Plaintiff v Defendant

Plaintiff v Defendant - [2009] VSC 566 - VSC 2009 case summary — Zoe

[103]

The proposed amendments in the Further Amended Statement of Claim (draft 1 May 2009) are extensive. They seek to allege additional facts concerning, inter alia, the trucking fees, Mr Lindberg's knowledge of the Arthur Andersen Report, the Ernst & Young Fraud Risk Assessment, Project Rose, the Independent Inquiry Committee into the United Nations Oil-for-Food Program (the Volcker Inquiry), the Tigris Agreement and the damage to AWB. Importantly, it is now alleged that not only did Mr Lindberg fail to warn the board about the sham transactions, but that he misinformed and allowed others to misinform the board.

On the evidence before me, I was satisfied that the proposed amendments would have lead to the vacation of the trial date. No satisfactory explanation was provided by Mr Lockett, who swore his affidavit of 1 May 2009 in support of the application to amend, for ASIC not having raised these allegations earlier to avoid the trial date being vacated. ASIC had obtained between 500,000 and 1,000,000 documents from AWB in 2007. There was no evidence before me to establish the matters that it now seeks to plead were not known to ASIC, or ought not to have been known, earlier to avoid the trial date being vacated. In my view, I have to do justice to both parties. ASIC has had the full weight of the state to enable it to frame and launch its case against Mr Lindberg. Some sixteen months after the proceedings were commenced, when the hearing was just some two months off, ASIC seeks to make extensive and substantial amendments which will lead to a vacating of the trial date.

Such amendments may be made in a commercial dispute where parties can be compensated by the appropriate order as to costs or an adjournment. In a matter as serious as a civil penalty proceeding, different considerations apply. It is now some nine years since many of the matters complained of happened. Mr Lindberg is to be called on to meet allegations about meetings and what was said nine or so years ago. It goes without saying that memories will be stretched to accurately and fairly recall what was or was not said. In my opinion, the further delay of these proceedings will unfairly prejudice Mr Lindberg in the conduct of his defence. Such prejudice exists in the context where his professional reputation and character is at risk. Such prejudice cannot be compensated for by an order as to costs.

[309]

The test of reasonableness in Anshun has been worked out in later cases. Those of particular relevance are Bryant v Commonwealth Bank of Australia [1995] FCA 1299; (1995) 57 FCR 287 and Ling v The Commonwealth [1996] FCA 1646; (1996) 68 FCR 180. Bryant was sued by the Bank in the Supreme Court of New South Wales for recovery of possession of mortgaged property and for debt. He raised various defences and cross-claims but later amended his pleadings to withdraw some of the cross-claims. He then brought separate proceedings in the Federal Court based on the cross-claims he had withdrawn. The Full Court held that they were barred by an Anshun estoppel. The Court (Beaumont, Wilcox and Moore JJ) considered the special problems that arise in the application of the Anshun principle to cross-claims and said (297-8):

... in contrast to defences, many cross-claims may have little or no connection with the principal claim in the action; there may be no more than an identity of parties. Where that is so, there may be no policy justification for forcing defendants to litigate their claims as cross-claims rather than as principal claims in separate actions in the forum of their choice. But, where, as here, a defendant's claim is intimately connected with that of the plaintiff, in the sense that each arises, substantially, out of the same matters of fact, there is every reason to require that both be litigated at the one time; thereby minimising costs and avoiding the possibility of inconsistent judgments ... This is such a case. The matters sought to be raised by the appellant in this Court were all matters connected with the claims made by the bank. The appellant, and his former legal advisers, recognised this. They pleaded his claims as defences to the bank's two Supreme Court actions and as cross-claims to those proceedings.

In Ling v The Commonwealth [1996] FCA 1646; (1996) 68 FCR 180 on the other hand the plaintiff's failure to plead his claim as a cross-claim in the earlier proceedings was held to have been reasonable and there was no Anshun estoppel. Wilcox J said (184):

In considering reasonableness ... consideration must be given to all aspects of the case. They include the extent of the overlap between the facts underlying each claim; the greater the overlap, the easier it is to argue that it was unreasonable not to raise the matter in the first case. They also include any difficulties that existed, or might reasonably have been perceived, in raising the matter earlier ... In assessing the reasonableness of Mr Ling's failure to raise his claim against the Commonwealth when he was sued by it in the earlier action, it is necessary to look at the whole of the circumstances that he then confronted. His claim involved facts that overlapped the Commonwealth's case to some extent but were substantially extraneous to that case.

In this case there is a substantial if not total overlap in the facts underlying both claims, and the amount now sued for was comprised within the earlier claim. There is therefore every reason to require that both be litigated at the one time, minimising costs and delay to both parties, and the demands on Court time. If there was no cause of action estoppel in this case there was certainly an Anshun estoppel, and I would allow the appeal on this basis as well.[109]

[324]

It is not the purpose of the criminal law to punish the guilty at all

costs. It is not that that end may justify whatever means may have been

adopted. There are two related aspects of the public interest which bear on

this. The first is that the public interest in the due administration of

justice necessarily extends to ensuring that the Court's processes are used

fairly by State and citizen alike. And the due administration of justice is a

continuous process, not confined to the determination of the particular case.

It follows that in exercising its inherent jurisdiction the Court is

protecting its ability to function as a Court of law in the future as in the

case before it. This leads on to the second aspect of the public interest

which is in the maintenance of public confidence in the administration of

justice. It is contrary to the public interest to allow that confidence to be

eroded by a concern that the Court's processes may lend themselves to

oppression and injustice.

....

The justification for staying a prosecution is that the Court is obliged

to take that extreme step in order to protect its own processes from abuse.

It does so in order to prevent the criminal processes from being used for

purposes alien to the administration of criminal justice under law. It may

intervene in this way if it concludes from the conduct of the prosecutor ...

that the Court processes are being employed for ulterior purposes or in

such a way ... as to cause improper vexation and oppression. The yardstick

is not simply fairness to the particular accused. It is not whether the

initiation and continuation of the particular process seems in the

circumstances to be unfair to him. That may be an important consideration. But the focus is on the misuse of the Court process by those responsible for law enforcement. It is whether the continuation of the prosecution is

inconsistent with the recognised purposes of the administration of

criminal justice and so constitutes an abuse of the process of the Court.[125]

[331]

The inherent jurisdiction of a superior court to stay its proceedings on grounds of abuse of process extends to all those categories of cases in which the processes and procedures of the court, which exist to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness. Thus, it has long been established that, regardless of the propriety of the purpose of the person responsible for their institution and maintenance, proceedings will constitute an abuse of process if they can be clearly seen to be foredoomed to fail ((22) See, e.g., Metropolitan Bank v. Pooley (1885) 10 App Cas 210 at pp 220-221; General Steel Industries Inc. v. Commissioner for Railways (N.S.W.) [1964] HCA 69; (1964) 112 CLR 125, at pp 128-130.). Again, proceedings within the jurisdiction of a court will be unjustifiably oppressive and vexatious of an objecting defendant, and will constitute an abuse of process, if that court is, in all the circumstances of the particular case, a clearly inappropriate forum to entertain them ((23) See, generally, Voth v. Manildra Flour Mills Pty. Ltd. [1990] HCA 55; (1990) 171 CLR 538.). Yet again, proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings ((24) See, e.g., Reichel v. Magrath (1889) 14 App Cas 655, at p 668; Connelly v. D.PP. (1964) AC 1254, at pp 1361-1362.). The jurisdiction of a superior court in such a case was correctly described by Lord Diplock in Hunter v. Chief Constable of the West Midlands Police [1981] UKHL 13; (1982) AC 529, at p 536.) as "the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people".[132]

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