Amery & Kedrina
[2021] FamCAFC 79
•27 MAY 2021
FAMILY COURT OF AUSTRALIA
Amery & Kedrina [2021] FamCAFC 79
Appeal from: Kedrina & Amery [2020] FamCA 117 Appeal number(s): EAA 34 of 2020 File number(s): PAC 2 of 2018 Judgment of: AINSLIE-WALLACE, RYAN & TREE JJ Date of judgment: 25 May 2021 Catchwords: FAMILY LAW – APPEAL – PROPERTY – Where the appellant wife sought to set aside property settlement consent orders pursuant to s 79A(1)(a) of the Family Law Act 1975 (Cth) – Where the wife brought earlier proceedings in relation to the consent orders pursuant to s 79A(1)(c) – Appeal against order to permanently stay proceedings – Leave to appeal not required – Anshun estoppel – Connectedness of the subject matter of the two claims – Conflicting judgments – Special circumstances – Considerations of finality and fairness – Permanent stay – Abuse of process – Delay – No error of law – Findings made and conclusions drawn by the primary judge not plainly wrong – Discretion correctly exercised – Appeal dismissed. Legislation: Family Law Act 1975 (Cth) ss 79, 79A, 90C, 94AA
Family Provision Act 1982 (NSW) (repealed) s 31Family Law Regulations 1984 (Cth) reg 15A(1)(a)
Cases cited: Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256; [2006] HCA 27
Blackman v Blackman (1998) FLC 92-791; [1998] FamCA 1
Brewer v Brewer (1953) 88 CLR 1; [1953] HCA 19
Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; [1996] HCA 25
Carr v Finance Corporation of Australia Ltd (No. 1) (1981) 147 CLR 246; [1981] HCA 20
Champerslife Pty Ltd v Manojlovski (2010) 75 NSWLR 245; [2010] NSWCA 33
Clayton v Bant (2020) 95 ALJR 34; [2020] HCA 44
Edwards v Noble (1971) 125 CLR 296; [1971] HCA 54
Henderson v Henderson (1843) 67 ER 313
House v The King (1936) 55 CLR 499; [1936] HCA 40
Hoystead v Commissioner of Taxation (1925) 37 CLR 290; [1926] AC 155
Jago v District Court (NSW) (1989) 168 CLR 23; [1989] HCA 46
Jess & Garvey (2018) FLC 93-827; [2018] FamCAFC 44
Johnson v Gore Wood & Co (a firm) [2002] 2 AC 1
Johnson v Rzetelski (1989) 64 ALJR 142
Licul v Corney (1976) 180 CLR 213; [1976] HCA 6
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45
Re Golding (2020) 94 ALJR 1014; [2020] HCA 38
Rzetelski and Johnson (1988) FLC 91-945; [1988] FamCA 4
Timbercorp Finance Pty Ltd (in liq) v Collins (2016) 259 CLR 212; [2016] HCA 44
Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28
Trawl Industries of Australia Pty Ltd (in liq) v Effem Foods Pty Ltd (1992) 36 FCR 406; [1992] FCA 377
UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45
Wong v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 146 FCR 10; [2004] FCAFC 242
Zetta Jet Pte Ltd v The Ship Dragon Pearl (No 2) (2018) 265 FCR 290; [2018] FCAFC 132
Division: Appeal Division Number of paragraphs: 130 Date of last submission/s: 8 February 2021 Date of hearing: 10 November 2020 Place: Sydney Counsel for the Appellant: Mr Stapleton Solicitor for the Appellant: Kyle & McGowan Family Law Counsel for the Respondent: Mr Richardson SC with Mr Gray Solicitor for the Respondent: Barkus Doolan ORDERS
EAA 34 of 2020
PAC 2 of 2018APPEAL DIVISION OF THE FAMILY COURT OF AUSTRALIA
BETWEEN: MS AMERY
Appellant
AND: MR KEDRINA
Respondent
ORDER MADE BY:
AINSLIE-WALLACE, RYAN & TREE JJ
DATE OF ORDER:
27 MAY 2021
THE COURT ORDERS THAT:
1.The appeal against the order made by a judge of the Family Court of Australia on 28 February 2020 is dismissed.
2.There be no order as to costs.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Amery & Kedrina has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
AINSLIE-WALLACE, RYAN & TREE JJ:
By Notice of Appeal filed on 23 March 2020, Ms Amery (“the wife”) seeks leave to appeal, and if leave is given, to appeal against the order of a judge of the Family Court of Australia made on 28 February 2020 by which he permanently stayed her application brought pursuant to s 79A(1)(a) of the Family Law Act 1975 (Cth) (“the Act”) to set aside property settlement orders made by consent on 28 September 2005 (“the 2005 consent orders”) between her and Mr Kedrina (“the husband”).
It is helpful to set out some factual background to give context to the issues agitated on the appeal.
BACKGROUND
The husband and wife were married in Country F in 1982. They arrived in Australia on 14 March 1990. They separated in July 2005 and divorced in 2010. There is one adult child of the marriage.
In 2002 the husband developed a business, D Pty Ltd. The principal shareholders of D Pty Ltd were: H Pty Ltd, the trustee of the Kedrina Family Trust (“the Trust”) which held 64.55 per cent of the shares; J Pty Ltd (a company unrelated to the parties) which held 32.41 per cent; and an individual who held the remaining 3.04 per cent of those shares.
In April 2004 D Pty Ltd was purchased by K Corporation for approximately $145.8 million of which amount, the Trust received approximately $66 million after tax.
The Trust also held shares in publicly listed companies.
After separation the parties negotiated an agreement as to the settlement of their property and on 28 September 2005, consent orders reflecting that agreement were made pursuant to s 79 of the Act. The orders were to the effect that, in an identified asset pool approximating $70 million, the wife was to receive assets and entitlements totalling approximately $31.24 million and the husband was to receive assets and entitlements totalling approximately $38.18 million (at [26]). The orders also provided for the wife to receive 45 per cent of the shares held by the Trust in publicly listed companies and funds invested by the Trust in a specified investment portfolio.[1]
[1] Annexure “A” to the wife’s affidavit filed 1 October 2019, Order 5; wife’s Further Amended Points of Claim filed 15 January 2019, paragraph 13.
In anticipation of the making of the 2005 consent orders, on 1 September 2005 the parties entered into a Financial Agreement pursuant to s 90C of the Act, dealing only with spousal maintenance (“the Financial Agreement”) and they also executed a contemporaneous Deed of Release dealing with succession, pursuant to s 31 of the Family Provision Act 1982 (NSW) (repealed).
For the purposes of the negotiations between the parties leading to the making of the 2005 consent orders, the husband’s solicitor provided to the wife’s solicitor a draft schedule of assets and liabilities. Through their solicitors, the husband and the wife also entered into correspondence identifying and agreeing on values of real properties owned by them. It should be noted that throughout this process, the wife had legal representation and that prior to the parties reaching the agreement which ultimately became the 2005 consent orders, the husband paid the wife some $2.5 million.
Further correspondence ensued between the parties and on 25 August 2005 the husband provided to the wife amended documents as to the parties’ assets and liabilities. After the wife requested further amendments to be made to those documents, on 1 September 2005 the husband executed the amended documents as did the wife on 6 September 2005.
From about 2013, the wife maintained that the husband had not completely complied with his obligations under the 2005 consent orders. The exact nature of the asserted non-compliance was not crystallised until July 2016 when the wife contended that the husband had not transferred certain shares to her in a timely way and, as a result, dividends and distributions relative to those shares had been paid to the husband rather than to her.[2]
[2] Husband’s affidavit filed 3 May 2019, paragraphs 31–50.
The June 2017 proceedings
In June 2017 the wife commenced proceedings in the Family Court pursuant to s 79A(1)(c) of the Act to recover from the husband the amount of the dividends and distributions which she said should have been paid to her. Section 79A(1)(c) is in the following terms:
Setting aside of orders altering property interests
(1)Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:
…
(c)a person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order…
…
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
(Emphasis added)
Although this action was referred to as an “enforcement” of the parties’ respective obligations arising from the 2005 consent orders, it was argued by senior counsel for the husband that as the orders had been complied with and there was no order requiring the husband to pay the dividends and distributions to the wife, there was no order to enforce.[3] We accept this argument and also accept that the only means available to the wife to recover those funds from the husband was through proceedings pursuant to s 79A(1)(c) of the Act.[4]
[3] Transcript 10 November 2020, p.56 line 29 to p.57 line 2.
[4] See Johnson v Rzetelski (1989) 64 ALJR 142; Rzetelski and Johnson (1988) FLC 91-945.
On 13 June 2017 further consent orders were made in the Family Court that the husband pay to the wife the total sum of $455,151.73 comprising payments for unpaid dividends, unpaid unit holdings, interest and less an adjustment that the husband had already paid to the wife (at [29]).[5]
[5] See also husband’s affidavit filed 3 May 2019, paragraph 47.
It is important to note that by those proceedings, the wife did not seek to impugn the 2005 consent orders but, rather, relied on them. Recitals “K” and “L” to the June 2017 orders make that plain:[6]
K.The parties intend to enforce their respective obligations arising under the [2005 consent orders] by way of these orders. The parties do not intend for these orders to set aside the [2005 consent orders].
L.The parties consent to the making of the following orders and to those being of the same force and validity as if they had been made after a hearing by the Court.
[6] Orders of 13 June 2017, Recitals “K” and “L”.
The January 2018 proceedings
Some six months later, on 2 January 2018 the wife commenced further proceedings, this time pursuant to s 79A(1)(a) of the Act in which she sought to set aside the 2005 consent orders and the Financial Agreement. In her Amended Initiating Application filed on 8 June 2018, the wife sought orders that the husband pay her $5 million within 30 days of the making of the orders together with an additional $50 million within six months of the Court making the orders.
Section 79A(1)(a) of the Act provides for the setting aside of orders altering property interests in the following way:
Setting aside of orders altering property interests
(1)Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:
(a)there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance…
…
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
(Emphasis added)
The husband responded by seeking that the application be permanently stayed on one of two bases – first that the wife be precluded from bringing the claim by the operation of Anshun estoppel (based on the principles in the well-known authority Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 (“Anshun”)) or secondly that the claim be permanently stayed as an abuse of process because of the delay in bringing it and by the wife’s failure to bring the new claim at the same time as the proceedings in June 2017.
The matter proceeded before the primary judge on the basis of the evidence filed by each party, Further Amended Points of Claim filed by the wife on 15 January 2019, the husband’s Summary of Argument filed on 25 October 2019, the wife’s written submissions filed on 15 November 2019 and the oral submissions of the parties before the primary judge on 18 and 19 December 2019.
The wife’s evidence as to the circumstances in which she commenced the proceedings in 2018
The wife explained that it was only at the end of the 2017 proceedings that she had cause to reconsider her prior trust in the husband who she had, up until that time, regarded as an honourable man. She said that with the assistance of an accountant, she “started properly considering information contained within documents, to increase [her] knowledge of what financial transactions had transpired” and to gain a “better understanding” of the parties’ financial circumstances.[7]
[7] Wife’s affidavit filed 1 October 2019, paragraphs 69–70.
In December 2007 the wife said that she received an email containing a link to the Annual Report of K Corporation for the fiscal year ending 31 December 2004. She said that while she looked at the report she, “found the document to be lengthy and did not understand a lot of the words used in the Annual Report”, nor, the wife said, did she understand the contents of it. She said that she “remained trusting” of the husband.[8]
[8] Wife’s affidavit filed 1 October 2019, paragraph 18.
Extracts from that document were set out in the wife’s affidavit. At paragraph 19, the following extract appeared:[9]
19.…
In April 2004, we acquired [D Pty Ltd]… for approximately $88 million in cash, net of cash acquired…
[9] Wife’s affidavit filed 1 October 2019, paragraph 19.
It was this document, amongst others, which the wife said she properly considered in late 2017 when she began to scrutinise the circumstances of the sale of D Pty Ltd and the making of the 2005 consent orders.
The wife said that on or around 18 September 2017 she received a phone call from a friend in Country L asking about the sale price of D Pty Ltd. The wife said that in that conversation, her friend told her that the husband’s lawyers had prepared a prenuptial agreement as between him and his then wife which included a notation that at the time the 2005 consent orders were made, the assets of him and the wife were in the order of $271 million.[10] It was this phone call that prompted the wife to become “very suspicious about the sale of [D Pty Ltd] and the expenditure of money” by the husband.[11] This suspicion also led the wife to review financial documents surrounding the making of the 2005 consent orders.
[10] The husband’s solicitor filed an affidavit on 25 October 2019 in which she denied that she had prepared such a document on the husband’s behalf (at paragraph 8).
[11] Wife’s affidavit filed 1 October 2019, paragraph 20.
In or around October 2017, the wife said that she and her accountant closely reviewed certain documents including the Annual Report for K Corporation for the fiscal year ending 31 December 2004 which particularised the sale of D Pty Ltd, financial statements from the Trust and trust tax returns for the financial year ending 30 June 2004. The wife contended that, having reviewed the documents, she understood that D Pty Ltd was sold for USD114 million, which equated to approximately AUD150 million.[12]
[12] Wife’s affidavit filed 1 October 2019, paragraphs 21 and 24–25.
In her written submissions to the primary judge, the wife set out her calculations and assumptions based on the documents she identified and said the actual sale price of D Pty Ltd was AUD154,857,880.40.[13]
[13] Wife’s written submissions filed 15 November 2019, paragraph 6(d).
The wife also asserted that at the time of separation the husband did not disclose his shareholdings in a range of companies both in Australia and internationally, which ought to have been included in the assets of the parties available for distribution between them.[14]
[14] Wife’s further Amended Points of Claim filed 15 January 2019, paragraphs 20–24.
As well as arguing that the 2005 consent orders should be set aside by reason of the husband’s failure to disclose, the wife argued that she was induced to sign the proposed consent orders and the Financial Agreement under duress. She contended that as the documents were prepared in a short time frame, “fulsome disclosure” was not provided to the wife and there were no “formal valuations of real estate assets” and the husband put a significant amount of pressure on the wife to sign the documents.[15] The wife also said that at the time of signing the 2005 consent orders, she was in ill health and in no position to understand the effect of the orders to which she consented.[16]
[15] Wife’s further Amended Points of Claim filed 15 January 2019, paragraph 31.
[16] Wife’s further Amended Points of Claim filed 15 January 2019, paragraph 34.
At the time of the making of the 2005 consent orders, the wife’s solicitor received a schedule of assets and liabilities from the husband’s solicitors. Her solicitor asked her whether the schedule was “complete and correct” and the wife, who described herself as being “in a position of dependency and/or trust in the [h]usband” replied that she did not doubt the completeness of that document. The wife also inquired with the family accountant whether the financial documents provided by the husband were accurate and said the accountant advised her to trust the husband as he was an “honourable man”.[17] In entering into the 2005 consent orders, the wife said that she “mainly relied on [the husband’s] estimates in calculating the property pool”.[18]
[17] Wife’s further Amended Points of Claim filed 15 January 2019, paragraphs 31–33.
[18] Wife’s affidavit filed 1 October 2019, paragraph 38.
Without wishing to do violence to the wife’s extensive evidence on the point, in summary, her case was that at the time she commenced the proceedings in June 2017 to cause the husband to pay to her the unpaid dividends and distributions to which she was entitled, she did not know and had no reason to suspect that the making of the 2005 consent orders was brought about by a miscarriage of justice through non-disclosure by the husband.
The husband denied that he misled the wife as to the sale price of D Pty Ltd and that “any part of the sale proceeds” of the company was hidden from the wife.[19]
[19] Husband’s affidavit filed 3 May 2019, paragraphs 109 and 122.
The husband disputed the wife’s assertions as to the sale price of D Pty Ltd and challenged the basis on which she had reconstructed the value of property, with “formulas” and information from documents found after 2017 without any expertise and “no expert accounting evidence”.[20] The husband contended amongst other things, that the wife misstated the accounting approach to the $26 million in cash and $19 million in intangible assets. He further said that at least from 2007, the wife had available to her the documents necessary to enable her to scrutinise the circumstances in which the orders were made.
[20] Transcript 18 December 2019, p.33 lines 14–28.
Although the husband argued that the wife’s evidence lacked credibility, he submitted to the primary judge that the determination of whether the wife should be estopped from continuing the 2018 litigation, did not depend on the primary judge making a finding to that effect.[21]
[21] Husband’s Summary of Argument filed 25 October 2019, paragraphs 45–46.
On 28 February 2020 the primary judge ordered that the wife’s application be permanently stayed “by reason of the application of the Anshun principle” (at [78]).
ANSHUN ESTOPPEL
The husband argued that the wife should be precluded from continuing the January 2018 application because the subject matter of that application was so relevant to that of the earlier proceedings in June 2017, that it was unreasonable for the wife not to have brought the second proposed claim at the same time as the first. Further, it was argued that, if that argument was accepted leading to a conclusion of that she was estopped, the Court would not find that special circumstances existed which would nevertheless, permit the wife to continue the January 2018 application.
There are a number of ways in which a party may be precluded from asserting rights in proceedings.
In circumstances where a cause of action has not previously been litigated and determined, Sir James Wigram VC in Henderson v Henderson (1843) 67 ER 313 said:
115.… where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.
(Emphasis in original)
Of this statement, the plurality in Anshun (Gibbs CJ, Mason and Aikin JJ) said at 598–599:
Although it has been said that 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…
Their Honours continued and said at 602–603:
… we would prefer to say that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding. In this respect, we need to recall that there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings e.g. expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few…
In Champerslife Pty Ltd v Manojlovski (2010) 75 NSWLR 245, Allsop P (as his Honour then was), after referring to the passage in Anshun quoted above said:
3.The question of unreasonableness is derived significantly from the matter being so relevant to the subject matter of the first proceeding. There are at least two related assessments that have to be made: was the matter so relevant that it can be said to have been unreasonable not to rely upon it in the first proceeding? Whilst it is necessary to eschew language of abuse of process, the character of the assessments is such as to make relevant to a point what Lord Bingham of Cornhill said in Johnson v Gore Wood & Co [2002] 2 AC 1 at 31:
“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.” (Emphasis added)
Leaving to one side his Lordship’s reference to “abusive” and “misusing or abusing the process of the court”, what is of assistance from what he said is the recognition that the assessment is not to be made mechanistically, but rather there is a value judgment to be made referable to the proper conduct of modern litigation.
4.One fundamental error in the approach of the respondent was to build on the proposition that because the matter could have been raised in the first proceeding to draw a conclusion, it should have been. That mechanistic approach was what Lord Bingham was rejecting in the above passage from Johnson v Gore Wood & Co. It is also what Gibbs CJ, Mason J and Aickin J found objectionable in Yat Tung Investment Co Ltd v Dao Heng Bank Ltd [1975] AC 581. In that case, Lord Kilbrandon spoke (at 590) of the principle as “an abuse of process to raise in subsequent proceedings matters which could and therefore should have been litigated in earlier proceedings” (Emphasis added). This way of putting it overstated the principle. The mere fact that the matter could have been raised does not mean it should have been raised (for the operation of the principle). Rather, it has to be so relevant as to make it unreasonable not to raise it.
(Emphasis in original)
Further illuminating the scope of the “broad merits-based judgment”, Lord Bingham of Cornhill in Johnson v Gore Wood & Co (a firm) [2002] 2 AC 1 (“Johnson v Gore Wood”), cited with approval in UBS AG v Tyne (2018) 265 CLR 77 (“UBS”) at [7], said at 31:
… 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…
In UBS, Gageler J said apropos the above passage:
68.Lord Bingham’s acknowledgement that an abuse of process might be established by nothing more than the bringing of a claim in later proceedings which “should” have been brought in earlier proceedings demonstrates the substantial overlap between abuse of process and the form of estoppel recognised in Port of Melbourne Authority v Anshun Pty Ltd. His Lordship’s rejection, as “too dogmatic”, of the equation of what “should” have been done in earlier proceedings with what “could” have been done in those earlier proceedings accords with the observation in Anshun that Lord Kilbrandon went “too far” when he spoke in Yat Tung Investment Co Ltd v Dao Heng Bank Ltd of it becoming “an abuse of process to raise in subsequent proceedings matters which could and therefore should have been litigated in earlier proceedings”.
69.Lord Bingham’s emphasis on the need for a “merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case” correspondingly encompasses, without necessarily being exhausted by, the enquiry mandated by the reasoning in Anshun (as a step in determining the existence of an estoppel) as to whether the claim sought to be brought in the later proceedings was so relevant to the subject matter of the earlier proceedings that it would have been unreasonable not then to have brought the claim so as to have allowed all relevant issues to have been determined in the one proceeding. The ultimate judgment to be made is in each case normative.
70.Finally, and for present purposes no less importantly, Lord Bingham’s reference to the need for the requisite normative judgment to take account of “the public and private interests involved” underscores that the question of whether the claim sought to be brought in the later proceedings “should” have been brought in the earlier proceedings cannot be determined solely by reference to interests of the parties to the action. There is a public interest in the timely and efficient administration of civil justice. The importance of that public interest has only increased in the years since Lord Bingham spoke.
(Footnotes omitted)
However, it is important too to observe that the failure of an applicant to have brought the second action at the same time as the first, even if it be through negligence, inadvertence or accidental omission does not render the failure reasonable. As Nettle J said in Re Golding (2020) 94 ALJR 1014:
11.… Generally speaking, an applicant for interlocutory relief is required to advance all of the grounds on which he or she relies in support of the relief sought; and, in the absence of exceptional circumstances, such as, for example, the discovery of facts of which the applicant was not aware and which the applicant could not have ascertained with reasonable diligence at the time of the first application, it will ordinarily be regarded as an abuse of process to make a second application for interlocutory relief on the same or other grounds…
(Footnote omitted)
Conflicting judgments
In Anshun, after referring to the “wide variety of circumstances” which may be considered to explain why a party reasonably did not raise the later issue in the earlier proceedings, the plurality said at 603:
It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment…
The plurality in Anshun referred to Brewer v Brewer (1953) 88 CLR 1, which cited Hoystead v Commissioner of Taxation (1925) 37 CLR 290, where Fullagar J with whom Dixon CJ agreed, said at 15:
… The point had not been argued on the first appeal, and there was therefore no express decision on the point. But the Commissioner had allowed it to be assumed against him, and the assumption was fundamental to the decision in the sense that, if the assumption had not been made, the decision must have been different. As Somervell L.J. said:– “He was therefore seeking to obtain an order which was on the face of it and in form in direct conflict with the order which had been made previously”…
(Emphasis in original)
Further submissions
Following the conclusion of the appeal, the decision of the High Court of Australia in Clayton v Bant (2020) 95 ALJR 34 (“Clayton v Bant”) was delivered. Both parties were invited to make further submissions on the Anshun point in light of that decision if they wished. Both counsel took up the invitation.
Counsel for the wife contended that the decision had the effect of “broaden[ing]” the Anshun principle and “omitting the qualification that the claim must be ‘so connected’ with the subject matter of the first proceeding so as to make it unreasonable to have not made the claim”.[22]
[22] Wife’s Further Outline of Argument filed 28 January 2021, paragraph 8.
It was further argued for the wife that, having regard to Clayton v Bant, it was apparent that the primary judge erred in that he focussed only on the connectedness of the two claims and did not consider whether to fail to raise the second application at the time of the first was unreasonable.[23]
[23] Wife’s Further Outline of Argument filed 28 January 2021, paragraphs 15–16.
The husband’s submissions argued that nothing in that decision represented a novel principle of law or a departure from the well-established authority on this point.[24] We agree. We do not understand how the wife’s conclusion was reached having regard to the decision and we do not accept that is the effect of the High Court decision.
[24] Husband’s Further Supplementary Summary of Argument filed 8 February 2021, paragraph 8.
Special circumstances
That facts which would justify the recognition of an estoppel are found does not necessarily preclude the action continuing.
In Wong v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 146 FCR 10 at 38, the Full Court of the Federal Court of Australia said:
38.Nevertheless, where an issue has not actually been litigated and decided before, there must be exceptions to that general rule (cf the operation of res judicata and issue estoppel where the action/issue has been determined on a final basis). As foreshadowed in Anshun, there will be instances where, even though there is every reason why the matter should have been raised earlier but was not, there are special circumstances that prevail to permit a party to raise the issue in a subsequent proceeding. The Court therefore has a discretion, if it determines that special circumstances exist, to allow an issue to be raised, even where it is found that the point was unreasonably omitted from the earlier proceeding. However, the circumstances in which that would be permitted must, because of the principles referred to above, be exceptional, constituting “special circumstances”. What will be sufficient to constitute special circumstances is by no means fixed and may involve consideration of a wide range of factors, all of which bear upon the general discretion of the Court where justice requires the non-application of the general principle.
(Citations omitted)
Thus, here to preclude the wife from bringing her claim under s 79A(1)(a) of the Act, it was necessary for his Honour to determine whether:
·the issue sought to be raised in the second proceedings was so relevant to the subject matter of the first proceedings that it was unreasonable for it not to have been raised in the first proceedings; and
·if these two matters are established, then whether any claim to special circumstances, which would nonetheless operate to permit the claim to be continued, has been established.
His Honour was required to determine, amongst other matters, whether the issue now sought to be agitated by the wife could not have been discovered with reasonable diligence at the time she brought the first application in June 2017.
It is against this legal context that we turn to consider his Honour’s decision.
THE PRIMARY JUDGE’S DETERMINATION
In his reasons for judgment, the primary judge referred generally to the wife’s evidence and broadly summarised the matters to which she referred in her Further Amended Points of Claim. His Honour summarised the bases on which she contended that the making of the 2005 consent orders was brought about through a miscarriage of justice.
In so doing, the primary judge referred to the wife’s assertions about how her suspicions about the husband’s “candour” and “honesty” were aroused after commencing the June 2017 proceedings and that the matters raised in those proceedings prompted her to investigate the circumstances in which the 2005 consent orders were made. His Honour also referred to the wife’s calculations based on documents obtained from third parties to contend that the sale price of the D Pty Ltd shares were understated by the husband at the time of the orders (at [40(f)]).
As we have said, the primary judge was required to determine whether the subject matter of the proposed proceedings was so relevant to that of the earlier proceedings, that it was unreasonable for the wife not to have raised the issue now proposed at the same time as the earlier. His Honour said:
44.The husband as to the present application argues that any application by the wife seeking to impugn the original s 79 consent orders should have been properly bought in the context of her subsequent application to enforce the very same orders “as it was fundamental to that part of the 2017 orders which enforced the 2005 [consent] orders that the latter were valid and enforceable”.
45.Otherwise, it is contended that the June 2017 orders, where the wife sought and obtained damages or compensation for shares and units that were to be transferred to her, were not orders that would be supported by an enforcement power but rather clearly s 79A(1)(c) of the Act. That provision provides:
(c)a person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order;
46.The wife, it is correctly submitted, now seeks a second round of relief under s 79A of the Act.
His Honour then referred to Anshun and the possibility of conflicting judgments and said:
49.It was inherent in the orders of 2017 that the orders of 2005 were valid and enforceable and not subject to challenge. Indeed, the validity of the orders was the foundation for the wife to receive damages and compensation for breach. As a consequence, the husband paid her $455,000.
His Honour, after referring to Jess & Garvey (2018) FLC 93-827 (“Jess & Garvey”) then said:
54.The application of these principles clearly gives rise to the estoppel asserted by the husband. The wife asserts no matters that would constitute “exceptional special” circumstances that would give rise to an exception to the general application of the Anshun principle…
55.The wife’s application to set aside property orders of 2005 will be permanently stayed. It is thus unnecessary to consider in the context of the 2005 [consent] orders the husband’s contention that the wife’s application, otherwise, constitutes an abuse of process and should be permanently stayed. However, for the reasons given below, such an order would otherwise be proper.
LEAVE TO APPEAL
The wife sought leave to appeal presumably on the basis that his Honour’s orders were interlocutory in nature and thus leave would be necessary.[25] To answer the question of whether an order such as this is final or interlocutory, regard is to be had to the legal effect of the order. In Licul v Corney (1976) 180 CLR 213 (“Licul v Corney”) at 225, Gibbs J (as his Honour then was), with whom Mason J (as his Honour then was) agreed, stated the test thus: “[d]oes the judgment or order, as made, finally dispose of the rights of the parties?”. In Carr v Finance Corporation of Australia Ltd (No. 1) (1981) 147 CLR 246 at 248, Gibbs CJ explained that the test in Licul v Corney requires “the Court to have regard to the legal rather than the practical effect” of the order.
[25] Section 94AA of the Act; reg 15A(1)(a) of the Family Law Regulations 1984 (Cth).
Here, the effect of the primary judge’s order is to permanently bring a halt to the wife’s proposed application with the effect, save for a successful appeal, that she is precluded from continuing it. It is thus final and no leave is required.[26]
[26] See Blackman v Blackman (1998) FLC 92-791 at 84,872 citing Anshun per Gibbs J.
THE APPEAL
On 9 November 2020, the day before the appeal hearing, the wife attempted to file an Application in an Appeal which sought to amend the grounds of appeal to address deficiencies in the filed documents said to have been identified in the Summary of Argument filed for the husband. We allowed this application over the objection of counsel for the husband, but we granted leave to counsel for the husband to provide further brief submissions in light of the amendments. We have had regard to the Husband’s Supplementary Summary of Argument filed on 13 November 2020.
In the result, seven grounds of challenge to his Honour’s orders were advanced. No submissions were made in relation to Ground 3 which refers (incorrectly) to his Honour having made an order that the wife’s application be “summarily dismissed on a final basis” and we assume that this ground is not pursued. Ground 4, which contends that the primary judge erred in not resolving the factual controversies in the parties’ evidence by conducting a final hearing, was advanced both in relation to the Anshun estoppel challenge and to the abuse of process permanent stay.
Anshun estoppel grounds
The wife relied on four grounds of appeal in relation to his Honour finding that estoppel existed: Grounds 1, 2, 4 and 5. It is of assistance to set them out in full:
Ground 1
That the learned Judge did not take into account the [wife’s] evidence of her explanation for her delay in seeking to have the 2005 consent orders and the s.90K Financial Agreement dated 1 September 2005 set-aside, either adequately or at all.
Ground 2
Alternatively, if the learned Judge did take into account the [wife’s] evidence of her explanation for her delay in seeking to have the 2005 consent orders and the s.90K Financial Agreement, that explanation was wholly and or partially misunderstood to the extent that it led to the mistaken finding that the facts give rise to the estoppel asserted by the [husband].
Ground 4
That the proper approach to the conflicting assertions of the [wife] and [the husband] about the [wife’s] explanation for her delay was to find there was a material factual controversy to be decided, which could only be resolved on a final hearing of the issue.
Ground 5
That the learned Judge erred in finding that an estoppel arose and or that special circumstances did not exist to operate as an exception to the [sic] any estoppel found to correctly apply and that accordingly, the [w]ife’s application be permanently stayed.
The Summary of Argument filed on 22 July 2020 on behalf of the wife was somewhat unfocussed in that it did not set out the arguments in support of the asserted grounds of challenge, instead it was a response to the written submissions relied on by the husband before the primary judge. We were left then to rummage through the document to glean quite what arguments were being advanced in support of the grounds. Regrettably, the oral argument threw little light on the matter and arguments unrelated to the asserted grounds were advanced. We have done our best to understand the basis for the contentions of error advanced in the grounds.
We will deal with Ground 5 first.
Ground 5
The ground broadly asserts that the primary judge erred in finding that the wife should be precluded from bringing the present application by application of Anshun estoppel. It was further argued that if the primary judge was correct in finding that an estoppel arose, his Honour erred in finding that there were no special circumstances to act as an exception to any estoppel found. Arguments on special circumstances will be dealt with in Grounds 1 and 2.
It was argued that his Honour erroneously concluded that the second application was connected (in the Anshun sense) to the first by mistakenly assuming that the two applications sought the same relief, whereas it was argued that the relief sought in June 2017 was substantially and materially different from that sought to be advanced in January 2018 and were “mutually exclusive”.[27]
[27] Wife’s Summary of Argument filed 22 July 2020, paragraph 21.
It was further argued that the two claims, that is, under ss 79A(1)(a) and (c) were “completely different” causes of action and thus there was no relevance between the two.[28] For example it was submitted that the financial outcome of the second application, if successful, would be significantly greater than that obtained in the first application and, it was argued, that had the wife been aware of the matters on which the present challenge is now based, she would, of course, have run that application at the same time or perhaps in lieu of the first.[29]
[28] Wife’s Summary of Argument filed 22 July 2020, paragraphs 21 and 45.
[29] Wife’s Summary of Argument filed 22 July 2020, paragraphs 21 and 24.
There is no force in this argument. The assessment of the connection between the two matters rests on the second matter being “so relevant to the subject matter of the first action that it would have been unreasonable” not to have relied on it in the first action. The submissions seek to argue that there is no relevant connection between the second matter and the first by pointing to the nature of the orders sought and the outcome achieved. The question of whether two proceedings are “connected” or “so relevant” to one another, that it would be unreasonable not to have raised the point now sought to be agitated in the first proceedings, is determined by having regard to the substantial equivalence of rights and subject matter of the actions, not the outcome achieved or the orders sought.[30]
[30] See Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 (“Anshun”) at 602.
In Clayton v Bant, Kiefel CJ, Bell and Gageler JJ said referring to Anshun estoppel:[31]
34.Founded on the twin policies of ensuring finality in litigation (thereby promoting respect for and efficient use of courts as well as avoiding inconsistent judgments) and of ensuring fairness to litigants (by sparing them the stress and expense of duplicative proceedings), the focus of the common law doctrine of estoppel is on “substance rather than form”. The doctrine looks not for absolute identity between the sources and incidents of rights asserted or capable of being asserted in consecutive proceedings. The doctrine looks rather for substantial correspondence between those rights. Enough for its operation is that the rights are of a substantially equivalent nature and cover substantially the same subject matter…
(Footnotes omitted)
[31] See too Trawl Industries of Australia Pty Ltd (in liq) v Effem Foods Pty Ltd (1992) 36 FCR 406 at 411 per Gummow J.
Here, the wife’s rights arose from s 79 and in the first and second proceedings she sought remedies pursuant to s 79A which, were she successful, would permit only of variation or of setting aside the existing orders and, in their place, different orders pursuant to s 79 would be made. Even though the first and second proceedings sought different outcomes in relation to the existing orders, they both concerned her rights to a property settlement under s 79 of the Act. Thus in our view the “sources and incidents” of the wife’s rights are found in s 79. It is important to emphasise, the words “capable of being asserted” for, as we will discuss later, it was uncontroversial that at the time of instituting the first proceedings the wife was in possession of the information and documents critical to her decision to institute the second proceedings. Plainly enough, the asserted rights were of a substantially equivalent nature and covered substantially the same subject matter.
As part of the ground, it was argued that the primary judge placed significant reliance on the decision of the Full Court in Jess & Garvey, not appreciating that its facts were readily distinguishable from the present case and thus led himself into error.
We reject that argument. Far from being distinguishable on its facts, we are of the view that Jess & Garvey is squarely on point.
In Jess & Garvey, the parties entered into a Binding Financial Agreement and, at their separation, the husband sought orders that the terms of the agreement be enforced as if they were orders of the Court. The wife resisted, contending that the agreement was void for uncertainty. However, she said that if it was not void, it should be enforced in a different way to that sought by the husband. The agreement was found not to be void for uncertainty. Some seven months later, in a second action, the wife sought orders that the agreement be set aside on a number of bases, one of which was that there had been non-disclosure and fraud. The primary judge concluded that the wife should be precluded from bringing this subsequent action. The wife appealed.
In dismissing the appeal, the Full Court rejected the wife’s contention that there were two different causes of action before the Court and thus estoppel did not arise. The Full Court, after referring to Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507 (“Tomlinson”) in which the plurality described the nature of Anshun estoppel, said:
127.Applying this analysis, we consider that the claims [sought to be advanced by the wife] were “so connected with the subject matter of the first proceeding as to have made it unreasonable in the context of that first proceeding for the claim not to have been made or the issue not to have been raised in that proceeding”.
Clearly then, the Full Court in Jess & Garvey considered the question of “connectedness” as being referrable to the subject matter of the claims and not the causes of action sought to be brought in relation to that subject matter; so too did the primary judge here.
This ground will fail.
Grounds 1 and 2
The thrust of these grounds relates to the wife’s evidence as to why she did not advance the s 79A(1)(a) claim in June 2017 and contends that the primary judge misunderstood the evidence as to why she did not bring the second application at the time of the first application or gave it no or inadequate weight.
It was argued that there was an abundance of evidence before the trial judge to explain why she only challenged the making of the 2005 consent orders in January 2018.
It was argued that his Honour’s observations that the wife had offered “no explanation for her delay from 2005 to 2017” (at [60]) and that “[n]o cogent explanation [was] given for the delay” (at [64]), demonstrate his Honour’s error.
These arguments are posited on the basis that had his Honour accepted the wife’s explanation for her delay, he would not have prevented her from proceeding with the January 2018 application.
We do not agree.
His Honour made clear reference to the wife’s evidence in the Further Amended Points of Claim (at [40]), which encompassed arguments made by the wife in her affidavit filed on 1 October 2019 including, amongst other evidence, her calculations of the value of D Pty Ltd and of the property pool, the proposed division of assets, non-disclosure by the husband of assets and the husband’s history of defaults. Further, the primary judge’s comments about the wife’s explanation for delay must be read in context of his Honour’s enquiry which was whether the wife’s failure to advance the proposed challenge to the 2005 consent orders at the time of the earlier application was unreasonable, or put another way, whether the points she now seeks to raise could have been discovered by reasonable diligence and raised in the first proceedings.
Thus it is not a question of whether his Honour accepted or did not accept the wife’s explanation for the delay.
His Honour determined that the wife would be precluded from proceeding with the January 2018 application, and it follows that he determined that in failing to bring it at the time of the June 2017 application, it was unreasonable and could have been discovered by reasonable diligence in 2017.
We do not accept that his Honour failed to engage with the wife’s evidence on the point or that he misunderstood its effect.
It must be understood however, that this was but one aspect of the necessary enquiry. His Honour found that the proposed application, if allowed to continue, brought with it the prospect of contradictory judgments (at [47]) and referred to the general acceptance that if a successive action would result in a judgment in conflict with the first, the successive action will be estopped.[32]
[32] See Anshun at 603.
His Honour’s reference at [48] to Timbercorp Finance Pty Ltd (in liq) v Collins (2016) 259 CLR 212 makes that clear as does his reference at [49] to what lay at the heart of the June 2017 action, namely a reliance on the validity of the orders. It appears to us that this, of itself, would have persuaded his Honour to prevent the wife from proceeding with the January 2018 application.
It was further argued that in concluding that no special circumstances existed, his Honour made no reference to the wife’s evidence. In short, the wife submitted that his Honour’s reasoning failed to engage with her evidence as to why she did not challenge the validity of the 2005 consent orders in the June 2017 proceedings.
The context in which a court comes to consider “‘exceptional special’ circumstances”[33] has to be seen against the principled application of Anshun which speaks of a consideration of interests over and above those of the parties and arises from a “value judgment to be made referable to the proper conduct of modern litigation”.[34]
[33] Wife’s Summary of Argument filed 22 July 2020, paragraph 49.
[34] Champerslife Pty Ltd v Manojlovski (2010) 75 NSWLR 245 at [3].
However, the determination of whether special circumstances exist is a discretionary one.[35] The foundation of the argument seems to be that had his Honour taken into account the wife’s evidence, he would have found special circumstances to exist. It was not said, nor in our view could it have been said, that this conclusion was “plainly wrong”.[36]
[35] Wong v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 146 FCR 10 at [38].
[36] Norbis v Norbis (1986) 161 CLR 513 at 539–540; House v The King (1936) 55 CLR 499.
Thus these challenges are not made out.
Ground 4
This ground, as we have said, contends that his Honour erred in considering the application of Anshun estoppel and not conducting a final hearing in order to resolve the material factual controversies between the parties.
Counsel for the husband argued to the primary judge that the wife’s evidence on the question of her failure to raise the challenge to the consent orders in 2017 was not credible and it is clear that there was considerable factual dispute between the husband and the wife. However, as counsel submitted to his Honour, the determination of the issue did not require there to be a resolution of those conflicts.[37] It is apparent from his Honour’s recital of the wife’s evidence that for these purposes, he did not attempt to resolve any evidentiary conflict but rather took her evidence into account in determining whether the wife’s failure was unreasonable.
[37] Husband’s Summary of Argument filed 25 October 2019, paragraph 4.
In any event, we consider this challenge to misconceive the relevant legal concepts. In Tomlinson, the plurality explained, after referring to the principles referrable to res judicata:[38]
21.Estoppel in relation to judicial determinations is of a different nature. It is a common law doctrine informed, in its relevant application, by similar considerations of finality and fairness. Yet its operation is not confined to an exercise of judicial power; it also operates in the context of a final judgment having been rendered in other adversarial proceedings. It operates in such a context as estoppel operates in other contexts: as a rule of law, to preclude the assertion of a right or obligation or the raising of an issue of fact or law.
(Footnotes omitted)
[38] See too Zetta Jet Pte Ltd v The Ship Dragon Pearl (No 2) (2018) 265 FCR 290 at [20].
Thus considerations of finality and fairness may operate to preclude a party from continuing an ostensibly meritorious claim where, as we have said, an issue sought to be raised is so relevant to the subject matter of the first proceedings that it would have been unreasonable not to rely on it in the first proceedings.
We therefore are of the view that his Honour’s finding that the wife should be prevented from continuing the second proceedings was correct.
Permanent stay
The second basis on which the husband sought to preclude the wife from continuing with her application was that it should be permanently stayed as an abuse of process.
In Tomlinson, the plurality of the High Court said of the relationship between the doctrines of estoppel and abuse of process:
24.… 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 invoked 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.
(Footnotes omitted)
A permanent stay may be ordered regardless of the merits of the proposed proceedings.[39]
[39] Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256 at [63].
Further, in Johnson v Gore Wood, Lord Bingham at 31 referred to abuse of process in bringing successive proceedings, the “underlying public interest” of finality in litigation and the “current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole”.
Turning then to the instant case, the husband contended that the wife’s delay in bringing the proceedings resulted in such prejudice to any case he could mount in opposition to it, such that it amounts to an abuse of process. He further contended that in failing to bring the January 2018 application at the time of the June 2017 proceedings, should also result in a permanent stay by reason of abuse of process.
Delay
The consequences resulting from delay in instituting proceedings are well known. In Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 551, McHugh J said, apropos the limitation periods imposed for the commencement of civil proceedings, which is entirely apposite here, when considering the effect of the delay in commencing proceedings:
The discretion to extend time must be exercised in the context of the rationales for the existence of limitation periods. For nearly 400 years, the policy of the law has been to fix definite time limits (usually six but often three years) for prosecuting civil claims. The enactment of time limitations has been driven by the general perception that “[w]here there is delay the whole quality of justice deteriorates”. Sometimes the deterioration in quality is palpable, as in the case where a crucial witness is dead or an important document has been destroyed. But sometimes, perhaps more often than we realise, the deterioration in quality is not recognisable even by the parties. Prejudice may exist without the parties or anybody else realising that it exists. As the United States Supreme Court pointed out in Barker v Wingo, “what has been forgotten can rarely be shown”. So, it must often happen that important, perhaps decisive, evidence has disappeared without anybody now “knowing” that it ever existed. Similarly, it must often happen that time will diminish the significance of a known fact or circumstance because its relationship to the cause of action is no longer as apparent as it was when the cause of action arose. A verdict may appear well based on the evidence given in the proceedings, but, if the tribunal of fact had all the evidence concerning the matter, an opposite result may have ensued. The longer the delay in commencing proceedings, the more likely it is that the case will be decided on less evidence than was available to the parties at the time that the cause of action arose.
(Footnotes omitted)
McHugh J continued at 552 saying that the power to stay proceedings as an abuse of process may be invoked where “by reason of delay or other matter[s], the commencement or continuation of the proceedings would involve injustice or unfairness to one of the parties”.
Albeit in a criminal context but no less relevant because of it, in Jago v District Court (NSW) (1989) 168 CLR 23 at 58 Deane J said:
The power of a court to stay proceedings in a case of unreasonable delay is not confined to the case where the effect of the delay is that any subsequent trial must necessarily be an unfair one. Circumstances can arise in which such delay produces a situation in which any continuation of the proceedings would, of itself, be so unfairly and unjustifiably oppressive that it would constitute an abuse of the court’s process. Multiple prosecutions arising out of the one set of events but separated by many years or a renewed charge brought years after the dismissal of earlier proceedings for want of prosecution could, in a case where the relevant material had been available to the prosecution from the outset and depending on the particular facts, provide examples. Where such circumstances exist, the power of a court to prevent abuse of its process extends to the making of an order that proceedings be permanently stayed.
Here, the husband argued that the effect of the wife’s delay of 12 years in bringing the proceedings had created such unfairness such that a permanent stay ought be made.
Understanding that the wife’s central challenge is to the sale price of D Pty Ltd, the husband deposed to the efforts he and his solicitors had made to re-assemble the source documents. The original agreement for sale and for the purchase of share and options has been destroyed. However, the husband said that a copy of those documents was found and produced, but the wife challenged its authenticity although, as was submitted to the primary judge, the wife gave no reason on which the challenge is made (at [31]–[32]).[40]
[40] See too Husband’s Summary of Argument filed 21 September 2020, paragraph 45; Transcript 18 December 2019, p.31 lines 25–32.
In his evidence, the husband set out in detail the attempts made by him or, on his behalf, his lawyers or his accountant to obtain documents relating to the original transaction without success because many of those documents had been destroyed.[41] Equally so, documents sought by the wife relating to the sale of D Pty Ltd have, in the main, produced no documents, again, it being said that they had been destroyed given the time that had elapsed since 2005 (at [32]–[33] and [75]).
[41] Husband’s affidavit filed 3 May 2019, paragraphs 107 and 178–179.
Requests for documents by the wife did not suggest that the documents said to have been destroyed in fact existed, nor did she challenge the husband’s evidence of efforts he had made to obtain the documents necessary to refute her claim.
The primary judge said:
74.The nature of the wife’s allegations are referred to above. The husband properly contends that a defence of same would require a close examination of the primary business transaction some 18 months before the parties separated in respect to which many primary documents are no longer available.
75.Otherwise, it would require a close examination of the wife’s personal circumstances at that time and as a far back as 1982 as to the equitable remedies sought by her. In particular, her solicitor’s file has been destroyed, the wife’s psychologist files are not available, the wife’s laptop containing, she asserts, “historical information” was stolen in 2013 and the wife has failed to discover or disclose any financial documents relating to her personal circumstances or that of various entities controlled by her.
76.The husband further contends that the availability of witnesses is likely to be compromised after so many years thus impacting on the quality of justice the deterioration of which may not even be apparent even to the parties: Brisbane South Regional Health Authority v Taylor (supra).
77.It is properly contended that the intervening years have made the husband’s defence all but impossible.
Grounds 6 and 7
Grounds 6 and 7 challenge the order made by the primary judge and we will set them out in full:
Ground 6
That the learning [sic] Judge erred in finding that the Wife’s application as to the Financial Agreement be permanently stayed as an abuse of process.
Ground 7
That the learned Judge erred in finding that the Husband would suffer significant prejudice if the Wife’s application were allowed to continue.
The grounds do not challenge the correctness of his Honour’s articulation of the relevant law nor does it challenge the husband’s evidence as to how the delay has impacted his ability to meet the wife’s claims.
Before considering the substance of the grounds, it is necessary to understand that the reference in Ground 6 to “the Financial Agreement” is a reference to the Financial Agreement entered into by the parties in contemplation of the making of the 2005 consent orders. The Financial Agreement related to spousal maintenance and provided that neither the husband nor the wife had an obligation to provide spousal maintenance to the other.
The wife’s application filed in January 2018 (as amended on 8 June 2018) sought that the 2005 consent orders and the Financial Agreement be set aside.
The primary judge said:
55.The wife’s application to set aside property orders of 2005 will be permanently stayed. It is thus unnecessary to consider in the context of the 2005 orders the husband’s contention that the wife’s application, otherwise, constitutes an abuse of process and should be permanently stayed. However, for the reasons given below, such an order would otherwise be proper.
His Honour then proceeded to consider the law relating to abuse of process through delay in commencing proceedings and concluded by reference to the facts of the case, that the delay and its attendant difficulties are such that the husband’s defence to the wife’s proposed claim was “all but impossible” (at [77]).
He continued:
78.In the circumstances discussed above, it is in the interests of justice that the wife’s application as to the Financial Agreement be permanently stayed as an abuse of process. Otherwise, for reasons given, it would be otherwise proper to dismiss or permanently stay the application by reason of the application of the Anshun principle.
Seizing on his Honour’s reference to the Financial Agreement at [78] it was argued for the wife that his Honour’s consideration of a permanent stay of proceedings by reason of abuse of process was limited to the Financial Agreement and not to the 2005 consent orders.[42] The consequence being that, if the finding that Anshun estoppel existed was made in error, the order for a permanent stay only related to the Financial Agreement, leaving the wife free to continue her proceedings against the 2005 consent orders.
[42] Transcript 10 November 2020, p.32 line 34 to p.33 line 13.
However, it appeared to us that this argument was abandoned by counsel for the wife in discussion with the Bench.[43]
[43] Transcript 10 November 2020, p.33 lines 25–41.
In any event, if this argument was not abandoned, we would otherwise reject it because the clear intention of the primary judge was that had his Honour not decided to preclude the wife from continuing the application by reason of Anshun estoppel, he would have permanently stayed it as an abuse of process.
Turning once more to the challenges to the permanent stay, it seems that these two grounds challenge his Honour’s findings of fact.
What facts are found arising from the evidence is, quintessentially, a matter for the trial judge. Where, as here, it is not argued that the facts as found by his Honour were affected by error of law or misapprehension or oversight of fact, but as was said in Edwards v Noble (1971) 125 CLR 296 at 304 per Barwick CJ:
If that finding is a view reasonably open on the evidence, it is not enough in my opinion to warrant its reversal that the appellate court would not have been prepared on that evidence to make the same finding. Merely differing views do not establish that either view is wrong…
Dealing first with his Honour’s conclusion as to the effect of the delay on the husband’s capacity to defend the wife’s case, those findings were entirely open on the evidence and we see no basis for interfering with those findings. So too, the conclusion that to permit the wife’s application to proceed would amount to an abuse of process. It is to be borne in mind that the determination of this issue is heedless of the merits of the proposed action, the question being whether to allow it to continue would involve injustice or unfairness to the other party. It is clear from his Honour’s findings as to the effect of delay that it would. That conclusion was open to him and again no error has been demonstrated.
Finally, here too, Ground 4 was invoked, namely that his Honour erred in failing to conduct a hearing to resolve the evidentiary disputes to determine the merits of the wife’s case rather than staying the proceedings.
As is abundantly clear from the above authorities, the determination of whether an action should be permanently stayed takes into account issues and interests beyond those of the parties and can be made regardless of the merits of the proposed application.
Here, it is apparent that regardless of the merits of the wife’s proposed action, the deleterious effect of the delay on the husband’s capacity to defend that suit was so unfair that it would be an abuse of process for it to continue.
There is no merit in these grounds of appeal.
CONCLUSION AND COSTS
With no ground of appeal being successful, the appeal will thus be dismissed.
Should the appeal fail, the husband sought no order for costs against the wife. Thus no order will be made.
I certify that the preceding one hundred and thirty (130) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Ainslie-Wallace, Ryan & Tree. Associate:
Dated: 25 May 2021
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