Leybourne v Habkouk

Nature of the case 3The detailed facts can be seen in the primary judgment. In short, the applicant seeks to complain about a property valuation dated 11 September 2003 prepared by the second respondent, Jacisa Pty Ltd ("Jacisa"), in whose preparation Mr Gregory Wickham and Mr Joseph Habkouk were allegedly involved. 4In 2008 the applicant commenced proceedings in the Supreme Court of New South Wales against Mr Wickham and Jacisa (the "first Supreme Court proceedings"). In those proceedings he alleged that Jacisa "through the negligence of ... [Wickham] and an employee (Joseph Habkouk) were liable for damages through the 'tortious liability of the reckless and inflated valuation of the property ...'": primary judgment (at 17). The statement of claim made various other allegations, the details of which are not presently relevant. In June 2009 the applicant accepted a Calderbank offer to resolve those proceedings made by the solicitors apparently acting for both Mr Wickham and Jacisa. On 30 June 2009 he signed a form of Consent Judgment/Order (the "Consent Judgment") which those solicitors forwarded to him. The Consent Judgment as so executed was filed in court, according to the court stamp it bears, on 2 July 2009. It recorded a judgment for each defendant and that each party pay his and its costs. 5In November 2010 the applicant commenced proceedings in the Supreme Court in which he named Joseph Habkouk as the first defendant and Jacisa as the second defendant in which, in substance, he again sought to claim damages in respect of the defendants' preparation of the 11 September 2003 valuation (the "second Supreme Court proceedings"). 6The applicant moved in the second Supreme Court proceedings for orders setting aside the Consent Judgment and also for leave to join Mr Wickham as a party to the second Supreme Court proceedings. He sought to have the Consent Judgment set aside on two bases. First, that it had been entered irregularly and against good faith: 36.15, Uniform Civil Procedure Rules 2005 ("UCPR"). He also relied on UCPR 36.16. Secondly, he sought to have the Consent Judgment set aside by way of review of what was described as "the registrar's decisions of the 2 July 2009 and chief clerk's order 22 February 2011 pursuant to UCPR 49.15, in the interests of justice". The "registrar's decisions" and "chief clerk's order" appears to have referred to those respective court officers affixing stamps to the Consent Judgment first as to the date on which it was filed in court and, secondly, when the chief clerk signed a prescribed form of judgment as to the date and terms of the Consent Judgment. 7Mr Habkouk filed a motion relevantly seeking an order that the applicant's statement of claim be struck out pursuant to UCPR 14.28. Jacisa filed a motion seeking orders that the proceedings be stayed against it pursuant to s 67 of the Civil Procedure Act 2005 and/or the inherent jurisdiction of the Supreme Court while the Consent Judgment remained in force. It also sought an order that the applicant's statement of claim be dismissed pursuant to UCPR 13.4(1) or struck out pursuant to UCPR 14.28. 8All motions were heard together. The primary judge dismissed the applicant's motion to set aside the Consent Judgment and to join Mr Wickham. He acceded to Jacisa's application that the second Supreme Court proceedings be stayed on the basis that they were an abuse of process because they sought "to agitate in substance ... the same if not identical claims against [Jacisa] having consented to judgment in favour of [Jacisa] in ... [the first Supreme Court proceedings]": primary judgment (at [94], [98]). His Honour also accepted (at [100]) Mr Habkouk's submission that the statement of claim in the second Supreme Court proceedings was "wholly deficient" and (at [102]) concluded that it "cannot stand in its current form and ... should be struck out". 9The primary judge ordered that "these proceedings be permanently stayed": primary judgment (at [105]). His Honour invited the parties to prepare short minutes to reflect his orders. No such document was in the papers. 10On 25 October 2011 the applicant filed a notice of intention to appeal from the primary judgment: UCPR 51.6. On 11 January 2012 he filed a notice of appeal: UCPR 51.16; 51.9. Both documents were filed within the time limited by the UCPR. 11At some stage in the course of directions hearings before the Registrar of the Court of Appeal it appears that the question whether the applicant needed leave to appeal from the primary judgment was raised. Although he contended that the primary judgment was final, on 11 April 2012 the applicant filed the summons seeking leave to appeal which is before the Court. 12Mr Habkouk and Jacisa both filed notices of motion seeking to have the appeal dismissed as incompetent: UCPR 51.41. The premise of each notice of motion was that the primary judgment or order was interlocutory such that the applicant required leave to appeal: s 101(2)(e), Supreme Court Act 1970. 13Prior to hearing the application for leave to appeal, the Court drew the parties' attention to: Port of Melbourne Authority v Anshun Pty Ltd (No 1) [1980] HCA 41; (1980) 147 CLR 35 ("Anshun (No 1)"); Bracks v Smyth-Kirk [2009] NSWCA 401; (2009) 263 ALR 522, Frumar v the Owners of Strata Plan 36957 [2010] NSWCA 172 and Kermani v Westpac Banking Corporation [2012] VSCA 42. 14In Anshun (No 1) Gibbs J (Mason and Murphy JJ agreeing) held (at 38) that an order permanently staying proceedings as an abuse of process on the basis that they were "an attempt to litigate an issue which is res judicata" was final because "as a matter of reality ... [it] does finally dispose of the rights of the parties". In Re Luck [2003] HCA 70; (2003) 78 ALJR 177 (at [6]) the High Court (McHugh ACJ, Gummow and Heydon JJ) observed that "[f]or more than a century, courts ... have consistently held that an order staying an action on the ground that is frivolous, vexatious or an abuse of process is an interlocutory order". Their Honours did not refer to Anshun (No 1). 15The apparent tension between Anshun (No 1) and Re Luck was discussed in Bracks v Smyth-Kirk (at [14] - [36]). As noted in that discussion, in Egglishaw v Australian Crime Commission [2007] FCAFC 183; (2007) 164 FCR 224 (at [43]) the Full Court of the Federal Court (Finn, Kenny and Edmunds JJ) concluded that there was no inconsistency between the two High Court decisions but, rather, that the difference between them flowed "from the difference between the judgments from which an appeal was brought or sought to be brought". Anshun (No 1), in their Honours' view (at [44]), concerned a case "where an earlier judgment or proceeding preclude[d] a further judgment or proceeding". Such a case was to be distinguished from "the ordinary case, where a proceeding discloses no cause of action, is frivolous or vexatious, or is to be dismissed on some other basis involving no final determination of rights". In their Honours' view Re Luck concerned the latter case. 16The distinction the Full Federal Court drew in Egglishaw between the nature of what we will, for convenience, call a Re Luck and an Anshun (No 1) judgment has been recognised in this Court: Frumar v the Owners of Strata Plan 36957 (at [36]). The Court of Appeal of the Supreme Court of Victoria has also followed Anshun (No 1) and held to be final in character an order permanently staying as an abuse of process later proceedings which the primary judge held to amount to a collateral attack on the decisions made in earlier proceedings: Kermani v Westpac Banking Corporation (at [89] - [90]). There is, accordingly, a substantial body of authority which this Court would ordinarily follow supporting the applicant's position that the permanent stay order the primary judge made in Jacisa's favour at least was a final one.

Issues on appeal 17When the matter was called on for hearing, the applicant indicated that he proposed to confine his grounds of appeal to three matters set out in his notice of appeal. He accepted that the first two were substantially the same, they being his complaint that the primary judge erred when dealing with the question whether the Consent Judgment should be set aside, by not taking into account his submissions concerning the Court's inherent jurisdiction to so act and, secondly, that the primary judge erred in holding that the second Supreme Court proceedings were an abuse of process and ordering that they be permanently stayed.

Submissions 18The applicant submitted that he did not require leave to appeal because the primary judge's order permanently staying his proceeding was a final order within the principles enunciated in Anshun (No 1) and the cases to which I have referred. 19Mr A Casselden of Counsel, who appeared for Mr Habkouk, submitted that the principles in Anshun (No 1) did not apply to his client because the primary judge had accepted his notice of motion that the statement of claim in the second Supreme Court proceeding was embarrassing and should be struck out thus bringing the case within Re Luck. He also submitted that the appeal was incompetent insofar as Mr Habkouk was concerned because the applicant did not rely upon any ground of appeal which affected him. 20Mr A Zahra, who appeared for Jacisa and Mr Wickham, submitted that Anshun (No 1) could be distinguished on the basis that it (and like cases) concerned a party who was not a party to an earlier decision being prevented from bringing later proceedings.

Determination 21In our view, the permanent stay the primary judge ordered was grounded on the same basis, insofar as Jacisa at least is concerned, as the perpetual stay granted in Anshun (No 1). This was that the second Supreme Court proceedings were an abuse of process because they sought to agitate issues which had been raised in the first Supreme Court proceedings in respect of which there was a Consent Judgment in Jacisa's favour. Accordingly, prima facie, insofar as Jacisa is concerned the appellant had an appeal as of right from that decision and exercised his right to so appeal, as I have said, within the time limited by the rules. On an appeal from a final order an appellate court can correct any interlocutory order which affected the final result: Gerlach v Clifton Bricks Ltd [2002] HCA 22; (2002) 209 CLR 478 (at [6]). The primary judge's order dismissing the applicant's motions to set aside the consent judgment clearly falls into that category as "it is theoretically open to the [applicant] to make another application for the same relief as that disposed of by the order sought to be challenged, even if any later application would as a practical matter 'be doomed to failure' ": Bracks v Smyth-Kirk (at [20]). However the observations in Re Luck were clearly seriously considered dicta (Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 (at [134])) and, against the possibility that the Re Luck position should be preferred, it is appropriate, in our view, at least to grant the applicant leave to appeal. It will, however, be necessary on the appeal for the Court to determine whether leave to appeal was required when dealing with questions of costs. 22Insofar as Mr Casseldon submits that Mr Habkouk's case falls into a different category, it should be observed that appeals are from orders, not reasons. The primary judge did not make an order that the statement of claim in the second Supreme Court proceedings should be struck out but, rather, only one that they should be permanently stayed. Although his Honour did not refer to this proposition, it is conceivable that he ordered that stay in Mr Habkouk's favour on the basis that the second Supreme Court proceedings fell into that category of an abuse of process which would arise if, "... the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same case again ...": Reichel v Magrath (1889) 14 App Cas 665 (at 668) per Lord Halsbury LC. Non-parties to previous proceedings can rely upon that principle: Rippon v Chilcotin [2001] NSWCA 142; (2001) 53 NSWLR 198 per Handley JA (Mason P and Heydon JA agreeing). If that is the case, Mr Habkouk's case is also in the Anshun (No 1) category. 23Prima facie, however, the apparent reason for the order permanent stay in Mr Habkouk's favour is the incoherence of the statement of claim which, as we have said, would place the order, insofar as Mr Habkouk is concerned, into the interlocutory category. However the primary judge does not appear to have given any consideration to whether the applicant should have an opportunity to replead his case insofar as Mr Habkouk. Such an order is often made when a strikeout order is appropriate on pleading grounds. There is an element of circularity involved because it is possible the reason his Honour considered such an order was not warranted was because of the abuse of process issue referred to in [22]. It is appropriate, in our view, in such circumstances, to apply the approach we have taken to Jacisa and also give the applicant leave to appeal from the permanent stay order insofar as it benefits Mr Habkouk. 24The respondents did not move on their competency motions, no doubt because the underlying premise, as is apparent, was not present if Anshun (No 1) was binding. 25It is to be hoped that the papers in the White Book can be used as the appeal papers supplemented to the least extent possible, but at least by the inclusion of the pleadings in both the first and second Supreme Court proceedings. 26Accordingly, we make the following orders:

1. Grant leave to appeal.
2. Applicant to file and serve the notice of appeal confined to grounds two to four in the draft notice of appeal in the White Book within 14 days of this judgment.
3. Reserve the costs of the application for leave to appeal and the competency notices of motion.
4. Stand the matter into the next call-over before the Registrar of the Court of Appeal with a view to consideration being given to minimising the costs of preparation of appeal books.

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: 18 July 2012