Donnelly v Kempsey Local Aboriginal Land Council

[2020] NSWSC 1548

Supreme Court

New South Wales

Medium Neutral Citation:

Donnelly v Kempsey Local Aboriginal Land Council [2020] NSWSC 1548

Hearing dates:

26 October 2020

Date of orders:

4 November 2020

Decision date:

04 November 2020

Jurisdiction:

Equity - Applications List

Before:

Williams J

Decision:

The defendant’s notice of motion filed on 11 September 2020 is dismissed.

Catchwords:

PRACTICE AND PROCEDURE – summary dismissal – whether reasonable cause of action disclosed on pleadings – where claims for relief in pleadings turn on complex questions of statutory construction of provisions in the Aboriginal Land Rights Act 1983 (NSW) – not appropriate to make a determination of the construction and operation of those provisions on a summary dismissal application

PRACTICE AND PROCEDURE – summary dismissal – res judicata and Anshun estoppel – where plaintiff’s earlier proceeding which included claims in contract and proprietary estoppel for the enforcement of a lease in respect of certain land was dismissed in orders made by consent – where notation in consent orders reserved issues in relation to the plaintiff’s removal of dwelling, fixtures and fittings in respect of that land – claim by plaintiff in earlier proceeding for damages for value of improvements to that land dismissed on terms that plaintiff is not precluded from commencing fresh proceeding – where plaintiff commences subsequent proceeding claiming relief in proprietary estoppel or restitution for improvements alleged to have been made by the plaintiff to the same land – different causes of action in the earlier proceeding and the subsequent proceeding – whether claims raised in subsequent proceeding are so relevant to earlier proceeding as to make it unreasonable not to have raised them in the earlier proceeding – no res judicata or Anshun estoppel

PRACTICE AND PROCEDURE – summary dismissal – abuse of process – ulterior purpose – whether plaintiff’s motive in commencing proceedings in the Supreme Court is to disrupt the hearing of a creditor’s petition in the Federal Circuit Court – not an abuse of process

Legislation Cited:

Aboriginal Land Rights Act 1983 (NSW), ss 40, 40B, 42E, 50, 51 and Sch 4 Pt 9 (cls 50 and 51)

Aboriginal Land Rights Amendment Act 2009 (NSW)

Civil Procedure Act 2005 (NSW), s 56

Interpretation Act 1987 (NSW), ss 30 and 33

Real Property Act 1900 (NSW), ss 118 and 119

Supreme Court Act 1970 (NSW), s 63

Uniform Civil Procedure Rules 2005 (NSW), rr 13.4 and 19.1

Cases Cited:

Baumgartner v Baumgartner (1987) 164 CLR 137

CG Maloney Pty Ltd v Noon [2011] NSWCA 397

Champerslife Pty Ltd v Manojlovski (2010) 75 NSWLR 245; [2010] NSWCA 33

Conference & Exhibition Organisers Pty Ltd v Johnson [2016] NSWCA 118

Donnelly v Kempsey Local Aboriginal Land Council [2019] FCCA 3152

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125

Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231

Johnson v Gore Wood & Co [2002] 2 AC 1

Lunt v Victoria International Container Terminal Ltd [2020] FCAFC 40

Muschinski v Dodds (1985) 160 CLR 583

Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589

Simmons v New South Wales Trustee and Guardian (2014) 17 BPR 33,717; [2014] NSWCA 405

Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28

UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45

Williams v Spautz (1992) 174 CLR 509

Zetta Jet Pte Ltd v Ship “Dragon Pearl” (No 2) (2018) 265 FCR 290; [2018] FCAFC 132

Category:

Procedural and other rulings

Parties:

Lynette Joy Donnelly (Plaintiff)
Kempsey Local Aboriginal Land Council (Defendant)

Representation:

Counsel:
Mr P Batley (Plaintiff)
Mr M Maconachie (Defendant)

Solicitors:
Johnson Winter & Slattery (Plaintiff)
Maher Legal Pty Ltd (Defendant)

File Number(s):

2020/244304

Publication restriction:

N/A

Judgment

Introduction

1. The plaintiff, Ms Lynette Donnelly, is an Aboriginal Australian.

2. The defendant is a Local Aboriginal Land Council known as Kempsey Local Aboriginal Land Council and is the registered proprietor of Lot 187 in Deposited Plan 39682, being the land known as 142 Gowlings Hill Road, South Kempsey, New South Wales (the Land).

3. The defendant is a statutory corporation established under s 50 of the Aboriginal Land Rights Act 1983 (NSW). According to s 51 of that Act, the object of the defendant is “to improve, protect and foster the best interests of all Aboriginal persons within the Council’s area and other persons who are members of the Council.”

4. The plaintiff commenced this proceeding by statement of claim filed on 21 August 2020.

5. These reasons for judgment relate to the defendant’s application made by notice of motion filed on 11 September 2020 for an order that the statement of claim be dismissed.

6. Whilst the grounds of the application were not identified in the notice of motion, it is clear from the defendant’s submissions that it seeks to have the proceeding summarily dismissed on the grounds that:

1. no reasonable cause of action is disclosed because the plaintiff cannot succeed on her claims for relief by reason of s 42E of the Aboriginal Land Rights Act (relying on the principles in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 and r 13.4(1)(b) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR));

2. further or alternatively, the claims made in this proceeding are res judicata or, alternatively, are the subject of an Anshun estoppel; and

3. further or alternatively, the present proceeding is an abuse of process because it has been commenced for the ulterior purpose of causing an adjournment of a creditor’s petition filed by the defendant in the Federal Court of Australia arising out of the plaintiff’s failure to pay the defendant’s costs of the earlier proceeding in this Court.

7. After the defendant’s notice of motion was filed, the plaintiff amended the statement of claim pursuant to UCPR r 19.1(1) by filing an amended statement of claim on 18 September 2020.

8. The defendant’s application falls to be determined by reference to the amended statement of claim.

9. I will return to the grounds of the defendant’s application for summary dismissal, and the plaintiff’s response to them, later in these reasons. First, it is necessary to explain the causes of action and issues raised in the earlier proceeding in this Court, the orders made by this Court in that earlier proceeding, and to summarise the evidence about the history of bankruptcy proceedings in the Federal Circuit Court of Australia and negotiations between the parties in connection with the 2013 proceeding and bankruptcy proceedings. Whilst the parties’ submissions emphasised different aspects of those matters, there was no dispute about the underlying facts.

Supreme Court proceeding 2013/327345

10. The plaintiff commenced proceedings in this Court on 30 October 2013 (the 2013 proceeding) seeking:

1. a declaration that there is an agreement for lease between the plaintiff and defendant to the effect that the defendant will lease to the plaintiff the whole of the Land in the form of an executed lease attached to the statement of claim; and

2. an order that the defendant enter into a lease with the plaintiff in the form of the unexecuted lease attached to the statement of claim, with a commencement date of 9 June 1992.

11. The plaintiff pleaded the following matters in the statement of claim in support of the relief claimed:

1. the plaintiff had purchased two houses at Figtree Estate in Kempsey with the assistance of the defendant on 25 November 1991 (the Figtree houses);

2. on 9 June 1992, the defendant agreed to the plaintiff’s application to lease the Land from the defendant and represented to the plaintiff that it would grant her a lease of the Land for a term of 99 years for a rent of $1 per year;

3. in or about April 1995, the plaintiff relocated the Figtree houses to the Land and installed the houses on the Land, where she had resided ever since. The installation of the houses on the Land was authorised by a building permit that had been issued by Kempsey Shire Council after the defendant, as owner of the Land, had written to the Council on 1 March 1995 confirming that the plaintiff had been granted a lease of the Land;

4. the relocation and installation of the Figtree houses on the Land was done in part-performance of the lease;

5. the plaintiff had relied on the defendant’s representation in relocating and installing the houses on the Land, in making other improvements to the Land, in occupying and residing on the Land and in paying water rates and council rates levied on the Land;

6. the defendant knew that the plaintiff was acting in reliance on the defendant’s representation to her detriment;

7. the defendant had given the plaintiff notice to vacate the Land on 7 August 2008, and had refused to execute a lease in favour of the plaintiff; and

8. the defendant, by its representation, was estopped from denying the plaintiff’s demand that it execute a lease in the terms of the unexecuted lease annexed to the statement of claim.

12. In its defence filed on 5 March 2014, the defendant:

1. admitted that it had agreed to assist the plaintiff with transportation costs of the Figtree houses (but did not admit that the houses had been transported in part performance of any lease);

2. admitted that it had agreed on 9 June 1992 to the plaintiff’s application to lease the Land, subject to approval by the New South Wales Aboriginal Land Council (NSWALC);

3. pleaded that there was no agreement as to the terms of any lease;

4. pleaded that no lease had been entered into because the NSWALC had not granted approval; and

5. pleaded that it had represented to the plaintiff only that it agreed, subject to the approval of NSWALC, to grant a lease of the Land to the plaintiff. The defendant did not admit that the plaintiff had relied on that representation to her detriment by relocating and installing the houses on the Land, in making other improvements to the Land, in occupying and residing on the Land and in paying water rates and council rates levied on the Land. The defendant denied that it knew that the plaintiff was acting and relying on the defendant’s representations to her detriment.

13. In relation to the requirement for NSWALC approval of a lease, the defendant relied on ss 40 and 40B of the Aboriginal Land Rights Act, as in force as at June 1992. Those sections provided (relevantly) as follows:

“40.   Disposal of land restricted

(1)   The New South Wales Aboriginal Land Council or a Local Aboriginal Land Council may not sell, exchange, lease, dispose of, mortgage or otherwise deal with land vested in it, except in accordance with this Division.

(2)   Any sale, exchange, lease, disposal or mortgage of, or other dealing with, land in contravention of this Division is void.

…

40B.   Lease, use etc. of land

…

(2)   A Local Aboriginal Land Council may, subject to the provisions of any other Act and with the approval of the New South Wales Aboriginal Land Council:

(a)   lease or change the use of land vested in it; and

(b)   grant an easement over land vested in it; and

(c)   release an easement benefiting land vested in it, but only if the lease, change of use or the grant or release of the easement has been approved at a meeting of the Local Aboriginal Land Council specifically called for that purpose at which a quorum was present.

(3)   The New South Wales Aboriginal Land Council may not refuse to give an approval of a lease or change of use under this section except on the ground that the terms or conditions of the lease are inequitable to the Local Aboriginal Land Council concerned or that the change of use would be detrimental to the interests of other Local Aboriginal Land Councils.”

14. The defendant denied that it was estopped from denying the plaintiff’s demand that the defendant execute a lease in favour of the plaintiff in the terms annexed to the statement of claim.

15. On 15 October 2014, the defendant filed a cross-claim in the 2013 proceeding for possession for the Land (the first cross-claim).

16. On 5 November 2014, the plaintiff filed a defence to the first cross-claim, in which she denied that the defendant was entitled to possession of the Land. Whilst the basis for the denial was not pleaded, I infer that the plaintiff relied on the lease that she claimed the defendant had agreed to grant to her and was estopped from refusing to execute, as entitling her to exclusive possession of the Land.

17. The 2013 proceeding was listed for final hearing before Young AJ on 25 August 2015.

18. On that date, his Honour made consent orders in the following terms:

“1.    Dismiss the statement of claim filed 30 October 2013.

2.    Judgment for possession of the whole of the land contained in and being Lot 187 in Certificate of Title Volume 15255 Folio 191, situate at and known as 142 Gowings Hill Road, South Kempsey in the State of New South Wales (‘Property’).

3.    The plaintiff/cross-defendant is to pay the defendant/cross-claimant’s costs to date on the ordinary basis.

4.    Leave for the defendant/cross-claimant to file any writ of possession in respect of the Property be withheld until further order.

5.    Note that the issue as to the plaintiff’s removal of the dwelling, fixtures and fittings on the land is reserved.

6.    The proceedings be listed in the Registrar’s list on 6 October 2015 at 9am.

7.    Further questions of costs reserved.”

19. Although order 2 set out above does not expressly state whether the judgment for possession is in favour of the plaintiff or in favour of the defendant, it was clear from the dismissal of the statement of claim and from order 4 that the judgment was intended to be in favour of the defendant.

20. In October 2015, the solicitors for the respective parties commenced negotiations concerning whether the plaintiff was entitled to remove any improvements from the Land. The defendant’s solicitors drafted a deed setting out terms on which the defendant was prepared to resolve that issue. The plaintiff did not accept those terms and the deed was not signed.

21. I interrupt the chronology to note that, at the hearing of the summary dismissal application, the defendant informed the Court that it does not admit that the plaintiff made all of the improvements that she claims to have made to the Land.

22. On 20 October 2015, the defendant filed a notice of motion seeking leave to issue a writ of possession for the Land. Darke J made orders in the terms of the notice of motion but stayed the execution of the writ up to and including 5:00pm on 17 November 2015.

23. According to the affidavit of the defendant’s solicitor, Mr Anthony Patrick Maher affirmed on 27 August 2020, Young AJ made the order and notation in paragraphs 4 and 5 set out in [18] above because counsel for the plaintiff had informed the Court that she wished to file a cross-claim seeking the removal of the dwellings, fixtures and fittings from the Land within 14 days.

24. The plaintiff did not file any cross-claim in the 2013 proceeding within the 14 day period that her counsel had indicated.

25. On 16 November 2015, the plaintiff filed a cross-claim in the 2013 proceeding (the second cross-claim) seeking:

“An order the Cross Defendant pay the sum of $155,000.00 being the assessed value of the improvements made by the Cross Claimant to the land comprised in Lot 187 in certificate of title volume 15255, folio 191 being the land situated at and known as 142 Gowings Hill Road, South Kempsey…in the State of New South Wales”.

26. The second cross-claim pleaded essentially the same factual matters as had been set out in the statement of claim, and concluded:

“The Cross Claimant claims damages in the amount of $155,000 expended by the Cross Claimant on the erection of buildings and development of infrastructure to the land.”

27. Whilst it was clear that the order sought in the second cross-claim for the defendant to pay the sum of $155,000 was a claim in damages, the second cross-claim did not articulate the cause of action said to give rise to a liability of the defendant to pay such damages to the plaintiff. The second cross-claim was plainly deficient in this respect.

28. On 17 November 2015, the defendant filed in court a notice of motion seeking:

1. an order that the second cross-claim:

“… be dismissed on terms that this order shall prevent the plaintiff from bringing any fresh proceedings or claiming the same relief in fresh proceedings.”

2. an order that the plaintiff’s solicitor indemnify the defendant against any costs payable by the defendant of and incidental to the notice of motion; and

3. an order that the plaintiff pay the defendant’s costs of the 2013 proceeding from 26 August 2015 (the costs for the period up to and including 25 August 2015 having been addressed in the orders made by Young AJ on 25 August 2015).

29. Written submissions prepared by the defendant in support of that notice of motion urged the Court to make orders dismissing the second cross-claim on terms that the plaintiff would be prevented from bringing fresh proceedings or claiming the same relief in fresh proceedings because, it was submitted:

1. parts of the second cross-claim pleaded issues raised in the statement of claim that had been dismissed by consent on 25 August 2015; and

2. the balance of the paragraphs of the cross-claim raised no cause of action but, if they did raise a cause of action, “an Anshun type estoppel would arise”.

30. The defendant’s notice of motion was heard by White J (as his Honour then was). White J dismissed the cross-claim. It is important to note the terms of his Honour’s orders (my emphasis):

“1.   The cross-claim filed by the plaintiff on 16 November 2015 is dismissed on terms that this order shall not prevent the plaintiff from bringing any fresh proceedings or claiming the same relief in fresh proceedings.   

2.   The plaintiff is to pay the defendant’s costs incurred as from 26 August 2015.

3.   The defendant’s notice of motion filed in court on 17 November 2015 is otherwise dismissed.”   

31. On 7 March 2016, the Court issued a writ of possession which required the plaintiff to vacate the Land by 10:00am on 28 April 2016. Notwithstanding this, it seems that the defendant did not seek to enforce the writ by that date due to ongoing negotiations between parties (which included the defendant making an offer for the plaintiff to access the Land to remove the improvements on 27 October 2016, which offer or its terms is not in evidence and was rejected in any event). According to Mr Maher in his affidavit of 27 August 2020, the defendant eventually took possession of the Land on 9 November 2016.

32. The plaintiff was legally represented throughout the 2013 proceeding by counsel and a firm of solicitors located in Kempsey. As will become apparent below, the plaintiff subsequently secured different representation at various times. In the present proceeding, the defendant has been represented by the same solicitor and counsel throughout.

Costs of the 2013 proceeding, the commencement of bankruptcy proceedings in the Federal Circuit Court and the commencement the present proceeding in this Court

33. On 18 March 2016, a certificate of determination of costs and a certificate of determination of costs of costs assessment were issued in relation to the cost order made by Young AJ on 25 August 2015. The defendant’s costs payable by the plaintiff were assessed in the amount of $70,214.92. The costs assessor also determined that the sum of $1,036.29 was payable by the plaintiff in relation to the costs of the costs assessment.

34. On 29 November 2016, the Local Court registered the certificate of determination of costs and the certificate of determination of costs of costs assessment as a judgment of that court. The total amount to be paid by the plaintiff (including filing fees payable in that court) was stated to be $71,431.21.

35. In March 2017, the plaintiff secured pro bono representation through Legal Aid at Port Macquarie from solicitors at Clayton Utz.

33. On 27 September 2017, the defendant served a bankruptcy notice on the plaintiff in respect of the $71,431.21 sum (plus interest that had accrued on that sum).

34. On 16 October 2017, the plaintiff’s solicitor at Clayton Utz sent a letter to the defendant’s solicitor. The letter recited the background to the dispute between the parties, including referring to previous attempts to settle the outstanding issues relating to the improvements on the Land. The plaintiff’s solicitor stated that having regard to the background and the nature of the dispute, including that the plaintiff had an offsetting claim to the value of the improvements made to the Land by virtue of those fixtures becoming part of the Land, that there was sufficient grounds to have the bankruptcy notice served on 27 September 2017 set aside. The plaintiff’s solicitor invited the defendant to withdraw the bankruptcy notice and to advise her in writing that the defendant would abandon any action taken in respect of the bankruptcy notice.

35. On 18 October 2017, the defendant’s solicitor sent a letter to the Australian Financial Security Authority (copied to the plaintiff’s solicitor) instructing that entity to withdraw the bankruptcy notice served on the plaintiff on 27 September 2017.

36. The parties continued to negotiate, but those negotiations broke down in around April 2018.

37. On 18 April 2018, the defendant served on the plaintiff another bankruptcy notice in respect of the $71,431.21 sum (plus interest that had accrued on that sum). At the time of being served with this notice, the plaintiff was no longer represented by solicitors at Clayton Utz.

38. On 2 May 2018, a solicitor employed at the Port Macquarie offices of Legal Aid NSW sent a letter to the defendant’s solicitor on behalf of the plaintiff. In that letter, the solicitor acknowledged the difficulties in resolving the dispute between the parties. The solicitor also stated (by reference to the letter sent by the plaintiff’s former solicitors at Clayton Utz on 16 October 2017) that the plaintiff had an offsetting claim to the value of any improvements to the Land which exceeded the amount claimed in the bankruptcy notice. The solicitor made a proposal in which he expressed the plaintiff’s willingness to enter into a three year lease of the Land with the defendant on terms that she pay $350 a week in rent and, in return, the plaintiff would release the defendant from any claim in relation to the value of the improvements made to the Land. The offer was made on conditions that the defendant take steps to enable the proposed tenancy to commence on or before 28 May 2018, with time being of the essence, and that the plaintiff be given an option to purchase the Land in the event that the plaintiff became able to finance the purchase at some future point. The solicitor requested a response from the defendant’s solicitor by close of business on 7 May 2018. This offer was subsequently rejected.

39. On 9 May 2018, the plaintiff commenced proceedings in the Federal Circuit Court to set aside the bankruptcy notice served on 18 April 2018. The plaintiff retained solicitors at Sparke Helmore and counsel for the purposes of prosecuting that proceeding.

40. On 27 July 2018, the plaintiff’s solicitor at Sparke Helmore sent an email to the defendant’s solicitor. After setting out the history of the dispute between the parties, the letter referred to the plaintiff’s claim in respect of improvements to the Land and that the value of this claim “substantially exceeds the quantum of [the defendant’s] claim in the bankruptcy notice”. The letter stated that it was open to the Federal Circuit Court to find that there was a sufficient cross-claim, set-off or cross-demand to set aside the bankruptcy notice, or on the basis that the Federal Circuit Court was satisfied that the interests of justice required it to do so. The letter also stated that the solicitors were instructed by the plaintiff to lodge a caveat against the title of the Land claiming that the plaintiff had an interest as a “[b]eneficiary of a constructive trust of dwelling and improvements to the [Land]”. The caveat there referred to was subsequently lodged on 16 October 2018.

41. The plaintiff’s application to set aside the bankruptcy notice was heard before Judge Barnes on 4 December 2018. On 5 November 2019, her Honour dismissed the plaintiff’s claim in reasons for judgment delivered that day (Donnelly v Kempsey Local Aboriginal Land Council [2019] FCCA 3152). Her Honour subsequently made an order that the plaintiff pay the defendant’s costs of the application on 13 December 2019.

42. On 20 December 2019, the defendant filed a creditor’s petition in the Federal Circuit Court. The creditor’s petition was served on the plaintiff on 23 December 2019.

43. On 10 January 2020, the plaintiff sought the assistance from another solicitor employed at the Port Macquarie office of Legal Aid NSW. That solicitor wrote to the defendant’s solicitor noting the plaintiff’s equitable interest in the alleged improvements to the Land and requesting access to the Land in order to obtain an up to date valuation of the said improvements. The defendant’s solicitor rejected the plaintiff’s request in a letter dated 17 January 2020.

44. In February 2020, the plaintiff retained her present solicitors at Johnson Winter Slattery who agreed to act for her on a pro bono basis.

45. On 2 March 2020, the plaintiff filed a notice stating grounds of opposition to the creditor’s petition. Those grounds were:

1. that the plaintiff had a genuine and arguable claim against the defendant for an amount exceeding the amount of debt upon which the creditor’s petition is founded;

2. that there is other sufficient cause why a sequestration order should not be made, namely that it would be unconscionable for the defendant to retain the benefit of the improvements said to have been made to the Land in the circumstances of the case; and

3. that the plaintiff seeks a declaration that the defendant holds the dwelling and the other improvements to the Land on constructive trust for the plaintiff, or alternatively, that the plaintiff seeks a declaration and orders for compensation that the defendant pay to the plaintiff the value of the improvements said to have been made to the Land.

49. On 2 April 2020, the proceeding was listed for directions before Judge Driver. His Honour made case management directions to prepare the matter for hearing, including a direction that the plaintiff be allowed access to the Land for the purpose of obtaining an expert valuation report in relation to the improvements said to have been made to the Land. The matter was set down for final hearing on 4 September 2020.

50. On 21 August 2020, the plaintiff filed the statement of claim that commenced the present proceeding in this Court. When the creditor’s petition came on for hearing in the Federal Circuit Court on 2 April 2020, it was adjourned pending resolution of the proceeding in this Court.

51. As I have referred to earlier in these reasons, the plaintiff filed an amended statement of claim in this proceeding on 18 September 2020.

52. In the amended statement of claim, the plaintiff claims:

1. a declaration that the defendant holds the Land subject on a constructive trust in favour of the plaintiff to the value of specified improvements (being the installation of the Figtree house on the Land and associated works, together with extensive concrete paving, construction of improvements to the Figtree house and the planting of a protea grove);

2. alternatively, an order that the defendant pay equitable compensation to the plaintiff for the value of those improvements; and

3. alternatively, an order that the defendant pay restitution to the plaintiff in the amount of the value of those improvements.

53. The factual matters pleaded in the amended statement of claim upon which the plaintiff relies in support of her claims for a declaration of constructive trust or equitable compensation include the facts pleaded in the statement of claim filed in the 2013 proceeding, with some additional detail concerning the alleged arrangements between the plaintiff and the defendant that resulted in the plaintiff relocating the Figtree house and installing it on the Land.

54. In addition to the matters pleaded in the 2013 statement of claim, the amended statement of claim in this proceeding pleads that:

1. the plaintiff undertook the improvements referred to above:

1. on the understanding that:

1. she had, or was entitled to, a 99 year lease of the Land; and

2. that the defendant had granted permission for her to install the Figtree house on the Land as a dwelling for her to live in; and

2. in reliance on a representation made by the defendant to Kempsey Shire Council on 1 March 1995 that the defendant had granted her a 99 year lease of the Land on 9 June 1992; and

3. on the understanding that she would enjoy the benefit of the improvements by living on the Land for the rest of her life;

2. the defendant knew or ought reasonably to have known at all material times that the plaintiff would expend money and effort in preparing the Land for building, transporting the Figtree house to the Land and undertaking the other improvements referred to above, on the understanding that she would enjoy the benefit of a 99 year Lease of the Land;

3. by operation of s 40 of the Aboriginal Land Rights Act as in force in June and September 1992, the defendant was not permitted to grant a lease to the plaintiff except with the approval of the NSWALC;

4. the NSWALC has not given approval for a lease of the Land to the plaintiff;

5. any lease of the Land to the plaintiff would therefore be void, and the defendant was prohibited from giving effect to any agreement with the plaintiff to grant a lease of the Land to the plaintiff;

6. the 2013 proceeding, in which the plaintiff sought specific performance of an agreement between the plaintiff and defendant for a 99 year lease of the Land, was therefore misconceived and orders were made dismissing the plaintiff’s statement of claim and granting possession of the Land to the defendant;

7. the plaintiff’s cross-claim in the 2013 proceeding for damages for the value of the improvements to the Land was dismissed on terms that the dismissal did not prevent the plaintiff from bringing any fresh proceeding or claiming the same relief in any fresh proceeding; and

8. the improvements made by the plaintiff have added value to the Land.

55. The following additional matters were pleaded by the plaintiff in support of her claim for a declaration of a constructive trust or equitable compensation:

1. the plaintiff made the improvements to the Land in pursuance of a joint endeavour with the defendant under which:

1. the plaintiff would (and did) transport the Figtree house onto the Land and thereby add value to the Land;

2. the plaintiff would be (and was) given a home on the Land by virtue of transporting the Figtree house onto the Land;

3. the defendant advanced its objects of providing housing for Aboriginal persons without having to undertake the expense of constructing a dwelling on the Land; and

4. the plaintiff assumed liability for payment of council rates and other expenses associated with the Land.

2. this joint endeavour broke down because s 40 of the Aboriginal Land Rights Act as in force in June and September 1992 did not permit the defendant to grant a lease to the plaintiff except with the approval of the NSWALC and such approval was not obtained, the result being that any such lease was void and the defendant was prohibited from giving effect to such lease; and

3. it was unconscionable for the defendant to retain the benefit of the improvements made to the Land without accounting to the plaintiff.

56. I understood the pleaded facts above to be referring to a claim for a constructive trust of a kind based on the principles expressed in the joint judgment of Mason CJ, Wilson and Deane JJ in Baumgartner v Baumgartner (1987) 164 CLR 137 at 147–148 (referring to Muschinski v Dodds (1985) 160 CLR 583).

57. The plaintiff framed her claim for restitution in two principal ways. The pleaded matters in the amended statement of claim in support of the first of these ways may be summarised as follows:

1. the defendant encouraged the plaintiff to make the improvements by selling her the Figtree house, granting her permission to place it on the Land and by making a representation on or around 1 March 1995 to the plaintiff and Kempsey Shire Council that the plaintiff had been granted a 99 year lease of the Land by the defendant on 9 June 1992;

2. the plaintiff, in making the improvements, acted on the basis that she had a right to a 99 year lease of the property;

3. by its conduct in resolving at a Special Lease Meeting to grant to the plaintiff a lease of the Land on 9 June 1992 and by its conduct in reaching an agreement with the plaintiff to sell to her the Figtree house on the understanding that it would be transported onto the Land, the defendant had induced the plaintiff to expend money and effort to make the improvements to the Land;

4. the improvements conferred an incontrovertible benefit upon the defendant by adding approximately $170,000 in value to the Land and making it possible for the defendant to rent out the Land as a dwelling pursuant to a residential tenancy agreement;

5. further, or in the alternative, the defendant accepted or acquiesced in the plaintiff making such improvements to the Land freely and without demur, with such improvements conferring a benefit on the defendant by adding approximately $170,000 in value to the Land and making it possible for the defendant to rent out the Land as a dwelling pursuant to a residential tenancy agreement;

6. further, or in the alternative, on an objective valuation of the benefit conferred by the plaintiff on the defendant, it is conscionable that the defendant should have to pay for the benefit; and

7. in all the circumstances, it is fair and just for the defendant to make restitution to the plaintiff for the amount by which the improvements added value to the Land.

58. The second way in which the plaintiff framed the claim for restitution may be summarised as follows:

1. On 9 June 1992, the defendant resolved at a Special Lease Meeting to grant to the plaintiff a lease of the Land, with such lease to be for a term of 99 years;

2. On 31 August 1992, the defendant agreed at a further meeting to sell to the plaintiff the Figtree house on the understanding that the plaintiff would transport the Figtree house to the Land and install it as a dwelling;

3. the plaintiff and defendant acted on a mistaken belief that the defendant had power and authority to grant to the plaintiff a lease of the Land for a term of 99 years in ignorance of the fact that s 40 of the Aboriginal Land Rights Act as in force in June and September 1992 did not permit the defendant to grant a lease to the plaintiff except with the approval of the NSWALC and such approval was not obtained;

4. in reliance on the understanding that she had or was entitled to a lease of the Land for a term of 99 years, the plaintiff lodged a Building Application with the Kempsey Shire Council to relocate and install the Figtree house on the Land. That application was alleged to have been approved on 27 March 1995;

5. in April 1995 and in the decades following, the plaintiff transported the Figtree house on the Land and made various improvements to the Land;

6. acting on the mistaken belief that the plaintiff was entitled to a lease of the Land for a 99 year term, the defendant encouraged and induced the plaintiff to expend money on making the improvements to the Land which conferred upon the defendant an incontrovertible benefit that were either accepted freely by the defendant or without demur.

7. In the circumstances of the case, it is fair and just for the defendant to make restitution to the plaintiff for the amount by which the improvements have added value to the Land.

59. In summary, as the plaintiff submitted: [1]

1. the foundation for the claims for a declaration of constructive trust or equitable compensation is proprietary estoppel by encouragement or, alternatively, the breakdown of a joint endeavour; and

2. the basis for the claim in restitution is the benefit to the defendant of the plaintiff’s improvements to the Land in circumstances where an agreement is void.

   1. Plaintiff’s written submissions dated 22 October 2020, paragraphs 22–23.

60. The defendant has not filed any defence to the amended statement of claim. As I have referred to earlier, the defendant’s notice of motion seeking summary dismissal of the proceeding was filed on 11 September 2020.

Consideration and determination

61. I now turn to consider each of the three grounds set out in [6] above on which the defendant relies in support of the motion for summary dismissal.

First ground – no reasonable cause of action

62. The first ground relied on by the defendant is that no reasonable cause of action is disclosed because the plaintiff cannot succeed on her claims for relief by reason of s 42E of the Aboriginal Land Rights Act.

63. The defendant submitted that s 42E of the Aboriginal Land Rights Act “holds the defendant … immune from any remedy arising from the circumstances pleaded by Ms Donnelly” and that s 42E defeats the plaintiff’s claim (independently of issues of res judicata, issue estoppel or Anshun estoppel). [2]

    2. Defendant’s written submissions dated 16 October 2020, paragraphs 2 and 22–30.

64. The defendant submitted, and the plaintiff did not dispute, that s 42E was introduced into Division 4 of a new Part 2 of the Aboriginal Land Rights Act by the Aboriginal Land Rights Amendment Act 2009 (NSW) and came into force on 31 March 2010.

65. Section 42E, as presently in force, relevantly provides:

“(1)   A Local Aboriginal Land Council must not deal with land vested in it except in accordance with an approval of the New South Wales Aboriginal Land Council under section 42G.

…

(4)   An agreement to deal with land vested in a Local Aboriginal Land Council that is made by the Council is, if the land dealing is not approved by the New South Wales Aboriginal Land Council and an approval is required, unenforceable against the Local Aboriginal Land Council.

(5)   A person is not entitled to damages, or any other remedy, against a Local Aboriginal Land Council in respect of a warranty or other promise relating to an unenforceable agreement referred to in subsection (4).

…

(7)   This section has effect despite any other Act or law.”

66. As the plaintiff submitted, [3] there is a real question as to whether there was any relevant unenforceable “agreement to deal with land” in this case to which s 42E(5) could apply at the time that s 42E of the Aboriginal Land Rights Act commenced on 31 March 2010. That question arises because any such agreement had already been rendered void by reason of the operation of s 40(2) of that Act as applicable at relevant times prior to 31 March 2010.

    3. Plaintiff’s written submissions dated 22 October 2020, paragraphs 12–13.

67. The defendant did not address that question other than by relying on Part 9 of Schedule 4 to the Aboriginal Land Rights Act, which contains savings and transitional provisions applicable to the amendments introduced by the Aboriginal Land Rights Amendment Act 2009 (NSW). Specifically, the defendant referred to clause 51(3) of Part 9 of Schedule 4, which provides:

“(3)   If the requirements of the former land dealing provisions were not complied with in relation to a land dealing entered into before the commencement of the new land dealing provisions, the new land dealing provisions apply to that land dealing.”

68. The key terms in cl 51(3) are defined in cl 50(1) as follows:

“(1)   In this Part—

amending Act means the Aboriginal Land Rights Amendment Act 2009.

existing land dealing means a land dealing that was approved by the New South Wales Aboriginal Land Council before the commencement of the new land dealing provisions.

existing registrable instrument means a registrable instrument giving effect to or forming part of an existing land dealing.

former land dealing provisions means Division 4 of Part 2 of this Act, as in force immediately before its substitution by the amending Act.

new land dealing provisions means Division 4 of Part 2 of this Act, as substituted by the amending Act.”

69. The definition of the term “land dealing” as used in cls 50(1) and 51(3) is set out in s 40(1) of the Act. It is defined as an “action in relation to land of a kind referred to in paragraphs (a)-(h) of the definition of deal with land.” The definition of the term “deal with land” is also set out in the same section. It is relevantly defined to mean:

“(a)   sell, exchange, lease, mortgage, dispose of, or otherwise create or pass a legal or equitable interest in, land, or

…

Note—

In this Act, a reference to land includes any estate or interest in land, whether legal or equitable (see section 4(1)).”

70. However, reference to cl 51(3) simply raises the question whether, in circumstances where any agreement to lease entered into between the plaintiff and the defendant prior to 31 March 2010 was void from the time it was entered into by reason of s 40(2) of the Act as then applicable, there was any “land dealing” to which cl 51(3) could apply as at 31 March 2010.

71. I do not consider that it is appropriate to make a determination about whether cl 51(3) has the effect that s 42E applies to the plaintiff’s claims in this proceeding, without the benefit of detailed submissions concerning the proper construction of cl 51(3) having regard to the language of cl 51(3) considered in the context of the then existing legislation, the amending legislation and the transitional provisions as a whole, as well as s 30 of the Interpretation Act 1987 (NSW), the common law presumption against imputing to the legislature an intention to retrospectively disturb accrued rights and any relevant case law. The parties’ submissions referred in passing to s 30 of the Interpretation Act and the common law presumption, and identified two cases in which the transitional provisions in Schedule 4 of the Act were the subject of some consideration or assumptions in the context of the different issues that were raised for determination in those cases. However, the submissions did not present the detailed analysis that would be required to resolve the question of the proper construction and operation of cl 51(3).

72. Even assuming (in the defendant’s favour) that cl 51(3) has the effect that s 42E applies to the plaintiff’s claims in the amended statement of claim in this proceeding, there is a further question about whether those claims are “in respect of a warranty or other promise relating to an unenforceable agreement” “to deal with land vested in [the defendant]” within the meaning of s 42E.

73. The claims for relief in the amended statement of claim arise from:

1. the plaintiff’s understanding encouraged by the alleged conduct of the defendant; [4]

2. the defendant’s alleged representation; [5]

3. works said to have been undertaken by the plaintiff in reliance on her understanding and the defendant’s representation and in pursuance of joint endeavour between the plaintiff and defendant, the substratum of which subsequently broke down rendering it unconscionable for the defendant to retain the benefit of the improvements; [6]

4. the defendant’s encouragement of the improvements made by the plaintiff conferring a benefit on the defendant; [7] and/or

5. the undertaking of those improvements whilst the plaintiff and defendant were of the mistaken belief that the defendant had power and authority to grant the plaintiff a 99 year lease of the Land. [8]

   4. Amended statement of claim filed on 18 September 2020, paragraphs 7–9.

   5. Amended statement of claim filed on 18 September 2020, paragraph 10.

   6. Amended statement of claim filed on 18 September 2020, paragraphs 13–15 and 29–31.

   7. Amended statement of claim filed on 18 September 2020, paragraph 32.

   8. Amended statement of claim filed on 18 September 2020, paragraph 33.

74. The plaintiff submitted that her claims are not claims for “damages or any other remedy … in respect of a warranty or other promise relating to an unenforceable agreement”. Rather, the claims are for remedies in respect of proprietary estoppel by encouragement, the breakdown of a joint endeavour and/or the benefit that the defendant has derived from the plaintiff’s alleged improvements to the Land as a result of an agreement for lease being void. [9]

    9. Plaintiff’s written submissions dated 22 October 2020, paragraphs 7 and 21–24.

75. The defendant’s submissions effectively treated the legal basis of the claims as irrelevant to the question whether they should be characterised as being “in respect of a warranty or other promise relating to an unenforceable agreement” within the meaning of s 42E(5). Counsel for the defendant repeatedly emphasised the factual basis of the claims.

76. Counsel for the defendant referred to s 119 of the Real Property Act 1900 (NSW), which applies in proceedings for the possession or recovery of land against the registered proprietor of that land brought by a person referred to in s 118(1)(e) or (f) of the Real Property Act. In short, those subsections of s 118 contemplate that a registered proprietor of land may be deprived of the land due to a misdescription of its boundaries or in circumstances where two folios have been created in the register for the same land and the registered proprietor in the earlier folio prevails. Section 119 provides that if:

1. the defendant registered proprietor in such proceedings has made improvements to the land prior to the commencement of the proceedings; and

2. the plaintiff’s title to the land is established,   

then the value of the improvements must be assessed and an order for possession or recovery of the land is not to be made in favour of the plaintiff unless the plaintiff pays into court for payment to the defendant an amount equivalent to the value of those improvements less the plaintiff’s costs of the proceedings.

77. The defendant acknowledged that s 119 does not apply to the present proceedings. However, counsel for the defendant emphasised the contrast between the specific provision in s 119 for claims for the value of improvements, and the lack of specific provision in Part 2, Division 4 of the Aboriginal Land Rights Act expressly permitting a person who has improved land whilst in possession of it under an agreement that is unenforceable by reason of s 42E(4) to make a claim for the value of those improvements. It was submitted that the Court should attribute to the legislature an intention in Part 2, Division 4 to exclude such claims by such persons and that the Court should therefore construe the description of claims to which s 42E applies as including the claims in this proceeding.

78. In the absence of authorities supporting that construction (and the defendant referred me to no such authority), I do not accept that a statutory provision that protects a registered proprietor of land in the unusual circumstances in which s 119 of the Real Property Act applies supports a construction of s 42E as precluding a person who has made improvements to land owned by an Aboriginal Land Council from making any claim for the value of those improvements, merely because the agreement pursuant to which they occupied the land was unenforceable.

79. Neither party made submissions concerning how the Court should construe the words used in s 42E(5) in the context of the language of the Aboriginal Land Rights Act as a whole and whether the respective constructions for which they contended would promote the purpose or objective underlying the Act: Interpretation Act, s 33. The need for submissions addressing these matters on the question of the proper construction of s 42E(5) illustrates why it would be inappropriate, in my opinion, to summarily dismiss the proceeding on the basis that the plaintiff’s claims are bound to fail by reason of s 42E(5) of the Aboriginal Land Rights Act.

80. The principles to be applied when determining an application for summary dismissal were summarised by the Court of Appeal in Simmons v New South Wales Trustee and Guardian (2014) 17 BPR 33,717; [2014] NSWCA 405 at [196]–[201]:

“196   It is not in dispute that ‘great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his cause by the appointed tribunal’: General Steel Industries Inc v Commissioner for Railways (NSW) (General Steel)[1964] HCA 69; 112 CLR 125at 130 (Barwick CJ).

197   More recently in Agar v Hyde [2000] HCA 41; 201 CLR 552, Gaudron, McHugh, Gummow and Hayne JJ said at [57]:

‘Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.’

198   Subsequent authorities have reaffirmed that formulation: see Batistatos v Roads and Traffic Authority (NSW) [2006] HCA 27; 226 CLR 256 at [46]; Spencer v Commonwealth at [24].

199   In Shaw v New South Wales [2012] NSWCA 102, Barrett JA (with whom Beazley, McColl, Macfarlan JJA, and McClellan CJ at CL agreed) expressed the test for summary dismissal as follows at [32]:

‘The question is...whether the claims in question are so obviously untenable or groundless that there is 'a high degree of certainty' that they will fail if allowed to go to trial; and whether this is one of the 'clearest of cases' in which the court may accordingly intervene to prevent the claims being litigated.’

200   Further, that assessment is to be made taking the plaintiff's case at its highest. The party applying for summary dismissal must accept the truth of all allegations in the statement of claim, and the ranges of meaning which the assertions of fact in the statement of claim are capable of bearing: Penthouse Publications Ltd v McWilliam (Court of Appeal (NSW), Priestley and Meagher JJA and Wardell AJA, 15 March 1991, unrep); Agius v New South Wales [2001] NSWCA 371 at [24].

201   No argument was raised on this appeal as to whether this test requires refinement in light of provisions of the Civil Procedure Act. That is, whether the statutory directives about case management and the ‘overriding purpose’ of the rules might warrant courts striking out proceedings on ‘less substantial grounds’ than those stated in General Steel: see Commonwealth of Australia v Griffiths [2007] NSWCA 370; 70 NSWLR 268 at [155] (Young CJ in Eq); Bott v Carter [2012] NSWCA 89 at [13]-[14] (Basten JA); Shaw v New South Wales at [33] and [128]-[134] (Barrett JA).”

81. I do not consider that it can be said with the degree of certainty referred to in Simmons (supra) at [196]–[200] that s 42E defeats the plaintiff’s claims in this proceeding.

82. Assuming (without deciding) that s 56 of the Civil Procedure Act supports the exercise of a power to summarily dismiss a proceeding with some lesser degree of certainty that claims are untenable or groundless and bound to fail, without sacrificing the achievement of a just resolution to quick and cheap considerations contrary to the overriding purpose, I do not consider that the present case reaches that lesser degree of certainty for all of the reasons already referred to above.

83. I therefore decline to summarily dismiss the proceeding on the first ground relied on by the defendant. Whether or not s 42E(5) operates to deny the plaintiff the relief claimed is a matter that must be determined at a final hearing on the merits, given my decision not to dismiss the proceeding summarily on either of the two alternative grounds relied on by the defendant for reasons that I address immediately below.

Second ground – res judicata or Anshun estoppel

84. The defendant submits that the plaintiff’s claims in the 2013 proceeding for a declaration that there is an agreement for lease between the plaintiff and defendant and an order requiring the defendant to enter into a lease by way of specific performance of that agreement or on the grounds that the defendant is estopped from refusing to do so, are res judicata by reason of the orders made by consent in the 2013 proceeding on 25 August 2015: Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 at [20]–[22]; Zetta Jet Pte Ltd v Ship “Dragon Pearl” (No 2) (2018) 265 FCR 290; [2018] FCAFC 132, especially at [14]–[18].

85. The defendant further submitted that the plaintiff’s claims in the amended statement of claim filed in this proceeding were res judicata by reason of the consent orders made in the 2013 proceeding on 25 August 2015. It was submitted that the claims in the amended statement of claim relate to improvements that form part of the Land and that “the only question that could possibly survive the res judicata that was given rise to by reason of [Young AJ’s] orders of 25 August 2015 is that very narrow issue of whether the plaintiff be entitled to remove [the improvements]”.

86. I reject those submissions. The claims in the amended statement of claim filed in the current proceeding rely on different causes of action than the causes of action pleaded in the 2013 proceedings: see [10]–[16] and [50]–[59] above. It follows that the causes of action in the present proceeding did not merge in the orders made on 25 August 2015. Those orders did not quell the controversy that is the subject of the present proceeding.

87. The defendant’s written submissions referred to issue estoppel in passing, but counsel for the defendant clarified in oral submissions that the defendant relied only on res judicata and Anshun estoppel. [10]

    10. Transcript, page 5 (lines 15–21 and 46–50) and page 7 (11–25).

88. The defendant’s submissions in relation to Anshun estoppel may be summarised as follows:

1. in the present proceeding, the plaintiff claims monetary compensation for improvements to the Land;

2. a claim for monetary compensation for improvements was not made in the 2013 proceeding, save for the second cross-claim which was dismissed by White J on 17 November 2015;

3. the “obvious reason” for dismissal of the second cross-claim was that it sought monetary compensation for improvements claim rather than removal of improvements as had been foreshadowed in the consent orders made by Young AJ on 25 August 2015;

4. the claim for monetary compensation for improvements in the current proceeding is based on the same facts as the 2013 proceeding and is so closely related to the issues in the 2013 proceeding that it should have been pleaded in the alternative, or should have been the subject of an application for leave to amend prior to the plaintiff consenting to the orders made by Young AJ on 25 August 2015. It is therefore an abuse of process for the plaintiff to now prosecute this proceeding.

89. The defendant’s submissions referred to abuse of process in the context of addressing Anshun estoppel, but I understood (and the defendant clarified in oral submissions) [11] that the defendant relies on Anshun estoppel and not some broader principle of abuse of process. [12]

    11. Transcript, page 8 (lines 36–50) – page 9 (lines 1–5).

    12. Compare UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45.

90. The plaintiff submits (citing Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507 at [22] (French CJ, Bell, Gageler and Keane JJ); Conference & Exhibition Organisers Pty Ltd v Johnson [2016] NSWCA 118 at [21]–[24] (Meagher JA, McColl and Leeming JJA agreeing)) that:

1. Anshun estoppel operates to preclude a party from asserting a claim or raising an issue of fact or law that is so closely related to the subject matter of proceedings already conducted that it ought reasonably to have been asserted or raised at an earlier time;

2. the question is whether the matter relied on in the present proceeding was so relevant to the subject matter of the 2013 proceeding that it was unreasonable not to rely on it in the 2013 proceeding;

3. this question is not answered merely by a mechanical approach to identifying common facts in proceedings said to give rise to an Anshun estoppel. There are a variety of reasons why it might be justifiable for a party to refrain from litigating an issue in one proceeding and seek to litigate it in a subsequent proceeding;

4. the mere fact that the matter could have been raised does not mean that it should have been raised. The matter has to have been so relevant to the earlier proceeding as to make it unreasonable not to raise it; and

5. it is a serious step to shut out a claim that a party wishes to pursue without determination of its intrinsic merit on the ground that it ought to have been raised in earlier litigation;

6. whilst the plaintiff’s claims in the present proceeding could have been brought in the 2013 proceeding, the relevant circumstances are such that it was not unreasonable for the plaintiff to have made those claims in the 2013 proceeding.

91. I accept that the submissions in (1) to (5) above accurately summarise the principles to be applied in determining whether an Anshun estoppel precludes the plaintiff from pursing the present proceeding.

92. The circumstances relied on by the plaintiff in support of the submission referred to in (6) above were:

1. the plaintiff’s lack of funds; [13]

2. the plaintiff’s limited education, inability to read or write and reliance on the legal advice given to her by the solicitors acting for her during the 2013 proceeding. Those solicitors did not give any advice that she was able to make a claim based on the grounds that it is unconscionable for the defendant to retain the benefit of and fail to account to her for the value of the improvements to the Land in circumstances where the improvements were made at her expense; [14]

3. the causes of action relied upon in the 2013 proceeding were fundamentally misconceived;

4. the 2013 proceeding was resolved without a hearing on the merits; and

5. the defendant has only revealed by its conduct that it would not account to the plaintiff for the increased value of its Land brought about by her improvements subsequent to the 2013 proceeding by pursuing bankruptcy action against the plaintiff in the knowledge that she has no assets of any value apart from her claim against the defendant arising out of the improvements.

   13. Affidavit of Lynette Joy Donnelly affirmed on 12 October 2020, paragraphs 6 and 22.

   14. Affidavit of Lynette Joy Donnelly affirmed on 12 October 2020, paragraphs 3, 5, 8, 20 and 21.

93. The plaintiff referred to the following statement in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 603 (emphasis added):

“…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. See the illustrations given in Cromwell v. County of Sac.”

94. The plaintiff also referred to Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231 at [85] where McColl JA (with whom Giles and Campbell JJA agreed) said (emphasis added):

“In considering whether an Anshun estoppel has been established it is necessary to bear in mind that ‘shut[ting] out a claim … a party wishes to pursue, without determination of its intrinsic merit, on the ground that it ought to have been raised in earlier litigation…is a serious step, [and] a power not to be exercised except ‘after a scrupulous examination of all the circumstances’ ‘: Ling v Commonwealth (1996) 68 FCR 180 (at 182) per Wilcox J, approved in [Bazos and Anor v Doman and Ors [2001] NSWCA 347] (at [45]) per Stein JA (Priestley and Beazley JJA agreeing); see also Brisbane City Council v Attorney-General (Qld) [1979] AC 411 (at 425) per Lord Wilberforce.”

95. The plaintiff also relied on the speech of Lord Bingham in Johnson v Gore Wood & Co [2002] 2 AC 1 where his Lordship said, in the context of discussing the broader species of abuse of process (at 31, emphasis added):

“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.”

96. Although the claims made in the present proceeding are different to those made in the 2013 proceeding, I accept that the claims in this proceeding were closely related to the claims in the 2013 proceeding and could have been raised in the alternative to the claims that were made in the 2013 proceeding. However, the question is whether the matters raised in this proceeding were so relevant to the 2013 proceeding as to make it unreasonable not to have raised them in the 2013 proceeding.

97. I have not been able to discern from the authorities any hard and fast rules as to the nature of the circumstances that may be taken into account in determining that question. It seems to me that the circumstances that may be taken in account are those that have a bearing on the “value judgment to be made referrable to the proper conduct of modern litigation”: Champerslife Pty Ltd v Manojlovski (2010) 75 NSWLR 245; [2010] NSWCA 33 at [3] (Allsop P), cited with approval in CG Maloney Pty Ltd v Noon [2011] NSWCA 397 at [62] (Campbell JA, Handley AJA and Tobias AJA agreeing) and at [157]–[159] per Handley AJA.

98. I do not consider that the plaintiff’s limited education and inability to read or write or the failure of her legal advisors in the 2013 proceeding to provide certain advice fall within the scope of the circumstances that may be taken into account in determining whether an Anshun estoppel operates to preclude the plaintiff from litigating the claims for relief in the amended statement of claim filed in this proceeding. Any party to litigation is ordinarily reliant on legal advice it receives concerning the conduct of that litigation. As Handley AJA said in CG Maloney Pty Ltd (supra) at [157]–[158], the Anshun principles promote efficiency and finality of litigation, consistently with s 63 of the Supreme Court Act 1970 (NSW) and s 56 of the Civil Procedure Act 2005 (NSW). In my opinion, it would significantly undermine the objective of finality of litigation that underlines the Anshun principles if parties were not bound by their conduct of earlier litigation merely because they identified or alleged a shortcoming in the legal advice or representation they had received.

99. Whilst I accept that the plaintiff’s lack of funds is a matter that may be taken into account, it does not seem to me to be directly relevant to the question whether it was unreasonable not to raise the present claims in the 2013 proceeding in all the circumstances.

100. It is the following circumstances that seem to me to be relevant.

101. The plaintiff did seek to introduce alternative claims for a monetary remedy referable to the value of the alleged improvements by the second cross-claim filed on 16 November 2015. As I have referred to in [25]–[30] above, the second cross-claim was dismissed by White J by orders made the following day on terms that the dismissal did not prevent the plaintiff from bringing any fresh proceedings or claiming the same relief in fresh proceedings.

102. No reasons for his Honour’s dismissal of the cross-claim were in evidence at the hearing before me of the defendant’s summary dismissal application. Counsel for the defendant invited me to infer that White J dismissed the cross-claim on the terms that his Honour did in order to preserve to the plaintiff the ability to bring a further proceeding to remove the improvements.

103. I do not consider that this inference is reasonably available for two reasons.

104. First, as I have referred to above, the second cross-claim pleaded facts and a claim for damages, without identifying the cause of action said to give rise to the defendant’s alleged liability in damages. This is an obvious reason commending summary dismissal of the second cross-claim. Indeed, it was a reason relied on in the defendant’s written submissions provided to White J in support of its application to dismiss the second cross-claim.

105. Second, the defendant also submitted before White J that the second cross-claim should be dismissed on the basis of Anshun estoppel (see [29(2)] above). As I have noted in [28(1)] above, the defendant’s notice of motion sought an order for dismissal on terms that the dismissal prevented the plaintiff from bringing any fresh proceedings or claiming the same relief in fresh proceedings. The terms of his Honour’s dismissal order were to the opposite effect. His Honour would not have dismissed the second cross-claim on terms preserving to the plaintiff the ability to bring any fresh proceedings, including fresh proceedings claiming damages or monetary relief in relation to the alleged improvements, if his Honour had intended to preserve to the plaintiff only the ability to bring a claim for removal of improvements.

106. In my opinion, the plaintiff’s conduct in now making the claims for relief set out in the amended statement of claim is consistent with the terms on which the second cross-claim in the 2013 proceeding was dismissed. Moreover, if the plaintiff succeeds on those claims, the judgment in her favour will not be inconsistent with the consent judgment and orders made in the 2013 proceeding on 25 August 2015. Contrary to the defendant’s submissions, there would be no contradiction between a judgment for possession in favour of the defendant and dismissal of claims for specific performance of a lease on the one hand, and a judgment requiring the defendant to pay equitable compensation or restitution to the plaintiff in respect of improvements to the Land on the other hand. In those circumstances, it cannot be said that it was unreasonable for plaintiff not to have prosecuted those claims for relief in the 2013 proceeding, in my opinion. It is true that almost five years elapsed between the dismissal of the second cross-claim and the commencement of this proceeding. However, I note that the defendant does not submit that this delay per se renders the current proceeding an abuse of process.

107. For all of those reasons, I decline to summarily dismiss the proceeding on the grounds of res judicata or Anshun estoppel.

108. I now turn to the third ground relied on by the defendant in support of its motion for summary dismissal.

Third ground – ulterior purpose

109. The defendant submitted that there is a compelling inference that the plaintiff’s purpose in commencing the present proceeding was “not vindication of any rights she claims to have, but rather an attempt to disrupt” the hearing of the creditor’s petition in the Federal Circuit Court. The defendant submitted that the inference arises from:

1. the delay in commencing the present proceeding until one month before the hearing of the creditors petition; and

2. the fact that, when the statement of claim was served on the defendant, the plaintiff requested the adjournment of the creditor’s petition pending determination of her claims in this proceeding. The defendant referred to this as an “express motive”.

110. The plaintiff will only succeed in disrupting the bankruptcy proceedings in any meaningful sense (that is, more than temporarily) if she succeeds in her claims for relief in this proceeding. In that event, she will be entitled to some relief that reflects the value of the improvements that she says she made to the Land. Neither the fact that she may then be able to rely on such a judgment in her favour to offset her liability to pay the defendant’s costs of the 2013 proceedings, and thereby avoid bankruptcy, nor the fact that the Federal Circuit Court decided to adjourn the creditor’s petition pending determination of this proceeding, renders this proceeding an abuse of process. As the plaintiff submitted, it is not an abuse of process for a party to commence or maintain proceedings for the purpose of achieving a result within the scope of the remedy sought, irrespective of whether that result (if obtained) may then achieve or contribute to some additional purpose or motive of the party: Williams v Spautz (1992) 174 CLR 509 at 526 (Mason CJ, Dawson, Toohey and McHugh JJ) and at 535 (Brennan J); Lunt v Victoria International Container Terminal Ltd [2020] FCAFC 40 at [16] and [20].

111. For those reasons, I do not consider that the plaintiff has commenced the present proceeding for a purpose that renders it an abuse of process. The defendant undoubtedly feels frustrated by the delay that the commencement of this proceeding has occasioned to the hearing of its creditor’s petition: see [50] above. However, the defendant has made an equal contribution to the delay of its bankruptcy proceedings by waiting eight months after its costs were assessed before causing the costs assessors certificate to be registered as a judgment and waiting a further 16 months to serve a bankruptcy notice (with one notice having being issued and then withdrawn in the meantime): see [33]–[40] above.

Conclusion and orders

112. For all of the above reasons, the defendant’s notice of motion filed on 11 September 2020 is dismissed.

113. Both parties accepted that the costs of the notice of motion should follow the event.

114. Accordingly, I make the following orders:

1. Dismiss the notice of motion filed by the defendant on 11 September 2020.

2. Order the defendant to pay the plaintiff’s costs of the notice of motion.

**********

Endnotes

Decision last updated: 04 November 2020