Allianz Australia Insurance Ltd v GSF Australia Pty Ltd & Anor
[2004] HCATrans 218
[2004] HCATrans 218
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Sydney No S431 of 2003
B e t w e e n -
ALLIANZ AUSTRALIA INSURANCE LIMITED
Applicant
and
GSF AUSTRALIA PTY LIMITED
First Respondent
GARRY DAVID OLIVER
Second Respondent
Application for special leave to appeal
GUMMOW J
KIRBY J
CALLINAN J
TRANSCRIPT OF PROCEEDINGS
AT SYDNEY ON FRIDAY, 18 JUNE 2004, AT 10.10 AM
Copyright in the High Court of Australia
MR K.P. REWELL, SC: If the Court pleases, I appear with my learned friend, MR P.S.L. DOOLEY, for the applicant. (instructed by TL Lawyers)
MR L. KING, SC: May it please the Court, I appear with MR J.W. CATSANOS for the first respondent. (instructed by Blake Dawson Waldron)
GUMMOW J: The Court holds a certificate from the Deputy Registrar that he has been informed by the solicitor for the second respondent that the second respondent submits to the order of the Court save as to costs. Yes, Mr Rewell.
MR REWELL: The second respondent was the plaintiff in the original proceedings and is only modestly concerned in the outcome.
GUMMOW J: That is right. Well, we will come back to that.
MR REWELL: Indeed, as I understand it, the lower of the two figures has already been paid to the second respondent. So it is a very small amount in issue, so far as he is concerned.
GUMMOW J: Is he a necessary party for attention?
MR REWELL: No, he is not.
GUMMOW J: Well, we will come back to that. Now, are the parties familiar with our decision in Insurance Commission of Western Australia v Container Handlers?
MR REWELL: Yes, indeed.
GUMMOW J: Right.
KIRBY J: This is justified between insurance companies?
MR REWELL: No, it is not, your Honour.
KIRBY J: And it is on the particular terms of the statute?
MR REWELL: Yes, it is.
KIRBY J: Just New South Wales legislation.
MR REWELL: Well, in a sense, yes. It is a conflict between two schemes of insurance, but it is a conflict which very much concerns plaintiffs, because a plaintiff who is injured in the course of his or her employment, but also injured in a manner incidental to the use of a motor vehicle, must make a choice as to which scheme the plaintiff commences proceedings under. Each scheme imposes very important procedural requirements qualifying a plaintiff to commence proceedings in the first place.
If the plaintiff chooses the wrong scheme, he or she will have failed to comply with the procedural requirements under the correct scheme, and that compels dismissal of his proceedings, even if, as has occurred in a number of cases to date, the problem about which scheme applies is not detected until the hearing. So the plaintiff can commence proceedings and go right through the whole of the requirements of bringing his case to court only to fall at the last moment, because he is under the wrong scheme. It has become no easy matter to determine which scheme a person ought commence proceedings under and which insurer ought therefore respond. That is why we are here.
KIRBY J: But the New South Wales Court of Appeal has settled the issue for the time being.
MR REWELL: Well, no, it has not, because the particular decision which is brought to this Court is a majority decision in which there was a strong dissent by Justice Santow and in which the two judges in the majority did not agree in their reasons. So it is, with respect to their Honours, of little assistance in resolving the problem that we have to deal with. Indeed, this particular case has been chosen as the subject of a special leave application because we see it as a very appropriate vehicle to have this issue dealt with by the High Court.
It is particularly appropriate because the facts in the case are, firstly, very clear – indeed, there is no dispute about them – and, secondly, they demonstrate negligence to a very high degree on the part of the employer of the plaintiff in the initial proceedings. There was no dispute about liability at any stage of the proceedings, so far as the plaintiff was concerned.
Despite the fact that the actual facts of the case demonstrated a very high degree of negligence on the part of the employer in the system of work, to the point of recklessness, the decision of the majority of the Court of Appeal has the effect that the worker’s entitlement to common law damages falls under the Motor Accidents Scheme and not under the alternative scheme, designed specifically to deal with work accidents. That is why this is a particularly appropriate vehicle. If I might ‑ ‑ ‑
KIRBY J: The Act causes the problem by using the words “a cause”.
MR REWELL: Yes, and by perhaps not using the word “directly” caused, as was used in the Western Australian case, and the corresponding legislation is different. The nub of our argument is that the use of different words in the legislation ought not matter, given the second reading speech, the specific intention of Parliament to limit the ambit of the Motor Accident Scheme. In other words, our argument is that the construction of the New South Wales provision ought be, in effect, the same as the construction of the Western Australian provision, despite a difference in wording.
KIRBY J: It is a very significant difference, though.
MR REWELL: Well, on one view.
KIRBY J: The point on which Justice Mason’s opinion pivoted was “a cause”.
MR REWELL: “A cause”, that is completely correct, but in arriving at the rather broad ambit that his Honour did through the word “a cause”, the legislative intention was defied. The same result followed from Acting Justice Davies, who took a very broad approach to the issue of causation, in effect, saying that if a defect in a motor vehicle is but one element or one link in a chain which ultimately leads to the worker’s injury, then that is sufficient to bring the matter within the Motor Accident Scheme. Now, that was quite the opposite of Parliament’s intention.
The facts of the case are important, because they are extreme. This worker arrived at work in the morning to find that a purpose‑built truck had a defect, in the sense that its loading and unloading mechanism had broken down. The truck was used to convey airline containers to the airport, loaded with foodstuffs. Each container weighed well in excess of a tonne. The whole purpose of the loading and unloading mechanism fitted to the vehicle was that only the push of a button was required to move the containers in and out of the trailer of the vehicle.
The employer negligently directed the plaintiff to unload the vehicle manually when it was obviously dangerous for him to do so. He was given a crowbar with which to move containers weighing over a tonne. It can have been a surprise to nobody that he injured his back in the process of that work.
The only way that the defect of the motor vehicle was involved was that it was the first element in a chain of facts which led the employer to make this grossly negligent requirement of the workers. The difficulty in the case was whether the breakdown of the loading and unloading mechanism ought be regarded as causative of the worker’s injury when it was ‑ ‑ ‑
KIRBY J: A cause. Do not slip away from the statute, please, because that is what we have to apply.
MR REWELL: But there are more words in the statute than “a cause”, as Justice Santow pointed out. The statute – I will come to it in a moment as to how it was formulated, but there are the words “if, and only if” before “a cause”, and I will come to the other words of the Act in a moment. We should start with the proposition that it would be curious for the pre‑existence of a broken down mechanism to be regarded as causative when nothing would have resulted from that breakdown but for the grossly negligent intervention of the employer to require the workers to do something which was quite foolish.
KIRBY J: Leave aside this case, where the fight is between which of two insurers ultimately picks up the tab. You would not want to give “a cause” a narrow view, would you, because there will be cases where there is no other cause but the somewhat remote cause of the motor vehicle defect, and that could be absolutely vital to indemnity to an otherwise impecunious insured to provide protection under the scheme for an injured person.
MR REWELL: That is certainly a valid point, your Honour, but one would not, for that reason, want to give too narrow a construction to “a cause”. The effect of the decision of the majority is to give the broadest construction to “a cause”. The facts of this case could hardly be more extreme, and yet there are more extreme examples which would, on the decision of the majority, fall under motor accidents law. I set one out in the submissions. If the worker had arrived at work to find that the engine of the vehicle had broken down and his employer had directed him to push it to the airport, under the decision of the majority, that would fall within the Motor Accidents Scheme rather than within the Workers Compensation Scheme – an outcome which would, in the event, be rather absurd.
The legislative background was referred to in most detail by the dissenting judge, Justice Santow. He, at page 39 of the application book ‑ ‑ ‑
KIRBY J: We had another case recently where Justice Santow dissented and went into a great deal of detail in respect of the matter.
MR REWELL: I think that is so, your Honour, but ‑ ‑ ‑
GUMMOW J: I think Mr Rewell knows about that very well.
KIRBY J: I was simply reminding him.
MR REWELL: But his Honour, no doubt learning from that previous experience, dissented in this case in a way which was right on the button. Justice Santow set out the relevant part of the second reading speech. The first and longer paragraph made it clear by the Attorney‑General that the purpose of the amendments, which bring into effect the definition with which we are concerned, was to limit the ambit of the scheme. I accept Justice Kirby’s qualification that it was not to limit it too narrowly, but it was certainly to limit, not expand, the ambit of the scheme. The last words of the second reading speech are important. The Attorney‑General said:
It is therefore proposed to amend the definition of “injury” –
and then referred to other States –
where “injury” is qualified in terms of its cause.
So the issue of causation was uppermost in the mind of the Attorney‑General. When one translates that into the legislation which was actually passed, which is set out by Justice Santow on page 33, one sees the definition of the word “injury” at line 35.
Now, “injury” is the important definition in the Motor Accidents Scheme. It is, to use President Mason’s words, the “gateway” to the scheme. If a person has an injury which fits within this definition, that person must bring the proceedings under the Motor Accidents Scheme; there is no election available. Damages must be assessed under the Motor Accidents Scheme, and the Motor Accidents CTP policy of insurance responds. “Injury” is there defined relevantly to mean:
personal or bodily injury caused by the fault of the owner or driver of a motor vehicle –
In this case, the owner of the motor vehicle and the employer were the same person –
in the use or operation of the vehicle if, and only if –
Those words are important. They emphasise the test of causation –
the injury is a result of and is caused during –
Now, that tautology again emphasises the test of causation, relevantly, the use or operation of a vehicle by a defect. So the words from “if, and only if” to the end of the legislative provision emphasise that causation is the important issue.
That conflicts with the approach of the majority, which applied in two quite different ways the broadest test of causation possible. We do not dispute that an element of common sense must always be brought to play in looking at the issue of causation in any particular context, and here the context is the Motor Accidents Scheme. But it is not, with respect to the majority, common sense to broaden the definition to its widest breadth in circumstances where there is a specific legislative mandate to do the opposite. And this is the problem which confronts us.
While it is undoubtedly a very important issue to the insurance industry in New South Wales, because it delimits which policy responds in quite common circumstances, it is also important to plaintiffs who must know which scheme of insurance dictates the procedural requirements of their cases. It is a very common problem. Many accidents in the course of employment also involve the use of motor vehicles. In many respects vehicles are alleged to be defective. Indeed, it is now common in this State to allege that a vehicle is defective not only if something is broken, but also if nothing is broken but something is missing. For example, there are a number of cases where it is alleged that a vehicle ought to have had some form of lifting device attached to it, but did not. So whilst there was nothing wrong with the vehicle, it is nevertheless said to be defective.
KIRBY J: These problems have been around for decades, have they not? Is there not contribution between insurers if you can find double insurance?
MR REWELL: Double insurance applies in cases where both are insured, the owner of the vehicle and the employer are the same person, and the risk is the same.
KIRBY J: Yes.
MR REWELL: But there are cases where there will not be double insurance.
KIRBY J: Risk will not be exactly – I think there were cases under the old Motor Vehicle (Third Party Insurance) Act and the Workers Compensation Act about the differential risks.
MR REWELL: And there are also cases like Zurich v CSR, which was at one point the leading case in this State, and may still be, about what constitutes a defect in a motor vehicle, where CSR was what we loosely call a self‑insurer. But, of course, under the law CSR was uninsured and so dual insurance did not apply.
CALLINAN J: You wonder whether it is almost impossible to wean judges off their affection for attributing causation to motor vehicle – I mean, what the courts have decided over the years, as arising out of or in the course of, is really extraordinary.
MR REWELL: That has led in this State to ‑ ‑ ‑
KIRBY J: Very sensible decisions I always thought.
MR REWELL: But it has led, to his Honour Justice Kirby’s chagrin, to successive legislative amendments.
CALLINAN J: Exactly, and sometimes one feels as if the legislature has never made them, the way the judges approach them.
MR REWELL: We are here to attempt to arrive at a test which will give effect to yet another attempt by the legislature to specifically limit the scope of the ambit of the Motor Accidents Scheme.
GUMMOW J: We will call on Mr King.
MR REWELL: Yes, thank you, your Honour.
MR KING: Your Honours, my learned friend places what seems to be central reliance on the second reading speech, and in particular the extract on page 14 of the print of the Court of Appeal’s decision, paragraph 29 of the reasons of ‑ ‑ ‑
CALLINAN J: We all relied on it in Insurance Commission of Western Australia, did we not?
MR KING: We did. But things ‑ ‑ ‑
KIRBY J: It does have a textual anchor, and that is “if, and only if”.
MR KING: Things are very different in the Western Australian ‑ ‑ ‑
GUMMOW J: Well, it has this word “directly” caused.
MR KING: Well, also, your Honours, if one goes to ‑ ‑ ‑
GUMMOW J: The structure is rather different in the definition.
KIRBY J: “If, and only if” is in there, and the duality – it has to be “caused” and “during”. So the whole message, apart from this second reading speech, is that it is confining.
MR KING: Your Honours, the words “if, and only if” are undoubtedly words of emphasis, but they do not have the significance that my learned friend attributes to them. What they are telling us, with respect – again, at page 8 of the print of the Court of Appeal’s judgment, paragraph 17, the opening paragraph of Justice Santow’s reasons, he sets out the definition. Now, reading that, “if, and only if”, in my submission, means this. They are words of emphasis. They emphasise what is in, and, by emphasising what is in, they say very vigorously what is out. They say what is in are (i) to (iv). Anything that is not fairly within (i) to (iv) is emphatically out.
The context, your Honours, provides the answer to this. I do not mean just the factual context – the legislative historical context. What the New South Wales Parliament did when it amended the definition of “injury” was to contend with this situation. They have introduced a new Motor Accidents Act in 1988, the statute we are concerned with. It had left out of the formula of causation the “arising out of” limb and just put in “caused by”. Now, there were two first instance decisions, one of his Honour Judge Mahoney in the District Court, NRMA v NSW Grain Corporation, another one of Acting Justice Sackville in Mercantile Mutual v Moulding, both of which are referred to in the reasons here. They were loading cases, and it was held that they were still within this indemnity. If you go to the extract in paragraph 29 of Justice Santow’s reasons, which my learned friend put so much store by ‑ ‑ ‑
CALLINAN J: Page, Mr King?
MR KING: Page 14 of the print of the Court of Appeal’s judgment, your Honour, paragraph 29 of the reasons of Justice Santow.
KIRBY J: Page 39 of the application book.
MR KING: Page 39 of the application book, I am sorry. Now, the bold words “during the loading and unloading of vehicles” – it goes on to say, we will take an approach “similar”. It is not identical with the Western Australian place, it is only similar, and “injury” is qualified in terms of cause. Your Honours, in the case that my learned friend referred to, Zurich Insurance, which he rightly said is the leading case, the Chief Justice of New South Wales, Justice Spigelman, said that in looking at exactly what Parliament did by way of amendment, he did not get much assistance from the second reading speech. The same view was taken in another case decided shortly after CSR, Mayne Nickless v Symen, in which the same sort of result as the majority arrived at in this case applied.
Your Honours, I am diverting myself from the short point I want to make. What Parliament has said in the definition is this, “All right, we’ve been told by the courts that some loading and unloading operations are still within the indemnity. We want to restrict that. We will restrict it, and we will restrict it to loading and unloading cases where there’s a genuine link to the vehicle and that link is a defect”. What Parliament has excluded is what might be called a mundane loading or unloading operation where the vehicle plays no relevant part. The vehicle could just be the same as a loading dock or something; it is just a physical object onto which something is being placed or from which something is being taken.
What the second reading speech is talking about, properly, in the bold emphasised part is a loading and unloading of vehicles where there is nothing wrong with the vehicle which plays a causal role. What Parliament has done, in (iv) of the definition, is maintain a genuine link to attract the indemnity. That is where the “a cause” comes in. My learned friend really overlooks the fact in his argument that this accident involved the physical activities of the men and the defect in the vehicle. Two things were necessary, and that maintains the link.
What Parliament did not do is use the sort of strong language that the Western Australians used, and which is best captured in the extracts of Justice Heydon’s reasons in the Containers Case on page 53 of the print of this Court’s judgment. They used a vigorous negative. They said:
For the purposes of this Act, the death or bodily injury to any person shall not be taken to have been caused by a vehicle if it is not a consequence –
The New South Wales Parliament did not say, “An injury shall not be deemed to be an injury within the meaning of this Act if it arises in an unloading or a loading operation”. They have left them in there, taking up what the courts have decided, so long as the vehicle plays a genuine part. What is the genuine role the vehicle plays, if it is defective.
With all respect to my learned friend, for him to say that this causes difficulties is quite the opposite of the real position. The position adopted by the majority here gives certainty. You have only to look at the question in paragraph 14 of Justice Mason, the learned President’s reasons, in this case:
Accordingly, it matters not for me how Mr Oliver might have answered his hypothetical bystander’s hypothetical inquiry about the cause of his injury.
He puts the ways of looking at it, which more or less cover the field, and says, “That attracts indemnity”. If you compare that with Justice Santow, paragraph 49 of his reasons, where he sets out the same sorts of inquiries, Justice Santow, really, by his approach, is creating doubts in the minds of plaintiffs’ lawyers as to which way to jump. They have not got to trouble themselves if they adopt the approach of the majority of the Court of Appeal, which, as I have said, is consistent with CSR v Zurich and consistent with Mayne Nickless v Symen. Your Honours, really, that is the answer I want to make ‑ ‑ ‑
KIRBY J: Could I just get that clear in my mind. Is your point that if you look at it from the point of view of plaintiffs assigning themselves to the right category, an emphasis on the word “a” – “a cause”, as it were – leaves a leeway for choice that the plaintiff can ‑ ‑ ‑
MR KING: Makes life easier.
KIRBY J: Whereas if you take the view that Justice Santow has taken, and lay emphasis on “if, and only if” in the second reading speech, then you are presenting a problem that you may wrongly elect.
MR KING: But the walking on eggshells difficulty ‑ ‑ ‑
KIRBY J: It is not this case. If a rational legal system were asked, “What do you assign this to, employment liability or motor vehicle liability?” I think I would be inclined to say you assign this to employment liability. But that is not the question. The question is how do you construe this Act, not just for a claim between insurers, but how you construe it in the interpretation of the Act when there is no other insurer and you have to decide whether an injured person falls within the protection of what is a beneficial piece of protective legislation. That may be why Parliament has used the word “a cause” as distinct from pretending that there is one and only cause.
MR KING: Your Honour, what has just fallen from your Honour is exactly what commended itself to the learned President. Justice Mason said exactly that in his reasons. Another proposition which is relevant to this Court’s function as to whether to grant special leave in this area is that it has been ever thus. I mean, there is nothing new about this. It has been the situation for donkey’s years – in this State, ever since 1942.
KIRBY J: No, but as Justice Callinan pointed out soon after he arrived in this Court, important statutory questions that have multiple applications and are in new legislation, which is State legislation, are properly the matter of a national Supreme Court.
CALLINAN J: We are the final court of appeal for the States. The Constitution says that. I always find it most unattractive when people say in respect of a matter that is plainly important, “Oh, it’s just a State matter, State legislation”.
KIRBY J: You did not say that, I think, Mr King. It was I who ‑ ‑ ‑
MR KING: But I went pretty ‑ ‑ ‑
CALLINAN J: I did not mean to verbal you, Mr King.
MR KING: Your Honour, I would be prepared to concede I went pretty close, but I was not quite so. If I can deal directly with that. What I understood Justice Callinan to be saying is almost a cri de coeur ‑ ‑ ‑
GUMMOW J: There has never been a complaint about New South Wales appeals.
MR KING: Your Honour, the answer to what I apprehend was going through your Honour’s mind is when you look at the specific 1995 amendment that the New South Wales Parliament introduced, in the words of the second reading speech, it was only similar to it, it was not identical with, and it did tack on this fourth limb of a defect. What they are saying is – I have said this before – a loading and unloading injury can still be within the indemnity if the vehicle really played a part through a defect in it. That is exactly this case, and you do not need to go any further than that. My learned friend is trying to take it out of a narrow compass.
CALLINAN J: Except I think Justice Santow said it was an extraordinary intervention of this court – there was an extraordinary intervention after the defect emerged. Another way of looking at it might be that the effects of the defect were spent and that there was an entirely new event which is unrelated to a motor vehicle in any sensible way. I mean, that is the argument. I am not saying ‑ ‑ ‑
MR KING: It says “a cause”. It is a pretty un‑commonsense ‑ ‑ ‑
CALLINAN J: Again, courts have been brand leaders in relation to extending the notion of cause, I must say. But there has been authority on that; significant cause, contributing cause. It is not ‑ ‑ ‑
MR KING: Your Honour, whatever else you might say about the Motor Vehicle (Third Party Insurance) Act, it remains essentially socially beneficial legislation designed to ‑ ‑ ‑
CALLINAN J: No, it may be a question of which insurer pays, whether the burden should be borne by all the ‑ ‑ ‑
KIRBY J: By industry ‑ ‑ ‑
CALLINAN J: ‑ ‑ ‑ or whether it should be borne by all of the people who drive motor vehicles. That is the real contest.
MR KING: Your Honour, the first thing I would say to that is that, as Justice Mason points out, there is not always going to be a workers compensation insurer there to stop the gap. Secondly, this amendment ‑ ‑ ‑
CALLINAN J: There should be, Mr King, if ‑ ‑ ‑
MR KING: This sort of accident is not always going to happen in an employment context.
CALLINAN J: In an industrial context– that is true, yes.
MR KING: Secondly, your Honour, this amendment does, as the second reading speech suggests, reduce premiums, because it takes out all loading and unloading injuries which are not genuinely linked to the vehicle through a defect in the vehicle. Then you go back to “a cause” and the commonsense causation. It is difficult, with respect, to separate the two. Your Honours, those are my submissions.
GUMMOW J: Mr Rewell, can you just enlighten us about the draft notice of appeal at page 60 and the orders? How would they work? In particular, paragraphs (c) and (e). What is the interrelation?
MR REWELL: In this particular case, the insurance company was joined as a party to the proceedings.
GUMMOW J: That appears on page 21.
MR REWELL: Yes, and therefore a judgment may be entered in favour of the insurer as a party to the proceedings. As I have said ‑ ‑ ‑
GUMMOW J: Against whom, though?
MR REWELL: Against the respondent to this application, the opponent to this application.
GUMMOW J: Well, that should be made clear.
MR REWELL: I am sorry, your Honour. If it has not been made clear ‑ ‑ ‑
GUMMOW J: Do you see what I mean?
MR REWELL: Yes. I will have it amended.
KIRBY J: How does it affect the second respondent?
MR REWELL: The second respondent has already been paid the appropriate judgment, assessed ‑ ‑ ‑
KIRBY J: In accordance with your interpretation, or in accordance with the court’s interpretation below?
MR REWELL: In accordance with our interpretation. The figures are very similar. There is a very small difference only, based on the fact that under motor accidents law general damages are determined according to the scale at the date of the hearing.
GUMMOW J: Well, the question is whether there is any difference, and what has to be done if there is.
MR REWELL: There is a very small difference. If we succeed ‑ ‑ ‑
KIRBY J: He has been paid everything he is entitled to ‑ ‑ ‑
MR REWELL: He has been paid the correct amount.
KIRBY J: ‑ ‑ ‑ and therefore no need for a special order.
MR REWELL: That is right.
GUMMOW J: But he needs to be retained as a party, does he, in this Court? It looks like it, from the report at page 60 ‑ ‑ ‑
MR REWELL: He has been included as a party only because there was a small amount of money involved from his point of view. We thought it inappropriate to exclude him when he had a small financial interest in the outcome. I suppose there is a method of excluding him, and that is to say that if the outcome results in him being ‑ ‑ ‑
GUMMOW J: We are anxious to avoid any strain and distress to this individual which is unnecessary.
MR REWELL: I accept that, your Honour, and I am sure we can overcome that by simply undertaking to him that if the outcome is that he is entitled under the Motor Accidents Scheme we will make the payment of the small difference, and it is small. So we can overcome that.
GUMMOW J: Are you sure that there will be a contact of that nature between solicitors and the party?
MR REWELL: Yes, your Honour.
GUMMOW J: With a copy of today’s transcript?
MR REWELL: Yes, your Honour.
GUMMOW J: Yes, very well. And you will attend to the revision of the notice of appeal, in the light of the discussion that has just taken place?
MR REWELL: Yes, your Honour.
GUMMOW J: There will be a grant of special leave in this matter and it will be a one day appeal. We will adjourn to reconstitute.
AT 10.43 AM THE MATTER WAS CONCLUDED
Key Legal Topics
Areas of Law
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Civil Procedure
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Commercial Law
Legal Concepts
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Appeal
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Jurisdiction
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Res Judicata
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Abuse of Process
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