But he did continue by stating that the trial judge had "correctly extracted the principle" of M'Cabe and he had not erred in applying it, from which I would infer that he accepted, although there was no direct statement to that effect appearing in M'Cabe, that the rule would not be applied if there were "wholly exceptional circumstances". One may observe that that statement of the principle, slightly qualified as it is in comparison with the bold words used in M'Cabe, has considerable similarity to the "special circumstances" exception referred to by the Full Court in Bowen v. Hickey. I suggest, with respect, that each court was aware that rules of that kind import an element of discretion, albeit that in the statement of principle the strong predilection of the court was that the making an order in the ordinary case and "as of course" should mean that the plaintiff who has refused to pay the costs of a former action must show special circumstances in order to avoid the making of a stay order.
142 There is one subsequent properly reported decision of the Court of Appeal which has sought to lay down principles relating to the stay of proceedings for failure to pay costs of an earlier action, namely Sinclair v. British Telecommunications Plc[142]. Regrettably the only cases cited to that Court on the issue were cases relating to stays sought with respect to interlocutory motions and applications, namely Morton v. Palmer and Thames Investment and Securities. With the greatest of respect, therefore, I find the analysis therein contained unsatisfactory because it proceeds upon the basis that the various dicta relating to the latter kind of application, many of which have been set out earlier, were used as the basis for qualified statements of principle which are not consistent with the earlier decision of the Court of Appeal in Hines v. Birkbeck College (which was neither cited nor discussed), nor are they consistent with the line of authority in New South Wales represented by Bowen v. Hickey. For example, Ferris, J., who seems to have given the principal judgment, took as his starting point[143] the principles stated by Goulding, J. in Thames Investment and Securities, which in turn were reliant on the statements in Morton v. Palmer. So he merely considered that "generally speaking, the plaintiff ought not to be allowed to apply for further identical or equivalent relief", although it might seem that his primary concern was as to jurisdiction at that stage.[144] But it is clear that he thought that the jurisdiction is merely "discretionary"[145], albeit that he considered that the stay order was correctly made. More doubtfully, as the case dealt with non-payment of costs of an earlier action, Judge, L.J., in whose judgment also Peter Gibson, L.J. agreed, took as the appropriate standard for exercising the discretion the statement in Morton v. Palmer to the effect that the problem should be approached "with an appropriate degree of caution".[146] Moreover his Lordship appeared also to accept[147] that the discretion involved a consideration as to whether "the proceedings would be stifled". Nevertheless he concluded that there was no sufficient evidence to support that contention, so that he likewise agreed that the stay order had been properly made. It may be observed that it is perhaps fortunate, having regard to the paucity of authority cited to the Court, that more was not said as to the Court's power in such circumstances, but it cannot be denied from a general reading of the judgments that they saw the power as essentially discretionary in the widest sense and with no predilection towards the making of such orders of the kind described in judgments such as Hines v. Birkbeck College.
143 The first of only two subsequent English appellate decisions of which I am aware is Societe Eram Shipping Co. Ltd. v. Compagnie Internationale De Navigation[148] in which Rix, L.J., exercising the jurisdiction of the Court of Appeal, dealt with an application to stay an appeal on the ground of non-payment of the original judgment costs. Clearly it was an unusual application and one which his Lordship identified as one involving the costs of part of the continuing proceeding. Finally there is the judgment last month of the Court of Appeal in Investment Invoice Financing v. Limehouse Board Mills Ltd. This case was, of course, not cited to us in argument but it is sufficient to say that it does not appear to differ from the recent English cases cited to the Court, including Hines v. Birkbeck College, as well as the earlier judgments in Martin and M'Cabe. An attempt was valiantly made by Moore-Bick, L.J. to apply also the observations in Sinclair v. British Telecommunication, but it seems, with respect, that in this most recent appeal the distinction carefully drawn in Hines v. Birkbeck College was again overlooked, although I do not think anything was said by the Court which was contrary to the propositions earlier stated. Brief reference was in fact made to Hines v. Birkbeck College[149] but, for reasons which are not apparent, the conflict between that case and Sinclair v. British Telecommunication were not addressed. In the result his Lordship, with whom Tuckey, L.J. agreed, stated the relevant rule in terms of the Court having "a discretion to stay the second proceedings until the cost of the first proceedings have been paid and will normally do so."[150] It was further said[151] that the principle is concerned with preventing abuse of the Court's process so that the purpose of making an order is "to do substantial justice between the parties". Finally it was said by his Lordship[152] that the ground for making the order in that case was that it was "unfair to put the defendant to the expense of fresh proceedings while his costs of the previous proceedings remain unpaid".
144 As I said earlier, it is necessary briefly to refer to some more recent unreported cases in New South Wales, although it will be seen that they add little to the general picture. In the one decision which went to the Court of Appeal, Idoport Pty. Ltd. v. National Australia Bank Ltd.[153], Mason, P., in whose judgment for this purpose Stein and Giles, JJ.A. concurred, a brief mention was made of the effect of an order for costs as a result of the dismissal of an appeal in that very long drawn out litigation. In dealing with the issue of costs generally the learned President observed[154] that, if and when the appellant commenced fresh proceedings, "it will, in the normal course, have to pay or secure the respondent's costs of the dismissed proceedings before being allowed to prosecute those proceedings", for which Bowen v. Hickey and Sinclair v. British Telecommunications were cited, although the page reference and the discussion in the latter case would not seem to support the proposition. In general terms that appears to be an endorsement of the Bowen v. Hickey test. The matter was referred to again in the same litigation at different stages thereafter. In one judgment under the same name but reported in [2005] NSWSC 752 Bergin, J. referred[155] to both Martin and M'Cabe, without dealing with subsequent authorities. Earlier Burchett, A.J. in another stage of the proceeding reported in [2004] NSWSC 212, had made general reference to cases such as Morton, Thames Investment, Bowen v. Hickey and Sinclair v. British Telecommunication, before citing in extenso a number of paragraphs from the judgment of Mason, P. including para.[83]. I would infer from the references to both Thames Investment and Sinclair that Burchett, A.J. took a broader view of the discretion than that accepted in cases such as Hines v. Birkbeck College.
Conclusion
145 It is by no means easy to draw conclusions as to the correct principles applicable on an application for a stay of proceedings based on failure to pay the costs of an earlier, concluded court proceeding. The answer is relevant in the present case inasmuch as it would be foolish to grant leave to the respondent in circumstances where the defendant, the present appellant, could seek such a stay on the basis of the relevant principle relying on admitted failures to pay costs in certain other proceedings.
146 It must be accepted that there are several decisions, including those of appellate courts, in which the relevant test is expressed in terms of a lesser or greater discretion and with that approach I have some sympathy, as may be seen from my discussion of the principles relevant in a cognate area, which has also been discussed here, where a stay is sought by reason of non-payment of costs in interlocutory stages of the subject proceeding: see Gao v. Zhang. Nevertheless it is obvious, at least from the authorities I have cited, that the courts have tended to take a more stringent view of the conduct of a plaintiff who has failed in an earlier proceeding relating to the same or substantially similar subject matter and has failed to pay the consequential costs ordered against that party. In substance it would appear that many courts have taken the view than an order for a stay would be granted "as of course". That may have been the product of a more rigorous approach to the conduct of parties in the nineteenth century and into the twentieth century, especially in courts of Chancery, but I have not traced why that should have been the case. Nor can I be satisfied that the consistent dicta I have quoted flowed from a misunderstanding of existing authority. On the other hand, although the principle is stated frequently in unqualified terms, it seems to have become accepted that a court may refuse to make such an order in cases where it can be shown that there are "some special circumstances which would justify relaxation of the normal rule", as the Full Court stated in Bowen v. Hickey[156]. A similar qualification would appear to have been accepted by Nourse, L.J. in Hines v. Birkbeck College although it can be argued that he expressed it more stringently.
147 There is no binding authority in this State but the solution, I suggest, lies in two directions. Undoubtedly the power should be seen to be a discretionary power but one ordinarily exercised if the relevant conditional facts are made out. No court power can be considered to be immutable, let alone one which brings to an end the right of a plaintiff to seek redress in the courts. What I believe has occurred is that there has been a confusion in earlier years between the circumstances in which a party could rely on res judicata or issue estoppel and those in which an unsuccessful party in respect of a similar claim had refused to pay costs. Unless the proceeding was terminated in exceptional circumstances, if the new one related to a claim in which the parties were identical and the issue was truly the same, then there can be little doubt that, if the relevant order were final, the party would be barred a second time by reason of the doctrines of res judicata or issue estoppel. The rule must therefore be directed to circumstances in which the order was not "final" or in which the proceedings are not identical or the parties are not identical, whatever the language used in the past. The Court therefore must look very carefully at what has been claimed and what has not been claimed and furthermore as to who makes the claim and who is subject to the claim. The closer the subject and the parties are to those of the original proceeding, the more reasonable it will be to treat the proceeding as a vexatious means of litigating the same question twice. The more closely the later proceeding resembles the first, the more obvious will be its vexatious character, but that factor will not be so clear if the first proceeding was defeated by reason of jurisdictional or other technical objections not going to the heart of the issues raised. But in a number of cases the elements of resemblance will be clear and the rule ought therefore to apply. The question remains as to how the rule should now be expressed.
148 If it were not for the long line of reported cases on this issue, it might be easier to assimilate the so-called rule into the general test applied by courts in their inherent jurisdiction to prevent abuse of process, for that certainly is the source of the rule, at least on the Common Law side. On the other hand, those statements which would seek to place the rule on such a basis might be said to run counter to the more emphatic expression of the rule in appellate courts. Nor is it possible to say that the rule is merely a product of pre-Judicature Act practice; indeed on the Chancery side it was an unusually rigid practice based on long replaced rules relating to the recovery of costs by attachment. But the strict rule survived the Judicature Acts; indeed it has been re-stated in emphatic terms by the House of Lords and the English and New South Wales Courts of Appeal. The only Victorian case, Boase v. Jones, seems to have depended entirely on what was said by the House of Lords in M'Cabe, but the practice in New South Wales was not merely clearly laid down by the Full Court in Bowen v. Hickey, but the Court of Appeal less than four years ago in Idoport explicitly described the practice in Bowen v. Hickey as the "normal course". Thus, therefore, authority would support a strict view of the practice, subject only to the right of the plaintiff to establish special circumstances. I find the analysis of the cases, at least those of which I am aware, contained in cases such as Bowen v. Hickey and Hines v. Birkbeck more satisfactory as a matter of logic, for, unfortunately, those in recent years who have taken a broader view and have expressed the rule in essentially discretionary terms could not have considered appropriately, if I may say so with respect, the leading authorities on stays for non-payment of costs of past actions, as opposed to stays based on non-payment of costs in interlocutory proceedings.
149 In the end, I would prefer to view the authorities as permitting an understanding of the rule as requiring only the exercise of a discretion, being a discretion to prevent vexatious proceedings or otherwise to control abuse of process. Likewise I would view the more stringent authorities as depending too greatly on the Chancery practice, which had its own peculiar rationale which has become of no relevance at least since the passing of the Judicature Act. If one were to prefer the practice on the common law side, then it would be possible to turn to the last reported decision on this subject, to my knowledge, of a common law court sitting in banc, namely, Cobbett v. Warner, in particular the judgment of Mellor, J. Although, as I have said, it has only been followed once explicitly to my knowledge, in Morton v. Palmer in the Queen's Bench Division, but in respect to non-payment of costs of interlocutory motions, what his Lordship said has never been disapproved and in my opinion can lie consistently with the later authorities, if one assumes, as I think one fairly may, that they each implicitly recognise that such orders involve the
exercise of a discretion, however firmly that exercise is suggested in those later appellate authorities. Cave, J. in Morton v. Palmer recognised that the general common law rule had been laid down in cases such as Hoare and Cobbett v. Warner, but he perceived the power in the case with which he was dealing to be discretionary in the widest sense.
150 If, however, one might return to that last appellate decision of a common law court where the costs in question were those incurred by an unsuccessful plaintiff in an earlier action, i.e. Cobbett v. Warner, then, as Mellor, J. stated, that jurisdiction to order a stay is to be invoked in order to prevent one party harassing another. He would have denied that it was a course "to be adopted whenever costs of a former litigation are unpaid" and he properly emphasised[157] that: "This summary jurisdiction should be sparingly exercised, as it deprives the party whose action is stopped of the right to try his cause and if necessary to carry it to the highest tribunal." With this approach I agree.
151 Nevertheless, whatever view one should take of the authorities, I am in agreement that the matter should be resolved in this case in the way proposed by the learned President in his judgment. I would in any event not be satisfied that the present cause of action is the same as, or substantially similar to, those in the previous actions relied upon, but I would likewise conclude that no error has been demonstrated in the exercise of the relevant discretionary power.