TIUFINO v WARLAND [2000] NSWCA 110 | Case summary

2 HANDLEY JA: This appeal involves the operation of the res judicata doctrine where proceedings between the same parties for the recovery of property damage caused by a motor vehicle accident have been determined by the Local Court before proceedings to recover damages for personal injuries are heard in the Supreme Court. 3 On 13 July 1993 a collision occurred at the intersection of Waldon Street and Forest Way, Belrose between a vehicle driven by Mrs Tiufino, the appellant, and owned by her husband and a vehicle owned and driven by Miss Warland, the respondent. 4 Forest Way is a major traffic road running approximately north-south. Waldon Street is a minor road which enters Forest Way on its western side to form a T-intersection. Mrs Tiufino, who had dropped off children at a nearby school, approached the intersection along Waldon Street. Miss Warland approached the intersection driving north in Forest Way and at the intersection had Waldon Street on her left. 5 Mrs Tiufino claimed that she had crossed the intersection and was stationary in a bay between the north and southbound lanes on Forest Way waiting for an opportunity to enter the traffic in the southbound lane when her vehicle was struck by Miss Warland's vehicle. Miss Warland claimed that the collision occurred when Mrs Tiufino's vehicle entered the intersection immediately in front of her. Both vehicles were damaged and Mrs Tiufino sustained serious injuries. 6 Mrs Tiufino has appealed from the decision of Dowd J given on 16 October 1998 that her action to recover damages for her personal injuries should be dismissed because it was barred by issue estoppels arising from a judgment against her recovered by Miss Warland in the Local Court. 7 On 22 December 1993 Miss Warland commenced proceedings in the Local Court against Mrs Tiufino to recover for the damage to her vehicle. On 10 February 1994 the appellant's husband, Mr Benjamin Tiufino, commenced proceedings in the Local Court against Miss Warland to recover for the property damage to his vehicle. Miss Warland then joined Mrs Tiufino as a third party. In the meantime on 21 January 1994 Mrs Tiufino had commenced proceedings in the Supreme Court claiming damages for her personal injuries. 8 On 26 September 1994 Dowd J dismissed a summons by Mrs Tiufino to have the two actions in the Local Court transferred to the Supreme Court or stayed until judgment was given in the Supreme Court. At common law a defendant was entitled as of right to a writ of certiorari to remove proceedings in an inferior court into a superior court for trial. (See Symonds v Dimsdale (1848) 2 Ex 533 [154 ER 603].) This jurisdiction of the Supreme Court was excluded by s 74 of the Local Courts (Civil Claims) Act 1970. It was common ground at the hearing before us that there was no statutory or common law basis for the removal of these actions directly to the Supreme Court. 9 The Supreme Court as a superior court of general jurisdiction has power, both inherent and under s 23 of the Supreme Court Act, to stay proceedings in an inferior court for abuse of process. See Walton v Gardiner (1993) 177 CLR 378. However Miss Warland commenced her action in the Local Court first, and her third party claim against Mrs Tiufino in the husband's action was defensive in nature. There could be no suggestion that either proceeding was an abuse of process. 10 The problems created where concurrent proceedings raising common issues are pending in an inferior and a superior court within the same legal system have been considered in a number of cases. In R v Middlesex JJ ex parte Bond [1933] 1 KB 72 a majority of the Divisional Court appeared to have held that proceedings in a superior court ousted the jurisdiction of an inferior court to determine issues that could be determined in the superior court. See also In re Harris (1936) 37 SR (NSW) 17, 27-8 per Jordan CJ. 11 The problem arose frequently in England because maintenance proceedings between husband and wife could be commenced in the High Court or in a Magistrate's Court. The proper approach where proceedings were pending in both Courts was considered in Kaye v Kaye [1965] P 100 at 105 where Sir Jocelyn Simon P said: "… a court of summary jurisdiction has jurisdiction to entertain maintenance proceedings notwithstanding that proceedings are current in the High Court. It is not a question of jurisdiction at all. It is a question of the exercise of a discretion to proceed or to adjourn. I see no reason why the way it was put by Jenkins LJ in Russell v Russell ([1956] P 283, 296) should not apply equally in the converse case where proceedings are pending in the High Court at a time when the justices are invited to make an order for maintenance. In all other but exceptional cases the justices should, as a matter of obvious convenience and public policy, exercise their discretion to adjourn the proceedings until the High Court proceedings are disposed of. But there may be exceptional cases where they would be justified in exercising their discretion to proceed to adjudication notwithstanding that proceedings are on the file of the High Court covering the same ground". 12 See also Lanitis v Lanitis [1970] 1 WLR 503. 13 In Boyd v Halstead ex parte Halstead [1985] 2 Qd R 249, McPherson J declined to order a stay of ejectment proceedings in the Magistrate's Court at Cairns because proceedings for a declaration had been commenced by the tenant in the Supreme Court. His judgment contains a careful review of the relevant authorities here and in England. He concluded at 252: "… it is, however, now quite clear that the existence of such concurrent proceedings in a superior and inferior court does not itself operate to 'oust' or to deprive an inferior court of jurisdiction in a matter in which, apart from the pendency of the concurrent proceeding in the [superior] court, the inferior court would certainly have jurisdiction to determine the matter before it. That appears from the decision in Kaye v Kaye [1965] P 100 and in Lanitis v Lanitis (supra) where, after an extensive review of the authorities, Ormrod J held that the Magistrates had, in the case where proceedings are pending in the divorce court, a discretion whether to proceed with the case before them or to refuse to hear it; and that they had to decide which course to take as a matter of public policy and general convenience, paying due regard to the interests of the applicant before them in having a speedy hearing of the application". 14 At 257 he said: "… if in the Magistrate's Court it is decided that the lease has been terminated, then the decision will, subject to appeal, presumably create an issue estoppel binding in the proceedings in this Court … that is not in this case a compelling reason for staying the proceedings in the Magistrate's Court. In conferring jurisdiction to entertain and determine such proceedings, and to do so summarily, the legislature must have had in mind that issue estoppels might arise, which would bind the parties and so preclude them from re-litigating the same issues. If it did not intend that result, either generally, or in a case where the same issue was before a superior court, then it is reasonable to expect that it would have said so. Nothing of that kind appears … from the provisions of the Act …". 15 On 4 March 1996 an application was made by Mrs Tiufino to the Local Court for an adjournment of the hearing of the two cases fixed for the following day. The grounds advanced were her wish to have the counsel of her choice, and to obtain a report from a traffic engineer. The application was refused and the trial commenced the following day. It continued on 15 and 16 August and when it concluded the magistrate gave an extempore decision. He found that Mrs Tiufino had been negligent and entered a verdict for Miss Warland against her for the full amount of her claim, $11,045, without any reduction for contributory negligence. He dismissed the action brought by Mr Tiufino. 16 No attempt was made to challenge the magistrate's decision to refuse the adjournment sought on 4 March. In the result, there was more than enough time before the hearing resumed on 15 August to obtain the evidence of a traffic engineer and to arrange for the attendance of Mrs Tiufino's counsel of choice. Moreover no application was ever made to the Local Court for it to stay its proceedings pending the decision of the Supreme Court. 17 There has been no appeal from the magistrate's decision, and since s 69(2) of the Local Court (Civil Claims) Act limits appeals to questions of law, an appeal would have had no prosects of success. 18 Following the decision of the Local Court the defendant applied in the Supreme Court for leave to amend to plead res judicata. The application came before Dowd J on 11 August 1997 and was opposed on the ground that no res judicata estoppel had arisen. The defendant also sought a separate decision of the res judicata issues. Dowd J heard full argument on the questions and in his reserved judgment granted leave to amend, formally ordered a separate trial of the questions raised by the amended defence, upheld the defence of issue estoppel, and entered judgment for the defendant. 19 The Court granted leave to appeal on 3 May 1999, but the plaintiff had an appeal as of right because Dowd J, after his decision of the separate questions, entered final judgment for the defendant. Section 103 of the Supreme Court Act which provides that an appeal shall lie by leave from a decision in proceedings in the Court on any question or issue ordered to be decided separately from other issues does not apply where that decision has led to a final judgment in the proceedings. See National Employers Mutual General Insurance Association Ltd v Manufacturers Mutual Insurance Ltd (1989) 17 NSWLR 223, 235, 240. Section 103 only applies where the decision of the separate questions does not dispose of the principal proceedings. 20 Counsel for Mrs Tiufino relied both before Dowd J and this Court on some remarks by his Honour during the hearing on 26 September 1994. It appears that counsel for Mrs Tiufino had argued in support of her summons that if she lost the cases in the Local Court she might be faced with issue estoppels in the Supreme Court. 21 Dowd J apparently expressed the view during argument that no such estoppel could arise. This is not shown on that day's transcript which, as usual, does not include counsel's argument but is proved by the affidavit of the counsel who then appeared for Mrs Tiufino. He was not cross-examined and his evidence was not challenged. The transcript records that Mr Hill of counsel appeared for the respondent, but the affidavit of the former counsel stated that Mr Hill appeared in the interests of the property damage insurer, and a Ms Windeyer appeared in the interests of the third party insurer. 22 The affidavit of the former counsel stated that "neither representative of the defendant demurred from the view expressed by his Honour, namely that no issue estoppel could arise from the decisions of the Local Court which would be binding on the parties in the Supreme Court action". It was not suggested that they were invited to comment on his Honour's views and they were under no legal or ethical obligation to volunteer any correction. The legal advisers of a party are not entitled to free legal advice from the legal advisers for their opponents. Counsel appearing for Mrs Tiufino accepted his Honour's view, which had been expressed without full argument, and did not press the application for removal or a stay. 23 As previously mentioned there was no power to order the removal of the Local Court actions direct to the Supreme Court. There was also no basis for a stay of proceedings without a prior application for a stay to the Local Court. Mrs Tiufino's alternative applications were therefore bound to fail in any event. 24 His Honour's view expressed during argument was necessarily provisional. Interlocutory observations by members of a court during argument while persuasive are not judicial pronouncements and do not decide anything. See Practice Note [1942] WN 89, PC per Viscount Simon LC. Mrs Tiufino and her legal advisers were not entitled to rely on his Honour's statement as legal advice which, unless immediately challenged by their opponents, would be binding on the parties. 25 The action brought by Miss Warland in the Local Court required it to determine who was responsible for the collision. The magistrate's decision established that Mrs Tiufino was guilty of negligence, that is she had been in breach of her duty to Miss Warland, and that Miss Warland had not been guilty of contributory negligence that is of any failure to take reasonable care for her own safety, or any breach of a duty of care she owed Mrs Tiufino. See Jackson v Goldsmith (1950) 81 CLR 446, 455; Noall v Middleton [1961] VR 285, 293; Ramsay v Pigram (1968) 118 CLR 271, 278, 283-4; Azzopardi v Bois [1968] VR 183, 188; Bollen v Hickson [1981] Qd R 249 FC, 254-5. The critical finding was that Miss Warland had not been guilty of contributory negligence because this established that she had not been guilty of any breach of duty owed to Mrs Tiufino. Mrs Tiufino's action in the Supreme Court was, of course, based on a breach by Miss Warland of her duty of care to Mrs Tiufino. 26 The governing principles of an issue estoppel were stated by Dixon J in Blair v Curran (1939) 62 CLR 464, 531-2: "A judicial determination directly involving an issue of fact or of law disposes once and for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion … Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue-estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established". 27 The judgment or order of an inferior court within jurisdiction can create an issue estoppel binding in a superior court. See Ex parte The Amalgamated Engineering Union (Australian Section) Re Jackson (1937) 38 SR (NSW) 13, 17, 19 per Jordan CJ; Marginson v Blackburn BC [1939] 2 KB 426 CA; Azzopardi v Bois [1968] VR 183, 185; Boyd v Halstead Ex parte Halstead, para 13 above; and Spencer Bower, Turner & Handley "Res Judicata", paras 21, 23 and 26. 28 Prima facie, therefore, the Local Court decision of 16 August 1996 estops Mrs Tiufino from alleging in the Supreme Court that Miss Warland's negligence caused or contributed to her injuries. Dr Morrison SC, who appeared for Mrs Tiufino, relied on a number of matters to displace this prima facie case of estoppel. Founding on Arnold v National Westminster Bank plc [1991] 2 AC 93 he submitted that special circumstances displaced the estoppel. 29 The special circumstances referred to by the House of Lords in Arnold's case were the existence of further material which had become available since the earlier decision, relevant to the correct determination of a point involved in that decision which could not, by reasonable diligence, have been brought forward in the earlier proceedings. This material might relate to matters either of law or fact. It is doubtful whether the existence of later material relevant only to a question of law could be a special circumstance where there was a right of appeal on questions of law from the earlier decision, but in Arnold's case there had been no such right. See Spencer Bower, Turner & Handley, p 95. Dr Morrison did not rely on new evidence or other materials to exclude the issue estoppel. 30 He relied on the magistrate's decision on 4 March 1996 to refuse Mrs Tiufino an adjournment, but this cannot be a special circumstance, and no attempt was made to establish either error in the decision or prejudice as a result. He also relied on the view expressed by Dowd J during the first hearing on 26 September 1994, but, for the reasons given, that cannot be a special circumstance either. There is therefore no occasion to consider whether the qualification to the general rule of issue estoppel established by Arnold v National Westminster Bank plc should be accepted in Australia. In O'Toole v Charles David Pty Ltd (1991) 171 CLR 232, 258 Brennan J said that Arnold was "a case which, in my respectful view, rests on an uncertain foundation", and misgivings were also expressed in Linsley v Petrie [1998] 1 VR 427 CA, 441, 449. 31 Dr Morrison did not argue that the parties in the two proceedings were different. The parties were nominally the same, but identity of parties is arguably to be decided as a matter of substance, rather than form. (See 116 LQR 191.) As Barwick CJ said in Ramsay v Pigram (1968) 118 CLR 271, 276 the parties in the two proceedings must litigate "in the same interest or capacity". This Court may be taken to know that the defence of the Supreme Court action is being conducted by Miss Warland's compulsory third party insurer and that she has no financial interest in the result. 32 The position of the parties on the record in the Local Court was not fully established. The barrister who appeared for Mrs Tiufino on 26 September 1994 stated in his affidavit that counsel who appeared for Miss Warland to oppose the removal or stay of the Local Court proceedings did so "in the interests of the property damage insurer". Nevertheless in the later hearing, as Dowd J recorded, "no question of insurer's subrogation has been raised"; and no such question was raised in this Court. 33 It was not established that the proceedings in Miss Warland's name in the Local Court were conducted by her property damage insurer, although there is an inference to that effect. If there was an excess clause in her policy, the proceedings may have been conducted for the benefit of both Miss Warland and her insurer for their respective interests in the loss. In that event Miss Warland may have been a real, and not merely a nominal, party. Res judicata estoppels must be mutual (Ramsay v Pigram (1967) 118 CLR 271, 276, 282; Hunter v Chief Constable [1982] AC 529, 540-1) but there is no authority that a compulsory third party insurer cannot take advantage of issue estoppels available to its insured and there is authority that it can. See Wall v Radford [1991] 2 All ER 741, 750; Craddocks Transport Ltd v Stewart [1970] NZLR 499, 524; Talbot v Berkshire CC [1994] QB 290 CA; Bollen v Hickson [1981] Qd R 249; and Webb v Davey [1982] Qd R 356. This Court should follow these decisions in the absence of argument to the contrary. 34 The principal submission of Dr Morrison was that the issue to be decided in the Supreme Court was not the same as the issue that had been decided in the Local Court. The causes of action were different (Brunsden v Humphrey (1884) 14 QBD 141) but this does not exclude an issue estoppel. See Blair v Curran (1939) 62 CLR 464, 531-2; Thoday v Thoday [1964] P 181 CA, 198. He submitted that the issues were different because the duty of care was different. There is support for this in the reasons for judgment of Hayne JA and Smith AJA in Linsley v Petrie [1998] 1 VR 427, but there is a long line of authority here, in England and elsewhere where the contrary has been held or assumed. 35 The earliest of the cases was Marginson v Blackburn BC [1939] 2 KB 426 CA. The plaintiff, the owner of a car which was being driven by his wife, sued in the High Court for his personal injuries, but was held to be bound by a decision of the County Court that his wife, driving as his servant, had been guilty of negligence. Slessor LJ said at 438: "This seems to us to be a clear decision on the same issue between the same persons litigating in the present case, and establishes conclusively, albeit in the County Court, in a claim by the defendants against the present plaintiff, that both were equally to blame". 36 The same view was taken or assumed in Jackson v Goldsmith (1950) 81 CLR 446, 461 per Williams J; Ramsay v Pigram (1968) 118 CLR 271, 276 per Barwick CJ; Clyne v Yardley [1959] NZLR 617; Craddocks Transport Ltd v Stuart [1970] NZLR 499 CA; and Shaw v Sloan [1982] NI 393 CA. In Azzopardi v Bois [1968] VR 183, 187 Adam J said: "The present question ... is not concerned with two distinct duties of care owed to two different persons, but with the one duty of care owed by Azzopardi to Bois in the manner of the driving and management of Azzopardi's car. In the earlier litigation it was decided that Azzopardi was guilty of a breach of his duty of care to Bois and this was a cause of the collision. These identical issues arise in the present action, in which Azzopardi asserts that he was guilty of no negligence in causing the collision, which was entirely caused by the negligence of Bois. That it was property damage resulting from the collision that alone was the subject of the previous litigation is not, I think, to the point: see Marginson v Blackburn BC [1939] 2 KB 426 at pp 437-8 … Identity of issues is not to be confused with identity of causes of action. The same issues of law or fact may arise in respect of different causes of action". 37 See also Bollen v Hickson [1981] Qd R 249 FC, 252; and Webb v Davey [1982] Qd R 356. 38 In Linsley v Petrie the majority held (434, 450) that although "a driver does not owe one duty to avoid damage to the property of A and another, different duty to the same person to avoid personal injury", nevertheless (435; 450) "the issue of breach of duty determined in an action for property damage is [not] the same issue as falls to be determined in a claim for damages for personal injuries". The third member of the Court, Callaway JA, said at 448 that since the majority accepted: "… that there is a single duty of care owed by A to B in respect of the latter's person and property, … it is difficult to see why the difference between personal injuries and property damage should furnish the criterion for distinguishing between issues that are, and issues that are not, concluded by an earlier proceeding. I should have thought, with respect, that the choice lay between there being one duty in the eye of the law and a single issue whether it was breached and there being three distinct issues in respect of a prospective plaintiff's person, chattels and land … but if that is the distinction, it is quite arbitrary". 39 Hayne JA, as he then was, (435) illustrated the distinction between the two issues: "The steps which a driver may reasonably be expected to take to avoid colliding with an empty supermarket shopping trolley may be very different from the steps that that driver must take to avoid colliding with a child". 40 With respect I do not find this illustration helpful. Separate duties will be owed to the owner of the trolley and to the child, so that, consistently with Jackson v Goldsmith (1950) 81 CLR 446 and Ramsay v Pigram (1968) 118 CLR 271 there could be no issue estoppel in any event. However putting aside this distinction one asks what if the child was in the supermarket trolley? That of course is the situation in this case. The vehicles were being driven by Mrs Tiufino and Miss Warland and had sufficient care been taken to ensure that there was no damage to the vehicles, Mrs Tuifino would not have suffered her injuries. The best way for a driver to ensure that persons in another vehicle do not suffer personal injuries on the highway is to drive in such a manner that there is no contact, or appreciable risk of contact, between the two vehicles. 41 Mrs Tiufino was not the owner of the car she was driving. Miss Warland owed her a duty of care, but it was a duty not to cause injury to her body or to her personal property in the car including the clothes she was wearing. The magistrate's finding that Miss Warland had not been guilty of contributory negligence negatived any breach by Miss Warland of the duty of care she owed Mrs Tiufino. 42 In Brunsden v Humphrey (1884) 14 QBD 141 Lord Colleridge CJ criticised the decision of the majority that there were separate causes of action for damage to the person and damage to property in cases such as this. He said, at 153: "… it seems to me a subtlety not warranted by law to hold that a man cannot bring two actions, if he is injured in his arm and in his leg, but can bring two, if beside his arm and leg being injured his trousers which contained his leg, and his coat sleeve, which contains his arm, had been torn". 43 The decision that there are two causes of action in these cases has stood too long to be disturbed by this Court, but it provides no reason for holding that the existence of a breach of duty to a victim in respect of the clothes he or she is wearing, and the existence of a breach of duty to the victim in respect of his or her bodily safety, are different questions. Linsley v Petrie confirmed that in highway cases a single duty is owed to a person for his property and bodily safety. If this is so I cannot, with respect, see that separate questions of breach can arise. There is no trace in the books before Linsley v Petrie of a case where the same tribunal of fact has found a breach of duty in one case and no breach in the other. 44 The majority in Linsley v Petrie relied on the decision in Azzopardi v Bois [1968] VR 183 that s 26(6) of the Wrongs Act 1958 authorised different apportionments of responsibility for contributory negligence in cases of property damage and personal injury sustained in the same collision. Adam J demonstrated the validity of the distinction by his example of a driver whose injuries were aggravated because an available seat belt was not being worn. 45 This part of the decision was, if I may say so, clearly correct, being founded on the words "a claim in respect of that damage" in the section. (See Law Reform (Miscellaneous Provisions) Act 1965 s 10(1).) Since there are separate claims for property damage and personal injury, the statute creates separate issues of apportionment. The appropriate apportionment depends on the court's assessment of the relative culpability and causative significance of the conduct of the parties, and different questions of causation can arise in relation to the collision, and the personal injuries it causes, as the example of Adam J demonstrates. See Barisic v Devenport [1978] 2 NSWLR 111 CA, 140-1 per Samuels JA; O'Connell v Jackson [1972] 1 QB 270 CA. 46 These separate questions could not arise at common law because contributory negligence was a complete defence. Their existence, as a result of a statute does not, in my view, establish that separate questions of breach of duty arise at common law in respect of the different types of damage. 47 This Court would ordinarily follow a decision of the Court of Appeal of Victoria, or its predecessors, but I have reluctantly concluded that we should not do so in this instance. This part of the decision in Linsley v Petrie is contrary to Marginson v Blackburn BC [1939] 2 KB 426, a long standing decision of the English Court of Appeal. It is also contrary to decisions of other intermediate appellate courts, and dicta in the High Court of considerable persuasive weight. Although some aspects of the reasoning in Marginson v Blackburn BC have been criticised, the conclusion of Slessor LJ that the issues of breach of duty were the same in the two cases had not previously been challenged. 48 In my opinion therefore Dowd J was correct in upholding the defence of issue estoppel. If I had been of a different view I would have held that the magistrate's decision in favour of Miss Warland made the maintenance of these proceedings an abuse of process. Mrs Tiufino had complete control over the proceedings in the Local Court through the solicitors and counsel of her choice. The particulars of negligence in her defence in the Local Court are the same as the particulars of negligence in her statement of claim. The solicitors who acted for her in those proceedings are the solicitors acting for her in the present proceedings. 49 This was an everyday collision case which the magistrate decided on the credibility of the witnesses and the probabilities. There was nothing in the case except possibly the amount of Mrs Tiufino's damages which called for the skills and experience of a Supreme Court Judge. The magistrate gave a careful and well-reasoned decision and no attempt was made to establish a plausible case of error of the kind that would attract appellate intervention if a full appeal on fact and law had been available to Mrs Tiufino. 50 In these circumstances the attempt to re-litigate these simple issues of fact was an abuse of process even if for some reason the defence of issue estoppel is not available. See Wall v Radford [1991] 2 All ER 741. It has long been established that proceedings which seek to re-litigate some question which technically is not covered by an issue estoppel may be stayed or dismissed as an abuse of process. See Reichel v Magrath (1889) 14 App Cas 665. 51 In my opinion the appeal should be dismissed with costs. 52 POWELL JA: I agree with Handley JA.

TIUFINO v WARLAND

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