding, for more often than not it was then possible to rely upon the proposed defence or cause of action. The issue is whether it was unreasonable to defer reliance upon the defence or cause of action, so, if it cannot be shown to have been unreasonable not to have relied earlier on the defence or cause of action, then the principle stated by the majority in Anshun's case will not shut out a party's later reliance on the defence or cause of action, unless some other principle of estoppel or the law can be called in aid. Only if deferring reliance can be shown to be unreasonable, will the party be shut out. Frequently there is no clear answer as to what was possible and reasonable in the earlier proceedings; sometimes it will have been technically possible for the party to have relied on a particular defence or set up a particular claim, but nevertheless it may not have been demonstrated that it was unreasonable in all the circumstances not to have relied on that defence or not to have set up the claim. The answer depends not so much on legalities as practicalities.
(Emphasis in original.)
42 In Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332, Brennan and Dawson JJ considered (at 346) whether Anshun estoppel extended to the bringing of a cause of action in a second proceeding where the cause of action could have been brought in an earlier proceeding by way of cross-claim. Their Honours said:
A plaintiff who has an unadjudicated cause of action which can be enforced only in fresh proceedings … cannot be precluded from taking fresh proceedings merely because he could have and, if you will, should have counterclaimed on that cause of action in a forum chosen by the opposite party in proceedings in which the opposite party sued him. We do not read the majority judgment in Port of Melbourne Authority v. Anshun Pty. Ltd. as holding the contrary, except in a case where the relief claimed in the second proceeding is inconsistent with the judgment in the first …
43 However, in Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287 (Bryant), a Full Court of this Court concluded that the Anshun principle can apply to cross-claims as well as defences. At 297-298, the Full Court said:
It is true that, in Tanning Research Laboratories at 346, Brennan and Dawson JJ stated that the Anshun principle will ordinarily not apply to cross-claims. They made an exception of cases where the relief claimed in the second proceedings is inconsistent with the judgment in the first. In making this distinction, their Honours may have had in mind a situation, such as the one before them in that case, where the cross-claim depended on facts remote from those of the principal claim. Questions of substantive degree may be involved; and in contrast to defences, many cross-claims may have little or no connection with the principal claim in the action; there may be no more than an identicality of parties. Where that is so, there may be no policy justification for forcing defendants to litigate their claims as cross-claims rather than as principal claims in separate actions in the forum of their choice. But, where, as here, a defendant's claim is intimately connected with that of the plaintiff, in the sense that each arises, substantially, out of the same matters of fact, there is every reason to require that both be litigated at the one time; thereby minimising costs and avoiding the possibility of inconsistent judgments …
44 In that case, the Full Court held that Anshun estoppel applied in an action where claims that had been withdrawn from defences and cross-claims adjudicated in earlier proceedings in the Supreme Court of New South Wales were sought to be raised in fresh proceedings in this Court. Their Honours said (at 298):
The matters sought to be raised by the appellant in this Court were all matters connected with the claims made by the [respondent]. The appellant, and his former legal advisers, recognised this. They pleaded his claims as defences to the [respondent's] two Supreme Court actions and as cross-claims to those proceedings. The appellant widened his defence and cross-claims, so as to abandon reliance on those matters in the Supreme Court, not because of a belief that they were insufficiently connected with [the respondent's] claim but because he was dissatisfied with the extent of discovery accorded to him. …
What is clear is that any deficiencies in the Supreme Court discovery process did not, in our view, justify the appellant taking the course of splitting the case between two proceedings in different courts. We agree … that the facts of this case provide a classic example of the evil that the Anshun principle was intended to prevent.
45 In Ling v Commonwealth (1996) 68 FCR 180 (Ling), Wilcox J referred to Bryant and said (at 183):
The decision in Bryant does not mean that it will always be appropriate to apply the Anshun principle to cross-claims. Some cross-claims have little or no connection with the claim in the action. There may be no more than an identicality of parties. It is difficult to see any justification for applying the Anshun principle to a case of that kind. Some cross-claims overlap the facts of the principle claim but involve additional facts. Where this occurs, a question of degree arises. It would be wrong to say that the Anshun principle is excluded whenever there are additional facts; to go so far would be to render it nugatory. However, where the additional facts are substantial, it may be appropriate to accept the reasonableness of separate proceedings.
46 His Honour addressed (at 184) the question of reasonableness in the following terms:
In considering reasonableness, as it seems to me, consideration must be given to all aspects of the case. They include the extent of the overlap between the facts underlying each claim; the greater the overlap, the easier it is to argue that it was unreasonable not to raise the matter in the first case. They also include an difficulties that existed, or might reasonably have been perceived, in raising the matter earlier. Where the matter can be raised only by way of cross-claim, as distinct from defence, and there was a serious question about the entitlement of the Court to consider the cross-claim, there is an obvious difficulty in arguing that it was unreasonable for the party not to have done so.
47 There is no requirement for identical parties before the Anshun principle will apply: Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231 at [83]. In that case, McColl JA at [83] said:
An Anshun estoppel also arises where an omission to plead a claim or defence will contribute to the existence of conflicting judgments, including those which are contradictory, though they may not be pronounced on the same cause of action as long as they appear to declare rights which are inconsistent in respect of the same transaction: Anshun (at 603 - 604). Thus an Anshun estoppel will apply even though the parties to the second proceedings are not the same as in the first. Although there may be "no question … of oppression and unfairness" where the parties in the second action "were not parties to the earlier action", the new proceedings may threaten the integrity of the administration of justice if they raise the prospect of conflicting judgments: Spalla (at [64] - [65]), referring to Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287 (at [36]).