PATRICK JEBB as trustee for THE TRAFALGAR WEST INVESTMENTS TRUST -v- SUPERIOR LAWNS AUSTRALIA PTY LTD [2019] WASCA 208 (23 December 2019)

Court of Appeal (WA)|2019-12-23|Before: Quinlan CJ

(This judgment was delivered extemporaneously on 12 December 2019 and has been edited from the transcript.)

The appellant appeals against orders made by Vaughan J on 17 April 2019, which were amended on 17 July 2019, in COR 177 of 2018 (primary proceedings). Relevantly, those orders included:

(a) Order 1, which was an order staying the primary proceedings until an amount (now specified as $175,000) is paid into court to meet the balance of the taxed costs of the defendants in COR 59 of 2011 (earlier proceedings) in accordance with the orders of Kenneth Martin J made on 8 February 2019;

(b) Order 2, which provided that if the temporary stay effected by order 1 had not been lifted by 17 July 2019, the primary proceedings would be dismissed;

(c) Order 3, which required that within 35 days of the date of the order, the plaintiff (the appellant) pay into court, by way of security for the costs of the defendants in the primary proceedings, an amount of $31,000 as an initial tranche in respect of the defendants' costs up to and including the close of pleadings;

(d) Order 7, which required that the plaintiff pay the defendants' costs of the application fixed in the sum of $8,360, to be paid within 35 days of the date of the order.

The appellant requires leave to appeal.[1] Generally speaking, leave should not be granted unless the decision below is plainly wrong or is attended by sufficient doubt to justify the grant of leave and a substantial injustice would be done if the decision remains undisturbed.[2]
The appellant advances 6 grounds of appeal (there are two grounds numbered '3') but three of those grounds merely seek to set aside orders 2, 4 and 7 of the orders made by the learned primary judge, if the other grounds of appeal are made out. Consequently, it is necessary only to deal with grounds 1 and 2 (which pertain to order 1) and grounds 3.1 ‑ 3.3 (which pertain to order 3).
For the reasons which follow, leave to appeal will be refused, and the appeal will be dismissed.
The background to the present appeal, as it concerns both the primary proceedings and the earlier proceedings, is set out in some detail in the reasons for decision given by the learned primary judge (primary reasons)[3], and in the decision of this court in Jebb as Trustee for Trafalgar West Investments Trust v Superior Lawns Australia Pty Ltd.[4] It is unnecessary for us to repeat that background here, save to make the following observation. The learned primary judge made the orders under appeal in response to an application by the defendants in the primary proceedings, which contained three planks:

(i) An application to permanently stay the primary proceedings as an abuse of the process of the court;

(ii) An application to stay the primary proceedings until the taxed costs of the earlier proceedings were paid into court (temporary stay application). The temporary stay application relied in part on the contention that the primary proceedings were an abuse of the process of the court;

(iii) An application for security for costs in relation to the primary proceedings (security for costs application).

The learned primary judge was not persuaded to permanently stay the primary proceedings on the basis that they were an abuse of process, but found the other two planks of the application had been made out.

In summary, in ground 1, the appellant contends that the learned primary judge erred in law in making order 1 because the inherent jurisdiction of the court to stay proceedings for an abuse of process did not encompass the power to stay the primary proceedings pending arrangements for the payment of costs in the earlier proceedings.
The learned primary judge held[5] that the inherent jurisdiction of the court extends to staying proceedings pending the payment of costs arising in interlocutory proceedings in the same action, or earlier proceedings raising the same, or substantially the same, cause or action or subject matter. He relied, in particular, on Sinclair v British Telecommunications plc[6] which his Honour regarded as having some parallels to the present case.[7] Further, while recognising that O 23 r 4 of the Rules of the Supreme Court 1971 (WA) did not apply (the earlier proceedings having been dismissed for want of prosecution rather than discontinued), his Honour nevertheless concluded that O 23 r 4 was significant because it recognised that subsequent actions may be stayed pending the payment of outstanding costs,[8] and the principles that informed that rule were reflective of the court's broader inherent jurisdiction to prevent an abuse of the process of the court.
We note that in the hearing of the application before the learned primary judge, the appellant did not dispute that the primary proceedings substantially repeated the claims made against the defendants in the earlier proceedings.[9]
The appellant contends that the inherent jurisdiction is enlivened only if the new proceedings are brought by, or on behalf of, the same or effectively the same party as is liable for the unpaid costs orders, and he contends that he was not a party to, or effectively the same party as the plaintiff in, the earlier proceedings. Further, the appellant submitted that the jurisdiction to stay proceedings against a successor in title, whether by assignment or otherwise, is predicated on the new plaintiff having avoided responsibility for the earlier proceedings or having unreasonably been the cause of the dismissal.[10]
Ground 1 has no merit, for the following reasons.
First, we see no error in the learned primary judge's analysis of the relevant authorities in relation to the scope of the court's inherent jurisdiction.
Secondly, the court's inherent jurisdiction to prevent an abuse of its processes is broad in scope, and flexible in its application. In the exercise of that discretion, the court has regard to substance and not form. In contrast, the appellant's submissions contemplate the exercise of the court's inherent jurisdiction in an inflexible and technical manner.
The appellant was not the plaintiff in the earlier proceedings. But the learned primary judge found that he was the controlling shareholder and directing mind and will of the plaintiff in those proceedings.[11] No challenge is made to that finding. The appellant contended that the Court of Appeal's inherent jurisdiction to grant a stay does not extend to circumstances in which the corporate plaintiff in the original proceedings has 'no voice' or ability to participate because of impecuniosity. He submitted that in those circumstances, the person who is the controlling mind of the corporate plaintiff has no ability to control that party's participation. Neither authority nor principle requires such a narrow view of the court's inherent jurisdiction.
We respectfully adopt the following observations of Kiefel CJ, Bell and Keane JJ in UBS AG v Tyne:[12]

The courts must be astute to protect litigants and the system of justice itself against abuse of process. It is to hark back to a time before this Court's decisions in Aon and Tomlinson ... to expect that the courts will indulge parties who engage in tactical manoeuvring that impedes the 'just, quick and efficient' resolution of litigation. To insist, for example, on 'inexcusable delay' as a precondition of the exercise of the power to stay proceedings as an abuse of process is to fail to appreciate that any substantial delay is apt to occasion an increase in the cost of justice and a decrease in the quality of justice. And other litigants are left in the queue awaiting justice. Further, there is no reason why the courts should tolerate attempts to manipulate other parties and the courts themselves by the deployment, by a single directing mind and will, of different legal entities under common control for such a purpose. The concern is as to whether the processes of the court are being abused. Given that this is the central concern, the circumstance that the abuse is effected by the use of multiple entities orchestrated by a single mind and will is no reason to tolerate it.

The appellant also submitted that the inherent jurisdiction arose only in cases where a new plaintiff had avoided responsibility for the earlier proceedings or unreasonably been the cause of the dismissal, however no authority was cited for that limitation on the scope of the inherent jurisdiction. In any event, that submission ignored the fact that the appellant, as the controlling mind of the plaintiff in the earlier proceedings, had failed to ensure that the plaintiff pursued its claim in a timely fashion, with the result that the action was dismissed for want of prosecution. We agree with the conclusion reached by the learned primary judge (at [204]) that right thinking people would not accept that the appellant's alter ego (the plaintiff in the earlier proceedings) having had its claim dismissed for want of prosecution, with costs, following the appellant's failure to cause the plaintiff to conduct that litigation in a timely way, the appellant could simply start afresh and pursue substantially the same claim as if nothing had happened and without making arrangements for payment of the costs awarded against the appellant's alter ego.
Thirdly, the appellant submitted that he was not capable of being substituted or joined as a party to the earlier proceedings, that his applications to be substituted had been refused, and he was not capable of taking an assignment or transmission of the cause of action the subject of the earlier proceedings. The reasons why that was the case are fully discussed in the reasons of Kenneth Martin J in Patrick Gerard Gladwyn Jebb as trustee of the Trafalgar West Investments Trust v Superior Lawns Australia Pty Ltd.[13] It is unnecessary to repeat those reasons here. However, to focus on whether the appellant could have been substituted as the plaintiff in the earlier proceedings, or taken an assignment of its cause of action, is to ignore the fact that the appellant was the controlling mind of the plaintiff in the earlier proceedings in any event. The discretionary considerations referred to by his Honour, especially at [88(a) ‑ (c)] of the primary reasons relied heavily on that factor. Those same considerations attracted substantial weight in the present context.
Fourthly, the appellant submitted that his position was analogous to an executor of a deceased estate where the deceased had oppression proceedings on foot at the date of death, and where it was submitted the court would not countenance orders saddling the executor with the costs of the previous action. The analogy is not apt.
Finally, the submission by the appellant that it would be 'unjust to effectively saddle the applicant with costs orders made against another party for which he had no capacity in avoiding or appealing despite his best efforts'[14] was misconceived. Order 1 made by the learned primary judge did not require the appellant to pay the costs for which the plaintiff in the earlier proceedings was liable. It merely required the appellant, as the controlling mind of the plaintiff, to make arrangements for those costs to be paid before the appellant would be at liberty to himself pursue substantially the same claim in the primary proceedings.

In summary, in ground 2 the appellant contends that the learned primary judge erred in law or in fact in the exercise of his discretion to grant a stay of the proceedings pending the making of arrangements for the payment of costs in the earlier proceedings.
This ground of appeal constitutes an appeal in respect of the exercise of the court's discretion to stay the proceedings so as to prevent an abuse of process. Whether the continuation of the proceedings in the circumstances identified by his Honour would amount to an abuse of process is not an issue of discretion. The court's remedy, however, does involve the exercise of discretion. The principles governing such appeals were set out in House v The King.[15]
Although many of the appellant's submissions were directed to the six factors set out from [165] of the primary reasons, the essence of the learned primary judge's reasoning in making the order now complained of is in [191] and following. No error has been demonstrated in that reasoning.
In respect of ground 2.1, no error has been demonstrated in the learned primary judge's finding that the appellant failed to cause the earlier proceedings to be conducted in a timely way so that it was dismissed for want of prosecution. The appellant challenged the learned primary judge's characterisation of the manner in which the proceedings were conducted as equating to a finding that his conduct was unreasonable and unwarranted. We do not accept that that is an accurate characterisation of the finding. In any event, the learned primary judge was entitled, and in our view, correct, to adopt the characterisation by Kenneth Martin J of the Trafalgar West Investments Trust's conduct of the earlier proceedings, of which his Honour was the case manager. Consequently, a finding of unreasonable conduct would have been open to his Honour.
In respect of ground 2.2, the appellant complains about the learned primary judge's analysis of the merits of the claim he sought to bring in the primary proceedings.[16] The learned primary judge concluded that the claim was arguable but not strong.[17] The appellant did not demonstrate any error in that analysis. In particular, the learned primary judge's conclusion[18] that the resolution of the issues concerning the employment termination payments were a matter for trial, cannot be faulted.
Thirdly, in ground 2.3, the appellant contended that the learned primary judge did not take into account, or gave insufficient weight to, circumstances that were relevant to the exercise of the discretion. The learned primary judge took those matters into account.[19] The weight he gave to them was a matter for the learned primary judge. Assertion of a weighting error does not demonstrate appellable error in an exercise of discretion. No error has been demonstrated.
As to ground 2.4, the appellant contends that the learned primary judge took into account an irrelevant consideration, or gave undue weight, to the matters there set out. We are not persuaded that any of those matters were irrelevant to the exercise of the court's discretion. Again, the weight to be given to them was a matter within the discretion of the primary judge. No error has been demonstrated.
As to ground 2.5, the appellant contends that the learned primary judge erred in inferring that the appellant had capacity to borrow monies to meet the costs in the earlier proceedings, whereas the appellant contends that the learned primary judge should have found that he was not likely to have access to any loan funds to discharge the costs. We do not agree. The appellant asserted that to make the order would stifle the proceedings. In that context, it was for the appellant to demonstrate his financial incapacity. The learned primary judge was not satisfied of that incapacity.[20] Having regard to the matters outlined by the learned primary judge at [199] ‑ [202] of the primary reasons, and especially to the fact that the appellant did not provide a full account of his financial position to establish that he was unable to obtain funding, and the appellant's concession that he would have to try to arrange a loan, we are far from persuaded that his Honour erred in so concluding.
Ground 2 is without merit.
In any event, even had appellable error been demonstrated, we would not have reached a different conclusion on the question of abuse of process, and we would not have exercised the discretion more favourably than the learned primary judge. As we have already noted at [0] above, we endorse the learned primary judge's conclusions at [204] of the primary reasons.

We turn to grounds 3.1 - 3.3.
In grounds 3.1 - 3.3, the appellant contends that the learned primary judge erred in making an order for payment for security for costs in tranches, commencing with a payment of $31,000, having regard to the circumstances set out in appeal grounds 2.1 and 2.2, and having regard to the contention of error in the learned primary judge's inference that the appellant had the capacity to borrow funds to meet the costs in the earlier proceedings. As we have rejected the appellant's contentions in respect of grounds 2.1 and 2.2, and the appellant's contention that the learned primary judge erred in inferring that the appellant had the capacity to borrow funds to meet the costs of the earlier proceedings, there is no substance in grounds 3.1 - 3.3. No error has been shown in the learned primary judge's order for security for costs.
Grounds 3.1 - 3.3 have no merit.

The appellant has not demonstrated that the decision below was plainly wrong or attended by sufficient doubt to justify the grant of leave. We are not persuaded that a substantial injustice would be done if the decision remains undisturbed.
Leave to appeal should be refused and the appeal dismissed.

Leave to appeal be refused;
The appeal is dismissed; and
The appellant pay the respondents' costs of the application for leave, and the appeal, to be taxed if not agreed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] See Zaghoul v Woodside Energy Ltd & Ors [2019] WASCA 187 [57].

[2] Kelbush Pty Ltd v Australia and New Zealand Banking Group Ltd [2016] WASCA 14; (2016) 49 WAR 374 [81]; Wilson v Metaxas [1989] WAR 285, 294 (Malcolm CJ, Brinsden & Smith JJ agreeing).

[3] Patrick Jebb as trustee for The Trafalgar West Investments Trust v Superior Lawns Australia Pty Ltd [2019] WASC 121.

[4] Jebb as Trustee for Trafalgar West Investments Trust v Superior Lawns Australia Pty Ltd [2018] WASCA 123 [8] ‑ [40].

[6] Sinclair v British Telecommunications plc [2000] EWCA Civ 6; [2000] 2 All ER 461.

[10] Appellant's submissions [23], WAB 15.

[13] Patrick Gerard Gladwyn Jebb as trustee of the Trafalgar West Investments Trust v Superior Lawns Australia Pty Ltd [2018] WASC 166.

[14] Appellant's submissions [20], WAB 14.

[15] House v The King (1936) 55 CLR 499.

[16] See primary reasons [62] - [89].

[19] See primary reasons [207] - [212].

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