Pitcher Partners Holdings Pty Ltd v Twigg

or The Ipswich Landfill Trust (Third Respondent) Brooklyn Landfill & Waste Recycling Pty Ltd as trustee for The Brooklyn Landfill Trust (Fourth Respondent) Maxwell James Twigg (Fifth Respondent) Twigg Co Pty Ltd (Sixth Respondent) Representation: Counsel: D L Williams SC / J D Jaffray / N Riordan (Applicants) M R Elliott SC / D K Smith (First to Fourth Respondents) Submitting appearance (Fifth and Sixth Respondents)

Solicitors: Gadens (Applicants) Roberts and Partners Lawyers (First to Fourth Respondents) O'Loughlin Westhoff (Fifth and Sixth Respondents) File Number(s): 2023/88427 Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Equity - Commercial List Citation: Twigg v Pitcher Partners Holdings Pty Ltd (No 4) [2023] NSWSC 109 Date of Decision: 20 February 2023 Before: Stevenson J File Number(s): 2022/150914

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE [This headnote is not to be read as part of the judgment] Pitcher Partners Holdings Pty Ltd, Pitcher Partners Investment Services Pty Ltd and Pitcher Partners Advisors Pty Ltd (the applicants) sought leave to appeal against the refusal by Stevenson J (the primary judge) of their application for a permanent stay of current proceedings brought against them by Diane Twigg and associated companies (the respondents) on the basis that they constitute an abuse of process. The Twigg Group was a landfill business conducted by Diane's husband, William, through corporate trustees for discretionary trusts (the plaintiff companies). When William died in 1996, Diane and William's son Max ran the business, Diane became the sole shareholder of the plaintiff companies and Diane and Max became their sole directors. The applicants were the accountants for the plaintiff companies and Diane. On 2 April 2007, Max sold Twigg Group to Cleanaway for $155.8 million. From the proceeds of sale, he paid $5 million each to his mother and his two sisters and retained the balance for himself and companies associated with him. In 2019, Diane and the plaintiff companies commenced proceedings against Max and associated entities alleging misappropriation of the sale proceeds by using invalid distribution resolutions and breaches of fiduciary duties. In the course of discovery, the applicants produced documents which revealed that they had a more significant involvement in disposition of sale proceeds than had previously been known. The trial judge made declarations and orders in the 2019 proceedings declaring that Max had breached the fiduciary duties he owed to the plaintiff companies and that the sale proceeds were held on trust for the plaintiffs. Consequential orders for the tracing of the sale proceeds were made. On 25 May 2022, the respondents commenced the current proceedings against the applicants and Max and Twigg Co Pty Ltd, a company associated with Max, alleging that the applicants breached the fiduciary duty of undivided loyalty which they owed to the plaintiffs and had knowingly assisted Max in a "fraudulent and dishonest design". On 15 July 2022, the applicants filed a notice of motion seeking to stay the proceedings (in respect of the claims against them) on the basis that they constituted an abuse of process because of the commonality of issues with the earlier proceedings. On 20 February 2023, the primary judge dismissed the application for a stay. The applicants challenged the primary judge's findings that the current proceedings are not an abuse of the Court's process, including his Honour's finding that Christiaan Roberts, Diane's solicitor, did not make a forensic decision not to sue the applicants in the 2019 proceedings. The Court held (Adamson JA, Meagher JA and Basten AJA agreeing and writing separately): Meagher JA and Basten AJA (1) The applicants failed to demonstrate any juridical basis upon which the existence or otherwise of a forensic decision not to join them to the earlier proceeding could result in the commencement of the subsequent proceeding against them constituting an abuse of process. It follows that nothing turned on the evidence of the plaintiff's solicitor, Mr Roberts, as to whether, and if so, why, he decided not to join the applicants to the earlier proceeding: [23]. UBS AG v Tyne as Trustee of the Argot Trust (2018) 265 CLR 77; [2018] HCA 45, distinguished. Adamson JA (2) No error in the primary judge's conclusion or the process by which that conclusion was reached has been established. Once the conclusion was reached that it had neither been established that Mr Roberts made a forensic decision not to sue Pitchers, nor that the plaintiffs "should" have sued Pitchers in the 2019 proceedings and that a fair trial had not been shown to be impossible, the correct normative judgment, in the circumstances of the present case, was not to stay the proceedings on the basis of alleged abuse of process: [144]. (3) An applicant for a permanent stay bears a heavy onus and the power to grant a permanent stay is to be exercised only in the most exceptional circumstances. No error has been shown in the primary judge's decision to refuse a permanent stay: [145]. Williams v Spautz (1992) 174 CLR 509 at 529; [1992] HCA 34, applied.

JUDGMENT

1. MEAGHER JA AND BASTEN AJA: The issue before the Court is whether it is (or may be) an abuse of the process of the court for a party, which had successfully litigated a claim for breach of trust against the trustee and its principal director, to commence a further proceeding against its accountants (who are also the accountants for that trustee and director) based on knowing involvement in those breaches by the trustee and the principal director. The primary judge (Stevenson J) dismissed the applicants' motion to stay permanently the further proceeding as an abuse of process: Twigg v Pitcher Partners Holdings Pty Ltd (No 4) [2023] NSWSC 109.
2. The active respondents to the motion below and the appeal in this Court are Mrs Diane Twigg and the corporate trustees of three discretionary trusts, the objects of which include Mrs Twigg and her three children. As they commenced the proceeding sought to be stayed it is convenient to refer to them as "the plaintiffs".
3. The applicants, being three companies in the Pitcher Partners group, were accountants and financial advisers, both to Mrs Twigg and the trusts. They do not dispute that the judgment below was interlocutory and they require leave to appeal. The application for leave was set down for a concurrent hearing of the request for leave and the proposed appeal. In the circumstances explained by Adamson JA, there should be a grant of leave to appeal, but the appeal should be dismissed with costs.

Leave to appeal

1. As explained in the joint reasons of Kiefel CJ, Bell and Keane JJ in UBS AG v Tyne as Trustee of the Argot Trust, [1] the power to stay proceedings permanently as an abuse of the process of the court may be engaged in either of two conditions, namely "where the use of the court's procedures occasions unjustifiable oppression to a party, or where the use serves to bring the administration of justice into disrepute". Where the circumstances satisfy one of the two conditions, they will often also satisfy the other.
2. As those joint reasons further noted, in determining whether the bringing or continuance of proceedings is an abuse of process, the court "must take into account the procedural law administered by the court whose processes are engaged" (at [34]). The procedural law relevantly includes the duty to further the overriding purpose of facilitating "the just, quick and cheap resolution of the real issues in the proceedings", as provided in s 56 (and other provisions in Pt 6) of the Civil Procedure Act 2005 (NSW).
3. Two difficulties confront the application for leave to appeal in the present case. First, as senior counsel for the applicants acknowledged in opening submissions, the applicants "do not challenge the primary judge's recitation of the relevant principles to be applied" [2] and, having noted certain categories of cases in which abuse has been found, accept that they do not "fall directly within any of those principles". [3]
4. Secondly, the applicants also accepted that determining whether particular circumstances rise to the level of an abuse of process involves a "broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before". [4] While the primary judge was confronted with a binary choice, the nature of the judgment required allowed for a margin of appreciation within which reasonable minds might differ.
5. The applicants, however, call in aid two factors in support of a grant of leave to appeal. The first is that, although a finding as to whether proceedings involve an abuse of process of the court is undoubtedly a matter of practice and procedure and involved matters of case management, it is more than that. That proposition should be accepted, as it was by Bell P in CBRE (V) Pty Ltd v Trilogy Funds Management Ltd. [5]

Relevance of the forensic decision

1. Some two-thirds of the way through his judgment, the primary judge identified an issue in the terms of the following heading: "Did the plaintiffs make a 'forensic decision' not to join Pitcher Partners to the Earlier Proceedings?"
2. That issue had not earlier been addressed or identified: its assumed relevance appears from the opening passages in the judgment under this heading: "85 At the heart of Pitcher Partners' submissions before me was the proposition that in the Earlier Proceedings, the plaintiffs had made a 'forensic decision' not to join Pitcher Partners as a defendant and had 'elected' not to do so. 86 In this regard, the submissions of both the plaintiffs and Pitcher Partners proceeded upon the basis that the relevant knowledge and belief was that of the plaintiffs' solicitor, Mr Christiaan Roberts, rather than Diane [Twigg]."
3. Having addressed the evidential basis for the submissions, the judge concluded: "111 There is no dispute that Mr Roberts did not raise with Mr Elliott or Mr Smith the possibility of joining Pitcher Partners as a defendant to the Earlier Proceedings. Surely, if this thought had crossed his mind, he would have shared it with his counsel. 112 I am not in these circumstances persuaded that Mr Roberts made a forensic decision to not join Pitcher Partners as a defendant to the Earlier Proceedings. 113 I also am unable to conclude that the plaintiffs 'should have' taken what could have been the very risky decision of joining Pitcher Partners in the Earlier Proceedings."
4. For the reasons explained by Adamson JA, the challenge to the factual finding that no such forensic decision had been made must be rejected. However, the assumption that a "forensic decision" not to join the applicants to the earlier proceeding would for that reason alone have rendered the fresh proceeding an abuse of process also should not be accepted. (It will be convenient to leave until later the normative finding sought by the applicants that the plaintiffs' "should have" joined them in the earlier proceeding.)
5. First, it may be noted that the term "forensic decision" is factually vague. While relief was sought by way of a permanent stay of the proceeding against the applicants, the impugned decision was not that the plaintiffs commenced that proceeding, but rather that they decided against commencing that proceeding at an earlier time by joining them to the existing proceeding. However, it was not suggested that the decision not to commence a proceeding was itself an abuse of process, nor could it have been. Precisely how an earlier unchallenged (and unchallengeable) decision not to proceed turned the later proceeding into an abuse of process was not explored either before the primary judge, or in this Court.

The normative issue

1. It remains to note that the applicants exhibited some ambivalence as to whether they also relied upon an objective test as to the conduct of the plaintiffs. There were hints to that effect in the notice of appeal. Thus, ground 1 alleged, in part, that the primary judge failed to consider evidence that the material available to Mrs Twigg's solicitor provided an arguable case as to the existence of a fiduciary duty on the part of the applicants and that the duty was breached: grounds 1(c) and (d). These allegations were, of course, inconsistent with the proposition that the present proceeding lacked sufficient merit to be maintainable. On the other hand, the applicants did not allege as a ground of appeal that a reasonable solicitor knowing what the plaintiffs' solicitor knew should have advised them to commence proceedings against the applicants at some time before the hearing of the earlier proceeding, although the primary judge's finding at [113] suggested it was raised below. However, had that proposition been raised, it would have invited a consideration of the scope and nature of the duty to act, which, in the circumstances, was not addressed.

Conclusion

1. The other grounds of appeal turned on factual assertions, including the relevant findings as to prejudice caused to the applicants from the failure to join them in the earlier proceeding and the commencement of a fresh proceeding. For the reasons given by Adamson JA, the applicants failed to establish any material error on the part of the primary judge in considering those issues.
2. The orders proposed by Adamson JA should be made.
3. ADAMSON JA: Pitcher Partners Holdings Pty Ltd, Pitcher Partners Investment Services Pty Ltd and Pitcher Partners Advisors Pty Ltd (together, Pitchers) seek leave to appeal against the refusal by Stevenson J (the primary judge) of their application for a permanent stay of proceedings 2022/150914 brought against them in the Commercial List of the Supreme Court (the current proceedings) by Diane Twigg and associated companies (the plaintiffs). Pitchers sought a permanent stay on the basis that the current proceedings against them constitute an abuse of process having regard to earlier proceedings in the Supreme Court: proceedings 2018/212326 (the 2018 proceedings) and proceedings 2019/71329 (the 2019 proceedings) (together, the earlier proceedings).
4. Before addressing the grounds of appeal, if leave is granted, it is necessary to give some background to the application for a permanent stay.

The landfill business conducted by Twigg Group

1. Diane's husband, William Twigg, conducted a landfill business known as Twigg Group. The business was conducted through corporate trustees for discretionary trusts: Twigg Plant Hire Pty Ltd as trustee for The Twigg Family Trust, Ipswich Landfill Pty Ltd as trustee for the Ipswich Landfill Trust and Brooklyn Landfill & Waste Management Pty Ltd as trustee for the Brooklyn Landfill Trust (together, the plaintiff companies). William and Diane had three children: two daughters, Frances Lambert and Elizabeth Flintoft, and a son, Max Twigg. When William died in 1996, Max ran the business of Twigg Group, Diane became the sole shareholder of the plaintiff companies and Diane and Max became their sole directors.
2. Pitchers were the accountants for the plaintiff companies as well as for Diane. The partner who had principally provided these services was Adrian Fitzpatrick. By the time of the earlier proceedings, he had ceased to be a partner.

The sale of Twigg Group to Cleanaway

1. On 2 April 2007, Max sold Twigg Group to Transpacific Waste Management Pty Ltd (Cleanaway) for $155.8million, subject to adjustment for actual earnings for the 2007 financial year. From the proceeds of sale, he paid $5million each to his mother and his two sisters and retained the balance for himself and companies associated with him. He signed directors' resolutions to authorise these payments, which were found to be ineffective to authorise the payments as they were not signed by Diane, his co-director.

The 2018 proceedings

1. In the 2018 proceedings, Diane and her daughters sought documents from Max and Twigg Investments Pty Ltd as trustee for the Twigg Investment Trust (Twigg Investments). Subsequently, the statement of claim was amended to limit the claim for relief to Twigg Investments.
2. In the second half of 2018, Christiaan Roberts, the plaintiffs' solicitor, obtained documents from Pitchers relating to Diane and Twigg Group. These documents comprised the following: 1. the constitutions of the plaintiff companies; 2. the trust deeds for the trusts; 3. some financial statements for the trusts; 4. the minutes of some purported meetings of directors of the plaintiff companies; and 5. some purported directors' resolutions.
3. Mr Roberts took the view that these documents were sufficient to commence proceedings against Max (the 2019 proceedings, referred to below). The documents did not, however, enlighten him about the wider context of the sale of Twigg Group or what involvement, if any, Pitchers had had in the sale or the distribution of the sale proceeds.

The allegations in the 2019 proceedings

1. The 2019 proceedings were commenced on 5 March 2019. The plaintiffs (Diane and the plaintiff companies) alleged that Max and associated entities (the Max parties) had misappropriated the sale proceeds from the Twigg Group by using invalid distribution resolutions and in breach of the fiduciary duties which Max owed to the corporate plaintiffs as their director.

The plaintiffs' application for a freezing order

1. On 8 March 2019, the plaintiffs applied by notice of motion for an interlocutory injunction to preserve the assets controlled by the Max parties pending determination of the proceedings (the freezing order) to enable the plaintiffs, if successful, to trace the alleged misappropriated funds. The Max parties opposed the application for a freezing order.

The evidence of Adrian Fitzpatrick in opposition to the freezing order

1. At the hearing of the application before the primary judge on 29 March 2019, the Max parties adduced evidence from Mr Fitzpatrick. In his affidavit sworn 22 March 2019, Mr Fitzpatrick gave evidence that he was at a meeting with Diane and Max on 26 May 2009 at which Diane approved of the distribution of the sale proceeds to Max, as reflected in the tax returns and "trust distribution minutes", and said: "Yes I understand and Max is able to do what he likes with the sale proceeds as it was his business and we received $5,000,000 which was very generous."
2. Mr Fitzpatrick's affidavit was read without objection. There was no cross-examination of any witness, presumably by reason of the nature of the application.

The dismissal of the application for a freezing order

1. On 5 April 2019, the primary judge dismissed the application for the freezing order: Twigg v Twigg [2019] NSWSC 373. The primary judge gave four reasons for the refusal, of which the fourth, at [104], was as follows: "The fourth is the nature of the forensic task Diane faces in making out her case on liability. I accept that there is a serious question to be tried that Max acted without authority when purportedly passing the directors' resolutions leading the making of the Impugned Sum. But Diane's success in that regard seems likely to depend on establishing, amongst other things, that Mr Fitzpatrick's recollection of the conversations to which I have referred, and to which he has put his oath, should not be accepted. Although I cannot predict, and express no view about, Diane's prospects in that regard, it represents a stark potential barrier to her success in the proceedings." [Emphasis added.]

The expedited hearing of the 2019 proceedings

1. As the freezing order had been refused, the 2019 proceedings were granted a degree of expedition. The plaintiffs filed an Amended Commercial List Statement on 17 May 2019 in which they joined two further defendants (companies associated with Max) and sought judgments against various defendants into whose hands it was alleged the misappropriated funds had been passed.
2. On 8 October 2019, the Court ordered that the 2018 proceedings and the 2019 proceedings be case managed and heard together.
3. On 11 October 2019, hearing dates commencing 1 June 2020 were allocated although, by that date, no evidence had been required to be filed in the 2019 proceedings. The hearing of the matter was allocated to Ball J (the trial judge). The Max parties sought, unsuccessfully, to vacate the hearing date on various occasions.
4. On 8 November 2019, the trial judge made orders for discovery and granted leave to the plaintiffs to issue a subpoena to Pitchers with an early return date of 22 November 2019.
5. On 10 November 2019, Mr Roberts wrote to Pitcher Partners enclosing a subpoena of 14 pages with 45 categories of documents sought. In the covering letter, Mr Roberts set out the background to the order and the subpoena as follows: "15. Until around September 2018, Pitcher Partners was the accountant and financial adviser to the Corporate Plaintiffs. We understand that Pitcher Partners has been the accountant and financial adviser to the defendants at all material times. Pitcher Partners may also have acted for Diane and the Twigg family generally in the relevant period. 16. Max's position is that he possesses almost no documents that would be the subject of discovery because he relies on Pitcher Partners to act as both the source and the repository of his financial information. It is also expected that both the plaintiffs and the defendants would need to subpoena Pitcher Partners for certain documents in any event. 17. Unnecessary complexity and delay would occur if Max were to request his documents from you and then produce them to the plaintiffs, and if the parties were to issue separate subpoenas seeking different documents. 18. The parties have engaged in discussions regarding the most appropriate means of giving discovery over past weeks. This has resulted in three directions hearings before Ball J on 1, 6 and 8 November 2019. 19. The agreed approach is embodied in the 8 November Order. That Order provides for the following framework: a. Categories of discovery have been settled. b. The plaintiffs are to issue the Subpoena on Pitcher Partners seeking production of documents in all categories. c. The parties will only discover documents to each other if they are not reasonably expected to be in Pitcher Partners' possession. d. The defendants have first access for a week to check whether any privileged documents have been produced. e. The parties are to share Pitcher Partners' costs equally."

The current proceedings

1. On 25 May 2022, the plaintiffs commenced the current proceedings against Pitchers, Max and Twigg Co Pty Ltd (a company associated with Max). They alleged in the Commercial List Statement, as filed, that Pitchers breached the fiduciary duty of undivided loyalty which they owed to the plaintiffs; and had knowingly assisted Max in a "fraudulent and dishonest design". On 7 June 2022, Pitchers applied by notice of motion for the current proceedings to be transferred to the Supreme Court of Victoria. The plaintiffs opposed the application, which was dismissed by the primary judge on 5 August 2022: Twigg v Pitcher Partners Holdings Pty Ltd [2022] NSWSC 1043.
2. On 15 July 2022, Pitchers filed a notice of motion seeking to stay the current proceedings in so far as the plaintiffs made claims against them (but not the plaintiffs' claims against Max or his associated company) on the basis that they constitute an abuse of process because of the communality of issues between the issues in the earlier proceedings and those that arise in the current proceedings.

The appointment of a tutor for Diane

1. On 10 October 2022, Elizabeth Flintoft was appointed as the tutor for Diane, on the basis that Diane was no longer capable of giving instructions in the proceedings.

Pitchers' application for a permanent stay of the current proceedings

1. Pitchers' application for a stay was heard by the primary judge on 1, 2 and 15 December 2022. The primary judge reserved his decision, which was delivered on 20 February 2023: Twigg v Pitcher Partners Holdings Pty Ltd (No 4) [2023] NSWSC 109. His Honour dismissed Pitchers' application for a stay. Reference in my reasons to paragraph numbers are references to the primary judge's reasons.

The evidence of Mr Roberts

1. Mr Roberts was the only witness who was cross-examined on the application. Mr Williams SC, who appeared with Ms Jaffray for Pitchers, cross-examined Mr Roberts for most of 1 December 2022. The evident purpose of the cross-examination was, principally, to establish that Mr Roberts had made a deliberate forensic decision not to join Pitchers to the 2019 proceedings. As Mr Williams relied heavily in this Court on the effect of this cross-examination and the approach which the primary judge took to it, it is necessary to set it out in some detail.
2. Mr Williams accepted in this Court that the relevant period for an assessment of whether Mr Roberts considered joining Pitchers to the 2019 proceedings was the period from 5 March 2019 to 11 October 2019 when hearing dates commencing 1 June 2020 were allocated. There was no challenge to the primary judge's finding (at [100]) that an application to join Pitchers at any time from November 2019 made it "very likely that the hearing date could not have been maintained."
3. In the course of his cross-examination, Mr Roberts accepted that it "must be right" that when he read the affidavits in support of the application for a freezing order, it occurred to him that there was a significant prospect that there would be a shortfall in recovery if the plaintiffs were successful against the Max parties.
4. Mr Roberts accepted that Diane had instructed him that she had been reliant on Mr Fitzpatrick to look after her financial affairs and that her evidence to that effect was contained in an affidavit which she swore on 1 May 2019 in the 2018 proceedings. Mr Roberts said that it did not occur to him at that time that the relationship between Mr Fitzpatrick and Diane was "the sort of relationship that may be capable of being described as a fiduciary one". After further cross-examination, Mr Roberts said: "I understood in the abstract the relationship of that nature could give rise to a fiduciary obligation, but I didn't think about it at the time. … My mindset at the time, as accountants fall in that category of - the general rule is they're not fiduciaries and I just didn't think about it."
5. Mr Williams continued to cross-examine Mr Roberts, including about documents in his possession. He returned to the topic of whether Mr Roberts regarded Mr Fitzpatrick as owing a fiduciary duty to Diane in the following questions, some 20 transcript pages after the last exchange referred to above: "Q. You appreciate that I have taken you to a number of documents and asked you questions earlier today about your state of knowledge concerning Mr Fitzpatrick? A. Yes, I appreciate that. Q. And I want to suggest to you that you did know by this stage, or at least believed that there was a reasonable basis for asserting that Pitcher Partners owed a fiduciary duty to Ms Twigg in connection with the sale? A. No. Q. And its - the distribution of the sale proceeds. A. No, I - I wasn't thinking about Pitcher Partners in that context. I was focused on Max."

The primary judge's reasons for refusing a permanent stay

1. The primary judge referred to the earlier proceedings and the Max parties' unsuccessful appeal. His Honour noted that $30million had been recovered from the Max parties (which left a shortfall of $120million): [11] and [18]. His Honour recorded that the current proceedings make "very serious allegations" against Pitchers, namely that: 1. they "breached fiduciary duties owed to [the plaintiffs] and knowingly assisted in a fraudulent design or plan undertaken by Max in respect of the misuse of the Sale Proceeds" ([14]); 2. they misconducted themselves in the 2019 proceedings; and 3. they were, accordingly, liable for $120million, being the shortfall in the plaintiffs' losses beyond what they had already recovered from the Max parties.
2. The primary judge reviewed the authorities on abuse of process and noted that no case had been identified in which a plaintiff who had been successful in earlier proceedings had been found to engage in an abuse of process when suing a different defendant arising from the same circumstances: [27]. However, his Honour, in accordance with authority to the effect that there are no hard and fast rules as to when abuse will be established (see, for example, UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45 (UBS) at [1] (Kiefel CJ, Bell and Keane JJ)) accepted that it was at least possible for an abuse of process to be found in those circumstances: [33].
3. The primary judge referred to the factors identified by Giles CJ Comm D in State Bank of New South Wales Limited v Stenhouse (1997) Aust Torts Reports 81-423 and addressed each, in so far as it was relevant. His Honour found: 1. the plaintiffs could have joined Pitchers in the 2019 proceedings ([35]); 2. there is "considerable overlap in the factual substratum" between the current proceedings and the 2019 proceedings ([36]); 3. there is a prospect that the trial judge hearing the current proceedings will make findings inconsistent with those of Ball J in the 2019 proceedings because Pitchers will advocate for different findings ([40]-[46]); 4. the trial judge who hears the current proceedings will have to be prepared to make inconsistent findings but that this possibility neither gave rise to an apprehension of bias nor tended to bring the administration of justice into disrepute ([50]-[58]); 5. Diane's incapacity to give evidence has the potential to cause prejudice to Pitchers although it is not possible to assess this as the trial judge found Diane's evidence to be unreliable in the 2019 proceedings ([59]-[68]); 6. had Pitchers been sued in the 2019 proceedings, they would have been able to cross-examine Max (who was called to give evidence) but it is not known whether he will be called in the current proceedings which may give rise to a situation where Pitchers might choose to call Max as a witness, in which case, Pitchers will only be able to cross-examine Max if leave is granted pursuant to s 38 of the Evidence Act 1995 (NSW) ([70]-[78]); 7. although Mr Fitzpatrick was not regarded as a reliable witness, this does not amount to prejudice as, had Pitchers been sued in the 2019 proceedings, this finding would have applied to them ([79]-[84]); 8. the primary judge was not persuaded that Mr Roberts: 1. made a forensic decision not to join Pitchers as a defendant in the 2019 proceedings ([85]-[112]); 2. ought to have taken the "very risky decision" of joining Pitchers in those proceedings ([113]); or 3. gave "active, or indeed any, consideration" to joining Pitchers to the 2019 proceedings ([121]); and 1. the primary judge was not satisfied that it was not possible for there to be a fair trial in the current proceedings ([122]).

The grounds of appeal

1. Pitchers seeks leave to appeal on the following grounds: "1 The primary judge erred in failing to consider that part of the appellants' (Pitcher Partners') case that involved: a. the knowledge or belief by the first respondent (Mrs Twigg) that the Earlier Proceedings (as defined at J[7]) brought against the fifth respondent (Mr Twigg) and his associated entities were unlikely to recover the whole of the loss suffered by Mrs Twigg and her associated entities; b. the consideration given by Mrs Twigg's solicitor to the question of whether Pitcher Partners owed her a fiduciary duty; c. the material available to Mrs Twigg's solicitor from which an arguable case of existence of fiduciary duty was capable of being pleaded and pursued; and d. the material available to Mrs Twigg's solicitor from which a case of breach of fiduciary duty was capable of being pleaded and pursued. 2 In finding that Mrs Twigg had not made a forensic decision not to join Pitcher Partners in the Earlier Proceedings (at J[112]), the primary judge erred in: a. failing to take into account as relevant considerations: i. that Mrs Twigg through her solicitor knew or believed at or about the time of commencing the Earlier Proceedings in March 2019 (or by 19 November 2019 at the latest) that there would be a significant shortfall in recovery even if she was successful against the defendants in the Earlier Proceedings; ii. that Mrs Twigg through her solicitor had considered at or about the time of commencing the Earlier Proceedings in March 2019 (or by 19 November 2019 at the latest) whether Pitcher Partners owed a fiduciary duty to Mrs Twigg (cf J[97],[101]); iii. to the extent that the consideration in (ii) above was deficient, Mrs Twigg and her associated companies were bound by the conduct of her solicitors; iv. that Mrs Twigg through her solicitor knew or believed at or about the time of commencing the Earlier Proceedings in March 2019 (or by 19 November 2019 at the latest), that if Pitcher Partners owed a fiduciary duty to Mrs Twigg there was at least an arguable basis for contending that Pitcher Partners had breached that duty and caused loss to be suffered by Mrs Twigg and her associated companies (cf [J107],[108]). b. having found at J[101] that the best evidence of Mrs Twigg's solicitor's state of mind was contained in a letter that he wrote to solicitors acting for Pitcher Partners dated 19 November 2019, the primary judge erred in failing to find that Mrs Twigg's solicitor knew or believed that there was an arguable basis upon which to plead and pursue a case against Pitcher Partners: i. for breach of any fiduciary duty which Pitcher Partners may owe to Mrs Twigg; ii. as an accessory to the claim made against Mr Twigg (cf J[107]). c. considering only whether Mrs Twigg's solicitor had an understanding or belief that Pitcher Partners were knowingly involved in a dishonest design (J[107], [108]). 3 The primary judge erred in his assessment of the nature or extent of the prejudice that would be occasioned to Pitcher Partners in the proceedings as a result of (separately or cumulatively): a. the appointment of a Tutor for Mrs Twigg (cf J[68]); b. an inability, or significantly compromised ability, to rehabilitate Mr Fitzpatrick as a witness of credit (cf J[84]); c. Mr Twigg being bound by principles of res judicata and/or issue estoppel in the proceedings; and d. the lost forensic benefits of being aligned with Mr Twigg in running a positive defence in the Earlier Proceedings (cf J[78]). 4 The primary judge erred in finding that any trial judge in the proceedings would be able to ensure that no injustice would be occasioned to Pitcher Partners by reason of their joinder to the proceedings (J[123]) and that any prejudice to Pitcher Partners was capable of being cured. 5 In undertaking an evaluative consideration of the merits of the application, the primary judge erred in his consideration of: a. the matters outlined in appeal grounds 1, 2, 3, 4, and 6; b. his assessment of the public confidence in the administration of justice; and c. relevant considerations in ss 56 to 59 of the Civil Procedure Act 2005 (NSW). 6 The primary judge erred in finding that there was no relevant delay by Mrs Twigg in bringing proceedings against Pitcher Partners (J[24]). 7 The primary judge erred in failing to find that where Mrs Twigg did not join Pitcher Partners to the Earlier Proceedings (cf J[113]) and thereby caused prejudice to Pitcher Partners, it would be an abuse of process to permit the proceedings to continue. 8 The primary judge erred in failing to find that Part XVI of the Amended Statement of Claim filed on 17 June 2022 was frivolous or vexatious and/or did not disclose a reasonable cause of action."

Leave in respect of grounds 1-7

1. It was common ground that leave to appeal was required in respect of grounds 1-7 as the decision whether to stay permanently proceedings is an interlocutory one (Supreme Court Act 1970 (NSW), s 101(2)(e)). Mr Williams, who appeared with Ms Jaffray and Mr Riordan for the applicants, argued that leave ought be granted, in part because the appeal raised an important point of principle. Mr Elliott SC, who appeared with Mr Smith for the plaintiffs, submitted that leave ought be refused because, although a point of principle was raised, the appeal was devoid of merit.
2. I consider that leave ought be granted. The circumstances in which an abuse of process may arise are not fixed. This appeal raises questions as to whether there is an abuse of process where plaintiffs bring a claim against new defendants (in this case, Pitchers), who are neither a party, nor related to a party in previous proceedings brought by the same plaintiffs, and the new defendants seek to have the proceedings permanently stayed as an abuse of process.

Leave in respect of ground 8

1. Ground 8 is in a different category since it seeks to challenge the primary judge's refusal to strike out part of the plaintiffs' claim on a summary basis. The relevant part of the plaintiffs' claim was the allegation that by their conduct prior to and during the 2019 proceedings Pitchers breached fiduciary duties owed to the plaintiffs. The alleged conduct included delaying the production of documents, seeking guidance from Max as to whether documents ought be produced, producing documents with a false annotation, and arranging for Mr Fitzpatrick to give evidence which was known to be false.
2. The primary judge dismissed Pitchers' strike-out application for the following reasons: "129 Pitcher Partners seeks to have the paragraphs of the List Statement in which these allegations are made struck out on the separate ground that they are vexatious and oppressive, as the fiduciary duty contended for is said to be incapable of being established, and that any application that Pitcher Partners pay the costs of the Earlier Proceedings should have been made in those proceedings by application for a third party costs order. 130 In my opinion, the plaintiffs' contentions are not such that they are amenable to summary disposition. I think that the plaintiffs were correct to submit that there is a triable issue as to whether there is a fiduciary duty of the kind contended for and as to whether the plaintiffs have the entitlement to seek damages, in respect of their unrecovered costs of the Earlier Proceedings, as sought."
3. The primary judge's reasons disclose no error in the application of the relevant test (whether there is a triable issue). The refusal to strike out the claim does not finally determine the rights of the parties. Pitchers will have the opportunity to oppose this claim at the hearing of the current proceedings (unless they are stayed). Mr Williams was unable to identify any issue of principle which could provide a basis for the grant of leave in respect of ground 8. For these reasons, I am not persuaded that leave ought be granted in respect of ground 8.

The applicable test for appellate review of alleged abuse of process

1. In Ghosh v NineMSN Pty Ltd (2015) 90 NSWLR 595; [2015] NSWCA 334 (Ghosh), this Court (Macfarlan JA, Leeming JA and Adamson J agreeing) set out the standard for appellate review of a determination whether there is an abuse of process at [37]: "A step in the primary judge's reasons for dismissing the proceedings was her conclusion that the manner in which they had been conducted amounted to an abuse of process. A determination that an abuse of process has occurred is not strictly a discretionary decision. Rather, it is an evaluative decision of a subjective nature, regarding an issue upon which minds may differ: Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; 226 CLR 256 at [7]. Nevertheless, appellate court intervention depends upon satisfaction of the same principles that apply in respect of discretionary decisions: Batistatos at [7], Singer v Berghouse (1994) 181 CLR 201 at 212. These are the principles stated in House v The King (1936) 55 CLR 499, which require, in substance, identification of an error of principle or a material error of fact, or, if no specific error can be identified, demonstration that the decision is 'unreasonable or plainly unjust': at 505."
2. This passage was approved and applied by the Full Federal Court (Jagot and Farrell JJ, Dowsett J dissenting) in Tyne v UBS AG (No 2) (2017) 250 FCR 341; [2017] FCFCA 5 at [54]. Although the decision was overturned by the High Court in UBS (Kiefel CJ, Bell, Keane and Gageler JJ, Nettle, Gordon and Edelman JJ dissenting), Gageler J expressly approved the requirement for establishment of House v The King (1936) 55 CLR 499; [1936] HCA 40 error: [74]. This question was not expressly addressed by the other judges of the High Court. It was common ground in this Court that Gageler J had correctly articulated the relevant test. It is also apparent from the wording of the first and second grounds of appeal that Pitchers have formulated the grounds in accordance with these principles.
3. The decision whether proceedings amount to an abuse of process is not "strictly" (to borrow the words from the extract from Ghosh above) a discretionary decision: see also the discussion in CBRE (V) Pty Limited v Trilogy Finds Management Limited (2021) 107 NSWLR 202; [2021] NSWCA 316 (CBRE) at [4]-[9] (Bell P, Basten JA agreeing). Nor does it involve merely a matter of practice and procedure: CBRE at [10]. However, as the authorities referred to above establish, a challenge to such a decision depends on the same principles that apply in respect of discretionary decisions. If this Court finds error, it is obliged to determine for itself whether the proceedings amount to an abuse of process.

Ground 1: alleged failure to address part of Pitchers' application

1. The way in which it is alleged the primary judge failed to address part of Pitchers' application is set out in detail in the first ground of appeal. The aspects of the alleged failure will be addressed in turn.

Alleged failure to address potential for shortfall (ground 1a)

1. In ground 1a, Pitchers alleges that the primary judge failed to address the plaintiffs' appreciation that there was likely to be a shortfall. The reasons of the primary judge do not refer to the potential for a shortfall or Mr Roberts' appreciation that there was a real prospect of a shortfall.
2. The primary judge was required to address the submissions made by the parties in so far as it was necessary to explain his Honour's conclusion. The obligation to give reasons does not require every piece of evidence or every submission made to be referred to: Strbak v Newton [1989] NSWCA 202 at 3 (Samuels JA, Gleeson CJ and Priestley JA agreeing), referred to in New South Wales Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231 at [73] (Bell CJ)) at 7.
3. It is plain from the primary judge's reasons that his Honour was not satisfied that the plaintiffs "should" have commenced proceedings against Pitchers and, as a relevant aspect of this, was not satisfied that Mr Roberts had made a forensic decision not to join Pitchers to the 2019 proceedings. While the prospect of a shortfall might have provided a motive for considering proceedings against third parties (such as Pitchers), it did not have that effect on Mr Roberts, who was focussed on the proceedings against the Max parties and did not consider a claim against Pitchers until after the relevant period. Thus, whether there was likely to be a shortfall was of little significance. Further, his Honour can be taken to have appreciated that there was a likelihood of a shortfall, having heard and determined the application for a freezing order, the basis for which was that some of the proceeds had been misappropriated and would not be available to satisfy any judgment in favour of the plaintiffs in the earlier proceedings. No error has been established.

Alleged failure to address the consideration given by Mr Roberts to the question whether Pitchers owed Diane a fiduciary duty (ground 1b)

1. This ground is related to, and will be dealt with together with, ground 2.

Alleged failure to address the material available to Mr Roberts from which an arguable case of existence and breach of fiduciary duty was capable of being pleaded and pursued (grounds 1c and 1d)

1. The matters alleged in grounds 1c and 1d related to the objective question: ought Mr Roberts have joined Pitchers to the proceedings on the basis that there was an arguable case against them for breach of fiduciary duty?
2. Mr Williams submitted that, in order to determine the application for a permanent stay, the primary judge was required to address each of the 40 matters which the applicants alleged a solicitor in Mr Roberts' position would have appreciated as giving rise to an arguable case against Pitchers for breach of fiduciary duty. This submission is based on the erroneous premise that the primary judge was obliged to determine the application by reference to individual matters relied on by Pitchers, rather than on the basis of the whole of the evidence.
3. The primary judge referred to the "40 matters" in global terms in [89] of the reasons. Rather than addressing each of the 40 matters, his Honour chose to focus on the matter which was crucial to any potential claim against Pitchers: namely, the instructions which Diane had given to Pitchers. These instructions were, as his Honour observed at [92], the subject of sworn evidence given by Mr Fitzpatrick in his affidavit sworn on 22 March 2019, who deposed that Diane had instructed Mr Fitzpatrick that Max could "do what he likes with the sale proceeds". If this evidence was true, it made any claim for breach of fiduciary duty against Pitchers untenable as Pitchers were obliged to act in accordance with the instructions of Diane and Max (who were both directors of the plaintiff companies) in respect of the affairs of the companies and in accordance with the instructions of Diane with respect to her own financial affairs. They were also obliged to have regard to Diane's interests as sole shareholder of these companies. That Diane, according to Mr Fitzpatrick's evidence, had given her imprimatur to Max treating the sale proceeds as his own was sufficient not only to authorise but also to oblige Pitchers to deal with Max and the proceeds of sale on that basis.
4. It is apparent from the primary judge's reasons at [91]-[96] that his Honour, in his reasons for dismissing the application for a freezing order, had regarded Mr Fitzpatrick's evidence as being a "stark potential barrier to [Diane's] success in the [earlier] proceedings". The primary judge accepted the force of Mr Elliott's submission that, in those circumstances, it was inherently improbable that the plaintiffs would have been considering suing Pitchers at that time. Indeed, it was only in the course of the hearing in 2020 that evidence of Pitchers' involvement in the misappropriation emerged. In light of Diane's instructions to the contrary and Max's evident self-interest in making such an allegation, Mr Roberts was entitled to regard with scepticism Max's allegation that Diane had authorised him to treat the sale proceeds as his own. However, the position was different, as the primary judge noted, when it came to Mr Fitzpatrick's evidence. Mr Fitzpatrick was a professional accountant who was engaged by Diane. Apart from the fees he obtained for services provided to Diane and the plaintiffs, he had no evident financial interest in the proceedings and therefore no apparent motive to give false, or unreliable, evidence.

Grounds 1b and 2: alleged failure to address the consideration given by Mr Roberts to the question whether Pitchers owed Diane a fiduciary duty (ground 1b) and alleged error in finding that Diane (through Mr Roberts) had not made a forensic decision not to join Pitchers in the 2019 proceedings (ground 2)

1. These grounds turn on the effect of the cross-examination of Mr Roberts extracted at length above. The question whether Mr Roberts had made a forensic decision (on behalf of Diane and by which she was bound) not to sue Pitchers depended solely on his evidence since it was not suggested that anyone else made or contributed to the alleged decision.
2. The primary judge referred, in general terms, to the cross-examination of Mr Roberts at [100] about his evidence that he had not formed any view about Pitchers' liability to the plaintiffs and had not considered whether they ought be joined as a party to the proceedings. Although the primary judge did not make an express credit finding about Mr Roberts' evidence, his Honour referred to Mr Roberts' email dated 19 November 2019, about which he had been cross-examined. It is plain from his Honour's reasons that the email was significant because Mr Roberts' knowledge at an earlier time could not, as a matter of logic, have been greater than it was on 19 November 2019 (a time at which the 2019 proceedings already had a hearing date of 1 June 2020). His Honour concluded that the email did not indicate that Mr Roberts had any "understanding or belief" that Pitchers was either "knowingly involved in any dishonest design on Max's part" ([107]) or "accessorily liable for Max's alleged breaches" ([108]). The primary judge considered that the email was "clearly enough directed to Mr Roberts' frustration with [Pitchers'] response to the subpoena" ([108]).
3. The fact that Mr Roberts had not discussed with counsel the possibility of suing Pitchers was also important to his Honour's conclusion that he was not persuaded that Mr Roberts had made a forensic decision not to join Pitchers in the 2019 proceedings. The primary judge regarded this matter as significant to the objective probabilities (it being highly unlikely that Mr Roberts would have made such a decision without consultation with counsel briefed in the matter).
4. The primary judge was entitled to address Pitchers' submission that Mr Roberts had made a forensic decision not to sue Pitchers (by October 2019) in this way. His Honour's approach obviated the need to make express credit findings regarding Mr Roberts' evidence (although it is implicit in his Honour's findings that the primary judge accepted his evidence) or to address the cross-examination about when or whether it had occurred to Mr Roberts that Pitchers might owe fiduciary duties to the plaintiffs.

Ground 3: alleged error in assessing prejudice occasioned to Pitchers in the current proceedings

1. In order to assess relevant prejudice, it is necessary to consider the appropriate counterfactual. Pitchers contended that the relevant comparator is the situation that would have existed had they been joined as defendants in the earlier proceedings. However, I am not satisfied that this is necessarily the case unless it can be established that the plaintiffs "should" have joined Pitchers to the 2019 proceedings, a matter of which the primary judge was not satisfied: [113]. Once it is accepted that the plaintiffs were not obliged to join Pitchers to the 2019 proceedings (and that there were substantial reasons not to join them, including that the plaintiffs' solicitors did not, at the relevant time, appreciate that there might be a claim, much less be in a position to assess whether any such claim would have reasonable prospects of success), it is difficult to see how Pitchers could be relevantly prejudiced by being sued in subsequent separate proceedings.
2. In order to address ground 3, it is necessary to address each of the sub-grounds before considering them as a whole.

Diane's incapacity which required an appointment of a tutor and will prevent her from giving evidence in the current proceedings (ground 3a)

1. The primary judge addressed the disadvantage that would flow to Pitchers by reason of the circumstance that Diane had lost capacity in the period between June 2020 when she gave her evidence in the 2019 proceedings and the present (and, inevitably, at the time when the current proceedings are heard if they are not stayed). The primary judge accepted the parties' concessions that the scenario which was least favourable to Pitchers was that her affidavit evidence and the transcript of her oral evidence could be tendered in the current proceedings on the basis that she was "unavailable" (in the sense of being "mentally unable to give the evidence", within the meaning of cl 4(1)(c) in Pt 2 of the Dictionary to the Evidence Act) within the meaning of s 63 of the Evidence Act. Thus, Pitchers would lose the opportunity to test her evidence in cross-examination or obtain concessions from her to establish informed consent or to support their laches defence.
2. The primary judge noted that the trial judge had found Diane's evidence to be unreliable and had placed little, if any, weight on her evidence. The primary judge concluded at [68]: "In those circumstances, it is hard to say, at this remove, whether it will be the plaintiffs or Pitcher Partners who will be most disadvantaged by Diane's incapacity. But I accept that such problem as does now arise for Pitcher Partners would not have arisen had it been joined as a defendant in the Earlier Proceedings. Of course, Pitcher Partners will not be bound by the findings that Ball J made about Diane's knowledge of Max's conduct."
3. The primary judge accepted that Pitchers suffered prejudice as a consequence of not being joined as a party to the 2019 proceedings because they lost the opportunity to conduct their own cross-examination of Diane. Pitchers alleged that the primary judge was in error in failing to find "significant" prejudice arising from the deterioration in Diane's mental capacity in the ensuing period. That a tribunal of fact must determine issues of fact upon a subset of the once available evidence does not make the trial unfair: The Queen v Edwards [2009] HCA 20; (2009) 83 ALJR 717 at [31] (Hayne, Heydon, Crennan, Kiefel and Bell JJ), citing Jago v District Court of New South Wales (1989) 168 CLR 23 at 47; [1989] HCA 46 (Mason CJ) and Williams v Spautz (1992) 174 CLR 509 at 519 (Mason CJ, Dawson, Toohey and McHugh JJ); [1992] HCA 34. It is also of significance, as the primary judge noted, that the plaintiffs will suffer the disadvantage of not having access to Diane (whether in terms of instructions or evidence) to respond to Pitchers' evidence regarding its defences of laches.

The inability or "significantly compromised ability" to rehabilitate Mr Fitzpatrick as a witness of credit (ground 3b)

1. The primary judge's response to Pitchers' submission that it would be difficult to persuade the judge who hears the current proceedings that Mr Fitzpatrick is a witness of credit appears at [84] of the reasons as follows: "That may be so, but it is hard to see why the position would have been any different had Pitcher Partners been a party to the Earlier Proceedings."
2. A principal aspect of the challenge to Mr Fitzpatrick's evidence in the earlier proceedings was that he had sworn false evidence in his affidavit in opposition to the plaintiffs' application for a freezing order. This affidavit was sworn and relied on well before it was suggested that Mr Roberts could have joined Pitchers. There is nothing to suppose that Mr Fitzpatrick would not have sworn an affidavit in the same terms in circumstances where he could hardly have been expected to anticipate that Pitchers would (on this scenario) have been joined to the 2019 proceedings. Thus, the seeds of the credibility finding against Mr Fitzpatrick would have been sown irrespective of whether Pitchers had been joined. For these reasons, the primary judge's conclusion was not only plainly open, but also correct.

The circumstance that Max would be "bound by principles of res judicata and/or issue estoppel" in the current proceedings (ground 3c) and the alleged lost forensic advantage in being aligned with Max in running a positive defence in the 2019 proceedings (ground 3d)

1. The primary judge accepted, at [72], that Max would be "estopped from raising and relying upon any allegations, non-admissions and denials, in defence of the plaintiffs' claim [in the current proceedings] that are inconsistent with issues that he raised, or could reasonably have raised, and findings made" in the 2019 proceedings. However, his Honour correctly found that Pitchers could cross-examine Max, if he is called to give evidence in his own case, about any relevant matter, including his dealings with Diane. Max could not, in submissions made on his behalf in the current proceedings, advance a proposition which was at odds with a finding made against him in the 2019 proceedings (either because of issue estoppel or because of the principles in Rippon v Chilcotin (2001) 53 NSWLR 198; [2001] NSWCA 142). However, if he is a witness in the current proceedings, there would be no such impediment to constrain the evidence he could give in answer to questions asked of him, including by Pitchers. Pitchers would not be constrained or bound by any finding made in the 2019 proceedings since it was not a party to the proceedings. To the extent to which Pitchers submitted to the contrary, I reject their submission.
2. If Max were not called in his own case, Pitchers could call him as a witness in their case (and require his attendance by subpoena, if necessary). If the pre-requisites for leave in s 38 of the Evidence Act were made out, Pitchers could be granted leave to cross-examine Max.
3. The primary judge accepted that there was a "real possibility" that Pitchers could be disadvantaged by having been sued separately but that the extent of the disadvantage was difficult to assess, although it "may be significant" ([78]).
4. I do not accept that it was open to the primary judge to make a finding in stronger terms than the one which was in fact made, having regard to the exigencies of litigation and the early stage at which the current proceedings were and remain (no Commercial List response having yet been filed). Accordingly, no error has been demonstrated. Thus, neither grounds 3c nor 3d has been made out.

Cumulative effect of ground 3

1. I am not persuaded that there is any proper basis to infer that the primary judge did not adequately address or appreciate the combined effect of the sub-grounds in ground 3.

Ground 4: alleged error in finding that the trial judge could ensure that Pitchers suffered no injustice

1. The primary judge's finding at [123] that the trial judge could ensure that no injustice was occasioned to Pitchers needs to be read in the context of the following passage from the reasons: "Unjustifiable oppression? 120 I have given careful consideration to all of the factors that I set out above. Overall, I accept that Pitcher Partners is disadvantaged by reason of not being joined as a defendant in the Earlier Proceedings and now, being sued separately in these proceedings. However, for the reasons I have set out, I am unable to conclude that the plaintiffs' use of the court's procedures to bring these proceedings against Pitcher Partners will occasion 'unjustifiable oppression' on Pitcher Partners. 121 I am not persuaded that the plaintiffs gave active, or indeed any, consideration to joining Pitcher Partners to the Earlier Proceedings and I can see why, as the Earlier Proceedings developed, they did not do so. 122 I am not persuaded that, as was put on behalf of Pitcher Partners, it is now impossible for there to be a fair trial of the issues the plaintiffs seek to raise in these proceedings. 123 I am confident that the trial judge, whoever he or she might be, will be acutely conscious of the various factors to which I have referred and will ensure that no injustice is occasioned to Pitcher Partners by reason of their joinder in these proceedings. 124 Overall, making the broad merits-based normative judgment called for in this application, I am not persuaded that the plaintiffs are abusing the court's process by bringing these proceedings against Pitcher Partners."
2. It is noteworthy that there is no challenge to the primary judge's finding at [122] that it has not been established that it is now impossible for Pitchers to have a fair trial. Nor did Pitchers point to any particular matter which was not capable of being remedied by a trial judge. Indeed, they submitted in writing: "If the primary judge considered the prejudice to Pitcher Partners could be cured, it was incumbent upon his Honour to identify how that would occur."
3. One of the difficulties was that the application for a permanent stay was made when no response to the Commercial List Statement had been filed, no evidence had been filed or bundles of documents prepared. Therefore, the primary judge was required to foresee and anticipate the way in which the prejudice for which Pitchers contended could arise and how it might be addressed. The primary judge had, for example, no way of knowing whether Max would participate in the current proceedings as a party or as a witness and what attitude he would take to being subpoenaed by Pitchers to give evidence (in the event that he did not give evidence on his own account). Nor could the primary judge predict what would be made of various aspects of the transcript of Diane's evidence. In these circumstances, the primary judge could do no more than identify potential prejudice and suggest a means, which could be expected to be employed by the judge at the eventual trial, by which any such prejudice could be ameliorated. It was not incumbent on the primary judge to list the various ways in which trial judges can overcome alleged prejudice, including, for example, by refusing to admit evidence under s 135 of the Evidence Act, by limiting the use to which particular evidence can be put under s 136 of the Evidence Act or by allowing Pitchers to cross-examine Max under s 38 of the Evidence Act if Pitchers calls Max as a witness in their case.

Ground 6: alleged error in finding that there was no relevant delay by the plaintiffs in bringing proceedings against Pitchers

1. The primary judge found that there had been no delay in bringing proceedings against Pitchers ([24]).
2. Pitchers' submissions in support of this ground are: 1. that, contrary to the primary judge's finding, the plaintiffs made a forensic decision not to join Pitchers to the 2019 proceedings; and 2. that decision was made before October 2019, the result being a delay between that time and May 2022 in the bringing of a claim which was based on conduct commencing over 15 years earlier when Twigg Group was sold to Cleanaway.
3. The basis of Pitchers' stay application is that the plaintiffs ought to have joined them to the 2019 proceedings before 11 October 2019, being the date on which the hearing date on 1 June 2020 was allocated (and after which the hearing date would have been imperilled). Thus, the relevant delay is the period of approximately two and a half years from 11 October 2019 to 25 May 2022 when the plaintiffs filed their Commercial List Statement (three weeks after this Court had dismissed the appeal brought by the Max parties against the trial judge's judgment). In circumstances where there was no forensic decision made by the plaintiffs not to join Pitchers to the 2019 proceedings, the primary judge was correct to find that there was no relevant delay in bringing the proceedings against them.
4. Further, it can be expected that Pitchers' documents, which were required to be produced on subpoena in the 2019 proceedings, have been assembled and are available to be produced and used in the current proceedings. There would appear to be no basis to infer that relevant documents have been lost in the period between the earlier proceedings and the commencement of the current proceedings.

Grounds 5 and 7: alleged error in failing to find that the proceedings constituted an abuse of process

1. In substance, Pitchers challenged the primary judge's conclusion that he was not persuaded that the current proceedings amount to an abuse of process ([124]). They further submitted that, had the primary judge properly taken into account the matters they had advanced in their grounds of appeal, his Honour would have found that the continuation of the proceedings constitutes an abuse of process, including on the ground that it would "bring the administration of justice into disrepute among right-thinking people" (citing Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd (2009) 239 CLR 75; [2009] HCA 43 at [28] (French CJ, Gummow, Hayne and Crennan JJ)) and would be unjustifiably oppressive.
2. Mr Williams submitted that, even if this Court did not disturb the primary judge's finding that he was not persuaded that Mr Roberts had made a forensic decision not to join Pitchers to the 2019 proceedings, the permanent stay ought still have been granted. In support of his submission that it is not necessary for the applicant for a stay to show that the respondent is at fault, Mr Williams relied on the following passage from UBS at [40] where Kiefel CJ, Bell and Keane JJ said: "[40] Batistatos makes clear that the just resolution of a controversy may be the permanent stay of the proceeding notwithstanding that the plaintiff is not at fault and that the merits of his or her claim have not been decided. As the joint reasons explain: 'The plaintiff certainly has a 'right' to institute a proceeding. But the defendant also has 'rights'. One is to plead in defence an available limitation defence. Another distinct 'right' is to seek the exercise of the power of the court to stay its processes in certain circumstances. On its part, the court has an obligation owed to both sides to quell their controversy according to law.'" [Emphasis added to indicate the portion relied on by Mr Williams.]
3. There are two answers to this submission. First, in support of its application for a permanent stay, Pitchers did not rely on delay of itself, such as was found in Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256; [2006] HCA 27. Second, the paragraph in UBS subsequent to the one on which Mr Williams relied shows that the distinction between the bases of the application is important. Their Honours said at [40]: "The abuse of process in Batistatos lay in the very great delay in the commencement of the proceedings on behalf of the incompetent plaintiff; a delay which made the fair trial of his claim impossible. That is not this case. The appeal is to be determined upon acceptance that the Trust's claims are arguable, that UBS has not been called upon to defend them, and that the delay has not made their fair trial impossible. The claimed abuse lies in invoking the processes of the Federal Court to litigate claims that could and should have been litigated in the SCNSW proceedings." [Emphasis added.]

Proposed orders

1. For the reasons given above, I propose the following orders: 1. Grant leave to appeal with respect to grounds 1 to 7. 2. Refuse leave to appeal with respect to ground 8. 3. Dismiss the appeal brought on grounds 1 to 7. 4. Order the appellants pay the respondents' costs of the proceedings in this Court.

Endnotes

1. (2018) 265 CLR 77; [2018] HCA 45 at [1] (UBS v Tyne).
2. CA Tcpt, 25 July 2023, p 1(46).
3. CA Tcpt, p 2(25).
4. Johnson v Gore Wood & Co [2002] 2 AC 1 at 31 (Lord Bingham of Cornhill), referred to with approval in UBS v Tyne at [7].
5. [2021] NSWCA 316 at [6]-[9] (Bell P, Basten JA agreeing).
6. CBRE at [9].
7. (1992) 174 CLR 509; [1992] HCA 34.
8. Williams at [516]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 August 2023