Discussion and Decision (Abuse of Process)
97 The High Court has said on more than one occasion that it is not possible to describe exhaustively what will constitute an abuse of process (Batistatos v Roads & Traffic Authority of New South Wales (2006) 226 CLR 256 (Batistatos) at 265-267 [9]-[15] per Gleeson CJ, Gummow, Hayne and Crennan JJ and the cases cited in those paragraphs; PNJ at 613 [3] per French CJ, Gummow, Hayne, Crennan and Kiefel JJ).
98 In Ridgeway v The Queen (1995) 184 CLR 19 (Ridgeway) at 74-75, Gaudron J observed that the courts have resisted laying down hard and fast rules as to what constitutes an abuse of process. Her Honour continued (at 75):
Abuse of process cannot be restricted to "defined and closed categories" (Hamilton v Oades (1989) 166 CLR 486 at 502, citing Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 639 and Tringali v Stewardson Stubbs & Collett Ltd (1966) 66 SR (NSW) 335 at 340, 344. See also Jago v District Court (NSW) (1989) 168 CLR 23 at 25-26, 47-48, 74; Walton v Gardiner (1993) 177 CLR 378 at 393-395; Rogers v The Queen (1994) 68 ALJR 688 at 689, 706; 123 ALR 417 at 419, 443) because notions of justice and injustice, as well as other considerations that bear on public confidence in the administration of justice, must reflect contemporary values and, as well, take account of the circumstances of the case (See Dietrich v The Queen (1992) 177 CLR 292 at 328-329, 364). That is not to say that the concept of "abuse of process" is at large or, indeed, without meaning. As already indicated, it extends to proceedings that are instituted for an improper purpose (As to what constitutes improper purpose, see Williams v Spautz (1992) 174 CLR 509 at 526-530, 532-537, 553-556; see also at 543-551) and it is clear that it extends to proceedings that are "seriously and unfairly burdensome, prejudicial or damaging" (Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at 247) or "productive of serious and unjustified trouble and harassment" (Hamilton v Oades (1989) 166 CLR 486 at 502).
99 In Ridgeway, at 46, Brennan J affirmed the views which he had expressed in Jago v District Court (NSW) (1989) 168 CLR 23 (Jago) at 47-48 where his Honour explained that:
An abuse of process occurs when the process of the court is put in motion for a purpose which, in the eye of the law, it is not intended to serve or when the process is incapable of serving the purpose it is intended to serve.
100 In the same case, at 60, Toohey J said that:
The concept of abuse of process is not a precise one. Nor can it be; it gives effect to a concern on the part of courts that may arise in a variety of circumstances. But at the heart of the concept lies the legitimate power of the courts to stay prosecutions brought in exercise of the prerogative of the Crown. In Connelly v Director of Public Prosecutions ([1964] AC 1254 at 1354) Lord Devlin addressed the fundamental issue in this way:
"Are the courts to rely on the Executive to protect their process from abuse? Have they not themselves an inescapable duty to secure fair treatment for those who come or are brought before them? To questions of this sort there is only one possible answer. The courts cannot contemplate for a moment the transference to the Executive of the responsibility for seeing that the process of law is not abused."
That passage asserts the power of the courts to act; it does not, and does not purport to, identify the scope of the power.
Generally, abuse of process derives from a concern that judicial process be not invoked for an improper purpose (the issue in Williams v Spautz) and that the process be not abused in a way that interferes with the conduct of a fair trial (the issue in Jago v District Court (NSW) and Walton v Gardiner). There are distinct aspects of abuse of process in that proceedings may be stayed if it appears that they have been brought for an improper purpose even though there is no reason to doubt that the accused will receive a fair trial. Equally, an accused may not receive a fair trial, by reason of delay for instance, though there is no improper purpose in bringing the proceedings. But the power of a superior court to stay its proceedings on grounds of abuse of process is not confined to those situations (Walton v Gardiner (1993) 177 CLR 378 at 395).
101 At 61, his Honour observed that a finding of abuse of process does not necessarily lead to a stay of proceedings and that there may be other ways of remedying the abuse.
102 In PNJ at 613 [3], the Court said:
It is not possible to describe exhaustively what will constitute an abuse of process (Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256; 27 ALR 425; 45 MVR 288; [2006] HCA 27 at [9]-[15] (Batistatos) per Gleeson CJ, Gummow, Hayne and Crennan JJ). It may be accepted, however, that many cases of abuse of process will exhibit at least one of three characteristics (Rogers v R (1994) 181 CLR 251 at 286; 123 ALR 417 at 443-4; [1994] HCA 42 per McHugh J. See also Batistatos at [15] per Gleeson CJ, Gummow, Hayne and Crennan JJ):
(a) the invoking of a court's processes for an illegitimate or collateral purpose;
(b) the use of the court's procedures would be unjustifiably oppressive to a party; or
(c) the use of the court's procedures would bring the administration of justice into disrepute.
103 Although PNJ was a criminal proceeding, the remarks made by the Court were not limited to criminal proceedings but were intended to apply to both civil and criminal proceedings. This much is made clear from the references to Batistatos in the footnotes referred to in [3] of PNJ, Batistatos itself being a civil case and some of the cases discussed in the passages from Batistatos which are referred to in the footnotes to [3] of PNJ also being civil cases. This is consistent with observations made by the Court in Batistatos at 264 [8] and by the majority in Moti v The Queen (2011) 245 CLR 456 at 464 [11].
104 In argument before me in the present case, both parties drew heavily upon the High Court judgment in Spautz.
105 In Spautz, Dr Spautz, who was a Senior Lecturer in the Department of Commerce at the University of Newcastle, commenced an action against that university for wrongful dismissal. Dr Spautz had been dismissed for misconduct constituted by his campaign against another academic who had been appointed as the Chair of Commerce at the same university. Dr Spautz believed that he (Spautz) should have been appointed to that position.
106 Subsequently, Dr Spautz laid criminal informations against various officers of the university alleging a number of offences including criminal conspiracy to defame and conspiracy to injure him without justification and by illegal means. On the application of some of those persons for declarations that particular prosecutions were an abuse of process, the primary judge found that Dr Spautz's predominant purpose in instituting and maintaining the criminal proceedings was to exert pressure upon the university to reinstate him and/or to agree to a favourable settlement of his wrongful dismissal case. In light of those findings, the primary judge made declarations as sought by the persons against whom the informations had been laid and stayed the prosecutions permanently.
107 On appeal, the New South Wales Court of Appeal overturned the primary judge's decision. It did so by majority. The leading majority judgment in that Court was delivered by Priestley JA who considered that the governing principle was that supervising courts should restrict use of their power to control abuses of process in relation to criminal proceedings to those cases in which the exercise of the power is the only way of ensuring that an accused person is not deprived of a fair trial by reason of such abuse. His Honour concluded that, on the materials before the Court, the persons against whom the informations had been laid would not have been deprived of a fair trial. The Court of Appeal rejected a challenge to the primary judge's central findings concerning Dr Spautz's predominant purpose which I have extracted at [109] and [111] below.
108 Dr Spautz's opponents then appealed to the High Court. By majority, that Court allowed the appeal. Four judgments were delivered. The first was the judgment of the plurality (Mason CJ, Dawson, Toohey and McHugh JJ). Each of Brennan J (as his Honour then was), Deane J and Gaudron J delivered a separate judgment. Both Deane J and Gaudron J dissented in the result.
109 At 516, the plurality recorded the primary judge's critical finding in the following terms:
The trial judge's findings of fact and the conclusions reached by the Court of Appeal
After examining in detail the conduct of Dr. Spautz during his self-proclaimed campaign for justice, Smart J. made this finding of fact:
"The predominant purpose of Dr. Spautz in instituting and maintaining the criminal proceedings, the subject of the present applications, against Profs. Gibbs and Williams and Mr. Morris was to exert pressure upon the University of Newcastle to reinstate him and/or to agree to a favourable settlement of his wrongful dismissal case." (Emphasis added.)
As Priestley J.A. noted in the Court of Appeal, there was ample material before the trial judge from which he could draw that conclusion.
110 The primary judge also found that Dr Spautz had other purposes in instituting the various criminal proceedings and that most of those purposes were also improper.
111 At 517, the plurality explained the ultimate conclusion of the primary judge in the following terms:
The trial judge expressed his understanding of the concept of abuse of process, which was based on the formulation by Hunt J. in Spautz v. Williams ([1983] 2 N.S.W.L.R., at p. 539), in these terms:
"The essence of an abuse of process action is that the proceedings complained of were instituted and/or maintained for a purpose other than that for which they were properly designed or exist, or to achieve for the person instituting them some collateral advantage beyond that which the law offers, or to exert pressure to effect an object not within the scope of the process. The focus in such a suit is on the purpose for which the proceedings exist, and on the dominant purpose of the person charged with abuse of process in instituting them."
His Honour then concluded that the fundamental purposes of a criminal defamation prosecution are to punish the defamer and to protect the community and that the dominant purpose of the prosecutor must be to bring the offender to justice. As the respondent's predominant purpose in bringing the prosecutions, namely, to secure his reinstatement, was improper and ulterior, the trial judge declared each of the relevant proceedings an abuse of process and ordered them stayed permanently.
112 At 518, the plurality said that it is well established that Australian superior courts have inherent jurisdiction to stay proceedings which are an abuse of process. In support of that proposition, their Honours cited Clyne v Bar Association (NSW) (1960) 104 CLR 186 at 201; Barton v The Queen (1980) 147 CLR 75 at 96, 107 and 116; and Jago. The jurisdiction extends to both civil and criminal proceedings.
113 At 521-522, the plurality discussed the power to prevent an abuse of process when the conduct on the part of the claimant in instituting and maintaining the relevant proceeding constitutes oppression. At 522, after referring to Goldsmith v Sperrings Ltd [1977] 1 WLR 478 (Goldsmith), their Honours said that the Court would prevent an abuse of process where, though the process might appear to be entirely proper and correct, it was used for an improper purpose. The particular example with which the plurality dealt at this point in their judgment concerned the case in which the plaintiff does not wish to pursue his or her cause of action to a conclusion because he or she intends to use the proceeding for a collateral and improper purpose.
114 At 522-526, the plurality discussed the relationship between the inherent jurisdiction to prevent an abuse of process and the tort of collateral abuse of process.
115 At 524, the plurality cited with apparent approval the following passage from the judgment of Isaacs J in Varawa (at 91):
In the sense requisite to sustain an action, the term 'abuse of process' connotes that the process is employed for some purpose other than the attainment of the claim in the action. If the proceedings are merely a stalking-horse to coerce the defendant in some way entirely outside the ambit of the legal claim upon which the Court is asked to adjudicate they are regarded as an abuse of process for this purpose.
116 At 524-525, the plurality also quoted with apparent approval the statement of principle made by Isaacs J in Dowling v Colonial Mutual Life Assurance Society Ltd (1915) 20 CLR 509 (Dowling) (at 521-522) where his Honour said:
If the object sought to be effected by the process is within the lawful scope of the process, it is a use of the process within the meaning of the law, though it may be malicious, or even fraudulent, and in the circumstances the fraud may be an answer; if, however, the object sought to be effected by means of the process is outside the lawful scope of the process, and is fraudulent, then - both circumstances concurring - it is a case of abuse of that process, and the Court will neither enforce nor allow it to afford any protection, and will interpose, if necessary, to prevent its process being made the instrument of abuse. Grainger v. Hill laid down the distinction.
117 Their Honours then moved on to refer to King v Henderson [1898] AC 720 at 731 (Henderson). Having done so, their Honours observed that the existence of an unworthy or reprehensible motive for bringing the action was not enough and that it must appear that the purpose sought to be effected by the litigant in bringing the proceeding was not within its scope and was improper.
118 At 526-527, the plurality said:
The boundaries of abuse of process
The observations of the Privy Council in King v. Henderson ([1898] A.C., at p. 731) and those of Isaacs J. in Dowling ((1915) 20 C.L.R., at pp. 521-522), to which we referred earlier, represent an attempt to achieve a formulation which keeps the concept of abuse of process within reasonable bounds. To say that a purpose of a litigant in bringing proceedings which is not within the scope of the proceedings constitutes, without more, an abuse of process might unduly expand the concept. The purpose of a litigant may be to bring the proceedings to a successful conclusion so as to take advantage of an entitlement or benefit which the law gives the litigant in that event.
Thus, to take an example mentioned in argument, an alderman prosecutes another alderman who is a political opponent for failure to disclose a relevant pecuniary interest when voting to approve a contract, intending to secure the opponent's conviction so that he or she will then be disqualified from office as an alderman by reason of that conviction, pursuant to local government legislation regulating the holding of such offices. The ultimate purpose of bringing about disqualification is not within the scope of the criminal process instituted by the prosecutor. But the immediate purpose of the prosecutor is within that scope. And the existence of the ultimate purpose cannot constitute an abuse of process when that purpose is to bring about a result for which the law provides in the event that the proceedings terminate in the prosecutor's favour.
It is otherwise when the purpose of bringing the proceedings is not to prosecute them to a conclusion but to use them as a means of obtaining some advantage for which they are not designed (In re Majory, [1955] Ch. 600, at pp. 623-624) or some collateral advantage beyond what the law offers (Goldsmith v. Sperrings Ltd., [1977] 1 W.L.R., at pp. 498-499; [1977] 2 All E.R., at pp. 581-582; see also Varawa (1911), 13 C.L.R., at p. 91). So, in Dowling ((1915) 20 C.L.R., at p. 524), Isaacs J. pointed out that "if, for instance, it had been shown that the Society had simply threatened Dowling that unless he did what they had no right to demand from him, namely, give up certain names, they would proceed to sequestration, and they had proceeded accordingly, there would have been in law an abuse of the process". However, because the Society wished to use the process for the very purpose for which it was designed, there was no abuse of process.
119 At 527-528, their Honours stressed that it is the use of the proceeding which must be examined and which may constitute an abuse of process. They also held that neither the authorities in England nor those in Australia require that there be an improper act as an essential ingredient of the concept of abuse of process.
120 At 528, the plurality said:
In his dissenting judgment in Goldsmith v. Sperrings Ltd., Lord Denning M.R. was of the view that to issue a writ for an improper purpose constitutes without more an abuse of process ([1977] 1 W.L.R., at pp. 489-490; [1977] 2 All E.R., at pp. 581-582). His Lordship appears to have regarded the cases on the tort of collateral abuse of process, including Grainger v. Hill, as supporting this proposition. In this respect, Lord Denning may well have been incorrect. However, his Lordship was right in treating the comments of Lord Evershed M.R., when he delivered the judgment of the Court of Appeal in In re Majory, as supporting the proposition. There, Lord Evershed referred ([1955] Ch., at pp. 623-624) to a general rule "that court proceedings may not be used or threatened for the purpose of obtaining for the person so using or threatening them some collateral advantage to himself, and not for the purpose for which such proceedings are properly designed and exist; and a party so using or threatening proceedings will be liable to be held guilty of abusing the process of the court and therefore disqualified from invoking the powers of the court by proceedings he has abused". In our view, that is a correct statement of the principle.
121 At 529, the plurality held that it was sufficient that the predominant purpose for the institution and maintenance of the proceeding is an improper purpose in order to found an entitlement to restrain or terminate the proceeding as an abuse of process. The improper purpose need not be the sole purpose for the institution or maintenance of the proceeding. The plurality also held that it was well established that the onus of satisfying the Court that there is an abuse of process lies upon the party alleging it. They said that the onus was "a heavy one" and that the power to grant a permanent stay is one to be exercised only in the most exceptional circumstances.
122 At 530-531, the plurality expressed their ultimate conclusion allowing the appeal in the following terms:
Conclusion
Although the primary judge did not express his findings in terms that the use of the proceedings was for an improper purpose, the findings are so expressed as to make it clear that Dr. Spautz threatened to use the proceedings for an improper purpose and that his commencement and maintenance of the proceedings were, in pursuance of that purpose, undertaken predominantly to that end. There was therefore a relevant use of the proceedings for an improper purpose.
123 Justice Brennan commenced his Reasons for Judgment with the following (at 531):
The jurisdiction of a court to prevent an abuse of its process and the power of a court to mould its procedures to ensure a fair trial are distinct aspects of curial authority (Barton v. The Queen (1980), 147 C.L.R. 75, at pp. 95-96; Jago v. District Court (N.S.W.) (1989), 168 C.L.R. 23). In Jago v. District Court (N.S.W.), this Court considered the power of a court to eliminate or diminish the prejudice created by an unjustifiable delay in bringing an accused person to trial and the manner in which that power should be exercised. That case was concerned with the court's procedures to ensure a fair trial. In this case, the other aspect of curial authority falls for consideration.
As I said in Jago (at pp. 47-48):
"An abuse of process occurs when the process of the court is put in motion for a purpose which, in the eye of the law, it is not intended to serve or when the process is incapable of serving the purpose it is intended to serve ... Although it is not possible to state exhaustively all the categories of abuse of process, it will generally be found in the use of criminal process inconsistently with some aspect of its true purpose, whether relating to the hearing and determination, its finality, the reason for examining the accused's conduct or the exoneration of the accused from liability to punishment for the conduct alleged against him. When process is abused, the unfairness against which a litigant is entitled to protection is his subjection to process which is not intended to serve or which is not capable of serving its true purpose."
124 His Honour then briefly described the criminal proceedings which Dr Spautz had instituted.
125 Then, at 532-533, his Honour said:
… To establish that the proceedings in the Local Court are an abuse of process which the Supreme Court of New South Wales ought to stay (In exercise of its supervisory jurisdiction: see s. 23 of the Supreme Court Act 1970 (N.S.W.) and Herron v. McGregor (1986), 6 N.S.W.L.R. 246, at p. 251), it is necessary to show that the purpose of those respective proceedings - seen as part of an entire criminal process - is not a purpose which they are designed to serve, that is, not a legitimate purpose. But what is meant by purpose when used in reference to a "proceeding"?
Purpose, when used in reference to a transaction, has two elements: the first, a result which the transaction is capable of producing; the second, the result which the person or persons who engage in or control the transaction intend it to produce. Or, to express the concept in different terms, the purpose of a transaction is the result which it is capable of producing and is intended to produce (See the reference to intention in Federal Commissioner of Taxation v. Whitfords Beach Pty. Ltd. (1982), 150 C.L.R. 355, at pp. 370, 381). When the transaction is the commencement or maintenance of a legal proceeding, its purpose is to be ascertained by reference to the intention of the party who commences or maintains it (hereafter "the plaintiff"). The intention of the plaintiff can be proved by what the plaintiff said and did, and from any inference that might be drawn from what was said or done (including the commencing and maintaining of the proceeding) in the circumstances of the case. The testimony of the plaintiff, though admissible to prove intention, is not conclusive.
The purposes which legal proceedings are designed to serve are the protection or vindication of particular legal rights or immunities, the maintenance or affection of particular legal relationships, and the imposition or enforcement of particular legal penalties, liabilities and obligations. The means by which these purposes are achieved in a proceeding consist in the verdict which might be returned or the order which might be made in the proceeding, in the consequences that flow naturally from a verdict that might be returned or from an order that might be made (for example, the vindication of a plaintiff's reputation flowing from a verdict in a civil action for defamation) and in compromise of the claims made in the proceeding. The achievement of any of the purposes mentioned by any of the means mentioned is within the scope of the remedy for which a proceeding is designed. But a proceeding may be intended to produce and may be capable of producing results that are not within the scope of the remedy.
The possibility of producing results that are not within the scope of the remedy arises from the variety of situations and interests that can be affected by the commencement or maintenance of a proceeding and, in particular, by the burdens, the delay and the publicity of litigation. Where a plaintiff commences or maintains a proceeding with the intention of obtaining a result falling outside the scope of the remedy, a question can arise as to whether the purpose of the proceeding is legitimate or not.
In the early formulation of the test of an abuse of process, emphasis was placed on the scope of the process to determine the legitimacy of the purpose of a proceeding. …
126 After referring to Grainger v Hill (1838) 132 ER 769, Brennan J noted that the criterion adopted by the Court for abuse of process was the character of the result which the plaintiff intended to achieve and that character was to be ascertained by comparing the object which the plaintiff intended to achieve with the scope of the process by which he intended to achieve it.
127 At 533-534, his Honour then discussed Dowling and Henderson. At 534, his Honour held that the pursuit of a legitimate remedy is not converted to an abuse of process by an unworthy and ulterior motive. His Honour then said (at 534-536):
These cases show that a plaintiff's intention to achieve a result must be distinguished from his motive for commencing or maintaining a proceeding, though the distinction may be elusive. In Bayne v. Baillieu ((1908) 6 C.L.R. 382, at p. 403), O'Connor J. cited with approval a statement by Holroyd J. in a Victorian case (In re Morrissey (1899), 24 V.L.R. 776, at p. 778):
"'I think that if the object of an act is legal, and there is no wrongful intention in it, but the intention is to do something also legal, founded upon that act - it is perfectly immaterial what the ulterior motive of the party may be - what it may be that prompts him to do the legal act.'"
That principle was held to be applicable to an act done in exercise of a legal right arising under a contract or other instrument in Chapman v. Honig ([1963] 2 Q.B. 502, at p. 520) in which Pearson L.J. said:
"I cannot think of any case in which such an act might be invalidated by proof that it was prompted by some vindictive or other wrong motive. Motive is disregarded as irrelevant."
In a given case, a distinction may have to be drawn between the purpose of the proceeding and the motive of the plaintiff in commencing or maintaining it (XCO Pty. Ltd. v. Federal Commissioner of Taxation (1971), 124 C.L.R. 343, at pp. 350-351). That distinction depends on a disparity between the plaintiff's intention and the plaintiff's motives. Intention relates to the result which the plaintiff desires to obtain by commencing or maintaining the proceeding; motive relates to all the considerations which move that party to commence or maintain the proceeding. The desired result is no doubt an element of the moving considerations, but it does not exhaust those considerations.
In a case where a plaintiff intends to obtain relief within the scope of the remedy available in a proceeding, there is no abuse of process whatever the plaintiff's motives may be. Isaacs J. said in Dowling ((1915) 20 C.L.R., at pp. 521-522):
"If the object sought to be effected by the process is within the lawful scope of the process, it is a use of the process within the meaning of the law, though it may be malicious, or even fraudulent, and in the circumstances the fraud may be an answer; if, however, the object sought to be effected by means of the process is outside the lawful scope of the process, and is fraudulent, then - both circumstances concurring - it is a case of abuse of that process, and the Court will neither enforce nor allow it to afford any protection, and will interpose, if necessary, to prevent its process being made the instrument of abuse."
For the reasons given by the majority judgment in this case, his Honour's reference to fraud should be understood as importing a purpose outside the scope of the remedy and improper.
There is no impropriety of purpose (whatever may be said of motive) when a plaintiff commences or maintains a proceeding desiring to obtain a result within the scope of the remedy, even though the plaintiff has an ulterior purpose - or motive - which will be fulfilled in consequence of obtaining the legal remedy which the proceeding is intended to produce. To amount to an abuse of process, the commencement or maintenance of the proceeding must be for a purpose which does not include - at least to any substantial extent - the obtaining of relief within the scope of the remedy. As Isaacs J. said in Varawa v. Howard Smith Co. Ltd. ((1911) 13 C.L.R. 35, at p. 91):
"the term 'abuse of process' connotes that the process is employed for some purpose other than the attainment of the claim in the action. If the proceedings are merely a stalking-horse to coerce the defendant in some way entirely outside the ambit of the legal claim upon which the Court is asked to adjudicate they are regarded as an abuse of process for this purpose."
Putting to one side, then, the cases where the plaintiff intends to obtain relief within the scope of the remedy, the problematic cases arise when the plaintiff's purpose is to obtain some benefit, to impose some obligation or to affect some relationship otherwise than by verdict, by order or by compromise of the particular claims made in the proceeding. …
128 At 536-537, his Honour discussed the English decisions of In re Majory [1955] Ch 600 at 623-624 and Goldsmith. After doing so, his Honour said (at 537):
… I would formulate the test in this way: if there be a reasonable relationship between the result intended by the plaintiff and the scope of the remedy available in the proceeding, there is no abuse of process. If there be mixed purposes - some legitimate, some collateral - I would restate his Lordship's test that "but for his ulterior purpose, [the plaintiff] would not have commenced proceedings at all". So expressed, the test casts on the other party an onus of proving what the plaintiff would not have done if he had not formed the intention of obtaining a collateral advantage. That onus may be impossible to discharge. If that onus were discharged, the other party would establish that the plaintiff had not commenced or maintained the proceeding for any substantial legitimate purpose. The gravamen of the test, I apprehend, is that the plaintiff did not commence or maintain the proceeding for any substantial legitimate purpose. I would state the test in that way. Substantiality is a matter of degree, ascertained by reference to the intention attributed to the plaintiff in all the circumstances of the case. At the end of the day, the court must determine, by reference to the intention attributed to the plaintiff, not merely whether the collateral purpose of the proceeding outweighs any legitimate purpose but whether the plaintiff entertained any substantial intention that the proceeding should achieve a legitimate purpose.
For these reasons, I would hold that an abuse of process occurs when the only substantial intention of a plaintiff is to obtain an advantage or other benefit, to impose a burden or to create a situation that is not reasonably related to a verdict that might be returned or an order that might be made in the proceeding.
129 His Honour then moved to discuss the application of the relevant principles to the case before the Court. In concluding, his Honour found that the appeal should be allowed and the trial judge's orders restored.
130 Justice Deane took a different view of the relevant law from the views expressed by the plurality and Brennan J.
131 Justice Gaudron, on the other hand, agreed with the explanation of the relevant principles given by the plurality. At 552-554, her Honour said:
It is convenient to adopt the expression "improper purpose" to describe the kind of purpose that must be established before proceedings or some step in proceedings can be characterized, by reason of the purpose involved, as an abuse of process. And, on that basis, I can at once state my agreement with Mason C.J., Dawson, Toohey and McHugh JJ. that an improper purpose is sufficient, without an improper act, to justify a stay. That, of course, says nothing as to the tort of collateral abuse of process which, I am inclined to think, requires some act amounting to a misuse or attempted or threatened misuse of the process involved. And I agree with their Honours that a stay may be granted on the basis of improper purpose even though there are reasonable grounds for the proceedings or for the taking of the particular step concerned. However, I differ from their Honours in that, in my view, something over and above what is involved in this case is necessary before a purpose can be identified as improper.
The kind of purpose that will indicate that proceedings should be stayed as an abuse of process is the same kind that marks out the tort of collateral abuse of process, they being different remedies deriving from the same law and based on those principles which protect the courts and their processes (In re Majory, [1955] 1 Ch. 600, at pp. 623-624). The tort was recognized by this Court in Varawa v. Howard Smith Co. Ltd. ((1911) 13 C.L.R. 35. For earlier discussion see Bayne v. Ballieu (1908), 6 C.L.R. 382, at p. 401; Bayne v. Blake (1909), 9 C.L.R. 347, at pp. 358-359) and in Dowling v. Colonial Mutual Life Assurance Society Ltd. ((1915) 20 C.L.R. 509). However, in neither of those cases was the tort established. The tort was made out in QIW Retailers Ltd. v. Felview Pty. Ltd. ([1989] 2 Qd R. 245). And in Hanrahan v. Ainsworth ((1990) 22 N.S.W.L.R. 73) it was held that there was sufficient evidence to be left to a jury. These appear to be the only reported cases in this country in which a plaintiff has succeeded on the tort or on some aspect of it. The same pattern can be observed in other jurisdictions, there being few successful claims since Grainger v. Hill ((1838) 4 Bing. (N.C.) 212 [132 E.R. 769]), the case in which the tort was established. Successful claims were made in Gilding v. Eyre ((1861) 10 C.B. (N.S.) 592 [142 E.R. 584]) in the United Kingdom, in Guilford Industries Ltd. v. Hankinson Management Services Ltd. ((1973) 40 D.L.R (3d) 398) in Canada and in Dishaw v. Wadleigh ((1897) 44 N.Y.S. 207) in the United States of America. The list is not exhaustive.
The cases in this area speak in terms that are not entirely explicit. The terms used include "[a purpose] foreign to the scope of the process" (Varawa v. Howard Smith Co. Ltd. (1911), 13 C.L.R., at p.55, per Griffith C.J. See also, at p.70, per O'Connor J.), "an object not within the scope of the process" (Parton v. Hill (1864), 10 L.T. (N.S.) 414, at p. 415), "some collateral advantage ... [other than] the purpose for which such proceedings are ... designed" (In re Majory, [1955] 1 Ch. 600, at pp. 623-624), or a "collateral advantage ... beyond what the law offers" (Goldsmith v. Sperrings Ltd., [1977] 1 W.L.R. 478, at pp. 498-499; [1977] 2 All E.R. 566, at p. 582). These expressions can be traced to Grainger v. Hill where the expressions used included "an object not within the scope of the process" ((1838) 4 Bing. (N.C.), at p. 221, per Tindal C.J. [132 E.R., at p. 773]) and "an ulterior purpose" (ibid., at p. 224, per Bosanquet J. [E.R., at p. 774]. See also Varawa v. Howard Smith Co. Ltd (1911), 13 C.L.R., at p. 91, per Isaacs J.). The terms leave it to be discovered from the facts of the cases in which abuse has been established (or potentially established) what it is that makes a purpose "foreign" or "ulterior".
I have already stated my agreement with the conclusion of Mason C.J., Dawson, Toohey and McHugh JJ. that an improper act is not essential. However, it should be noted that many, if not all, of the cases in this area and in which it has been held that there was an abuse of process have involved some positive act. That is not surprising: many cases are cases in tort where damage is essential, and it is difficult to conceive of damage occurring in this area without some act or threat; and, at least ordinarily, improper purpose is discoverable only because of some act done in furtherance of the purpose. Notwithstanding my view that improper purpose is sufficient to justify a stay, it is necessary to have regard to the cases involving an improper act for, otherwise, very little useful guidance is to be had.
The cases in which abuse of process has been established have usually involved an act described in terms such as "extortion" (Gilding v. Eyre (1861), 10 C.B. (N.S.), at p. 605 [142 E.R., at p. 590]. See also Guilford Industries (1974), 40 D.L.R. (3d), at p. 405, where the act was described as obtaining "a settlement by means of legal 'blackmail'"), "coercing" (Dishaw v. Wadleigh (1897), 44 N.Y.S., at p. 210) or "bring[ing] pressure to bear ... to force [a result]" (QIW Retailers Ltd. v. Felview, [1989] 2 Qd R., at p. 258). These terms signify a claim or demand made without right and without claim of right. And without going to the detail of the cases in which those expressions were used, it is fair to say that, save in the case of Gilding v. Eyre, what was demanded was unrelated to the right, interest or wrong asserted in the proceedings which were held to constitute an abuse of process or, in the case of ancilliary proceedings, the right, interest or wrong asserted by the particular process involved.
132 In Walton v Gardiner (1993) 177 CLR 378, complaints which had been made against three medical practitioners were referred to the Medical Tribunal constituted under the Medical Practitioners Act 1938 (NSW). The complaints alleged misconduct in the treatment of patients at Chelmsford Private Hospital in Sydney. The complaints were accompanied by wider allegations of the inappropriateness of the kind of treatment being given at Chelmsford, including the use of deep sleep therapy in conjunction with electro-convulsive therapy. In 1986, on the application of two of the doctors in question, the Court of Appeal (NSW) granted a stay of the proceedings before the Tribunal as against those practitioners. The basis for the stay was that there had been a prolonged delay in dealing with the alleged misconduct after the relevant facts had become known. The Medical Tribunal itself stayed proceedings against the third practitioner. A subsequent Royal Commission reported adversely on the conduct of all three practitioners. In 1991, fresh complaints were made against them which, though not the same as the earlier complaints, arose out of the same pattern of professional conduct as had given rise to the earlier complaints and raised issues which substantially overlapped those that would have arisen under the earlier complaints. The Court of Appeal (NSW) stayed the new complaints on the ground that they were so unfairly and unjustly oppressive as to constitute an abuse of process.
133 The High Court, by majority, held that the proceedings had been properly stayed.
134 The majority (Mason CJ, Deane and Dawson JJ) recounted the history of the disciplinary proceedings against Dr Gardiner and the other two doctors at 382-392 and then discussed the grounds that had been advanced in support of the stay granted by the Court of Appeal.
135 At 392, their Honours referred to the essence of the judgments in the Court of Appeal. They noted that Gleeson CJ and Kirby P considered that the Court of Appeal has power to make an order staying proceedings if it is satisfied that the continuation of the proceedings would be "so unfairly and unjustifiably oppressive" as to constitute an abuse of process. Mahoney JA considered that the question for the Court of Appeal was whether, in all the circumstances, the continuation of the proceedings before the Tribunal would involve unacceptable injustice or unfairness. The majority judges in the High Court observed that, in their view, the test propounded by Mahoney JA was, in substance, the same as that which had been propounded by Gleeson CJ and Kirby P. The majority in the High Court expressly approved the approach adopted by the Court of Appeal.
136 At 392-393, the majority said:
The inherent jurisdiction of a superior court to stay its proceedings on grounds of abuse of process extends to all those categories of cases in which the processes and procedures of the court, which exist to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness. Thus, it has long been established that, regardless of the propriety of the purpose of the person responsible for their institution and maintenance, proceedings will constitute an abuse of process if they can be clearly seen to be foredoomed to fail (See, e.g., Metropolitan Bank v. Pooley (1885), 10 App. Cas. 210, at pp. 220-221; General Steel Industries Inc. v. Commissioner for Railways (N.S.W.) (1964), 112 C.L.R. 125, at pp. 128-130). Again, proceedings within the jurisdiction of a court will be unjustifiably oppressive and vexatious of an objecting defendant, and will constitute an abuse of process, if that court is, in all the circumstances of the particular case, a clearly inappropriate forum to entertain them (See, generally, Voth v. Manildra Flour Mills Pty. Ltd. (1990), 171 C.L.R. 538). Yet again, proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings (See, e.g., Reichel v. Magrath (1889), 14 App. Cas. 665, at p. 668; Connelly v. Director of Public Prosecutions, [1964] A.C. 1254, at pp. 1361-1362). The jurisdiction of a superior court in such a case was correctly described by Lord Diplock in Hunter v. Chief Constable of the West Midlands Police ([1982] A.C. 529, at p. 536) as "the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people".
137 The majority then referred to Jago and said that at least three of the five members of the Court who decided that case had specifically rejected the narrower view that a court's power to protect itself from an abuse of process in criminal proceedings is limited to traditional notions of abuse of process. At 393-395, the majority said:
His Honour quoted, with approval, the following remarks of Richardson J. of the New Zealand Court of Appeal in Moevao v. Department of Labour ([1980] 1 N.Z.L.R. 464, at p.481):
"public interest in the due administration of justice necessarily extends to ensuring that the Court's processes are used fairly by State and citizen alike. And the due administration of justice is a continuous process, not confined to the determination of the particular case. It follows that in exercising its inherent jurisdiction the Court is protecting its ability to function as a Court of law in the future as in the case before it. This leads on to the second aspect of the public interest which is in the maintenance of public confidence in the administration of justice. It is contrary to the public interest to allow that confidence to be eroded by a concern that the Court's processes may lend themselves to oppression and injustice."
Deane J. expressed a similar view in his judgment in Jago ((1989) 168 C.L.R., at p. 58):
"The power of a court to stay proceedings in a case of unreasonable delay is not confined to the case where the effect of the delay is that any subsequent trial must necessarily be an unfair one. Circumstances can arise in which such delay produces a situation in which any continuation of the proceedings would, of itself, be so unfairly and unjustifiably oppressive that it would constitute an abuse of the court's process. Multiple prosecutions arising out of the one set of events but separated by many years or a renewed charge brought years after the dismissal of earlier proceedings for want of prosecution could, in a case where the relevant material had been available to the prosecution from the outset and depending on the particular facts, provide examples. Where such circumstances exist, the power of a court to prevent abuse of its process extends to the making of an order that proceedings be permanently stayed."
In her judgment in Jago (ibid., at p.74), Gaudron J. stressed that the power of a court "to control its own process and proceedings is such that its exercise is not restricted to defined and closed categories, but may be exercised as and when the administration of justice demands." Her Honour added the comment (ibid., at p.74) "that, at least in civil proceedings, the power to grant a permanent stay should be seen as a power which is exercisable if the administration of justice so demands, and not one the exercise of which depends on any nice distinction between notions of unfairness or injustice, on the one hand, and abuse of process, on the other hand". Subsequently in her judgment (ibid., at p.77), her Honour made clear that, subject to some refinements which she identified, that comment was also appropriate to be adopted in relation to criminal proceedings.
It should be mentioned that there was considerable discussion in the course of argument about the effect of some comments in the judgment of the majority of the Court in Williams v. Spautz ((1992) 174 C.L.R. 509, at pp. 519-520). When those comments are properly understood in context, however, there is nothing in them which supports the proposition that a permanent stay of proceedings can only be ordered on the ground of either improper purpose or no possibility of a fair hearing. Indeed, careful examination of them discloses that they lend some support to a denial of that proposition (ibid., at p. 520, see, in particular, the approving reference to the judgment of Richardson J. in Moevao v. Department of Labour, [1980] 1 N.Z.L.R 464, at p. 482).
138 Justice Brennan was of the opinion that the Court of Appeal's supervisory jurisdiction under s 23 of the Supreme Court Act 1970 (NSW) is confined to ensuring that the relevant tribunal acts within its jurisdiction and power, that its jurisdiction has not been invoked for an impermissible purpose and that the way in which it exercises its jurisdiction is not oppressive so as to prevent the proceeding before it from being fairly tried.
139 At 416, his Honour said:
The traditional view with respect to the scope of abuse of process has been described as "narrower" than the scope of abuse of process endorsed by some of the judgments in Jago ((1989) 168 C.L.R., at pp. 27-30, 58, 74). I adopt the narrower view not only because it is traditional but because it denies to judges and to other repositories of jurisdiction conferred for the public benefit (that being the character of the jurisdiction conferred on the Tribunal by Pt 3A of the Act) any discretion to refuse to do justice according to law. It is the very absence of that discretion which maintains the rule of law and the authority of courts and of judicial tribunals to administer the law.
140 His Honour held that the stay order granted by the Court of Appeal was erroneous in principle.
141 At 420, Toohey J indicated general agreement with the reasons of Brennan J. At 421, his Honour emphasised that Walton v Gardiner was not a case where the basis of the alleged abuse of process was improper purpose.
142 In Rogers v The Queen (1994) 181 CLR 251 (Rogers), the High Court again dealt with the question of abuse of process in the criminal context.
143 At 255, Mason CJ said:
I agree with the reasons given by Deane and Gaudron JJ. for concluding that the prosecution's tender of the records of interview constituted a direct challenge to the 1989 determination and was therefore an abuse of process. The concept of abuse of process is not confined to cases in which the purpose of the moving party is to achieve some foreign or ulterior object, in that it is not that party's genuine purpose to obtain the relief sought in the second proceedings. The circumstances in which abuse of process may arise are extremely varied and it would be unwise to limit those circumstances to fixed categories (Hunter v. Chief Constable, [1982] A.C., at p. 536, per Lord Diplock). Likewise, it would be a mistake to treat the discussion in judgments of particular circumstances as necessarily confining the concept of abuse of process.
144 The Chief Justice adverted to the majority judgment in Walton v Gardiner at 393 and 395 in order to emphasise the proposition that the power of a superior court to grant a permanent stay of proceedings was not limited to cases where the proceeding was brought for an improper purpose or where there was no possibility of a fair hearing.
145 After referring to Walton v Gardiner, the Chief Justice said (at 256):
… there are two aspects to abuse of process: first, the aspect of vexation, oppression and unfairness to the other party to the litigation and, secondly, the fact that the matter complained of will bring the administration of justice into disrepute. This led the majority in Walton v. Gardiner to state that the question whether criminal proceedings should be permanently stayed was to be determined by a weighing process involving a balancing of a variety of considerations ((1993) 177 C.L.R., at pp. 395-396). Those considerations, which reflect the two aspects of abuse of process outlined above, include (ibid., at p. 396):
"the requirements of fairness to the accused, the legitimate public interest in the disposition of charges of serious offences and in the conviction of those guilty of crime, and the need to maintain public confidence in the administration of justice."
In the present case, a weighing of these considerations inevitably compels the conclusion that a stay should be ordered. ...
146 Justice McHugh commenced his discussion of abuse of process at 286. There, and at 287, his Honour said:
Inherent in every court of justice is the power to prevent its procedures being abused (Hunter v. Chief Constable of the West Midlands Police, [1982] A.C. 529, at p. 536). Although the categories of abuse of procedure remain open, abuses of procedure usually fall into one of three categories: (1) the court's procedures are invoked for an illegitimate purpose; (2) the use of the court's procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court's procedures would bring the administration of justice into disrepute. Many, perhaps the majority of, cases of abuse of procedure arise from the institution of proceedings. But any procedural step in the course of proceedings that have been properly instituted is capable of being an abuse of the court's process. In Walton v. Gardiner ((1993) 177 C.L.R. 378, at p. 393), Mason C.J., Deane and Dawson JJ. said that the jurisdiction to stay proceedings that are an abuse of process "extends to all those cases in which the processes and procedures of the court, which exist to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness". Their Honours gave three examples of such an abuse of process. ((1993) 117 C.L.R., at p. 393). One of them is the case where an estoppel cannot be established but the proceedings are unjustifiably oppressive because it is sought to litigate an issue which has already been disposed of by earlier proceedings (See, e.g., Reichel v. Magrath (1889), 14 App. Cas. 665, at p. 668; Connelly v. Director of Public Prosecutions, [1964] A.C. 1254, at pp. 1361-1362). Reichel v. Magrath ((1889) 14 App. Cas. 665) is the paradigm example of such a case.
147 The following propositions may be distilled from the above discussion of Spautz, Walton v Gardiner, Rogers, Ridgeway, Batistatos and PNJ:
(a) Every superior court has an inherent power to prevent its procedures from being abused (Hunter v Chief Constable of the West Midlands Police [1982] AC 529 at 536; Spautz at 518 and the cases there cited; and Rogers at 287).
(b) The categories of abuse of process are not closed (Batistatos at 265-267 [9]-[15]; PNJ at 613 [3]; and Ridgeway at 75). The concept is not at large or without meaning. Notions of justice and injustice must reflect contemporary values if the courts and the administration of justice are to continue to enjoy the confidence of the public (Ridgeway at 75).
(c) Abuses of procedure usually fall into one of the following three broad categories:
(i) The court's procedures are invoked for an illegitimate or improper purpose;
(ii) The use of the court's procedures is unjustifiably oppressive to one of the parties or vexatious; or
(iii) The use of the court's procedures in the manner contemplated would bring the administration of justice into disrepute.
(Rogers at 287; PNJ at 613 [3]).
(d) An improper purpose is a purpose to use a proceeding as a means of obtaining some advantage for which that proceeding is not designed (Varawa at 91; Dowling at 524; and Spautz at 526-527). It is the use of the proceeding which must be examined and which may constitute an abuse of process (Spautz at 527-528). It is not necessary that, in addition to the improper purpose, the abuser must have committed an improper act. In this context, the purpose of the plaintiff is the result which the institution of the relevant proceeding is capable of producing and the result which it is intended to produce (Spautz at 532-533). The purposes which legal proceedings are designed to serve are the protection or vindication of particular rights or immunities, the maintenance or affection of particular legal relationships and the imposition of particular legal penalties, liabilities and obligations (Spautz at 532-533). The pursuit of a legal remedy is not converted into an abuse of process merely by an unworthy or ulterior motive (Spautz at 533-534).
(e) An abuse of process occurs when the processes and procedures of the court are utilised as instruments of injustice or unfairness. For example, a proceeding will constitute an abuse of process if it can be clearly seen to be foredoomed to fail (Walton v Gardiner at 392-393). Other examples of unjustifiably oppressive and vexatious proceedings are: where the proceeding seeks to litigate anew a case which has already been finally disposed of by earlier proceedings even though no res judicata or issue estoppel can be established; where unreasonable delay on the part of the plaintiff has made it extremely difficult for the defendant to marshal and bring forward evidence in her defence; and where the legitimate public interest in having those who commit offences brought to justice promptly is not served by reason of delay.
(f) The onus of proving an abuse in any given case rests upon the party alleging abuse. That onus is a heavy one (Spautz at 529).
148 In their textbook Class Actions in Australia (2nd ed, Thomson Reuters, 2012) at pp 7-8 [1.170], the learned authors (Messrs Grave, Adams and Betts) summarise the views expressed by the Australian Law Reform Commission (ALRC) in its report, Grouped Proceedings in the Federal Court, Report No 46 (1988). At [2] of the Report, the ALRC said:
Allowing proceedings to be brought on behalf of a group or class of persons can ensure that persons who have a cause of action arising from multiple wrong-doing are not prevented or discouraged from having that claim determined by a court as a result of lack of resources, cost barriers or ignorance of legal rights. In addition, the grouping of many claims into one proceeding may be a more efficient way of determining the issues which are common to those claims than separate proceedings would be.
149 The ALRC considered that the class actions procedure had a number of advantages. These are set out by the learned authors at p 7 in their textbook in the following terms:
Reducing the cost of court proceedings to the individual;
Enhancing access by the individual to legal remedy;
Promoting efficiency in the use of court resources;
Ensuring consistency in the determination of common issues; and
Making the law more enforceable and effective.
150 Overall, the ALRC considered the class action procedure to provide a desirable mechanism for the expeditious, fair and cost effective determination of claims with common features made by a large number of persons. The procedure is regarded as particularly useful when each individual claim is for a relatively small amount of money.
151 It is now also well accepted that the lawyers who represent the lead claimant in a class action owe a fiduciary duty to the members of the class in that proceeding, even where those lawyers have not been retained by some members of the class (King v AG Australia Holdings Ltd (2002) 121 FCR 480 at 488-489 [24]-[27] per Moore J).
152 This Court has developed special procedures for dealing with class actions. Integral to those procedures is effective case management in which the Court retains a keen ongoing interest.
153 TWE's abuse of process application must be considered in the class action context which I have briefly described at [148]-[152] above.
154 As already noted, TWE relies upon all three of the broad categories of abuse of process identified by the High Court in PNJ at 613 [3].
155 The main focus of TWE's submissions was on the first category of abuse, namely, the invoking of the Court's processes for an illegitimate or collateral purpose.
156 In order to address TWE's arguments in support of their broad contention that the present proceeding has been brought for an illegitimate or collateral purpose, I make the following findings:
(a) Mr Elliott's purpose in causing MCI to bring this proceeding may be safely attributed to MCI as its purpose for bringing this proceeding. This is because Mr Elliott is the sole director and sole shareholder of MCI and because there is no evidence to suggest that any other person has any say in the affairs of MCI.
(b) Mr Elliott did not give evidence before me. Thus, there is no direct evidence from Mr Elliott explaining his purpose in causing MCI to behave as it has done in bringing this proceeding. However, for reasons which I will outline below, I consider that, in the circumstances of this case, it was incumbent upon Mr Elliott to proffer an explanation for MCI's conduct in evidence given to the Court. In particular, in my view, he was obliged to explain his purpose in bringing this proceeding. In all of the circumstances, his failure to do so provides a basis for the Court to draw certain adverse inferences against MCI.
(c) In the period between November 2012 and May 2014, Mr Elliott caused MCI to purchase a small parcel of shares in each of 157 corporations listed on the ASX. Mr Elliott did not cause MCI to make those purchases because he was interested in investing in each of the corporations in which shares were purchased either as a long-term investor or as a trader.
(d) As found by Ferguson J in TWE No 1, MCI was created by Mr Elliott as a vehicle for bringing class actions against listed corporations alleging (inter alia) breaches of continuous disclosure obligations by those corporations.
(e) Mr Elliott caused MCI to make the share purchases which it made in order to enable MCI to position itself to move quickly to commence a class action as the lead plaintiff against any one or more of the corporations in which the shares were purchased and, to the extent possible, to enable Mr Elliott himself to earn legal fees from the exercise. By positioning MCI in this way, Mr Elliott intended that MCI would be best placed to initiate class actions as the lead claimant in the event that opportunities to do so presented themselves in the future. MCI would then be well-placed to negotiate with other relevant parties in relation to such actions for its own financial benefit. These parties would include class action lawyers, litigation funders and, of course, the proposed defendants themselves.
(f) The causes of action pleaded in this proceeding are immaterial to MCI's purpose in commencing it. The question of ultimate success is also immaterial to MCI's purpose. As found by Ferguson J in TWE No 1, MCI had no interest in recovering the insignificant amount of $700 when it launched this proceeding. Its purpose was to gain a financial benefit for itself which was likely to exceed that amount to a very significant degree. MCI's purpose is not altruistic. It has not positioned itself in the manner which I have described in order to champion at its own cost and risk shareholders who have suffered losses at the hands of defaulting corporations.
(g) These findings are broadly in line with the findings made by Ferguson J and the Court of Appeal in the first MCI proceeding although the focus of the Court in that proceeding was on Mr Elliott's role as the solicitor for MCI.
(h) Given the reasons for MCI's purchases of shares which I have found, it is very difficult, if not impossible, for Mr Elliott to contend in the present proceeding that MCI actually relied upon the various positive statements made by TWE to the ASX said to constitute contraventions of the Corporations Act or that MCI actually relied upon the integrity of the share market including adherence by TWE to its statutory obligations to make accurate ongoing material disclosures from time to time. Furthermore, it would be very difficult for MCI to persuade the Court at a final hearing that, in the circumstances to which I have referred, it should be able to rely upon market-based causation theory to establish an indirect basis for reliance by it on the alleged contraventions committed by TWE. In blunt terms, Mr Elliott and MCI almost certainly did not rely upon anything TWE said or failed to say or do when it purchased the 140 ordinary fully paid shares in TWE which it purchased on 1 November 2012. This was the very first parcel of shares acquired by MCI. That circumstance is suggestive of the possibility that Mr Elliott may, by 1 November 2012, already have formed the view that there may be grounds for MCI to mount a class action against TWE alleging contraventions of the type now incorporated in the Statement of Claim filed by MCI in this proceeding.
(i) MCI's efforts to dissociate Mr Elliott from the present proceeding began immediately after Ferguson J gave judgment in TWE No 1. Very soon after that judgment was delivered, MCI took steps to replace Mr Elliott as the solicitor on the record in the first MCI proceeding with Tan and Partners.
(j) In late August 2014, Portfolio Law was incorporated. Those who appear to stand behind that incorporated legal practice have no experience in running class actions and have ongoing connections with other practices. Neither Mr Zita nor Mr Sica gave evidence before me. Although TWE did not establish by direct evidence that Mr Elliott was involved in the management of Portfolio Law or that he stood to gain financially from its operations, I think that it is more probable than not that Mr Elliott is concerned in the affairs of Portfolio Law in some fashion designed to bring him or MCI financial reward. No-one came forward to explain the circumstances in which Portfolio Law came to be incorporated nor did anyone explain why it was incorporated when it was. No-one came forward to deny that Mr Elliott was involved in the affairs of Portfolio Law. Evidence of these matters could easily have been brought forward but it was not.
(k) The insignificant amount sought to be recovered for itself by MCI in the present proceeding does not, on any rational basis, justify the commencement and maintenance of this proceeding. The costs of litigating the issues raised and the risk of an adverse costs order clearly militate against pursuing this proceeding to judgment or settlement. There is no evidence that MCI is being funded by an established litigation funder nor is there any evidence which would otherwise support the proposition that MCI has the capacity both to maintain the present proceeding and meet any adverse costs order.
157 The Court should not permit MCI to institute and maintain this class action when, as I have found, it is not doing so in order to obtain a remedy which the law provides either for itself as an individual claimant or for the members of the class which it purports to represent. In addition, it plainly does not have the capacity to fund this proceeding itself and has not attempted to satisfy the Court that it has put in place secure litigation funding which will cover its own costs and the amount of any adverse costs order. MCI's claims are, at best, very weak if not hopeless. Its causation theory is problematic. MCI commenced this proceeding knowing that the Jones proceeding was on foot. It also commenced this proceeding with the intention of using it as a "fallback" or "failsafe" against the possibility that the first MCI proceeding would remain permanently stayed as an abuse of process.
158 The purposes of MCI identified and discussed at [156]-[157] above demonstrate that this proceeding has been brought for an illegitimate or collateral purpose. For that reason, it constitutes an abuse of process and should be permanently stayed. It is also oppressive and vexatious vis-à-vis TWE and, if allowed to be maintained, will bring the administration of justice into disrepute. Nonetheless, I note that the claims made by MCI in this proceeding on its own account will be able to be litigated in due course in the Jones proceeding if MCI does not opt out of that proceeding. For this reason, the orders which I propose to make will not deny to MCI any legitimate remedy to which it may be entitled.
159 In light of the findings which I have made and the conclusions which I have reached, I have not found it necessary to consider in detail whether the decisions of Ferguson J and the Court of Appeal in the Supreme Court gave rise to the estoppels by way of issue estoppel for which TWE contended. However, in deference to the parties' submissions, I will briefly state my conclusions in relation to the arguments based upon issue estoppel.
160 First, I am of the view that the Court of Appeal's decision has the necessary quality of being final and on the merits for the purposes of considering the arguments based upon issue estoppel. While that decision may technically be interlocutory, it has the legal and practical effect of terminating the first MCI proceeding.
161 Second, I think that the statements of legal principle extracted by me at [63(a)] and [63(b)] above do bind both MCI and TWE in the present proceeding. I pause to observe that, in my view, in any event, those statements of principle correctly state the law.
162 Third, I am of the opinion that both MCI and TWE are bound by the findings to which reference is made in subpars (c) to (f) of [63] above. However those findings have to be viewed in the context in which they were made. In particular, they have to be viewed against the ultimate conclusion expressed by the Court of Appeal that the vice in MCI's conduct in instituting the first MCI proceeding was that it did so in order to provide a means for Mr Elliott to earn legal fees from that proceeding. The particular findings to which I have referred can only have relevance to the present proceeding if they can be viewed as extending beyond the context in which they were made in the first MCI proceeding. I do not think that they can be so viewed.