Capel v Marac Finance Australia Ltd

[1996] QCA 71

IN THE COURT OF APPEAL	[1996] QCA 071
SUPREME COURT OF QUEENSLAND
BRISBANE	Appeal No. 235 of 1995
[Capel v. Marac Finance Australia Ltd]
BETWEEN:

ELWYN JOHN CAPEL (for himself and as Assignee of the Trustee in Bankruptcy of Estate 1256 of 1988)

(Plaintiff) Appellant

AND:

MARAC FINANCE AUSTRALIA LIMITED

(ACN 000 098 402)

(Defendant) Respondent

________________________________________________________________________

Davies J.A. Mackenzie J.

Helman J.

________________________________________________________________________

Judgment delivered 26/3/1996

JOINT REASONS FOR JUDGMENT OF DAVIES J.A. AND MACKENZIE J.
HELMAN J. AGREEING WITH THE JOINT REASONS FOR JUDGMENT AND WITH THE
ORDERS MADE.

_______________________________________________________________________

APPEAL DISMISSED WITH COSTS TO BE TAXED

_______________________________________________________________________

CATCHWORDS:	ESTOPPEL - Res judicata - issue estoppel - contested hearing for summary judgment before a Master of the Court - appeal to a Chamber Judge - appeal to the Full Court - plaintiff estopped from relitigating certain issues upon an application to a Chamber Judge - whether plaintiff should be estopped.
PLEADINGS - defendant conceded that a certain issue is separate, distinct and not yet litigated - leave given to re-plead that issue - whether the leave to re-plead includes leave to plead a claim of fraudulent misrepresentation, in relation to that issue.
PROCEDURE - application and cross application to strike out the application - cross application heard first - appellant unrepresented - whether the procedure was unreasonable.
Counsel:	Appellant appeared on his own behalf Mr R. Bain Q.C. for the respondent
Solicitors:	Appellant appeared on his own behalf Clayton Utz for the respondent
Hearing date:	20/02/96

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

BRISBANE	Appeal No. 235 of 1995
Before	Davies J.A. Mackenzie J. Helman J.

[Capel v. Marac Finance Australia Ltd]

BETWEEN:

ELWYN JOHN CAPEL (for himself and as Assignee of the Trustee in Bankruptcy of Estate 1256 of 1988)

(Plaintiff) Appellant

AND:

MARAC FINANCE AUSTRALIA LIMITED

(ACN 000 098 402)

(Defendant) Respondent

JOINT REASONS FOR JUDGMENT - DAVIES J.A. AND MACKENZIE J

Judgment delivered 26/03/96

This is an appeal against a decision of a Chamber Judge on 25 September 1995 in which the

appellant's statements of claim were struck out with leave to re-plead, limited to certain specified issues.

The Chamber Judge referred to three statements of claim the last of which was the one the appellant

wished to deliver.

In 1985 proceedings had been taken against the appellant in respect of a $40,000 loan made

by the respondent to him. After contested proceedings for summary judgment in which he was

successful before a Master, judgment was given against him on appeal to the Chamber Judge and an

appeal against that decision was dismissed by the Full Court. The Chamber Judge had regard to the judgment of de Jersey J. in that action to demonstrate that the appellant had raised particular issues in

the summary judgment proceedings. The Chamber Judge said that a great deal of the present statement

of claim was an attempt to re-litigate the appellant's obligation to repay the loan. Reference to the

judgment of de Jersey J confirms that this was a major issue before him. The Chamber Judge referred

particularly to Port of Melbourne Authority v. Anshun (1981) 147 CLR 589 and Access Finance

Corporation Pty Ltd v. Golubovic (1991) ASC 56-089, observing that the latter, which involved a

contested application to set aside a default judgment, had some similarity to a contested summary

judgment application because of the need to show some merit justifying the relief. Anshun identifies

circumstances where a litigant may not re-litigate issues in subsequent proceedings. Res judicata arises

when a cause of action merges into judgment. Issue estoppel excludes any issue necessarily decided

in reaching the ratio of the decision, including any point, admission or assumption which is necessarily

connected to the ratio. An estoppel may also arise if it is unreasonable not to have raised the issue in

the original hearing. Generally speaking, the principle will operate 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,

enabling the relevant issues to be determined in the one proceeding.

The Chamber Judge's reasons demonstrate that he clearly appreciated that the identification of

the issues which the parties litigated or are taken to have litigated or which ought reasonably to have

been brought forward involves a case by case examination. He has correctly summarised the relevant

principles. On the information before us it has not been shown that the Chamber Judge misapplied the

principles to the facts before him in finding that the appellant was precluded from raising the issues which

seek to relitigate the obligation to repay the loan.

One matter which was allowed to be re-pleaded concerned an agreement allegedly made in March 1985 under which the appellant agreed to purchase display kitchens for a price, the finance for which was to be provided by the respondent. As the Chamber Judge appreciated, this was a different

agreement from that upon which the summary judgment was founded. One of the submissions made

in respect of it is that there were two aspects of this transaction pleaded. The first was that display

kitchen equipment had been removed in breach of the agreement causing loss to the plaintiff. The other

was that false representations had been made by the respondent's employees knowing that they were

untrue or recklessly not caring whether they were true or false. The appellant submitted to us that he

should be allowed to raise the issue of fraudulent misrepresentation in respect of that transaction. While

that aspect of the matter is not specifically referred to in the reasons of the Chamber Judge, the right to

litigate issues relating to that transaction has been conceded to the appellant and if it is unclear that that

is comprised in what the Chamber Judge has allowed to be repleaded, it is sufficient to say that that

allegation may be raised in respect of that agreement.

The other specific matter raised by the appellant on this aspect of the case is that he wishes to

include in the statement of claim an allegation that there was a conspiracy to pervert the course of justice

in the Federal Court proceedings which resulted in him being declared bankrupt. The Chamber Judge

described the allegation as one that the respondent had conspired to serve process in the bankruptcy

proceedings in such a way that the documents would not come to his notice. The issue of service was

litigated in the Federal Court in proceedings to annul the bankruptcy. Pincus J held that service was

valid, and dismissed a separate more elaborate application on the basis that validity of service had

already been litigated.

The Chamber Judge said that the precise point of the conspiracy had not been articulated but

that it seemed to him that the attack on service had been litigated between the parties and that a decision

had been made upon it, making it inappropriate to allow further litigation to open up the same issue or

an issue which was reasonably within the compass of that dispute. Before this Court the appellant submitted that the conspiracy allegation could not have been finally disposed of by the proceedings

before Pincus J because he had not known of the conspiracy until after those proceedings. It is difficult

to see the basis for this allegation, because the material in his affidavit relied on for the purpose of the

second application to annul the bankruptcy makes a number of allegations that a course of conduct was

engaged in by the respondent and those acting for it to manufacture a situation in which an order for

substituted service might be obtained even though they knew he would be overseas when substituted

service was made. The material shows that he knew the facts upon which the allegations were based

at all material times. The fact that he did not specifically refer to "conspiracy" in the hearings before

Pincus J cannot assist him. In the circumstances there is no reason to suppose that the Chamber Judge

was incorrect in refusing leave to re-plead in respect of this allegation.

One other matter was raised by the appellant. That was that he was disadvantaged by the

procedure followed by the Chamber Judge. There were two applications before the Chamber Judge.

The respondent had served a striking out application and the appellant had applied, inter alia, for

judgment in default of a defence to the second of the relevant statements of claim. The appellant said

that he believed that he would be asked to present his arguments in respect of his application, to which

the counsel for the respondent would respond and then present his arguments in support of the

respondent's application to strike out. The appellant said that he then expected to reply on his own

application and respond to the striking out application. Then counsel for the respondent would reply

on the striking out application.

The course actually followed was that, after the material had been read and the summary of

arguments handed to the Chamber Judge, he adjourned for a period to read the applications. The

Chamber Judge then invited the appellant to make his submissions on the striking out application, which

he did. Counsel for the respondent then replied to the appellant's arguments. The Chamber Judge then told the appellant that he had a limited right of reply on the application by the respondent and adjourned

until after the luncheon break, when the appellant's reply was heard. The appellant complains that he

was not heard on his own application and that the decision on the striking out application was made

without adequate opportunity being given to him to present his arguments.

While the appellant was unrepresented, he is not inexperienced in appearing as advocate in his

own causes. No complaint was made at the time about the procedure. As the fate of the statement of

claim upon which the appellant's application was based was a fundamental issue, it was not only not

unreasonable but was a sensible course to be followed to hear argument on that matter first. It was not

unreasonable for the Chamber Judge to call upon the appellant first to ascertain the basis upon which

the statements of claim could be maintained having regard to the principles involved. In our view there

is no substance in the complaint about the procedure followed.

The appeal is dismissed with costs to be taxed.

REASONS FOR JUDGMENT - HELMAN J

Delivered 26 March 1996

I have had the advantage of reading the reasons prepared by Davies J.A. and Mackenzie J. I agree with the orders they propose and with their reasons.