Whether any Anshun estoppel arises in the present matter
62 To a not insignificant degree much of the criticism from the Receivers' solicitors appears to involve the allegation that MSI will be estopped from pursuing the proceedings once they are served, or that service will be set aside. Whether that result will ultimately occur is not necessary to decide on the present application. Here, all that needs to be determined is whether the prevention of the continuation of this action is "inevitable": Trina Solar, 26 [117] - [119]: and that question is to be answered at a high level of abstraction rather through the undertaking of a mini trial.
63 One initial difficulty is that it cannot be said with any degree of certainty that service will be set aside on Anshun estoppel grounds or an abuse of process grounds because it may well be that an appearance will need to be entered in this action prior to the delivery of judgment in the WASC Proceedings. In the absence of any determination in those proceedings the scope for any Anshun estoppel or abuse of process to arise is limited.
64 In general terms Anshun estoppel precludes the assertion of a claim which is so connected with the subject matter of a prior proceeding that it was unreasonable, in the context of the prior proceeding, for the claim in question not to have been raised in it: Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589, 602-3 (1981) 147 CLR 589, 602-3 (Anshun); Timbercorp Finance Pty Ltd (in liq) v Collins (2016) 259 CLR 212, 229 [27] per French CJ, Kiefel, Keane and Nettle JJ; 245 [97] per Gordon J (Timbercorp). In this formulation much turns on the notion of what constitutes "unreasonableness" in the circumstances of the earlier litigation. It has been stressed that it is a fundamental error in the application of Anshun estoppel principles to hold that simply because a claim could have been raised in earlier proceedings that it was unreasonable not to do so. Rather, the claim must have been so "relevant" in the first proceedings that it was unreasonable for the party seeking to advance it in later proceedings not to have raised it: Champerslife Pty Ltd v Manojlovski (2010) 75 NSWLR 245 (Champerslife).
65 It is well established that the principle can extend to claims that could have been raised by way of cross-claim in prior litigation: Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287, 297-8: although it is generally more difficult to conclude that a party acted unreasonably by refraining from litigating a cross-claim as opposed to raising a defence: Champerslife, 253 [41]. In Anshun itself it was observed at 600 that, "[t]o require that the defendant always raise his cross-claim or set-off at the first available time could cause great inconvenience". This observation supports the established principle that the question to be answered is not whether the cause of action "could" have been raised in the earlier proceedings, but whether in the circumstances it "should" have been: Champerslife 247 [3]-[4], 255 [52], 262 [89]. The greater the inconvenience or difficulty in making the cross-claim, the less unreasonable it will be not to raise it. On that basis, it will usually be even more difficult to establish that a cross-claim should have been made in an earlier proceeding when it is one to be made against an entity who was not a party to that earlier action.
66 Further, the mere fact that the earlier proceedings and those which is sought to be stayed have similarities or are closely related, is not sufficient to attract the principle. In Timbercorp the majority stressed that the determination of the issue is not dependent upon the degrees of similarity between matters raised in the two actions.
67 It follows that an evaluative judgment is required of the conduct in the earlier proceedings in the circumstances of that case so as to determine whether there is sufficient connection between the two claims to justify preventing the agitation of the later claim. The following factors, as identified by MSI in its written submissions, are generally relevant to that determination:
(a) whether the claim now sought to be advanced could have been raised in the earlier proceedings;
(b) whether the matter was closely connected with the subject matter of the earlier proceedings;
(c) whether the omission to raise the matter in the earlier proceedings would contribute to conflicting judgments;
(d) whether, if the omitted matter were postponed, there would be an increase in costs; and
(e) whether there was a reasonable explanation for the omission.
68 In respect of the latter point, in Anshun itself Gibbs CJ, Mason and Aickin JJ (at 602 - 603) observed:
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.
69 There can be little doubt that when an Anshun point is raised, an important issue is whether the continuation of the later proceedings creates the possibility of there being conflicting judgments. Where the point or claim sought to be raised is in direct conflict with the determination in an earlier proceedings, that may of itself provide a justification for staying the subsequent action. However, the concern here is with conflicting or inconsistent judgments rather than merely inconsistent findings. In this respect MSI relied upon the observations of Santow J in Minero Pty Ltd v Redero Pty Ltd (unreported, NSWSC, Santow J, 29 July 1998) where his Honour said:
But it does not follow that every issue of fact determined or, importantly, expressly assumed in the course of a judgment is to be treated as giving rise to inconsistent judgments if attempted to be re-visited in a subsequent proceeding. In Port Melbourne Authority (above) at 603, Gibbs CJ, Mason and Aickin JJ cite the decision of Brewer v Brewer (1953) 88 CLR 1 as "illuminating". …. According to Fullagar J, a conflicting judgment is one that contradicts an assumption "which was fundamental to the decision in the sense that, if the assumption had not been made, the decision must have been different".
The quoted passage from Fullagar J makes clear that "assumption" includes not only a point which might have been raised but was omitted in the first proceedings, but also the point which was not argued but expressly assumed against the party who might have argued it. Both are of course potential examples of Anshun estoppel. ...
[T]he principle of avoiding conflicting judgments is not truly involved, where the second proceedings is in relation to a claim reasonably omitted from the first though based on the same matrix of facts. If a different result occurs in the second proceedings, the conflict is not truly between decisions but ultimate result; the first decision never dealt with the omitted claim nor reasonably should it have.
70 Here, a conflict of a relevant type might arise. If in the WASC Proceedings it is determined that the agreement was not legitimately terminated by the Receivers, MBN and MBI, that conclusion may conflict with a decision in the present action in which it is alleged that the agreement was terminated. That necessarily raises concern although, at present, there is no decision in the WASC Proceedings. In these circumstances the prospect of there being inconsistent judgments or findings is entirely speculative. As Mr Stewart QC submitted, in the absence of any decision in the WASC Proceedings, consideration of Anshun estoppel is somewhat premature.
71 An important consideration is that MMB was not and is not a party to the WASC Proceedings. Whilst an Anshun estoppel may arise in relation to a claim which could have been brought in the earlier proceedings against a third party to them: Deep Investments v Casey (2018) 125 ACSR 564, 599 [173]; ACCC v Swishette Pty Ltd [2018] FCA 55 [113]: such an issue usually arises where a plaintiff has proceeded against one party but failed, and then commenced new proceedings against an alternative defendant which had not been joined to the original action. In those cases the potential for conflicting judgments is obvious and the unreasonableness of not joining all potential defendants in the one action may loom large.
72 However, different evaluative considerations must necessarily apply where the complaint is that a claim was not brought in the original proceedings by way of a cross-claim against a third party by a defendant. In such circumstances the authorities identify that any unreasonableness in not joining the third party should amount to an abuse of process before denying the plaintiff its entitlement to litigate its valid claim in the most convenient manner to it: Redowood Pty Ltd v Link Market Services Pty Ltd (formerly known as ASX Perpetual Registrars Ltd) [2007] NSWCA 286 [45], [50]. In that case, it was observed that there is no inveterate rule that a litigant must bring all its claims in relation to a matter in the one proceedings thereby complicating the litigation and rendering it more expensive for all involved. In Solak v Registrar of Titles (2011) 33 VR 40, 54 - 55 [69], Warren CJ (Neave JA agreeing) recognised that a similar position existed in the United Kingdom. The Chief Justice said:
The English Court of Appeal has expressed a similar sentiment. In Aldi Stores Ltd v WSP Group Plc, [[2008] 1 WLR 748] Thomas LJ stated [at 764, [25].]:
[T]here is a real public interest in allowing parties a measure of freedom to chose whom they sue in a complex commercial matter and not to give encouragement to bringing a single set of proceedings against a wide range of defendants or to complicate proceedings by cross-claims against parties to the proceedings. That freedom can and should be restricted by appropriate case management.
73 The Chief Justice went on to explain (at 55 [70] - [71]):
70. All of the Australian cases to which the court was referred where a defendant who was not a party to the first proceeding was able to successfully rely on Anshun estoppel in the second proceeding involved the estopped plaintiff attempting to assert in the second proceeding some proposition inconsistent with the judgment in the first proceeding. Even if such a collateral attack by the plaintiff is not a necessary precondition for Anshun estoppel, its absence is a significant factor militating against a finding that Anshun estoppel has arisen.
71. It is not necessary in this case to decide whether special principles or a different test applies where the person asserting Anshun was not a party to the first proceeding. It is clear that the test is at least as strict as the test applicable in a case where the parties are the same. Applying that test, I am satisfied that no Anshun estoppel arises in this case.
74 It follows that a conclusion that it was unreasonable for the plaintiff not to join the third party in the earlier proceedings is neither conclusive nor of such a nature that the latter proceedings should necessarily be regarded as an abuse of process: Ekes v Commonwealth Bank of Australia (2014) 313 ALR 665, 698 [131] - [132] per Bathurst CJ (Beazley P agreeing).
75 Mr Stewart QC also referred to the possibility of MMB raising a claim of "abuse of process" in relation to the proceedings on the basis that it raises a similar issue of law in a subsequent proceeding. The nature of this kind of abuse of process was considered by the High Court in Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507, 518 - 519 [25] - [26], where the plurality observed:
25 Abuse of process, which may be invoked in areas in which estoppels also apply, is inherently broader and more flexible than estoppel. Although insusceptible of a formulation which comprises closed categories, abuse of process is capable of application in any circumstances in which the use of a court's procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute. It can for that reason be available to relieve against injustice to a party or impairment to the system of administration of justice which might otherwise be occasioned in circumstances where a party to a subsequent proceeding is not bound by an estoppel.
26 Accordingly, it has been recognised that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel. Similarly, it has been recognised that making such a claim or raising such an issue can constitute an abuse of process where the party seeking to make the claim or to raise the issue in the later proceeding was neither a party to that earlier proceeding, nor the privy of a party to that earlier proceeding, and therefore could not be precluded by an estoppel.
76 As with Anshun estoppel, this principle can extend to those cases where a party seeks to relitigate against a party an issue which has already been determined in earlier proceedings against as between different parties: Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198. However, the weight of authority, albeit not all, suggests that for the subsequent proceedings to constitute an abuse of process, the issue which is sought to be relitigated was one which has been determined against the putative abuser.
77 Some guidance to the application of the concept of "abuse of process" in circumstances involving the prior litigation of an issue was given by Gyles CJ in State Bank of New South Wales Ltd v Stenhouse (1997) Aust Torts Reports 81-423, 64,089, where the Chief Justice said:
It is apparent from this brief review of the decisions that whether proceedings are, or an aspect of proceedings is, an abuse of process because a party seeks to relitigate an issue already decided depends very much on the particular circumstances. The guiding considerations are oppression and unfairness to the other party to the litigation and concern for the integrity of the system of administration of justice, and amongst the matters to which regard may be had are -
(a) the importance of the issue in and to the earlier proceedings, including whether it is an evidentiary issue or an ultimate issue;
(b) the opportunity available and taken to fully litigate the issue;
(c) the terms and finality of the finding as to the issue;
(d) the identity between the relevant issues in the two proceedings;
(e) any plea of fresh evidence, including the nature and significance of the evidence and the reason why it was not part of the earlier proceedings; all part of -
(f) the extent of the oppression and unfairness to the other party if the issue is relitigated and the impact of the relitigation upon the principle of finality of judicial determination and public confidence in the administration of justice; and
(g) an overall balancing of justice to the alleged abuser against the matters supportive of abuse of process.
78 The application of these principles requires a consideration of the precise issue in question and the circumstances surrounding the reasons why it was not advanced in the prior proceedings, including the ability of the alleged abuser to advance it on that occasion. Further it must be kept steadily in mind that staying a claim on this ground involves preventing a party seeking redress before the Court in respect of a claimed right which, prima facie, it is the obligation of the court to determine. That starting point of any consideration carries with it the usual reluctance of courts to exclude persons with valid claims from litigating them. It is, perhaps, for this reason that it is accepted that the power to stay a proceeding should be exercised with caution and only in the most exceptional or extreme case: Walton v Gardiner (1993) 177 CLR 378, 392.