Plaintiff v Defendant

1 By summons filed on 19 March 2014, the Defendant sought an order, amongst others, that this proceeding be permanently stayed, alternatively dismissed without adjudication on the merits, alternatively struck out ('the First Application'). It submitted that the purpose for which the proceeding was commenced was improper and that the proceeding was an abuse of process.

2 Another company, Treasury Wine Estates Limited ('Treasury Wine'), which was itself a defendant in a separate proceeding also brought by the same Plaintiff under Part 4A of the Supreme Court Act 1986 (Vic), sought the same orders as the Defendant.

3 Ferguson J heard the applications of the Defendant and Treasury Wine together on 16 May 2014 and judgment in respect of both matters[1] was handed down on 23 July 2014.[2] Her Honour made the following findings of fact:

(a) MCI [the Plaintiff] was created by Mr Elliott as a vehicle for bringing representative proceedings against listed companies alleging breaches of continuous disclosure obligations;

(b) MCI would be the representative plaintiff in such proceedings; and

(c) Mr Elliott would act as MCI's solicitor, with Mr Elliott earning fees from doing so.[3]

4 Her Honour also found that Melbourne City Investments Pty Ltd ('MCI') commenced the proceedings for the predominant purpose of generating legal fees for Mr Elliott. However, having made that finding, Her Honour then distinguished between MCI's immediate purpose (to obtain orders for compensation against the Defendants) and its ultimate purpose (for Mr Elliott to earn legal fees) in finding that the proceeding was not an abuse of process.[4]

5 Treasury Wine appealed Her Honour's findings in relation to abuse of process. The Defendant did not appeal.

6 On 10 October 2014 the Court of Appeal heard Treasury Wine's appeal and on 22 December 2014 handed down judgment allowing the appeal by majority decision.[5]

7 The Court of Appeal found that commencing a proceeding for the predominant purpose of generating legal fees was an abuse of process. In their majority judgment, Maxwell P and Nettle JA held, amongst other things, that:

This proceeding [Treasury Wine's appeal] is one of a number of class actions brought by the respondent ('MCI') for the predominant purpose of enabling MCI's sole director and shareholder ('Mr Elliott') to earn legal fees by acting as solicitor for MCI in the proceeding.[6]

...

The question for determination, therefore, is whether MCI's purpose of 'generating legal fees for Mr Elliott' is a legitimate purpose. Plainly enough, generating legal fees does not constitute a purpose of vindicating legal rights or immunities. ...[7]

... The authorities distinguish between two types of case. On the one hand, a proceeding will not be regarded as an abuse of process by reason only that it is brought for the purpose of taking collateral advantage of any judgment or settlement in vindication of legal rights or immunities which might be obtained in the proceeding. On the other hand, ... if a proceeding is brought for the predominant purpose of obtaining collateral advantage from the existence of the proceeding as such, as opposed to collateral advantage flowing from any judgment or settlement in vindication of legal rights or immunities which might be obtained in the proceeding, it will be an abuse of process and liable to be stayed.[8]

What distinguishes the two categories is the use to which the proceeding is put. ... In the present case, MCI is using the cause of action to create an income­ generating vehicle for its solicitor. It has no interest in vindicating its rights, or obtaining a remedy, as such.[9]

The nature of the cause of action - as a claim based on an alleged breach of disclosure requirements - is immaterial to MCI's purpose. Its sole purpose has only ever been to create for itself- in this case, by acquiring a small parcel of shares - a cause of action of sufficient merit to induce the defendant company to pay Mr Elliott's fees.[10]

It seems to us that this is a clear example of an abuse of process. ...[11]

Ultimately, the policy considerations which inform the law relating to abuse of process are twofold: to ensure that the processes of the Court are used fairly, and to maintain public confidence in the ability of the Court to function in that way. In this case, there is a palpable unfairness in a defendant being brought to court for the predominant purpose of enriching the plaintiffs solicitor, and the community's confidence would undoubtedly be shaken if that were held to be a legitimate purpose for bringing proceedings.[12]

8 Justice Kyrou dissented, agreeing with Ferguson J that the proceeding was not an abuse of process.[13]

9 On 19 February 2015 the Defendant filed a further summons seeking an order that this proceeding be permanently stayed, alternatively dismissed without adjudication on the merits, alternatively struck out, on the grounds that the commencement and maintenance of it is an abuse of process ('the Second Application'). The Defendant also sought its costs of the proceeding on an indemnity basis.

10 In support of the Second Application, the Defendant relies upon the Court of Appeal Decision, the evidence which the Defendant has filed in this proceeding previously and an affidavit of Mr James Agnus Campbell affirmed 20 February 2015.

11 The Defendant submits that as the facts applying to this proceeding are the same as those underpinning the factual findings of the Court of Appeal Decision, this Court is bound to follow the Court of Appeal Decision and order that this proceeding be permanently stayed.

12 At the commencement of the hearing the Court was informed that the Plaintiff proposed to make application for special leave to appeal the Court of Appeal Decision to the High Court. No date for the hearing of such application has been allocated.

13 Before argument commenced I indicated to the parties that my preliminary view was that there should be a stay until further order, with costs reserved. As indicated to the parties, I had in mind the forthcoming special leave application.

14 The Defendant accepted my preliminary view as being a practical way forward. However, the Plaintiff did not. As became apparent during the course of argument the Plaintiff's position is that the outcome of the special leave application is irrelevant. Accordingly the matter proceeded and much authority was referred to as to whether a party could have a 'second go' at an interlocutory application.

15 Each party filed detailed and comprehensive written submissions. These submissions were supplemented by oral argument on 16 March 2015.

16 In summary the Plaintiff argued that the decision of Ferguson J on the issue of abuse of process, although interlocutory, was in effect a final decision on the issue thereby attracting the principles of issue estoppel and res judicata. Further, it was submitted that the Second Application was itself, in the circumstances, an abuse of process and indeed in breach of various provisions of the Civil Procedure Act 2010 (Vic) ('CPA'). Finally, it was submitted that by its conduct in not appealing but continuing with further interlocutory steps, including making application for security for costs, the Defendant was estopped from, alternatively waived its right to commence the Second Application. Perhaps anticipating the submission by the Defendant to the effect that there was an exception to the issue estoppel principle, the Plaintiff submitted that there was no fresh evidence and no significant change in the law.

17 The Defendant disputed each of the Plaintiff's contentions. In summary the Defendant contended that the decision was truly interlocutory and not amenable to the principle of res judicata or issue estoppel. Alternatively it was argued that even if final on the abuse of process issue, the peculiar circumstances of this case fell clearly within recognised exceptions to the res judicata and issue estoppel doctrines that enshrine the principle of finality in litigation. Accordingly, the Defendant contended that the Second Application was not an abuse of process and was not in breach of any provision of the CPA. Further it was contended that there could be no estoppel or waiver in the circumstances. Finally, the Defendant contended that there was a change in the law, indeed a significant change, that on the authorities, compelled a stay in order to prevent the administration of justice falling into disrepute, a category of abuse of process.

18 What is the Court to do? Is the Second Application an abuse of process? Or, is the continuation of the proceeding, in light of The Court of Appeal Decision, an abuse of process?

19 I propose to make orders in accordance with my preliminary view which has not changed. It is a practical and desirable position that balances the interests of all parties including the Court. Accordingly, there will be a stay until further order.

20 The Court has the power and indeed the obligation to regulate its own processes. I do not consider, in circumstances where there is a pending special leave application to the High Court, that further steps should be taken in the proceeding. By the same token I do not consider that a permanent stay should be granted. There is no prejudice to either party in waiting for a relatively short period.

21 In my opinion it is not desirable to grant a permanent stay at this stage. If special leave is granted and the appeal ultimately succeeds, the Plaintiff will be in a difficult position if a permanent stay was in operation. In such event it would, albeit in a retrospective sense, cast doubt on the desirability of having granted a permanent stay in the face of a pending special leave application. The Plaintiff would be vindicated and would be entitled to run its case but would presumably have to start again. Of course, the Court is obliged to consider the position in accordance with the existing state of the law. However, as the parties are not ready for trial and there is still much to do, there is no relevant prejudice to any party if a limited stay is granted. It follows that if special leave is granted, the limited stay will be extended to the hearing and determination of the appeal in the High Court. No steps should be taken until the result of the application for special leave is known.

22 This approach is entirely in the interests of justice and balances the interests of all parties, and of course the Court and the administration of justice. The Plaintiff is not shut out if it succeeds. It will not face all the problems that may exist if a permanent stay was in place. The Defendant does not have to face ongoing interlocutory steps in circumstances where another case, exactly the same as this case, has been permanently stayed. Finally the court will not be managing a case where the Court of Appeal has effectively said it is an abuse of process. The status quo is in a sense preserved giving recognition to both the Court of Appeal Decision and the prospect of a successful appeal.

23 I now turn to the other possibility. The refusal of special leave or the granting of special leave but dismissal of the appeal. In such circumstances there will be a permanent stay. This result is consistent with authority, common sense and the interests of justice. I will state my reasons briefly and without a detailed exposition of the law relating to issue estoppel, res judicata, abuse of process, estoppel and waiver and the CPA. Each of these pleas, doctrines or principles is not without complexity. However, in my view there is a short answer to the Plaintiff's wide ranging submissions.

24 Assuming (without deciding) that the Plaintiff is correct and that the disposition of the First Application, despite its interlocutory nature, was in the relevant sense, final in relation to the issue, so as to create an issue estoppel or (less likely) res judicata (a proposition not assented to by the Defendant) the clear and relevant exceptions to the doctrines preclude any reliance on them.

25 In my opinion the Court of Appeal Decision clearly falls within the exception to the application of the doctrine of issue estoppel and res judicata in this case (of course in the event that they are applicable at all) so as to permit the Second Application. Further, the exceptions or special and exceptional circumstances, namely the Court of Appeal Decision, preclude a submission to the effect that the Second Application is an abuse of process.

26 In Arnold & Ors v NatWest Bank Plc,[14] the House of Lords confirmed that the plea of issue estoppel did not constitute a complete bar to later litigation and was not a rigid or inflexible rule. It was held that in special circumstances the plea may not operate. Lord Keith[15] who delivered the principal speech said

... In my opinion your Lordships should affirm it to be the law that there may be an exception to issue estoppel in the special circumstance that there has become available to a party further material relevant to the correct determination of a point involved in the earlier proceedings, whether or not that point was specifically raised and decided, being material which could not by reasonable diligence have been adduced in those proceedings. One of the purposes of estoppel being to work justice between the parties, it is open to courts to recognise that in special circumstances inflexible application of it may have the opposite result ...

... If a judge has made a mistake, perhaps a very egregious mistake, as is said of Walton J's judgment here, and a later judgment of a higher court overrules his decision in another case, do considerations of justice require that the party who suffered from the mistake should be shut out, when the same issue arises in later proceedings with a different subject matter, from reopening that issue?

... Estoppel per rem judicatam, whether cause of action estoppel or issue estoppel, is essentially concerned with preventing abuse of process. In the present case I consider that abuse of process would be favoured rather than prevented by refusing the plaintiff's permission to reopen the disputed issue. Upon the whole matter I find myself in respectful agreement with the passage in the judgment of Sir Nicolas Browne-Wilkinson V.-C. where he said [1989] Ch. 63, 70-71:

"In my judgment a change in the law subsequent to the first decision is capable of bringing the case within the exception to issue estoppel. If, as I think, the yardstick of whether issue estoppel should be held to apply is the justice to the parties, injustice can flow as much from a subsequent change in the law as from the subsequent discovery of new facts. In both cases the injustice lies in a successful party to the first action being held to have rights which in fact he does not possess. I can therefore see no reason for holding that a subsequent change in the law can never be sufficient to bring the case within the exception. Whether or not such a change does or does not bring the case within the exception must depend on the exact circumstances of each case".[16]

27 Although Lord Lowry agreed with Lord Keith, his Lordship very candidly admitted that until reading in draft the speech of Lord Keith he was of the rival view. In changing his mind his Lordship said

The reliance on "new law" in the proviso was a new departure. It was conceded before your Lordships that the presentation of a new argument or the discovery of a previously overlooked authority would not suffice: the new law must take the form of a new decision; but it seems that this could come about by a lucky accident or even as a result of encouraging another litigant to take the same point. In Property and Reversionary Investment Corporation Ltd v Templar [1977] 1 W.L.R. 1223 a new decision opened the way for the Court of Appeal to exercise its discretion by permitting a late appeal; that case was not an example of defeating an issue estoppel, since the granting of leave to appeal out of time meant that success was achieved in what was still a pending action.

It appears from this review that there are significant arguments in favour of the proposition that issue estoppel constitutes a complete bar to relitigating a point once it has been decided but I am now of the opinion that the court can, and in exceptional circumstances should, relax that rule.

Once the possibility of relying on special circumstances is established as a legal proposition, I have no hesitation in agreeing that the circumstances of this case are special and indeed exceptional. [17]

28 In DA Christie Pty Ltd v Baker[18] the Court of Appeal considered an appeal from a decision of a County Court judge to allow a second application for an extension of time within which to bring an action under s 23A of the Limitation of Actions Act 1958 (Vic). An initial application for extension of time had been dismissed by a different County Court judge on the grounds that there was no explanation for the delay. The second application was supported by material explaining the delay. The appeal was allowed by the majority comprising Brooking and Hayne JJA, Charles JA dissented.

29 Brooking JA decided the appeal on the basis that the second application was caught by the principle of issue estoppel.[19] Brooking JA said:

If I were wrong in this view, I should still be of the opinion that the appeal must succeed.... If the principle of issue estoppel was inapplicable, then it was for the judge to consider whether it was an abuse of process for the respondent to apply again when he had failed on the merits and when he vouchsafed no explanation of his omission to put forward at the time of the first application the additional material on which he now relied. If the decisions I have cited do not lead to the conclusion that an issue estoppel arose here, then in my view they at least support the conclusion that on the facts of this case the respondent, having not 'come fully prepared with proper materials in the first instance', and having not sought any adjournment once the gap in his case became apparent, and having offered no explanation of his failure to put forward the material which was later provided, should not be allowed to vex the appellant with a second application. The judge failed to turn his mind to this question. We are in as good a position as he to determine the question and we should do so adversely to the respondent, and allow the appeal. I agree, with respect, with what Hayne JA has written on the subject of abuse of process.[20]

30 However, Brooking JA stated clearly that he was not stating a general rule which was applicable to all interlocutory applications, and his acceptance of the reasoning of Hayne JA on abuse of process must be viewed in this light. Brooking JA stated in this regard:

It is arguable... that, questions of practice and procedure being under the control and generally within the discretion of the court in which the action is brought, it is, generally speaking at all events, open to the court to exercise a wide discretion in the interests of justice in considering whether an applicant who has failed on the merits may none the less succeed on a second application.... We are concerned, not with the ordinary interlocutory application made in the course of litigation, which is governed by the court's own practice and procedure, but with an application under a statute which empowers a court to enlarge a limitation period if it decides...[21]

31 Hayne JA decided the appeal on the ground of abuse of process. His Honour said

Consideration of the private interest of a respondent to an application under s 23A in having certainty on the question whether action may be brought against it notwithstanding the expiration of the relevant limitation period, together with consideration of the important public interest in ensuring that judicial determinations are binding, final and conclusive and that there should not be conflicting decisions on the same issue lead me to the view that the circumstances in which second applications under s 23A may be made after dismissal of an earlier application are limited. So far as presently relevant that limitation is to be imposed by an application of principles concerned with abuse of process and in at least most cases may be resolved by concluding that a second application is an abuse unless there is proof of fraud or it is sought to adduce fresh evidence, 'fresh', that is, in the sense in which that expression is used in connection with the admission of evidence on appeals.[22]

32 In common with Brooking JA, Hayne JA made it clear that he was not laying down any general rule to be applied to interlocutory applications of whatever kind:

As Brooking JA has demonstrated in his reasons for judgment (which I have had the advantage of reading in draft) there are many cases which have examined questions of issue estoppel or res judicata in relation to applications of widely varying kinds. Clearly, the weight of that authority favours the conclusion that a party may not succeed in a second application save in exceptional circumstances. As Brooking JA points out, some decisions have applied principles of issue estoppel and some have applied principles of abuse of process. In my view it is the latter principles that lead to the conclusion that this appeal should succeed.

...

Whether the same considerations apply to interlocutory applications of the kind I have mentioned earlier - those under the control of and generally within the discretion of the court in which the action is brought - is not a matter I have to decide. Nothing I say here should be read as deciding whether the renewal of such an application is an abuse of process.

Moreover, given the breadth of possible application of the principles of abuse of process, I do not intend in what I say to attempt some definition of the circumstances properly to be regarded as constituting an abuse of process or to say that it is only upon proof of fraud or the adducing of fresh evidence that a second application of the kind now under consideration can be said not to amount to an abuse. The hazards of attempting some general definition of such broad and discretionary principles as are encompassed in the simple expression 'abuse of process' are well known and need not be restated.[23]

33 In Nominal Defendant v Manning,[24] the New South Wales Court of Appeal by majority,[25] declined to follow the majority decision in Christie. Like Christie, Manning considered whether a second application to extend the time within which to commence proceedings was an abuse of process. Although the majority declined to follow Christie in respect of such applications, there was agreement that it was undesirable to lay down any general rule to be applied in considering whether an interlocutory application constitutes an abuse of process. For example, Heydon JA said:

... there are considerable differences between the particular goals of each type of [interlocutory] order and the categories of circumstances in which each type of order is made. These differences make it difficult to propound a general rule suitable for all cases when the controversy in one specific case for decision does not have characteristics which are common to all categories. Not only are the categories different, but the circumstances of particular cases falling within each category are almost infinitely various. It is unlikely that a single set of rigid and exhaustive criteria could justly settle all issues.[26]

34 Mason P although dissenting (and agreeing with the Court of Appeal in Christie) agreed with Heydon JA on this point. His Honour said

There will be cases in which the attempt to revisit a contested interlocutory application without change of circumstances or genuinely fresh evidence will not amount to an abuse of process. For example, the opposition to an application for an interlocutory injunction on the first return of the motion may be of such a perfunctory nature on both sides that an attempt to revisit the issue at the interlocutory stage would not be an abuse of process even if the evidence were accessible to the defendant on the first occasion. One can also conceive of situations where the revisiting of a legal proposition adopted or assumed in an earlier interlocutory hearing would not constitute an abuse of process. For example, new and unexpected appellate authority may have arrived on the scene.

To concede that there may be exceptions to the rule of practice does not mean that there is no general rule. Nor does it mean that the rule of practice is a matter of pure discretion. Nor does it mean that cases falling within the letter and spirit of the rule of practice are any less abuses of process. The present case falls squarely within the ambit of the rule of practice.

I agree with the reasoning of Hayne JA in D A Christie Pty Ltd. Subject to possible and presently irrelevant exceptions, the principle expressed as "the ordinary rule of practice" in Brimaud means that an attempt to evade that principle in a second substantive interlocutory application is an abuse of process. Once the Court detects this and satisfies itself that the case falls within the letter and spirit of the rule of practice then the application should be dismissed.[27]

35 In Kingston City Council v Monash City Council & Ors[28] Gillard J found special circumstances precluding reliance on the plea of issue estoppel. After referring to Arnold's case his Honour said

Finally, in my opinion there are special circumstances which preclude the application of the plea. A court may refuse to apply the plea where there are special circumstances and to do so would produce an injustice. This is established by the judgment of Sir James Wigram VC in Henderson v Henderson (1843) 3 Hare 1000 at 114-115 and adopted by the House of Lords in Arnold. Doubts have been expressed in Linsley v Petrie (1998) 1 VR 427 at 441 and 449. But in my respectful opinion the plea could in rare cases cause an injustice especially where there is doubt as to the correctness of the issue decided.[29]

36 In National Parks and Wildlife Service v Pierson[30] the New South Wales Court of Appeal considered a second application to reinstate a proceeding which had been struck out for default in compliance with the Court's directions. Palmer AJA, with whom Mason P and Santow JA agreed, considered that if an application for reinstatement was made before the default had been cured, and was dismissed for this reason, there was no bar to a second application after the default had been cured. This was because 'there will have been a change in the circumstance which led to the refusal of the first application'.[31] Further, Palmer AJA considered that it was not impossible for a second application for reinstatement to succeed, even if the default has not been cured prior to the making of the application, 'because the overriding principle governing the approach of the court to interlocutory applications is that the court should do whatever the interests of justice require in the particular circumstances of the case'.[32]

37 In Tenth Vandy Pty Ltd v Natwest Markets Australia Pty Ltd[33] Hargrave J very helpfully collected a number of the relevant authorities dealing with subsequent interlocutory applications. In granting a second application to reinstate a proceeding his Honour said

My review of the authorities has led me to the conclusion that I am not bound, in considering the second reinstatement application in this case, to apply Guss and Stragan, with the effect that I am limited to considering any "new evidence"' which was not available on the hearing of the first reinstatement application. I am of this view for the following reasons.

In the first place, although the second reinstatement application is of a similar kind to an application to set aside a default judgment, it is a different application.

Secondly, the decision of Mandie J in Global Realty constitutes a single judge decision which is contrary to the decisions in Guss and Stragan. In these circumstances, the weight to be attached to the fact that the decisions in Guss and Stragan concern matters of practice and procedure is diminished.

Thirdly, and most importantly, both Brooking and Hayne JJA in Christie clearly stated that they were not purporting to lay down any general rules to be applied in determining whether any interlocutory application constitutes an abuse of process.

Fourthly, the variety of interlocutory applications and of the circumstances pertaining to each individual application dictate, in my view, that it is undesirable that there be a set of rigid rules to be applied to every case where a second interlocutory application is made after the refusal of a first application for the same relief. In this regard, I respectfully adopt the passage from the judgment of Heydon JA in Manning quoted above which was referred to with apparent approval by Maxwell P in Philip Morris.

As a result, it is my view that the correct approach to apply to second or subsequent interlocutory applications is that stated in Manning and Pierson that "the overriding principle governing the approach of the court to interlocutory applications is that the court should do whatever the interests of justice require in the particular circumstances of the case". As I have said, this statement was referred to with apparent approval by Maxwell P in Philip Morris. Further, this approach is consistent with the statement of Brooking JA in Christie quoted above in respect of interlocutory applications concerning questions of practice and procedure that:

... it is, generally speaking at all events, open to the court to exercise a wide discretion in the interests of justice in considering whether an applicant who has failed on the merits may none the less succeed on a second application.[34]

38 In a written submission, filed with leave after the hearing and in response to the Defendant's submission, to the effect that Beazley P[35] had referred to and adopted the exception to the usual application of the issue estoppel plea referred to in Arnold, the Plaintiff made two related points. First, it was submitted that Arnold was truly an exception given 'the bizarre construction of certain legislation adopted by the trial judge which had been rejected in later cases, and in the absence in that case of any right of appeal'[36] and that accordingly and presumably it should be restricted to its own peculiar (or bizarre) facts. Secondly, Arnold should be read in light of a later decision of the House of Lords in Watt v Ahsan[37] where Lord Hoffman emphasised that the whole point of issue estoppel on a question of law was that parties remain bound by an erroneous decision. In that case Lord Hoffman held that it did not matter that a subsequent higher Court had reached a different decision. Because there was no appeal, the earlier erroneous decision stood and was res judicata between the parties.[38]

39 The Defendant was given leave to file a one paragraph response. It is as well to set it out in full.

It is not correct that the circumstances in which it is appropriate for a court to rely upon the exceptions to issue estoppel referred to in Arnold v National Westminster Bank Plc [1991] 2 AC 93 are circumscribed by Watt v Ahsan [2007] UKHL 51; [2008] 1 AC 696 (cf. plaintiff's submissions at [2(b)]). At [34] of Watt v Ahsan, Lord Hoffman acknowledged the existence of a discretion to allow an issue to be re-opened in subsequent proceedings where there are special circumstances in which it would cause injustice not to do so, referring to Arnold, and recorded the statement of Lord Keith of Kinkel in Arnold at 109 that the purpose of the estoppel is to work justice between the parties. Lord Hoffman immediately turned to consider the application of that principle in the case before him, and did not seek to confine or restrict the general principle in any way. Nor did Beazley P, who quoted the general principle from Arnold and also referred to Watt v Ahsan in Cassegrain v Gerard Cassegrain & Co Pty Ltd (2013) 203 ALR 648 at [96], suggest that the exception was circumscribed in the manner in which the plaintiff now suggests.

40 In my opinion there is substance in the Defendant's submissions.

41 From this very brief and non-exhaustive review of the more relevant authorities and for the purpose of this application, a number of propositions are readily apparent specifically in relation to second or subsequent interlocutory applications. First, even if the doctrine or plea of issue estoppel (and perhaps res judicata) is applicable, its application is not rigid and inflexible and there is clearly an exception for special or exceptional circumstances. There is no suggestion in any of the authorities (including Watt) that the plea is absolute particularly in relation to interlocutory matters. Secondly, in assessing whether the second or subsequent application is an abuse of process (whether as the preferred approach to issue estoppel or an alternative approach), special or exceptional circumstances are also examined in order to determine whether it is in the interests of justice to permit or refuse a second or subsequent application.[39] Thirdly, the categories or class of cases that fall within special or exceptional circumstances (applicable whichever approach is followed), is not closed but does relevantly include a change in the law or a subsequent decision of an appellate court in another matter on the very issue particularly in circumstances where the case in which the second application is made is still in the interlocutory stage.

42 If the Plaintiff is unsuccessful in taking the matter further, I am of the opinion that special and indeed exceptional circumstances exist so as to preclude the Plaintiff from challenging the Second Application on the grounds of issue estoppel, res judicata and abuse of process. The special circumstance or exception is the Court of Appeal Decision. In fact, as alluded to in the authorities, permitting the matter to proceed in such circumstances would constitute an abuse of process. It would bring the administration of justice into disrepute. A trial judge of the court cannot possibly permit a matter to proceed where the Court of Appeal has by reference to another case with the same facts, said that it is an abuse of process. I do not accept that the Court of Appeal Decision does not affect a change in the law but merely the application of existing law. It is relevantly no less a change in the law if a higher court, by using existing law, characterises the facts of a case in a different way so as to produce a different result from the court below. It is the different result or decision that is relevant, whether or not it changes any underlying legal principle.

43 There are sound policy considerations that underpin finality in litigation. The application of the relevant principles may often lead to harsh results, such as cases finally decided and disposed of before the law changes. However case management and interlocutory decisions and particularly the circumstances of this case are self-evidently different. Conceptually, jurisprudentially and practically, the timing, quality and nature of the decision in the First Application cannot foreclose on a subsequent application in the circumstances of this case by invocation of the potentially applicable doctrines of issue estoppel and res judicata, which (as Watt demonstrates) apply far more readily when a case has finally been heard and determined. Even then, as indeed here, there are exceptions. Once it is recognised as indeed it must, that the plea of issue estoppel, as with res judicata and abuse of process, is not rigid or absolute, it is a question of deciding whether a particular situation rises to the level of special or exceptional circumstances. In my view the exception is entirely justified in this case.

44 It follows that the remaining argument based on the CPA must also fail.

45 Finally, I am not satisfied on the evidence that the conduct of the Defendant after the First Application has precluded it from bringing the Second Application either by estoppel or waiver. It decided not to appeal and got on with the matter. It was only when the Court of Appeal handed down its decision that the Defendant gave consideration to the Second Application.

46 Accordingly, for these reasons if special leave is refused, or if granted and the appeal is unsuccessful, I will grant a permanent stay.

47 At this stage and for these reasons I will simply grant a stay until further order and reserve the costs.

[1] The judgment was a single judgment with both matters appearing in the heading.

[2] Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited (No 3) [2014] VSC 340.

[5] Treasury Wine Estates Limited v Melbourne City Investments Pty Ltd [2014] VSCA 351 ('the Court of Appeal Decision').

[14] (1991) 2 AC 93, (Arnold).

[15] Lord Griffiths, Lords Oliver, Jauncey and Lowry agreeing.

[18] [1996] VicRp 89; [1996] 2 VR 582 ('Christie').

[24] [2000] NSWCA 80; (2000) 50 NSWLR 139 ('Manning').

[25] Heydon JA and Foster AJA; Mason P dissenting.

[28] [2001] VSC 41.

[30] (2002) 55 NSWLR 315.

[32] Ibid, referring to Foster AJA in Manning, 161.

[33] [2006] VSC 170.

[34] Ibid [41]-[46]. Citations omitted.

[35] In Cassegrain v Gerard Cassegrain & Co Pty Ltd [2013] NSWCA 454; (2013) 305 ALR 648 [96] ('Cassegrain').

[36] Beazley P in Cassegrain, 665 [96].

[37] [2007] UKHL 51; [2008] 1 AC 696 ('Watt') (also referred to by Beazley P in Cassegrain, 665 [96].

[39] The categories are not closed. See Kermani v Westpac Banking Corporation [2012] VSCA 42, 152-153 [94]-[95], [97].