The general principles
325 I have drawn these principles from the observations of the High Court in Tomlinson together with other relevant references.
326 The rendering of a final judgment in the exercise of judicial power, as between persons or classes of persons, "quells" a controversy between those persons or classes of persons with the result that questions in controversy as to the existence of rights or obligations as between them cease to have an independent existence because they merge in the final judgment: [20]; Blair v Curran (supra) at 532.
327 As to the matter of "quelling a controversy", it should be noted that Mason, Murphy, Brennan and Deane JJ in Fencott v Muller (1983) 152 CLR 570 at 608 observe that the unique and essential function of judicial power is the quelling of controversies by ascertaining facts, applying the law and, where appropriate, exercising judicial discretion. Put simply, the underlying public interest is that there should be finality in litigation and a party should not be twice vexed in the same matter.
328 The plurality observe that estoppel in relation to judicial determinations is a common law doctrine informed, in its relevant application, by similar considerations of finality and fairness: [21].
329 However, its operation is not confined to an exercise of judicial power: [21]. In that context, Gibbs J observes in Administration of Papua New Guinea v Daera Guba (1973) 130 CLR 353 at 453 that "a fairly obvious example is the case of a court-martial, whose sentence might in some circumstances be pleaded as an estoppel … although not made in the exercise of judicial power".
330 The plurality observe that estoppel operates as a rule of law to preclude the assertion of a right or obligation or the raising of an issue of fact or law: [21]. The plurality observe that three forms of estoppel are recognised by the common law of Australia as having preclusive potential by the rendering of a final judgment in adversarial proceedings.
331 The first is sometimes called "cause of action" estoppel although it is largely redundant where final judgment was rendered in the exercise of judicial power and where res judicata in the strict sense therefore applies bringing about the merger of a right or obligation in the judgment: [22]. It precludes assertion in a subsequent proceeding of a claim or right or obligation asserted in the proceeding determined by the judgment.
332 The second form of estoppel is almost always now referred to as "issue estoppel": [23]. It operates to preclude the raising in a subsequent proceeding of an ultimate issue of fact or law which was necessarily resolved as a step in reaching the determination made in the judgment: [22].
333 As to that matter and that formulation, Dixon J in Blair v Curran (supra) said this at 531-533 which is regarded as the "classic expression" (Tomlinson at [22]) of the primary consequence of its operation:
A judicial determination directly involving an issue of fact or of law disposes once 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, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared. The distinction between res judicata and issue-estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.
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. Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground upon which the existence of the right was negatived. But in neither case is the estoppel confined to the final legal conclusion expressed in the judgment, decree or order. … the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point in issue. Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous.
334 It should also be noted that in Jackson v Goldsmith (1950) 81 CLR 446 at 466, Fullaghar J observes that the term "issue estoppel", first used by Higgins J in Hoysted v Federal Commissioner of Taxation (1921) 29 CLR 537 at 561, had been adopted by Dixon J in Blair v Curran and the term has the "great advantage of being quite unambiguous".
335 The third form of estoppel is Anshun estoppel: [22], Port of Melbourne Authority v Anshun Pty Ltd (supra). The plurality observe that it is sometimes referred to as the "extended principle" in Henderson v Henderson (1843) 3 Hare 100 at 115, Sir James Wigram V.C.; 67 ER 313 at 319. The plurality observe that Anshun estoppel is an extension of res judicata and issue estoppel: [22]. In this extended form, an Anshun estoppel operates "to preclude the assertion of a claim or the raising of an issue of fact or law if that claim or issue was so connected with the subject matter of the first proceeding as to have made it unreasonable in the context of the first proceeding for the claim not to have been made or the issue not to have been raised in that proceeding": Tomlinson, [22].
336 In Anshun, Gibbs CJ, Mason and Aickin JJ observe at 598 that although the principle operates so as to extend the doctrines of issue estoppel as well as res judicata, its application to cases of issue estoppel is to be treated with "caution" in part because Lord Wilberforce in Carl Zeiss Stifung v Rayner and Keeler Ltd (No 2) [1967] 1 A.C. 853 at 966 observed that Henderson v Henderson was an instance of res judicata and Lord Reid in Carl Zeiss at 916 noted that confusion had arisen by applying to issue estoppel, without modification, rules designed to deal with res judicata.
337 Importantly, however, the extended form of estoppel "has been treated in Australia as a 'true estoppel' and not as a form of res judicata in the strict sense" [emphasis added]: Tomlinson, [22].
338 In this context, Deane, Toohey and Gaudron JJ observe in Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 at 509 that:
In truth Henderson v Henderson was not concerned with res judicata in its strict sense but rather with its implications when an issue is sought to be raised "which could and should have been litigated in the earlier proceedings": Port of Melbourne Authority.
[emphasis added]
339 Each of these three forms of estoppel has the potential to preclude assertion of a right or obligation or the raising of an issue of fact or law between parties to a proceeding or their privies: Tomlinson, [23].
340 It is important to keep in mind that for all three forms of estoppel, the operation of an estoppel is to preclude the assertion in a subsequent proceeding of what is claimed to be the truth: Tomlinson, [38].
341 The plurality observe that one principle must govern the identification of privies for the purpose of all forms of estoppel which result from the rendering of a final judgment in an adversarial proceeding: [23].
342 In Tomlinson at [22], the plurality observe that considerations similar to those which underpin Anshun estoppel may support a preclusive abuse of process argument. The doctrine of estoppel so explained in its three forms overlaps with the doctrine of abuse of process. As to the relationship between the two or the degree of overlapping, the plurality make these observations at [24] and [25]:
[24] To explain contemporary adherence to the comparatively narrow principle in Ramsay v Pigram, it is appropriate also to explain the relationship between the doctrine of estoppel and the doctrine of abuse of process as it has since come to be recognised and applied in Australia. The doctrine of abuse of process is informed in part by similar considerations of finality and fairness. Applied to the assertion of rights or obligations, or to the raising of issues in successive proceedings, it overlaps with the doctrine of estoppel. Thus, the assertion of a right or obligation, or the raising of an issue of fact or law, in a subsequent proceeding can be simultaneously: (1) the subject of an estoppel which has resulted from a final judgment in an earlier proceeding; and (2) conduct which constitutes an abuse of process in the subsequent proceeding.
[25] Abuse of process, which may be involved in areas in which estoppels also apply, is inherently broader and more flexible than estoppel. Although insusceptible of a formulation which comprises closed categories, abuse of process is capable of application in any circumstances in which the use of a court's procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute. It can for that reason be available to relieve against injustice to a party or impairment to the system of administration of justice which might otherwise be occasioned in circumstances where a party to a subsequent proceeding is not bound by an estoppel.
[emphasis added]
[footnotes omitted]
343 As to the scope of the doctrine of abuse of process where an estoppel might not arise or where the party making the claim was neither a party nor a privy of a party to the earlier proceeding, the plurality said this at [26]:
[26] Accordingly, it has been recognised that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel. Similarly, it has been recognised that making such a claim or raising such an issue can constitute an abuse of process where the party seeking to make the claim or to raise the issue in the later proceeding was neither a party to that earlier proceeding, nor the privy of a party to that earlier proceeding, and therefore could not be precluded by an estoppel.
[emphasis added]
[footnotes omitted]
344 The footnote to the second sentence in [26] is in these terms: "47 O'Shane v Harbour Radio Pty Ltd (2013) 85 NSWLR 698 at [99] - [111] and the cases there cited. See to similar effect Reichel v Magrath (1889) 14 App Cas 665 and Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2014] AC 160 at [25], explaining Johnson v Gore Wood & Co [2002] 2 AC 1".
345 In Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd, Lord Sumption JSC at 185, [25] (with whom Baroness Hale, Lord Clarke and Lord Carnwath JJSC agreed) explains that neither Lord Millett nor Lord Bingham in Johnson v Gore Wood & Co took the view that because Henderson v Henderson was concerned with abuse of process it could not also be part of the law of res judicata. Leaving aside the aspect of res judicata for present purposes (because at least, so far as the "extended principle" of Henderson v Henderson is concerned, the Anshun extension of res judicata and issue estoppel (Tomlinson, [22]) is, in Australia, a "true estoppel" (Tomlinson, [22])), Lord Sumption at [25] observes that the focus in Johnson v Gore Wood & Co "was inevitably on abuse of process because the parties to the two actions were different, and neither issue estoppel nor cause of action estoppel could therefore run …".
346 As to abuse of process, Gleeson CJ, Gummow, Hayne and Heydon JJ said this in D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at 28 [74]:
The circumstances in which proceedings might be classified as an abuse of process have been described in various ways. In Hunter v Chief Constable of the West Midlands Police to which extensive reference was made in the speeches in Arthur J S Hall v Simons, Lord Diplock spoke of abuse of process as a misuse of a court's procedure which would "be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people". In Rogers v The Queen Mason CJ observed of Lord Diplock's speech that, with what had been said in this court, it indicated:
"that there are two aspects to abuse of process: first, the aspect of vexation, oppression and unfairness to the other party to the litigation and, secondly, the fact that the matter complained of will bring the administration of justice into disrepute".
[footnotes omitted]
347 In Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256, Gleeson CJ, Gummow, Hayne and Crennan JJ at [15] accepted the correctness of the observations of McHugh J in Rogers v The Queen (1994) 181 CLR 251 at 286 that:
Although the categories of abuse of procedure remain open, abuses of procedure usually fall into one of three categories: (1) the court's procedures are invoked for an illegitimate purpose; (2) the use of the court's procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court's procedures would bring the administration of justice into disrepute.
348 In O'Shane v Harbour Radio Pty Ltd (supra) at 723, Beazley P (McColl JA and Tobias AJA agreeing) observes at [105]:
The relevance, for present purposes, of an abuse of process not being dependent upon the existence of an estoppel, is that a court may intervene to prevent an abuse, notwithstanding that the subsequent proceedings are not between the same parties or their privies. As the authorities state, the court will act upon an abuse of process where the use of the court's procedures would bring the administration of justice into disrepute.
349 However, it is important to recall the observations of Heydon JA (Spigelman CJ and Mason P agreeing) in R v O'Halloran (2000) 159 FLR 260 at 289 that the "position" in relation to the parties in the two proceedings in question "does create certain difficulties" (in the application of the doctrine of abuse of process) for the party contending (that case) that the earlier civil proceeding to which neither the appellant nor the DPP were parties rendered reliance by the DPP on certain prohibited acts (in the DPP's later proceedings) an abuse of process. Heydon JA also observed that, secondly, if the abuse is said to arise out of an attempt to "re-litigate" determinations made in earlier litigation, "there cannot be 're-litigation' if there has not been litigation": at 290.
350 On the question of caution about parties, Heydon JA said this about some of the earlier authorities at [108] and [109]:
108 Reichel v Magrath was a case in which Reichel was defeated on an issue in proceedings he brought against certain parties, and it was held to be an abuse of process for him to re-agitate it in later proceedings brought against him by different parties. Walton v Gardiner raised the issue of whether, where a moving party had brought disciplinary proceedings against medical practitioners which had been stayed, there ought to be a stay of the second set of disciplinary proceedings brought by that moving party against the same practitioners in relation to allegations substantially overlapping the allegations in the first proceedings. Hunter v Chief Constable of West Midlands Police was a case where an accused was convicted on the basis of an allegedly coerced confession: civil proceedings by him against the police claiming damages for injuries allegedly suffered when the confession was obtained were struck out as an abuse of process. ...
109 In all these cases the person whose role in later proceedings, whether as moving party or defendant, was characterised as an abuse of process was a person who had been a party to the earlier proceedings. The Director of Public Prosecutions was not party to the civil proceedings before the Supreme Court. In all these cases, too, the persons said to have abused process had lost on an issue in the earlier proceedings.
[citations omitted]
351 It should be noted, however, that in Reichel v Magrath (supra), the House of Lords held that a defence which was not barred by res judicata estoppel may nevertheless be struck out as an abuse of process, as an expression of the principle put by Lord Halsbury LC in that case in these terms:
… 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 … there must be an inherent jurisdiction in every Court of Justice to prevent such an abuse of its procedure ...
[emphasis added]
352 This statement of principle has been adopted by the High Court in Walton v Gardiner (1993) 177 CLR 378 at 393 and Rogers v The Queen (supra) at 287-288. It is cited at fn 46 to support the proposition in the second sentence in Tomlinson at [26] in circumstances where the party seeking to make the claim was neither the party (or to use Lord Halsbury's term "the litigant") to the earlier proceeding nor the privy of such a party and therefore could not be precluded by an estoppel in any of the three forms discussed by the plurality.
353 As to privy in interest, in Ramsay v Pigram (supra), Pigram brought an action for damages for personal injuries arising out of a motor vehicle accident said to have been caused by the negligent driving of a vehicle (owned by the State of New South Wales), by a police officer.
354 Ramsay was the appointee of the Nominal Defendant.
355 Ramsay pleaded that Pigram was estopped from asserting negligence on the part of the police officer in the course of his duty because an issue estoppel arose out of an earlier action in the District Court in a proceeding brought by the police officer against Pigram arising out of the same collision. In the earlier proceeding, the jury found a general verdict for the police officer on the issue of negligence and the issue of contributory negligence.
356 The High Court (by the whole Court) found that there was no privity of interest between Ramsay and the police officer so as to entitle Ramsay to rely upon the findings in the police officer's proceeding in which there was a final judgment in his favour personally.
357 At 279, Barwick CJ said this:
Clearly in this case the actual parties to the Supreme Court action are not the same as the parties to the District Court action. But it is said that the Government was a privy of the police officer who in its service drove its vehicle on the occasion out of which the claims of the parties arose. The question in this case therefore at this point is simply whether there was relevant privity between the Government and the police officer.
Of the three classes of privies of blood, of title and of interest, the only one which is submitted and indeed could be submitted to be relevant is that of a privy in interest. But I am unable to conclude that the Government or the Police Department was in this sense a privy of the police officer. The basic requirement of a privy in interest is that the privy must claim under or through the person of whom he is said to be a privy. Here it is quite clear that the Government had no interest in the action between [Pigram] and the police officer: nor can it be said that the action brought by the police officer was brought by him in any sense on behalf of the Government or that in relation to the defence of contributory negligence [Pigram] could have been treating the Government as the real "defendant" to that claim. In every respect the action between [Pigram] and the police officer was personal to each of them, neither being in any sense in relation to the action or any of the issues involved in it, representative of another. Nor can it be said that the Government in any sense claims under or in virtue of the police officer or of any right of his, or that it derives any relevant interest through him.
[emphasis added]
358 This principle in Ramsay v Pigram governs the identification of whether a person is privy in interest with a party to proceedings for the purpose of determining whether an estoppel results from the rendering of a final judgment. The principle is informed by a "higher-level principle" of: "who takes the benefit ought also to bear the burden" and the notion that "[a] man will be bound by that which bound those under whom he claims": Tomlinson, [29].
359 In the result, neither Pigram nor the police officer were the representative of another in the earlier action or the issues in it and nor could it be said that the State of New South Wales was asserting a position "under" the police officer or asserting any right "of" the police officer or that it "derived" any relevant interest "through him". Barwick CJ's explanation that the State was not privy in interest with the police officer was based on two limbs: the absence of either representation of interest or derivation of interest under or through the police officer: Tomlinson, [32].
360 The plurality in Tomlinson explain that consistently with the rationale for the principle and the explanation of it by Barwick CJ, a party to a later proceeding (A), can be privy in interest with a party to an earlier proceeding (B) in one of two ways. First, (A) might have had some legal interest in the outcome of the earlier proceeding which interest was represented by (B), or (B) has some legal interest in the outcome of the later proceeding which interest is represented by (A): Tomlinson, [33]. The "extent to which the representation by (A) or (B) will be sufficient to bind the other is the critical issue": Tomlinson, [33].
361 Second, after the earlier proceeding is concluded by judgment, (A), the party to the later proceeding, might acquire from (B), the party to the earlier proceeding, some legal interest which would give rise to an estoppel in the later proceeding.
362 The plurality recognise that an economic or other non-legal interest of (A) in the outcome of the earlier proceeding is not sufficient to render (A) a privy of (B): Tomlinson, [35]. Also at [35] the plurality said of subsequent applications of the Ramsay v Pigram principle that:
Those applications have also correctly emphasised that, absent a legal interest, such influence as A might have had over the conduct of the earlier proceeding is irrelevant even if that influence amounted to control. Thus, directors of a company, who also held shares in its parent company, were held not to be estopped from pursuing a later action to recover damages to compensate for a loss on their own account in circumstances where they had stood to gain financially from an earlier action by the company claiming damages for loss on the company's account. That was despite the directors having been found to have exercised effective control over the company's conduct of the earlier action.
[emphasis added; citations omitted]
363 The authorities (which I will simply call the Effem Foods cases both at first instance and on appeal) referenced at fn 58 in support of the quoted propositions at [35] of Tomlinson are these: "Effem Foods Pty Ltd v Trawl Industries of Australia Pty Ltd (In liq) (1993) 43 FCR 510 [the Full Court decision; Northrop and Lee JJ with a separate judgment by Burchett J dismissing an appeal from Gummow J]. See also Trawl Industries of Australia Pty Ltd (In liq) v Effem Foods Pty Ltd (1992) 36 FCR 406 [the first instance decision of Gummow J] and Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 108 ALR 353 [a further decision of Gummow J dismissing a second application for a stay of the claims of applicants other than Trawl Industries of Australia Pty Ltd]".
364 It is not necessary to examine the decisions in Effem Foods before Gummow J or the decision of the Full Court as the proposition deriving from those decisions has been affirmed by the High Court in Tomlinson at [35].
365 The point of the proposition, however, can be illustrated by noting that in the earlier proceedings Trawl Industries sought relief against Effem Foods in reliance upon causes of action including rectification of an agreement; breach of it; and claims based on ss 82 and 52 of the Trade Practices Act 1974 (Cth). Final judgment, however, was entered for Effem Foods on all causes notwithstanding that only the contract claims were heard at trial as separate questions with no trial of the ss 82 and 52 claims.
366 The later Federal Court proceedings were instituted by Trawl Industries (receivers and managers appointed); Cumbeline, the owner of all shares in Trawl Industries; (H) and (S), directors of Trawl Industries and Cumbeline and each a one third owner of the shares in Cumbeline; (P), a director of Trawl Industries and Cumbeline; Meridoc, the remaining one third owner of Cumbeline and Idobook, a lender to Trawl Industries and Cumbeline. All of these applicants sought damages suffered by each of them measured by their respective loss suffered in reliance upon representations said to have been in contravention of s 52. Although the shareholders and others held economic interests in the claims made by Trawl Industries in the earlier Supreme Court proceedings (and the directors exercised control over Trawl Industries in the earlier proceedings), Trawl Industries did not claim in the earlier proceeding as representative of the interests of others nor did it claim under or through them and thus they were not privies of Trawl Industries.
367 No estoppel arose against them although an estoppel arose against Trawl Industries.
368 There is another principle which derives from Ramsay v Pigram that should be mentioned. An issue estoppel can only be asserted in the subsequent proceeding by a party who was a party to the earlier proceeding or a privy of a party to the earlier proceeding. Relevantly here, UBS was a party to both the Singapore 801 proceedings and the SCNSW proceedings.
369 Having set out the propositions at [35] affirming the principle of the Effem Foods decisions, the plurality made this further observation in the final sentence of [35]:
The constraint on the conduct of A in such circumstances lies not in an estoppel but, in an appropriate case, in abuse of process.
[emphasis added]
370 In support of that observation, the plurality at fn 59 refers to the speech of Lord Bingham in Johnson v Gore Wood & Co (HL (E)) [2002] 2 AC 1 at 30-31 (Lord Goff, Lord Cooke and Lord Hutton agreeing and Lord Millett agreeing in the result). Lord Bingham said this:
It may well be, … that what is now taken to be the rule in Henderson v Henderson has diverged from the ruling which Wigram V-C made, which was addressed to res judicata. But in Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all.
[emphasis added]
371 Lord Bingham also said this:
I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not. Thus while I would accept that lack of funds would not ordinarily excuse a failure to raise in earlier proceedings an issue which could and should have been raised then, I would not regard it as necessarily irrelevant, particularly if it appears that the lack of funds has been caused by the party against whom it is sought to claim.
[emphasis added]
372 As to the proper method of approach, Lord Bingham said this:
While the result may often be the same, it is in my view preferable to ask whether in all the circumstances a party's conduct is an abuse than to ask whether the conduct is an abuse and then if it is, to ask whether the abuse is excused or justified by special circumstances. Properly applied, and whatever the legitimacy of its descent, the rule has in my view a valuable part to play in protecting the interests of justice.
373 As to estoppel, the plurality in Tomlinson also recognise that, as a matter of principle, a person does not become bound, as a party to a later proceeding, by an estoppel by reason of a party having represented legal interests of that person in an earlier proceeding merely as a consequence of that party having lawfully asserted a claim which, if accepted, would have resulted in a determination embracing or enforcing a legal entitlement of the person (such as the assertion of an entitlement by a claimant discharging a statutory jurisdiction in respect of such a claim): [37]. The plurality observe at [37]:
[37] … In the absence of the person having authorised the assertion of the claim, the representation must at least have been of such nature as to have protected the person from being unjustifiably subjected to an unwanted estoppel.
374 At [38] and [39], the plurality explain why that is so.
375 At those paragraphs, their Honours said this:
[38] Why that should be so is not difficult to explain. It is a principle at the core of our legal system that a party claiming or denying the existence of a legal right or obligation should have an opportunity to present evidence and arguments to establish the facts and law on which the claim or denial is founded. There are countervailing considerations, some of which operate to create exceptions to that principle. Finality and fairness, including maintaining the certainty of past adjudicated outcomes and ensuring the predictability of future adjudicated outcomes, are amongst those countervailing considerations, and the estoppels informed by those considerations are amongst the exceptions to the principle. …
[39] The justice of binding to an estoppel a person who was a party to an earlier proceeding is readily apparent: the person has already had an opportunity to present evidence and arguments. The justice of binding to an estoppel a person whose legal interests stood to benefit from the making or defending of a claim by someone else in an earlier proceeding will often also be apparent. With the benefit of the claim or defence also comes the detriment of the estoppel. That, at least, is the underlying theory. But it is a theory which has limitations. It would be quite unjust for such a person to be precluded from asserting what the person claims to be the truth if the person did not have an opportunity to exercise control over the presentation of evidence and the making of arguments in the earlier proceeding and if the potential detriment to the person from creating such an estoppel was not fairly taken into account in the decision to make or defend the claim in an earlier proceeding or in the conduct of the earlier proceeding.
[emphasis added]