The Bank's claim
39It was the submission of the Bank that the allegations now raised in the present proceedings are so relevant to those asserted in the 2010 proceedings that it would have been unreasonable for them not to have been raised and relied upon in the 2010 proceedings. The submissions put forward by the Bank were as follows:
"75. As set out in detail in paragraph 51 above, the Claim traverses numerous matters that were relevant to the issues before the Court in the 2010 Proceedings and were indeed raised in pleadings and evidence, including:
(a) the First Facility, the Second Facility, the 2007 Guarantee and the 2008 Guarantee;
(b) the provision of finance under the Camden Facility;
(c) the alleged representation of Mr Crakanthorp concerning the use that might be made of surplus funds available under the Camden Facility; and
(d) the Bank's refusal to honour cheques and the freezing of Camden's account.
76. While Mr Sanchez's substantive allegations including those concerning Mr Crakanthorp's alleged representations were not determined in the 2010 Proceedings, at all times prior to the final hearing, the parties proceeded on the basis that these issues would be dealt with. In this respect, extensive pleadings, evidence, submissions and other documents covering these issues were prepared and served by the parties.
77. Mr Sanchez did not bring any cross-claim in the 2010 Proceedings, notwithstanding the reference to his intention to do so in the Defence filed on 28 April 2010 (see paragraph 16(h) above), and the guiding comments of his Honour Kirby J on 6 June 2011 in which, as referred to above, his Honour predicted a contention that would be raised by Mr Sanchez in the following terms:
...there will be a contention that had been a provision of funds in a timely way and if they had access to some of the Camden funds they could have stayed afloat. So it becomes quite a mess working it out but unconscionable in light of the representation which is said against you, failure to permit them to use such funds in a timely way to keep the thing afloat. They may have been able to survive. I don't know what their case is going to be....
78. The further or alternative pleading now contained in the Claim (referred to in paragraph 52 above) clearly adopts his Honour's comments. The Claim alleges that the Bank knew or ought to have known that unless Mr Sanchez could raise alternative finance, he had no other source of funds to discharge his liabilities to the Bank under the 2007 Guarantee and the 2008 Guarantee in the event that the Bank did not perform the representation (paragraph 18.2) (Alternative Allegation).
79. The claim for damages asserted in the Claim is said to amount to the resulting loss of opportunity to develop Lauderdale and Camden which is pleaded to arise from matters including the Bank resiling from the representation made by Mr Crakanthorp, and a breach of duty of care by the Bank. While the asserted claim for damages is a different formulation of the claim for damages asserted in the 2010 Proceedings by Mr Sanchez, the claim remains a claim that is essentially and in substance one arising from substantially the same facts that were asserted by Mr Sanchez in the earlier proceedings.
80. Why Mr Sanchez did not raise and press in the 2010 Proceedings a cross-claim asserting the matters that he now seeks to raise in the Current Proceedings is inexplicable. No evidence has been adduced to explain this omission. This is particularly demonstrated in the context of (a) of the versions of the defence that were filed by Mr Sanchez and which substantially raised the allegations that are now pressed, and (b) the comments of his Honour Kirby J on 6 June 2011 where the Alternative Allegation was, in substance, raised.
81. The matters raised in the Alternative Allegation were known to Mr Sanchez when conducting the 2010 Proceedings, including at the final hearing on 29 November 2011. Indeed, the substance of the Alternative Allegation had been specifically drawn to the attention of Mr Sanchez by Kirby J on 6 June 2011.
82. Notwithstanding this, Mr Sanchez, through his solicitors, made a forensic decision not to raise these matters, whether at the final hearing in response to the claim under the 2007 Guarantee or at any stage during the 2010 Proceedings. Having made that election it is too late for Mr Sanchez to raise the matters now. Mr Sanchez cannot now assert a right to take a position which is inconsistent with one taken earlier in the 2010 Proceedings: Commonwealth v Verwayen (1990) 170 CLR 394 at 481 per Gaudron J.
83. Mr Sanchez has at all material times been represented by solicitors and has had the same solicitors in both the 2010 Proceedings and the Current Proceedings. Given the various amendments to Mr Sanchez's defence in the 2010 Proceedings and his consistent representation, there was no want of opportunity to raise the matters that are now sought to be litigated by Mr Sanchez."
40The plaintiff seeks to avoid the result intended by the Bank by suggesting that the conduct at the hearing before McCallum J indicate an intention by the Bank to abandon their claim under the 2008 Guarantee if it succeeded on the 2007 Guarantee and the consequence that evidence on the representations was not read. The only argument put forward by the plaintiff at that hearing was that the 2007 Guarantee is replaced by the 2008 Guarantee. As a result, the merits of Sanchez' claim in relation to the Camden finance facility had never been considered by the court despite the extensive evidence in pleadings prepared and served on his behalf due only, it was submitted, to his ill-health on the date of the hearing of the 2010 proceedings.
41The plaintiff submits that the hearing before McCallum J was in effect a separate determination of the issue of liability under the 2007 Guarantee only and that the Bank should have been aware of the potential for further litigation of the issues raised by the defence which were excluded from the hearing and expressly did not seek a determination of those matters.
42In effect, the plaintiff suggests that the Bank elected to take the risk that these other matters would be subsequently and separately pursued.
43The plaintiff's submissions concluded as follows:
"The Bank would have the Court apply the principle purely on the basis of the availability of the earlier proceedings as a vehicle, in which Sanchez might technically have had an opportunity to plead and pursue his damages claims, without regard to:
- the very limited compass of the previous case ultimately pursued by the bank,
- the substantial width of the case, which Sanchez previously pleaded and sought to pursue, - his inability to attend the previous hearing and have the merits of his case considered,- the 'tactical' choice made by the Bank to proceed without consideration and determination of the substantial issues raised by him,- the inconsistency between the position now taken by the Bank with the bases, upon which it obtained a summary judgment on part of its claim and the application for leave to appeal was dismissed, and- the lack of prejudice to the Bank of now having the merits of his claims considered and determined separately from the Bank's simple debt claim.With a proper consideration of all the circumstances, it is submitted, that it was clearly not unreasonable for Sanchez to have not run his claims in these proceedings in the bank's earlier proceedings on the 2007 guarantee. Alternatively, it is clearly not unarguable, that an 'Anshun estoppel' applies, such as to justify summary relief."
44As I stated earlier in this judgment it is necessary to refer to the caution to be used in applying an Anshun estoppel in strikeout proceedings. Referring to the power of the court to summarily terminate proceedings, the High Court's decision in Spencer v Commonwealth [2010] HCA 28; (2010) 241 CLR 118 states at [24] per French CJ and Gummow J:
"The exercise of powers to summarily terminate proceedings must always be attended with caution. That is so whether such disposition is sought on the basis that the pleadings fail to disclose a reasonable cause of action or on the basis that the action is frivolous or vexatious or an abuse of process. The same applies where such a disposition is sought in a summary judgment application supported by evidence. As to the latter, this Court in Fancourt v Mercantile Credits Ltd said:
'The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried'
.
More recently, in Batistatos v Roads and Traffic Authority (NSW) Gleeson CJ, Gummow, Hayne and Crennan JJ repeated a statement by Gaudron, McHugh, Gummow and Hayne JJ in Agar v Hyde which included the following:
'Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.'" (citations omitted)
45The plaintiff submitted that a determination in relation to whether an Anshun estoppel arises should be dealt with at the stage of a final hearing, as was stated by Ormiston JA in Triantafilidis v National Australia Bank Ltd (1995) VConvR 54-536 at 66,637, in relation to requirements of the unreasonableness test:
"If this be the kind of necessary enquiry which Anshun's Case requires, then it is not ordinarily appropriate that it be dealt with upon an application for a summary judgment or stay. Unless the alleged unreasonableness is manifest (eg if the potential judgment would be plainly inconsistent), the appellant is entitled to have both the questions of principle and the issues of fact resolved upon a trial and upon the basis of precisely pleaded defences."
46However, as was submitted by the Bank, in that case Ormiston JA was in the minority on this issue. Phillips JA (with whom Brooking JA agreed) did not share the view of Ormiston JA concerning the appropriateness of dealing with the issue at a summary stage in that case.
47The Bank submitted that other courts have not insisted on dealing with Anshun points only at a final hearing. In Rahme v Commonwealth Bank of Australia, Bryant v Commonwealth Bank of Australia and R & J Lyons Family Settlement Pty Ltd v 155 Macquarie Street Pty Ltd [2008] NSWSC 232, the issue was dealt with on a summary or interlocutory basis rather than at a final hearing.
48The Bank submits that the failure of the plaintiff to run the current claim as a cross-claim in the 2010 Proceedings was unreasonable such that an Anshun estoppel precludes the claim from being brought. In Port of Melbourne Authority v Anshun Pty Ltd, the Court said at [37]:
"...there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding. In this respect, we need to recall that there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings e.g. expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few."
49The plaintiff submitted that the approach taken before McCallum J was for the issues in relation to the 2007 Guarantee to be decided on the basis that it was a separate issue from the more difficult and complex issues that would arise in relation to the 2008 Guarantee because of the defence that the plaintiff wished to raise, that the Bank made false or misleading and deceptive representations or otherwise engaged in unconscionable conduct such as to preclude enforcement of the 2008 Guarantee. On the face of exchanges in Court that is not the case.
50In the proceedings before McCallum J, it was common ground that the hearing of the defences to the claim under the 2008 Guarantee could not proceed in the absence of Mr Sanchez. The course of the hearing involved the abandonment of the claim on the 2008 Guarantee and the defences to that claim.
51It is fundamental to the Bank's case that those defences were quite different in fact to what is now propounded. It is not the case, as suggested by the plaintiff, that "all the issues" in respect of the representations were on the table. Despite warnings from Kirby J, Mr Sanchez had not amended his defence to include a claim for capital losses as an answer to the 2007 Guarantee. He could have but did not.
52There is no explanation as to why this was not done. At the hearing before McCallum J no one raised the possibility of these other claims.
53In my view it was unreasonable for Mr Sanchez not to have raised these. If he had, the trial could have been adjourned and leave given to raise the matters in a third amended defence.