Thoday v Thoday

APPLICANT Mr J Ayling Ms L R Finn Abbott Tout LEGAL REPRESENTATIVES: RESPONDENT Mr J Till Mr P Rigg Bruce A Swane & Co Deacons Graham and James

JUDGMENT:

1. These proceedings ("the 1998 proceedings") relate to premises located at 44 Endeavour Street, Sans Souci ("the subject premises") which is owned by Botany Bay Yacht Club Limited (hereafter referred to as the "Third Respondent") and which are currently leased to Pronsa Pty Limited (`the First Respondent") the directors of which are David Copps McKay and Valda Dorothy McKay (hereafter referred to as the "Second Respondents"), who play no part in this motion. The subject premises are used for the purposes of a yacht club and boat yard.

On 14 December 1982 pursuant to a Notice to Applicant of Determination of Development Application No 181/82, Kogarah Municipal Council ("the Council") pursuant to Section 92 of the Environmental Planning and Assessment Act 1979 ("the Act") granted consent to an application for an erection of a yacht club upon the subject lands subject to twenty-one conditions.

Certain difficulties were experienced in the operation of the yacht club and in consequence the Council instituted proceedings No 40058 of 1993 ("the 1993 proceedings"). The amended application filed in those proceedings dated 23 November 1993 establishes that the Council sought restraining against the Third Respondent from permitting the slipways and designated storage areas of the subject premises to be used for the purpose of commercial boat repair and construction services. It also sought orders that the Third Respondent be restrained from using the subject lands otherwise than in accordance with the consent granted by the Applicant Council to the Respondent on 14 December 1982 and from using the premises for the purposes of commercial premises.

The 1993 proceedings were defended but were resolved by consent orders made on 24 December 1993. The orders impose a prohibition upon certain activities at the subject premises, such activities being related to the use of the slipway, a restriction on the use of the premises otherwise than in accordance with conditions 11 and 12 of the consent issued by the Council on 14 December 1982, a restriction on the use of power tools after certain hours, and associated matters.

In the 1998 proceedings the Council seeks relief related to the use of the subject lands, namely declaration and orders that the Respondents be restrained from using the subject lands otherwise than in accordance with the consent granted by the Applicant Council to the Third Respondent on the 14th December 1982 and from using the subject lands for commercial boat repairs.

Each of the above prayers for relief is contained in paragraphs 1 to 4 of the amended application. The remaining prayers for relief deal with alleged breaches of the Environmental Offences and Penalties Act 1989.

By Notice of Motion filed 6 August 1998 the Third Respondent seeks orders dismissing claims for injunctive relief, on grounds that the fresh proceedings constitutes an abuse of the process of the Court. The Third Respondent says that the consent orders that were made on 24 December 1993 disposed of the same issues, and that, if any breach thereof exists, the Council should proceed by way of contempt proceedings. The Council denies that any issue estoppel or abuse of process arises, and says that the agreement that was reached concerning the resolution of the 1993 proceedings does not prevent the Council seeking the relief now claimed. It says that there is a fundamental difference between the two claims, the present proceedings raising much extensive issues than those raised previously, upon which there was never any determination on the merits by this Court.

Part 13 Rule 5 of the Rules of the Supreme Court of New South Wales which, by virtue of Part 6 Rule 1 apply in this Court make provision for this question. The Third Respondent may be entitled to succeed in its motion if it can be shown that there has either been a estoppel or res judicata by virtue of an earlier judgment in the 1993 proceedings on the identical issues, or if the 1998 proceedings can otherwise be shown to be an abuse of the Court process.

The relevant estoppel for consideration in the present circumstances is known as estoppel per rem judicatam and was explained by Diplock LJ in Thoday v Thoday [1964] P.181 at 197-198.(at page 197) as follows:-

"The particular type of estoppel relied upon by the husband is estoppel per rem judicatam. This is a generic term which in modern law includes two species. The first species, which I will call "cause of action estoppel," is that which prevents a party to an action from asserting or denying, as against the other party, the existence of a particular cause of action, the non existence or existence of which has been determined by a court of competent jurisdiction in previous litigation between the same parties...The second species, which I will call "issue estoppel", is an extension of the same rule of public policy..".

It is apparent that the Third Respondent cannot succeed on the ground of this type of estoppel, since in the absence of a determination by this Court of the 1993 proceedings, no such estoppel can arise: see Carl Zeiss Stiftung v Rayner & Keeler Limited [1967] 1 AC 853; Blair & Ors v Curran & Ors (1939) 62 CLR 464; Jackson v Goldsmith (1950) 81 CLR 446 at 466 per Fullagar J. There are numerous authorities which confirm the principle that where matters have been the subject of litigation, and decided against the plaintiff in previous proceedings between the parties, it will constitute an abuse of process for such subject matter to be re-litigated: see Bayne v Blake (1909) 9 CLR 366; Clarke v Darley (1898) 14 WN (NSW) 129. Accordingly this doctrine cannot assist the Applicant and the enquiry must then be directed to the issue of whether the settlement of the 1993 proceedings renders the institution of the 1998 proceedings an abuse of process.

A Court has inherent power irrespective of whether a specific rule exists, to stay proceedings which constitute an abuse of process see: Willis v Earl Beauchamp (1886) 11 P 59 Bowen LJ at page 63, but such power is one which is exercised only in exceptional cases (Dyson v Attorney General [1911] 1 KB 410 at 418, 419, CA, per Fletcher Moulton LJ; Metropolitan Bank v Pooley (1885) 10 App Cas 210 at 220, 221, HL. Usually such power will only be exercised where the proceedings are shown to be frivolous, vexatious or harassing or otherwise manifestly groundless, or where there is clearly no cause of action in law or in equity. Jago v District Court of New South Wales (1989) 168 CLR 23; Re Majory [1955] Ch 600 at 623-4. In Hunter v Chief Constable of West Midlands Police [1982] AC 529 at 536 the court affirmed the inherent power of a court to prevent abuse of its procedure, and determined that the term "issue estoppel" should be restricted to the species of estoppel per rem judicatam that may arise in civil act ions between the same parties (see pp 540-541).

In Mills v Cooper [1967] 2 QB 459, Diplock LJ at p 468 explained the meaning of issue estoppel in the following terms:-

"...That doctrine, so far as it affects civil proceedings, may be stated thus: a party to civil proceedings is not entitled to make, as against the other party, an assertion, whether of fact or of the legal consequences of facts, the correctness of which is an essential element in his cause of action or defence, if the same assertion was an essential element in his previous cause of action or defence in previous civil proceedings between the same parties of their predecessors in title and was found by a court of competent jurisdiction in such previous civil proceedings to be incorrect, unless further material which is relevant to the correctness or incorrectness of the assertion and could not by reasonable diligence have been adduced by that party in the previous proceedings has since become available to him. ...

...Issue estoppel is a particular application of the general rule of public policy that there should be finality in litigation."

The difficulty confronting the Third Respondent in this motion is that it is not possible to conclude that the facts which are now to be relied on as entitling the Council to the relief claimed are the same as those relied upon in the 1993 proceedings. Further, the consent orders which resulted in the termination of the 1993 proceedings do not bear a discernible relationship to the prayers for relief as set out in the 1993 amended application, none of which were ever pleaded in detail. The parties obviously negotiated a settlement which, at that time, was a practical method of resolving the current dispute between them. The position is similar to that referred to in SCI Operations Pty Limited & Anor v Trade Practices Commission & Ors (1984) 53 ALR 283 at 348 where Sheppard J said:-

"But what is the position where there is no determination on the merits but the proceedings are simply dismissed perhaps after the Commission has said to the court that it proposes to offer no evidence. If, upon a reading of the pleadings and any other relevant material, it is perceived that there are a multiplicity of issues between the parties there will not be any issue estoppel because it is impossible to say upon what grounds the proceedings were dismissed. To say that they should be treated as having been resolved against an applicant or plaintiff on every issue is not correct."

The "pleadings" in each proceedings namely the 1993 and 1998 amended applications are not traditional pleadings which define issues. Rather, they state relief which is sought without identification of the specific facts relied upon to justify the relief claimed. At no stage have points of claim or points of defence been filed in either proceedings which would have identified the alleged breaches with precision. The 1993 application sought an order that the Respondent be restrained from using the premises otherwise than in accordance with the development consent granted by the Council on 14 December 1982. In the instant proceedings, a declaration is sought in the same terms. However, the precise condition or conditions of consent allegedly breached are not specified, either in the 1993 application or in the 1998 application. The present claim could relate to any one of the twenty-one conditions, which may or may not include the conditions in respect of which the 1993 proceedings were instituted. It is impo ssible to conclude that the claim for relief now made is, upon examination, the same as that of the earlier proceedings. The position is analogous to that in Petree v Knox (1918) 35 WN (NSW) 32 in which Ferguson J declined an application to strike out and observing that it was impossible to say that the issues raised in the second action were the same, or substantially the same as those in the first. There are other authorities which establish that although there appears to have been a settlement of a claim, a Court will not necessarily stay or strike out the subsequent proceedings instituted by the same party upon the ground that it constitutes an abuse of process: see Lovell v Williams Vol 62 Ll R 249.

Similarly, the factual basis necessary to establish the illegal use is not specified in either application. In the 1993 application, the Council sought to restrain the use of specific portions of the subject lands, namely the slipways and designated boat storage areas for commercial boat repair and construction services. It also sought to restrain the use of the premises for commercial use. The 1998 proceedings differs in two respects. Firstly, it is not limited by geographic description to any portion of the premises, but seeks to cover the entire premises. Secondly, the activity to be restrained is commercial boat repairs. Whether the evidence will show that the claims now made for relief are identical to the 1993 claims is a matter which must abide a hearing. The similar claim for relief does not mean that the same issues are to be re-litigated.

It is impossible to conclude that the present proceedings are "bound to fail": see Charles Forte Investments Ltd v Amanda [1964] 1 Ch 240 per Wilmer LJ at p 252. In the absence of such particularisation the Court could not reach a conclusion that the relief claimed in the 1998 proceedings is identical to the 1993 proceedings and therefore constitute an abuse of process.

The Court says nothing as to the possible result of the litigation. If the Third Respondent was able to establish that the facts relied upon by the Council were the same as those relied upon in the previous proceedings it would be entitled costs, and possibly indemnity costs. However this determination must await the hearing.

(1) The Notice of Motion of the Third Respondent is dismissed.

(2) The Third Respondent is ordered to pay the costs of the motion.

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