Commonwealth Bank of Australia v White (No. 7)

[2003] VSC 344

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 5660 of 1997

COMMONWEALTH BANK OF AUSTRALIA	Plaintiff
v
PETER EVERETT WHITE	Defendant
and
THE SOCIETY OF LLOYD’S	Third Party

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JUDGE:	Mandie J
WHERE HELD:	Melbourne
DATE OF HEARING:	11 September 2003
DATE OF JUDGMENT:	16 September 2003
CASE MAY BE CITED AS:	Commonwealth Bank of Australia v White (No. 7)
MEDIUM NEUTRAL CITATION:	[2003] VSC 344

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Practice and Procedure – whether third application to stay third party proceeding is an abuse of process

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms M Loughnan	Ryrie Bridges
For the Defendant	Mr M K Moshinsky	Foster Hart
For the Third Party	Mr P Jopling QC with Dr I Hardingham QC	Freehills

HIS HONOUR:

1. By summons dated 25 March 2003, the third party (“Lloyd’s”) seeks an order that the proceeding contained in the defendant’s Fourth Amended Statement of Claim against the third party be dismissed or forever stayed.  The summons also seeks orders in the alternative for the striking out of certain specified paragraphs in the defendant’s Fourth Amended Statement of Claim. 

1. The background to Lloyd’s present application is set out in the material before the Court and has also been dealt with in a number of previous judgments of this Court.  It is unnecessary to set out again the full background and history of the matter, and I will only do so in so far as necessary, and then as briefly as possible.

1. The defendant (“Mr White”) was an active member of Lloyd’s from January 1981 until December 1992 and on 21 October 1986, he signed a “general undertaking” which constitutes the essential contract between Mr White and Lloyd’s and which contains a provision, in effect, giving the English Courts exclusive jurisdiction over all disputes relating to or arising out of the relationship between Lloyd’s and Mr White. 

1. The proceeding itself was commenced by the plaintiff bank (“CBA”) by writ dated 29 May 1997.  The plaintiff claimed against Mr White approximately $428,000, being the amounts (plus interest) of certain irrevocable letters of credit given by CBA to Lloyd’s, allegedly at the request of Mr White, which letters of credit were drawn down by Lloyd’s in 1995 and 1996 to meet Mr White’s alleged liability to Lloyd’s as a result of his obligations as a “Name” in various syndicates which were formed and operated in the Lloyd’s insurance market.  On 10 December 1997, Mr White was granted leave to bring a third party proceeding against Lloyd’s and the first Statement of Claim was filed by Mr White on 30 January 1998.  After that, a number of interlocutory steps occurred, both in the proceeding between plaintiff and defendant and in the third party proceeding.  It is sufficient for present purposes to note that an Amended Third Party Notice was filed on 14 December 1998 and that Lloyd’s applied to set aside or stay the service of that Notice on 29 January 1999.  Lloyd’s application was heard by Byrne J in June 1999 and dismissed by His Honour on 29 July 1999.  I note that on 3 September 1999, the Court of Appeal refused leave to appeal from the orders of Byrne J and on 11 February 2000, the High Court refused Lloyd’s application for special leave to appeal from the Court of Appeal’s said refusal. 

1. At this juncture it is necessary to note that proceedings were brought by Lloyd’s in England against a number of “Names”, including Mr White, and in which a counterclaim by those “Names”, including Mr White, was brought against Lloyd’s alleging a number of matters said to amount to fraud by Lloyd’s.  That proceeding is referred to as “the Jaffray proceeding”.  Prior to the commencement of the trial of the Jaffray proceeding, Lloyd’s was granted an “anti-suit injunction” against Mr White and a number of other parties, pending the determination of the Jaffray proceeding.  The trial of the Jaffray proceeding commenced on 28 February 2000 and lasted about 64 days.  Meanwhile, on 6 March 2000 in this Court, Lloyd’s applied again for a stay of the third party proceeding and obtained from Warren J a stay pending the outcome of the Jaffray proceeding.

1. Then, judgment was given in favour of Lloyd’s by Cresswell J in the Jaffray proceeding on 3 November 2000.  On 2 February 2001, the anti-suit injunction against Mr White and the other parties was made permanent, thereby restraining Mr White from maintaining any relevant proceeding against Lloyd’s outside England.  A considerable number of the unsuccessful defendants in the Jaffray proceeding (including Mr White) appealed to the Court of Appeal in England and while that appeal was pending, a number of further steps occurred in the present proceeding before this Court.  On 9 April 2001, Mr White filed a Second Amended Statement of Claim against Lloyd’s.  On 24 April 2001, Lloyd’s again filed a summons seeking a stay of the third party proceeding.  That application was heard by Warren J in June and July 2001 and judgment was given on 21 December 2001 in The Commonwealth Bank of Australia v White (No. 4) [2001] VSC 511. Lloyd’s sought leave to appeal from the Court of Appeal from Warren J’s decision and that application was adjourned until 14 days after the judgment of the Court of Appeal in England in the Jaffray proceeding. 

1. On 26 July 2002, the Court of Appeal in England dismissed the appeal by the defendants in the Jaffray proceeding.  The unsuccessful appellants, or some of them, then sought leave to appeal from the House of Lords, an application which was finally refused on 5 February 2003.  However, the Court of Appeal in England, while dismissing the appeal in the Jaffray proceeding, had left what Counsel referred to as “a window of opportunity” for the unsuccessful defendants, being an opportunity to seek to plead that Lloyd’s had represented to them in a certain brochure, in essence, that Lloyd’s had in place an auditing system in relation to the making of reasonable estimates about outstanding claims.  As a result, a number of “Names”, including Mr White, had applied in England to Cooke J in a proceeding now called “the Laws proceeding” for leave to amend existing pleadings so as to bring a “non-fraud” claim under the Misrepresentation Act 1967 (UK) and/or in negligence.  I was informed that Cooke J had on 17 April 2003 dismissed that application, except in relation to 38 “Names” (including Mr White) where limited leave to amend had been granted.  However, it appears from the material before the Court that Mr White does not himself intend to proceed with the non-fraud claim, and is seeking leave to discontinue. 

1. On 15 October 2002, Mr White filed in this Court a Third Amended Statement of Claim against Lloyd’s.  On 20 December 2002, Master Kings ordered that the hearing of the third party proceeding be severed from the hearing of the proceeding between plaintiff and defendant, but that order was reversed on appeal on 11 April 2003 by Byrne J: see Commonwealth Bank of Australia v White (No. 6) [2003] VSC 90. In the meantime, on 28 February 2003 (pursuant to leave granted by Master Kings earlier that month), Mr White filed a Fourth Amended Statement of Claim against Lloyd’s which resulted in the present summons dated 25 March 2003.

1. Lloyd’s submitted that there were “fresh facts”, perhaps better described as new facts or new material, which entitled the Court to reconsider or rehear the question whether the third party proceeding should be stayed, notwithstanding that that question had been the subject of determination previously by Byrne J in July 1999 and by Warren J in December 2001.  I note that the application for leave to appeal from Warren J’s orders of 21 December 2001 has not yet come on for hearing before the Court of Appeal.  The delay in that application coming on is significantly less than would otherwise appear, given that the appeal from the Jaffray proceeding was not resolved until July 2002 and the application for leave to appeal to the House of Lords was not determined until February 2003. 

1. Before considering what was said on behalf of Lloyd’s to be the “fresh facts” justifying this further application for a stay of the third party proceeding, it is necessary to review the reasons for judgment of Warren J dated 21 December 2001.[1]  At paras [11] to [41], Warren J considered the application by Lloyd’s to stay the third party proceeding based upon the exclusive jurisdiction clause contained in the general undertaking signed by Mr White.  Her Honour reviewed the authorities and what had been said on the same matter by Byrne J in Commonwealth Bank of Australia v White [1999] 2 VR 691. Her Honour noted that Byrne J had decided that Mr White had discharged the onus which English law, being the proper law of the contract, placed upon him to show strong cause why the discretion to stay the proceeding should not be exercised. Her Honour further noted that Byrne J had held that Mr White had discharged that onus, having regard, among other things, to the factor that “an exclusive jurisdiction clause could potentially circumvent statutory protection for investors and [statutory protection] against misleading or deceptive conduct [under] s.52 of the Trade Practices Act 1974 (Cth)”. Her Honour reviewed some of the authorities referred to by Byrne J, and noted that she had been urged by Counsel for Lloyd’s to prefer the approach of McDonald J in Williams v Society of Lloyd’s [1994] 1 VR 274 to that taken by Byrne J for a number of reasons which are set out in Her Honour’s judgment. Furthermore, Her Honour noted that Counsel for Lloyd’s had urged that two significant events had occurred since the judgment of Byrne J, namely the success of Lloyd’s in the Jaffray proceeding at first instance and the permanent anti-suit injunction against Mr White granted shortly thereafter.  In a detailed consideration of all of the foregoing, Warren J also noted that leave to appeal from Byrne J’s decision had not been obtained either before the Court of Appeal of this Court or from the High Court.  In essence, Warren J saw no basis for departing from the reasons of Byrne J, based as they were upon the fact that the claims made by Mr White arose “only under the Australian and Victorian jurisdiction, namely, the Trade Practices Act and the Fair Trading Act”.  Her Honour referred to the judgment of the Victorian Court of Appeal in Christie v Baker [1996] 2 VR 582, and concluded, in effect, that nothing new had arisen to entitle the Court to detract from the policy of “finality of judicial determinations and against a person being vexed twice in the Courts for the same matter”.

   [1][2001] VSC 511.

1. It is convenient at this juncture to refer to the case mentioned above of Christie v Baker [1996] 2 VR 582. In that case, the County Court had refused an application under s.23A of the Limitation of Actions Act 1958 (Vic) for an extension of time within which to bring an action in respect of an alleged injury (suffered some 14 years earlier) because of the lack of explanation for a period of delay. The applicant made a second application to a different judge supported by further evidence giving an explanation of the delay. That second application was granted but the Court of Appeal by majority (Hayne and Charles JJA, Brooking JA dissenting) allowed the appeal against the grant. Hayne JA (as he then was), while rejecting the proposition that any question of issue estoppel arose, applied an aspect of the principles relating to abuse of process where the “continuance [of proceedings] would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which had already been disposed of by earlier proceedings”. His Honour considered that the second application was an abuse of process where the additional material which it was sought to put forward was all material which had been available to the applicant at the time of the first application.

1. Counsel for Lloyd’s, in referring to the decision in Christie v Baker, submitted that there were “fresh facts” which showed that the application was not an abuse of process.  The facts, and the only facts, which were advanced in this regard were the following (see too the grounds (a) – (c) in the summons):

·     The decision at first instance in the Jaffray proceeding had been upheld by the Court of Appeal in England and the House of Lords had refused leave to appeal therefrom.

·     Mr White had been party to the application to Cooke J seeking leave to bring the “non-fraud” claim and had obtained such leave.

·     The “non-fraud” claim was based upon the same facts as those relied upon before this Court in making the claims under the Trade Practices Act and the Fair Trading Act contained in the Fourth Amended Statement of Claim. 

1. In so far as the making of the “non-fraud” claim in England would be a matter requiring or entitling this Court to now reconsider whether there should be a stay of the third party proceeding (which I do not decide), I do not think, given Mr White’s disavowal of any intention to proceed with such “non-fraud” claim or any claim in England, that this matter provides any basis for contending that there is a new ground for granting a stay.  Nor do I think that the result in the Jaffray proceeding provides any such basis.  In my opinion, the reasoning of Byrne J and of Warren J is as much applicable to the present state of the third party proceeding (as set out in the Fourth Amended Statement of Claim) as it was at the time of those earlier applications.  I am not persuaded that the reasoning of Warren J is arguably rendered inapplicable by anything that has since occurred.  I conclude that it is an abuse of process to renew any stay application because there is no new matter or event justifying a further application for a stay.  It would be wrong, therefore, to venture upon a reconsideration of the reasons for judgment of Byrne J (leave to appeal having been refused) or of Warren J (where an application for leave to appeal is still pending). 

1. At the conclusion of the hearing, I indicated that I would dismiss Lloyd’s application for a stay of the third party proceeding and adjourn that aspect of the summons which sought to strike out paragraphs of the Fourth Amended Statement of Claim pending the determination of any application for leave to appeal (and any appeal) from the judgment of Warren J and from this judgment.  For the above reasons, the application by Lloyd’s for a stay will be dismissed with costs and the balance of the summons will be adjourned sine die.

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