He held that the receipt of new evidence not available at the time of the original proceedings in which the matter was determined could be a reason to depart from the general policy (of not permitting collateral attack on a prior decision of the Court) but that the new evidence must be such as "entirely changes the aspect of the case" where the attack is on a court of coordinate jurisdiction (ie the trial judge's decision on the voir dire) (p 545) which test was not satisfied here.
47 Whilst Hunter demonstrates that abuse of process can apply even where there is no uniformity of parties (the first trial was a prosecution, the second civil proceedings), I do not think it is relevant to the present situation. I think Asher is also somewhat removed because the district auditor was a defendant in both proceedings and the issue thrown up in the second proceedings was directly relevant to the liability imposed on the councillors.
48 In Hunter, Lord Diplock (and Goff LJ in the Court of Appeal) cited with approval the words of Lord Halsbury in Reichel v Magrath (1889) 14 App Cas 665 at 668 and Smith LJ in Stephenson v Garnett [1898] 1 QB 677 at 680-681.
49 Reichel concerned an attempt to raise a defence to a claim by the new vicar to be able to use the vicarage that had in proceedings between the defendant and his Bishop been determined adversely to him, namely that his resignation was ineffective. Lord Halsbury LC (with whom the other members of the House agreed) said at 668:
"it would be a scandal to the administration of justice if, the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same case again."
50 Stephenson was a similar case but involved the same parties (there had been a finding by a Court that there had been a misrepresentation by the defendant as to his means inducing a reduction of costs). Reichel and Stephenson are probably best treated as res judicata or issue estoppel cases: see Spencer Bower at paras 231 and 445 dealing with Reichel as a res judicata case.
51 In Cleary v Jeans [2006] NSWCA 9, the NSW Court of Appeal dealt with a res judicata claim in the following circumstances. Cleary had sued the Commonwealth Bank, asserting misleading and deceptive conduct and seeking to set aside a guarantee given by Jeans in respect of a company that was involved in a real estate development. The bank cross claimed and the trial judge, Sackville J in the Federal Court, entered judgment against Jeans for $4.7 million. In the course of the hearing, Jeans had sought unsuccessfully to withdraw an admission that the guarantee had been executed by him. Jeans' appeal to the full Federal Court was dismissed.
52 Jeans then commenced proceedings in the Supreme Court against Mr Cleary, his former bank manager, claiming that Cleary had purported to witness his signature on the guarantee when in fact he, Jeans, had not signed it. Cleary sought dismissal of the proceedings on the basis of issue estoppel, Anshun estoppel or abuse of process. Mathews AJ rejected all three grounds: Jeans v Cleary [2004] NSWSC 1245. The issue estoppel was rejected on the basis that Cleary was not a privy of the Bank and there was no appeal from that conclusion.
53 Cleary appealed to the Court of Appeal in relation to the other two conclusions. Handley JA (with whom Young CJ in Eq agreed) dismissed the appeal. Handley JA held:
"[23] The fact that the respondent has been held liable on the basis of an estoppel in one proceeding does not prevent him relying on the truth against a different party in other proceedings, particularly where the plaintiff's liability in the first proceedings was a result of his reliance on a fraudulent misrepresentation by the person sued in the later proceedings."
54 He pointed out at [24] that the principle is not limited to cases of fraud and said:
[25] Proceedings to recover a loss incurred as a result of a judgment in earlier proceedings are competent where the plaintiff alleges that the adverse judgment was the result of the defendant's breach of duty.
55 He held that the claim against Cleary was not a collateral attack on the judgment of the Federal Court. Young CJ in Eq essentially agreed with Handley JA. Bryson JA was of the view that Jeans' claim against Cleary was a collateral attack on the Federal Court's decision. To succeed against Cleary, Jeans would have to establish that he did not in fact execute the guarantee, and was not in fact liable to the Bank when the Federal Court has found he was liable on the guarantee.
56 Bryson JA analysed Jean's evidence about execution of other documents and failure to appreciate that his signature had been forged, even swearing in the Federal Court that he had executed the guarantee. Bryson JA at [54] categorised Jeans' claims as:
"in the realm of the fantastic and has no claim to be adjudicated. The manner in which, according to Mr Jeans' evidence in the Federal Court, he conducted the Federal Court proceedings and came to realise what had occurred after repeatedly asserting and averring to the contrary effect, further demonstrates the already clearly fantastic character of the allegations. It would be an abuse of power to require Mr Cleary to go to trial and answer such a fairytale."
57 Bryson JA at [28]-[38] had earlier referred to the propositions set out by Morritt VC at 16 [37] of Secretary of State for Trade and Industry v Bairstow [2004] Ch 1; [2003] EWCA Civ 321; his Honour at [45] then quoted the following passage from Bairstow:
"'[38] In my view these cases establish the following propositions. (a) A collateral attack on an earlier decision of a court of competent jurisdiction may be but is not necessarily an abuse of the process of the Court … .(c) If the earlier decision is that of a court exercising a civil jurisdiction then it is binding on the parties to that action and their privies in any later civil proceedings. (d) If the parties to the later civil proceedings were not parties to or privies of those who were parties to the earlier proceedings then it will only be an abuse of the process of the Court to challenge the factual findings and conclusions of the judge or jury in the earlier action if (i) it would be manifestly unfair to a party to the later proceedings that the same issues should be relitigated or (ii) to permit such relitigation would bring the administration of justice into disrepute.'"
58 At [55] Bryson JA said that it would be manifestly unfair to Cleary to allow Jeans to litigate notwithstanding the course taken by Jeans earlier. To permit it would be "scandalous and would tend to bring the administration of justice into disrepute", and the Court should "not require Mr Cleary to deal with or to answer so fantastic an allegation or so radical a reversal of position".
59 Importantly, at [10] Handley JA indicated that but for the allegation of fraud he, like the trial judge, would have enforced an Anshun estoppel or dismissed the proceedings as an abuse of process, confirming that Anshun is not limited to a case against the same party as that in the first proceedings.
60 Cleary is different to the present case because it was Jeans' case that Cleary's conduct had induced him to make an admission in the Federal Court proceedings which on his case he should not have made. Thus the outcome of the proceedings was directly linked to the conduct of which complaint was made. Here Mongoose had refused to treat Redowood as having rights to receive money from it before any proceedings had been instituted. In a sense the only purpose of the proceedings against Mongoose so far as the claim against ASX-Perpetual is concerned, would have been to establish that Mongoose was not liable to Redowood had ASX-Perpetual asserted that Mongoose was liable - which it had not done: see p 98 of Exhibit "D".
61 In Zavodnyik v Alex Constructions Pty Ltd [2005] NSWCA 438, proceedings had been commenced by a builder in the Fair Trading Tribunal seeking to recover a large amount for contractual variations. When the building work commenced the builder was not licensed but he subsequently obtained a licence. The builder asserted a contract in relation to each variation (he being licensed at the time of the variations). Subsequently following legislative changes to the Tribunal the builder amended his claim to include the original contract sum relying on a newly introduced legislative provision that he contended overcame his problems due to lack of registration as a builder and s 10(3) of the Home Building Act 1989. An amendment was sought and granted but in a context where it was agreed that all that would be argued on the more extensive amount was that s 27(3) of the Fair Trading Tribunal Act 1998 and the fact of subsequent registration overcame the absence of registration but not on a Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 restitutionary quantum meruit claim: para 18. The Tribunal rejected the builder's claims and awarded the owner $321,000 on his cross-claim. The builder sought a re-hearing in the Tribunal which was refused and sought to have the decisions quashed by way of prerogative relief in the Supreme Court but those proceedings were dismissed.
62 The builder then issued a claim in restitution or alternatively quantum meruit, which came before the District Court (following transfer). Application was made to strike out the Statement of Claim but that application was rejected, on the basis that the causes of action sued on in the Tribunal and the District Court were "separate and distinct" (at [21]) and that the merits of the builder's claim had not been adjudicated on by the Tribunal.
63 The Court of Appeal (Handley JA with whom Mason P and Latham J concurred) upheld the appeal both on the basis of cause of action estoppel and Anshun. So far as the cause of action estoppel was concerned emphasis was placed on Trawl Industries of Australia Pty Ltd (in liq) v Effem Foods Pty Ltd (1992) 36 FCR 406. So far as Anshun was concerned, Handley JA said at [40]:
"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. …"
64 In Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287, it was held that the Anshun estoppel can apply to a claim that was unreasonably not brought by way of cross-claim. The CBA commenced proceedings in the Common Law Division against Bryant, seeking possession of premises mortgaged to the bank. CBA also sued Bryant, claiming that he was liable to the CBA on guarantees. Those proceedings were commenced in the Commercial Division but were transferred to the Common Law Division. Bryant filed defences and cross-claims in each proceeding. He alleged that CBA had breached its contract, that CBA had made misrepresentations which had led him to execute guarantees, he also asserted a fiduciary duty and alleged breach of that duty.
65 In the Supreme Court proceedings, Bryant abandoned the misrepresentation case and fiduciary case, noting that he had commenced proceedings in the Federal Court in relation to these other causes of action. Counsel for the CBA indicated that CBA would object to these other matters being raised in the Federal Court if they were abandoned in the Supreme Court proceedings. Levine J said the following words to him:
"Pausing there, if I allow you to make the amendment the effect is that in these cases you have abandoned them as issues in these cases. It is open to you to institute proceedings in the Federal Court and Mr Nicholas has made clear that, in so far as the bank is concerned, all those issues are still and will, even in that court, be vigorously alive [sic] and defended."
66 Levine J held that Bryant was liable on the guarantee and on the mortgage.
67 In the Federal Court, CBA raised Anshun estoppel against Bryant. Einfeld J dismissed the claim (in which Bryant alleged misrepresentation, breach of duty of care, breach of fiduciary duty and breach of contract and provisions of ss 51AA, 52 and 60 of the Trade Practices Act 1974).
68 Bryant appealed to the Full Federal Court (Beaumont, Wilcox and Moore JJ) which dismissed the appeal: Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287. The Full Court held that Anshun estoppel did apply to cross-claims as well as defences. The Court noted that Anshun will ordinarily not apply to cross claims (see Tanning Research Laboratories Incorporated v O'Brien (1990) 169 CLR 332) but where relief claimed in the second set of proceedings is inconsistent with judgment in the first this will make a difference (at 297G-298B):
"Questions of substantive degree may be involved; and 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 identicality 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 … "
[emphasis added]
69 The matters sought to be raised by the appellant in this Court "were all matters connected with the claims made by the Bank": at 298B.
70 The Court rejected the assertion that an alleged inadequacy of discovery in the Supreme Court justified his splitting of the case: at 298D. The Full Court then went on to consider the exception identified in Anshun and formulated in Yat Tung Investment Co Ltd v Dao Heng Bank Ltd [1975] AC 581 at 590 as:
"The shutting out of a 'subject of litigation' - a power which no court should exercise but after a scrupulous examination of all the circumstances - is limited to cases where reasonable diligence would have caused a matter to be earlier raised; moreover, although negligence, inadvertence or even accident will not suffice to excuse, nevertheless 'special circumstances' are reserved in case justice should be found to require the non-application of the rule."
71 Bryant argued that he had been misled by what Levine J had said to him at the time. The Court rejected that on the basis of the lack of evidence that Bryant had in fact been misled by what Levine J had said to him (at 299) coupled with the timing of his abandonment.
72 In the Mongoose proceedings, no misleading and deceptive conduct was alleged against Mongoose; rather there was an alternative case of estoppel. I have no doubt that Redowood could not subsequently have advanced any case against Mongoose based on ASX-Perpetual's alleged conduct and upon the basis that Mongoose was liable for the conduct of its agent (whether in tort or under s 52 or its analogues), once judgment was entered in favour of Mongoose in the Mongoose proceedings.
73 It is clear that at the time that proceedings were commenced against Mongoose, or at least once Mongoose filed its defence, Mongoose disputed the existence of a contract. It also, by particulars provided to Mr Gye's office (see paras 7 and 8 to the affidavit of Ms Badman of 23 February 2006) asserted that to the extent that ASX-Perpetual's conduct was said to give rise to liability, it was outside the scope of any agency power possessed by ASX-Perpetual: see pp 5-7 of Ms Badman's affidavit. Redowood knew all that there was to know about its claims based on misleading and deceptive conduct: it knew what ASX-Perpetual had said to it (on its case), it knew that it had relied on those statements (on its case), and it knew that Mongoose was denying that it was liable in contract.