Fairfield Pastoral Holdings as the trustee of the Piney Ridge Trust v Van Niekerk
[2025] FCAFC 25
•12 March 2025
FEDERAL COURT OF AUSTRALIA
Fairfield Pastoral Holdings as the trustee of the Piney Ridge Trust v Van Niekerk [2025] FCAFC 25
Appeal from: Fairfield Pastoral Holdings Pty Ltd as trustee of the Piney Ridge Trust v Van Niekerk [2023] FCA 1185 File number: SAD 155 of 2023 Judgment of: CHEESEMAN, GOODMAN AND MCEVOY JJ Date of judgment: 12 March 2025 Catchwords: ESTOPPEL – Res judicata – issue estoppel – Anshun estoppel – where primary judge concluded that Anshun preclusion doctrine prevented claim being raised in subsequent proceedings – where leave had previously been granted to raise claim in earlier proceedings but was not exercised – where leave had subsequently been refused in the earlier proceedings to raise claim shortly before trial – whether primary judge erred in determination that the claim was precluded in the subsequent proceedings – no error –appeal dismissed Cases cited: Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175
Champerslife Pty Ltd v Maojlovski (2010) 75 NSWLR 245
Clayton v Bant (2020) 272 CLR 1
Fairfield Pastoral Holdings Pty Ltd as trustee of the Piney Ridge Trust v Van Niekerk [2023] FCA 1185
Fairfield Pastoral Holdings Pty Ltd v Ridge Estate Pty Ltd [2022] FCA 1
Henderson v Henderson (1843) 3 Hare 100
Inghams Enterprises Pty Ltd v Francis Hannigan [2021] NSWCA 309
Macquarie Bank Ltd v National Mutual Lift Association of Australia Ltd (1996) 40 NSWLR 543
Mandeville v Better Lending Pty Ltd (2021) 139 SASR 1
Palmer v Citic Ltd (No 7) [2023] WASC 202
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Ridge Estate Pty Ltd v Fairfield Pastoral Holdings Pty Ltd [2024] FCAFC 17
Tomlinson v Ramsay Food Processing Pty Ltd (2015) 256 CLR 507
UBS AG v Tyne (2018) 265 CLR 77
Wong v Minister for Immigration and Multicultrual and Indigenous Affairs (2004) 146 FCR 10
Division: General Division Registry: South Australia National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 57 Date of hearing: 8 August 2024 Counsel for the Appellant: Simon Ower KC and Lewis Gentry Solicitor for the Appellant: Elix Lawyers Counsel for the Respondent: Tim Kentish Solicitor for the Respondent: HGV Legal ORDERS
SAD 155 of 2023 BETWEEN: FAIRFIELD PASTORAL HOLDINGS AS TRUSTEE OF THE PINEY RIDGE TRUST
Appellant
AND: BRENDA VAN NIEKERK
Respondent
ORDER MADE BY:
CHEESEMAN, GOODMAN AND MCEVOY JJ
DATE OF ORDER:
12 MARCH 2025
THE COURT ORDERS THAT:
1.The appeal be dismissed.
2.The appellant pay the respondent’s costs as agreed or assessed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
THE COURT:
By a notice of appeal filed on 2 November 2023 the appellant, Fairfield Pastoral Holdings Pty Ltd (FPH) as trustee of the Piney Ridge Trust (the PRT), appeals from orders made by the primary judge dismissing its originating application for relief in Fairfield Pastoral Holdings Pty Ltd as trustee of the Piney Ridge Trust v Van Niekerk [2023] FCA 1185.
The proceedings before the primary judge were, in effect, a sequel to proceedings that had been commenced in 2018 and in which White J pronounced judgment on 4 January 2022: Fairfield Pastoral Holdings Pty Ltd v Ridge Estate Pty Ltd [2022] FCA 1. An appeal from White J’s orders to the Full Court by the respondents in those proceedings (which included the respondent to the present appeal, Ms Brenda Van Niekerk) was subsequently dismissed: Ridge Estate Pty Ltd v Fairfield Pastoral Holdings Pty Ltd [2024] FCAFC 17 (Banks-Smith, O’Sullivan and Feutrill JJ), and an application for special leave to appeal to the High Court of Australia was refused.
While the appeal from the orders of White J was pending, the proceedings which are the subject of the present appeal were instituted and heard by the primary judge. As will be seen, one of the principal issues which fell for determination before his Honour was whether a point concerning the status of a loan could not have been pleaded earlier, in the proceedings before White J, and thus whether FPH’s claim (either in its entirety, or the part concerning interest on the liability) was precluded by res judicata or Anshun estoppel.
The primary judge analysed the matters raised in the earlier proceedings between the parties and concluded (at [55]) that the issue concerning the loan sought to be raised by FPH in the action before him was so closely related to the issues in the proceedings before White J that it was not reasonable for FPH to have failed to raise it in those earlier proceedings. Whether or not the primary judge was correct in his analysis in this regard is the question for determination in this appeal.
For the reasons that follow we have concluded that there was no error in the primary judge’s consideration of the underlying facts, or his Honour’s identification and application of relevant legal principle. The appeal will therefore be dismissed and it is unnecessary to consider the respondent’s notice of contention.
BACKGROUND
The principal background facts found by the primary judge (at [1]-[10]) are not challenged. In substance they are as follows.
Under a deed executed on or about 31 March 2016 (the trust deed), FPH was appointed as the trustee of the PRT. The appointor and primary beneficiary under the trust deed was the present respondent, Ms Van Niekerk.
On 17 February 2016 FPH, purportedly acting as trustee of the PRT (although it had not yet been appointed trustee), had entered into a contract to purchase a property known as Lot 2, Piney Ridge Road Brukunga (Lot 2). Lot 2 was adjacent to a property known as Lot 1, owned by Ridge Estate Pty Ltd (Ridge Estate), an entity associated with Mr Steven Van Niekerk (the son of Ms Van Niekerk). Mr Steven Van Niekerk had wished to purchase Lot 2 but was unable to do so, so he had asked his friend and business associate, Dr Andrew Hamilton, to assist him. Dr Hamilton was the sole director of FPH. The formal appointment of FPH as trustee of the PRT took place between execution and settlement of the contract for the purchase of Lot 2.
The purchase price of Lot 2 was $750,000. FPH paid a deposit of $30,000 (which it borrowed from its wholly owned subsidiary Fairfield Pastoral Holdings No 1 Pty Ltd (FPH No 1)), borrowed $525,000 from the National Australia Bank (NAB) secured by a mortgage over Lot 2 and a further $182,130 secured by a mortgage over equipment, and provided $59,500 from its own funds. Settlement occurred on 8 April 2016.
By October 2018 the relationship between Mr Steven Van Niekerk and Dr Hamilton had soured. On 4 October 2018, Ms Van Niekerk executed a document which purported to remove FPH as trustee of the PRT and appoint Ridge Estate in its place (the removal deed).
Dr Hamilton and Mr Steven Van Niekerk had entered into substantial joint business dealings since around 2014, principally involving attempts to acquire properties that might generate income from coal seam gas exploration. The falling out between the two men led to the proceedings before White J which have been mentioned. Those proceedings encompassed the dealings which have been described above, along with many other issues. The applicants in those proceedings were FPH and FPH No 1. The respondents were Ridge Estate, Mr Steven Van Niekerk, his father, Mr Philip Van Niekerk, and Ms Van Niekerk.
Amongst the relief granted by White J in that proceeding was a declaration that the removal deed was void. FPH therefore continues to be (and has been since March 2016) the trustee of the PRT. The proceedings before the primary judge concerned rights which FPH asserted it had in that capacity.
In June 2017 Mr Steven Van Niekerk had identified a property in Whale Beach, on the Northern Beaches of Sydney (the Whale Beach property), which he wished to purchase. The purchase price was $3.05 million. Mr Steven Van Niekerk procured FPH, in its capacity as trustee of the PRT, to be the purchaser of this property. The contract of sale was executed on 7 July 2017. The deposit was $305,000, with $152,500 to be paid on exchange and the remainder to be paid either on completion or upon written demand by the vendor. The date for completion specified in the contract was 30 November 2017. The initial $152,500 was paid on behalf of FPH by its subsidiary FPH No 1.
Neither FPH nor Mr Steven Van Niekerk had ready access to anything approaching $3.05 million and efforts to raise the finance needed to complete the contract were unsuccessful. At some stage Mr Steven Van Niekerk negotiated with the vendors for a later completion date in return for an increase in the purchase price to $3,200,000. In January 2018, FPH paid the second part of the deposit. For this purpose, FPH borrowed $122,000 from the NAB (the Whale Beach loan), secured by a mortgage over Lot 2.
In June 2018, citing purchaser default, the vendors of the Whale Beach property terminated the contract and retained the deposit. FPH was left out of pocket and with a liability of $122,000 to the NAB upon which it had to pay interest.
The proceedings before White J had involved a large number of issues as between Dr Hamilton and Mr Stephen van Niekerk. However, FPH’s originating application and statement of claim in those proceedings made no mention of the Whale Beach loan – that is, the amount of $122,000 which FPH had borrowed from the NAB, secured over Lot 2. By orders made on 20 March 2020, however, White J had granted leave to FPH to amend its claim to include a claim for relief in relation to the Whale Beach loan. Importantly for present purposes, this leave was not exercised. The primary judge in the present proceedings held (at [55]), and this is not challenged by FPH, that this was a “deliberate forensic decision” on the part of FPH not to plead any issue concerning the Whale Beach loan.
Before the commencement of the trial before him, White J had made orders on 26 March 2021 for the judicial sale of Lot 2. That sale was completed in July 2021 and the net proceeds after repayment of mortgages (including the Whale Beach loan) were paid into court. It is relevant to observe, however, that in obtaining orders for the judicial sale of Lot 2, the Whale Beach loan was misdescribed by Dr Hamilton in his evidence, such that neither the court nor the respondents were informed that the loan would be discharged from the proceeds of sale.
Subsequently, a fortnight or so before the trial before White J was to commence, FPH sought leave to amend its pleading to raise a claim in relation to the Whale Beach loan. The proposed amendment relevantly sought orders that FPH be indemnified from the funds held in court (as assets of the PRT) in respect of liabilities which included, without limitation, a deposit and other amounts for the purchase of the Whale Beach property. These were particularised by reference to a schedule (Annexure J) which listed various expenses, including interest on the Whale Beach loan. Both White J (at [433]-[434] of his reasons for judgment), and the primary judge (at [52(a)]), ultimately held that this claim necessarily depended upon FPH establishing the capacity in which the Whale Beach loan was entered into.
Justice White refused FPH’s application for leave to amend the further amended originating application and the further amended statement of claim by reason of the delay in making it, the absence of any explanation for the leave which had been granted on 20 March 2020 not having been exercised, and the prejudice which would have been suffered by the respondents had the late amendment been allowed.
FPH’s evidence in support of the judicial sale application, which has been mentioned, mischaracterised the debts secured over Lot 2 by describing the loan to be discharged as equipment finance rather than the Whale Beach loan (when the equipment finance had been discharged in April 2019), and failed to disclose that the Whale Beach loan would also be discharged from the proceeds of sale of Lot 2. While White J considered that there was undoubtedly a proper basis for the respondents to contend that these omissions were deliberate on the part of Dr Hamilton and calculated to enable the Whale Beach loan to be discharged without FPH having to prove an entitlement to do so, his Honour ultimately held that the omission was a “manifestation of the muddled headedness and foolishness of Dr Hamilton evident in so much of his conduct” (see at [424]-[431]).
In circumstances where FPH had not established its entitlement to an indemnity in respect of the Whale Beach loan at trial, White J’s final orders provided for FPH to have the opportunity to pursue a further claim to establish its entitlement before any orders were made for payment out of the funds held in court (at [654(h), [656]-[661]). Significantly, however, White J expressly noted (at [661]) the following:
The remaining $122,000, plus the interest accrued on that portion of the monies held in Court, should, subject to further order of the Court, continue to be held in the Court’s Litigants’ Fund to the credit of this action. My intention is to give FPH the opportunity in other proceedings to vindicate its entitlement to that sum. As I have said, I am making no comment as to the viability of such an action, given FPH did not pursue the claim in these proceedings. If no proceedings are current as at 4 April 2022, any other person with an interest in the monies may apply for an order for payment out. If proceedings are current, FPH or the respondents may seek an extension of the time in which the monies are to continue to be held, pending the determination of those proceedings. At the conclusion of those proceedings, the same persons or entities may apply for an order for payment out in accordance with the determination of the issue in those proceedings.
(Emphasis added.)
As has been explained, the proceedings before the primary judge were the further proceedings for which White J made allowance in his orders. Ms Van Niekerk was the only respondent, as the appointor and primary beneficiary under the terms of the trust deed. The principal relief that FPH sought before the primary judge were declarations that:
(a)the liability that it incurred pursuant to the Whale Beach loan was incurred in its capacity as trustee of the PRT; and
(b)it was and is entitled to apply the proceeds from the sale of Lot 2 in discharge of the Whale Beach loan, pursuant to its right of indemnity as trustee.
THE REASONING OF THE PRIMARY JUDGE
The primary judge identified the principal issues arising before him as follows:
(a)whether FPH incurred the liability under the Whale Beach loan as trustee of the PRT;
(b)whether FPH was therefore entitled to be indemnified in respect of that liability (and for interest that it paid on that liability) out of the trust assets (including whether indemnity was not available because the liability was incurred in breach of trust and/or circumstances of gross negligence); and, as has been mentioned,
(c)whether FPH’s claim (either in its entirety, or the part concerning interest on the liability) is precluded by res judicata or Anshun estoppel.
Appropriately and logically the primary judge began with consideration of whether, by reference to the doctrine of res judicata and the principle of Anshun estoppel, FPH could advance its claim in light of the manner in which it conducted the earlier proceeding before White J, and his Honour’s judgment in that case: see generally Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 (Gibbs CJ, Mason, Murphy, Aikin and Brennan JJ) (Anshun); Tomlinson v Ramsay Food Processing Pty Ltd (2015) 256 CLR 507 (French CJ, Bell, Gageler, Keane and Nettle JJ) (Tomlinson). It is as well to observe that the primary judge’s consideration of the relevant legal doctrines was detailed and careful.
The primary judge concluded (at [29]-[38]) that the respondent’s reliance on the doctrine of res judicata was misplaced. His Honour reached a similar conclusion on the question of whether the status of the Whale Beach loan was the subject of any issue estoppel (at [39]-[41]).
The primary judge then turned (at [42]), to Anshun estoppel, noting that the test stated in Anshun itself (at 602) by Gibbs CJ, Mason and Aickin JJ is as follows:
… we would prefer to say that there will be no estoppel unless it appears that the matter
relied upon … in the second action was so relevant to the subject matter of the first
action that it would have been unreasonable not to rely on it.The primary judge continued (at ([43]), explaining that the meaning of “unreasonableness” in this context is where the unreasonableness of having omitted to raise a claim in the first proceeding must flow, substantially if not wholly, from the closeness of its connection with the subject matter of that proceeding, referring to Champerslife Pty Ltd v Maojlovski (2010) 75 NSWLR 245 at [3] (Allsop P). His Honour then turned (at [44]) to consider whether FPH had relevantly “refrained from litigating” its claim for indemnity in relation to the Whale Beach loan in circumstances where it had sought to amend its claim in the proceedings before White J to plead a claim for indemnity in respect of that loan, but had been prevented from doing so (essentially because the application to amend was made so late). These circumstances, his Honour noted, had the consequence that the Anshun estoppel was sought to be based not on the omission to raise a claim, but on the lateness in doing so.
After careful consideration at [45]-[50], the primary judge concluded that an Anshun estoppel may arise where the failure to litigate a matter in earlier proceedings was due to leave to amend to raise the issue being refused, referring in particular to Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 (French CJ, Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ) (Aon); Spencer Bower and Handley, Res Judicata (5th ed, LexisNexis, 2019) at [8.36] which cites Aon for the proposition that “[the] Henderson principle applies although leave to raise the omitted matter was refused”; and contra Macquarie Bank Ltd v National Mutual Lift Association of Australia Ltd (1996) 40 NSWLR 543 at 618-619 (Macquarie Bank) where Powell JA considered that if a party had sought but been refused leave to raise a matter in earlier proceedings that would constitute special circumstances requiring the court to permit the matter to be raised in the second proceedings. We interpolate that the sixth edition of Spencer Bower and Handley (LexisNexis, 2024) at [8.36] is to the same effect as the fifth edition, both contending that Powell JA’s contrary view cannot be accepted.
The primary judge’s application of the relevant principles commences at [51]. This was done by reference to FPH’s contention, which is maintained on appeal, that there was no need for it to have brought a claim in respect of the Whale Beach loan as it had already been satisfied from the proceeds of sale of Lot 2, and that the need to do so only arose later, by reason of the final orders made by White J, which withheld part of the funds to which FPH was entitled and required FPH to make out a claim for indemnity in order to obtain release of those funds. Then (at [52]) his Honour identified the difficulties with FPH’s submission in this regard, concluding that it:
(a)did not address the claim that had unarguably been sought to be advanced in respect of interest, which claim depended on FPH establishing the capacity in which it entered into the Whale Beach loan;
(b)did not address why the issue had not been ventilated when leave to amend was granted by White J in March 2020; and
(c)was inconsistent with the application to amend ultimately made shortly before trial.
The primary judge therefore concluded (at [53]) that it was unreasonable for FPH not to have raised the issue that it then sought to raise before his Honour concerning the Whale Beach loan in the proceedings before White J, and that there are no special circumstances that prevent an Anshun estoppel from arising. His Honour elaborated (at [54]) to the effect that in relation to FPH’s claim for interest on the Whale Beach loan among the payments in respect of which it was seeking indemnification, having sought to advance that claim in the proceedings before White J and then withdrawn it when it became untenable because the necessary facts as to the capacity in which the loan was taken out were not pleaded or proved, FPH could not be heard to advance this claim again.
The primary judge addressed the point concerning the status of the Whale Beach loan at [55]. His Honour concluded that there was no reason why the point concerning the status of that loan could not have been pleaded earlier, finding that:
(a)there was a “deliberate forensic decision” not to exercise the leave granted to plead the issue in March 2020, well before the sale of Lot 2 resulted in the repayment of the loan;
(b)the grant of leave indicated the desirability of determining the Whale Beach loan issues at the same time as, and in the context of, the other issues arising from the falling out of Dr Hamilton and Mr Steven Van Niekerk; and
(c)the status of the Whale Beach loan “necessarily underpinned the claim for the interest payments that FPH was maintaining.”
Thus his Honour concluded that the issue was “so closely related to” the issues in the proceedings before White J that it was not reasonable for FPH to have failed to raise it.
Concluding his analysis of the Anshun preclusion point, the primary judge also considered (at [56]) whether there were “special circumstances” such that, despite his conclusion about unreasonableness, FPH should have been permitted to raise the Whale Beach loan. His Honour concluded (at [57]) that there were no such circumstances, the relevant circumstances not rising to the exceptional level required.
FPH’S GROUNDS OF APPEAL
FPH’s grounds of appeal are expressed in the following terms in its notice of appeal:
1.The learned primary judge erred in finding that the application to amend the earlier proceedings was an application to include a claim for the determination of the Appellant’s right of indemnity in respect of the “Whale Beach Loan” (as defined by His Honour at para. [9], being the loan itself and not the interest payments thereon), and ought to have held that it related to the interest payments therein only.
2.The learned primary judge erred in holding that Anshun estoppel had application in these proceedings to preclude the determination of the Appellant’s right of indemnity in respect of the “Whale Beach Loan” (as defined by His Honour at para. [9], being the loan itself and not the interest payments thereon) in these proceedings where:
a.the loan had been discharged by the proceeds of sale of a trust property known as “Lot 2”, and was not a liability of the Trust or the Appellant as at the date of trial; and
b.the necessity for the determination only arose by reason of the judgment and orders of White J (being the judgment of 4 January 2022, para. [656]-[661]).
3.Further or in the alternative to ground 2 above, the learned primary judge erred in holding that it was unreasonable for the Appellant not to have sought the determination of the Appellant’s right of indemnity in respect of the “Whale Beach Loan” (as defined by His Honour at para. [9], being the loan itself and not the interest payments thereon) in the earlier proceedings where:
a.the loan had been discharged by the proceeds of sale of a trust property known as “Lot 2”; and
b.the necessity for the determination only arose by reason of the judgment and orders of White J (being the judgment of 4 January 2022, para. [656]-[661]).
4.In the further alternative, the learned primary judge erred in holding that the above circumstances alleged in relation to the Whale Beach Loan did not constitute special circumstances that otherwise would mean that the rule of preclusion did not arise in these proceedings.
5.The learned primary judge erred in holding that, in the circumstances of this matter, the refusal of leave to amend the earlier proceedings to include:
a.a claim for a determination of the right of indemnity to interest in relation to the Whale Beach Loan; and
b.(in the alternative to ground 1) a claim for determination of the Appellant’s right of indemnity in respect of the “Whale Beach Loan” (as defined by His Honour at para. [9], being the loan itself and not the interest payments thereon);
Itself (sic) constituted a special circumstance that otherwise would mean that the rule of preclusion did not arise in these proceedings.
These grounds can conveniently be considered under two heads.
FPH’s distinction between the Whale Beach loan and the interest payments
Grounds 1, 2 and 3 are each concerned with what is said to have been the factual error of the primary judge in finding that the application to amend the earlier proceedings was an application to include a claim for the determination of FPH’s right of indemnity in relation to the Whale Beach loan itself, rather than the interest payments thereon. By ground 1, FPH contends that his Honour ought to have held that the application to amend related to the interest payments paid on the Whale Beach loan, and that had this distinction been appreciated he would not have treated the two claims as one and the same. The fact that the primary judge approached matters in this way, FPH submits, affected the reasonableness analysis his Honour was obliged to undertake in considering whether FPH was the subject of an Anshun estoppel, an analysis which is fact specific and contextual, referring to Tomlinson at [22] (French CJ, Bell, Gageler and Keane JJ).
By ground 2, FPH maintains that the primary judge erred in holding that Anshun estoppel had any application to preclude the determination of its right of indemnity in respect of the Whale Beach loan (as distinct from the interest payments) where the loan had been discharged by the proceeds of sale of Lot 2 and was not a liability of the PRT or FPH at the date of trial, and the need for the determination only arose because of White J’s final judgment and orders. Ground 3, as an alternative to ground 2, proceeds on the basis that it was an error for the primary judge to hold that it was unreasonable for FPH not to have sought determination of its right to indemnity in relation to the Whale Beach loan in the circumstances which are the focus of ground 2.
FPH maintains that it never had any requirement to litigate a claim in respect of the Whale Beach loan itself, and that it was only the determination of the proceedings before White J that changed those circumstances and created the need to litigate the matter further. FPH challenges the reasoning of the primary judge, and his Honour’s reference to the language of “could” rather than “should” (at [55]) in relation to whether the Whale Beach loan could not have been pleaded earlier, contending that that analysis is similar to the reasoning criticised by the High Court in Clayton v Bant (2020) 272 CLR 1 at [31] (Kiefel CJ, Bell and Gageler JJ).
Insofar as the primary judge regarded FPH’s argument concerning its asserted changed circumstances as being attended by difficulties (at [52]), FPH submits that the first of these difficulties only related to the Whale Beach loan interest payments, the second concerned the lack of explanation for why the issue was not litigated originally (and, it is said, his Honour did not explain why this was significant), and the third appeared to be based on the finding that leave had been sought to litigate the claim, when this was not so.
FPH submits that in consequence of these matters the primary judge erred in holding that it was unreasonable in the circumstances for FPH not to have brought the claim for the Whale Beach loan “per se” in the proceedings before White J, and that FPH was precluded in the proceedings before the primary judge from doing so.
We are not persuaded by grounds 1, 2 and 3 and the submissions advanced by FPH in support of them. In our assessment the distinction FPH seeks to draw between the principal component of the Whale Beach loan and the interest component of that loan to justify its failure to agitate an entitlement to interest in the proceedings before White J is not merely minor (as senior counsel for FPH conceded in argument), it is a distinction without a difference. The fact that there may have been no obligation to repay the principal component of the loan but there was an alleged obligation to repay interest amounts seems to us not to affect the analysis of the primary judge in the way asserted by FPH. As the respondent submits, it is clear from his Honour’s reasons that he was fully aware of the nature of the proposed amendments which were refused, and that they raised as an issue in the proceeding whether the Whale Beach loan was an appropriate trust expense (see at [15], [29]-[38], [52(a)], [54] and [55]).
We accept the respondent’s submission that the primary judge proceeded on the correct basis that the claim which was sought to be advanced by FPH for an indemnity in respect of interest paid on the Whale Beach loan necessarily raised as an issue whether the Whale Beach loan was a trust expense in the first place. Further, given the way in which the issue arose in the proceedings before White J, it having emerged at trial that FPH had misled the court in its evidence to obtain judicial sale orders in respect of Lot 2, we accept that it is difficult for FPH now to contend that these circumstances favour its position. It is noteworthy that FPH’s submissions do not address these circumstances.
Even if we were to accept (and we do not) that the primary judge erred in his understanding of the nature of the amendment sought to be made by FPH to its pleadings, that would not undermine his Honour’s ultimate conclusion. As the respondent submits, that the particulars in respect of which the amendment was sought related only to interest on the Whale Beach loan does not assist FPH given that this necessarily raised as an issue whether the loan was an appropriate trust expense. The point also does not address FPH’s failure to exercise the leave which had been granted, or the overlap of issues.
Insofar as FPH can be taken to rely on the remarks of Powell JA in Macquarie Bank to dispute the primary judge’s analysis of the relevant principles of Anshun estoppel (at [45]-[55]), which hold that such an estoppel may arise where the failure to litigate a matter in earlier proceedings was due to leave to amend to raise the issue being refused, we apprehend no difficulty with the reasoning of the primary judge. As the respondent submits, while it is not necessarily determinative, the fact that leave to amend to introduce a claim was sought and refused is plainly relevant to consideration of whether subsequent litigation of the point is precluded by an Anshun estoppel.
In this regard we agree with the learned authors of Spencer Bower and Handley that the view so definitively expressed by Powell JA in Macquarie Bank at 619 cannot be accepted as a statement of generally applicable principle. It would be anomalous if a party could avoid an Anshun estoppel merely by virtue of having sought to raise the issue by means of a late amendment. This is especially so in light of the now entirely orthodox recognition of the importance of timely, cost effective and efficient conduct of modern civil litigation. In UBS AG v Tyne (2018) 265 CLR 77 (UBS AG) at [38], Kiefel CJ, Bell and Keane JJ addressed the effect of Aon in this respect as follows:
The timely, cost effective and efficient conduct of modern civil litigation takes into account wider public interests than those of the parties to the dispute. These wider interests are reflected in s 37M(2) of the [Federal Court of Australia Act]. As the joint reasons in Aon Risk Services Australia Ltd v Australian National University explain, the “just resolution” of a dispute is to be understood in light of the purposes and objectives of provisions such as s 37M of the [Federal Court of Australia Act]. Integral to a “just resolution” is the minimisation of delay and expense. These considerations inform the rejection in Aon of the claimed “right” of a party to amend its pleading at a late stage in the litigation in order to raise an arguable claim. The point is made that a party has a right to bring proceedings but that choices are made respecting what claims are made and how they are framed. Their Honours speak of the just resolution of the dispute in terms of the parties having a sufficient opportunity to identify the issues that they seek to agitate. The respondent’s argument in Aon, that the proposed amendment to raise the fresh claim was a necessary amendment to avoid multiple actions, did not avail. As their Honours observe, if reasonable diligence would have led to the bringing of the claim in the existing proceedings, any further proceeding might be met by a stay on Anshun grounds.
(Citations omitted.)
Gageler J (as his Honour then was) expressed his agreement with the reasons of Kiefel CJ, Bell and Keane JJ in UBS AG at [61], and made further relevant observations at [66]-[70].
Nonetheless, we would also observe that what Powell JA said in Macquarie Bank at 619 should properly be understood as obiter, directed to a factual conclusion, rather than as a generally applicable principle of law. Whether a party which had sought leave to add a cause of action and been refused will later be precluded from litigating the claim separately will always be fact-dependent, because of the nature of the principle that is being applied. Powell JA’s statement in Macquarie Bank at 619 must be read subject to his Honour's earlier reasoning, where he held that the refusal by Cole J in the earlier proceeding to grant the amendment constituted a substantial injustice. It is important to have regard to the issue Powell JA was deciding, which was a factual and not a legal issue. Accordingly, his Honour’s observation at 619 is properly to be understood as expressing a conclusion about facts that could not possibly be of universal application, or constrain the proper application of the principle in Henderson v Henderson (1843) 3 Hare 100 at 114-115 (Wigram VC) (Henderson). The application of that principle will vary, and inevitably call for the examination of the facts on a case-by-case basis.
As to the primary judge’s difficulties with FPH’s contention that it only became necessary to advance a claim in relation to the Whale Beach loan in the light of White J’s final orders withholding part of the funds and requiring FPH to make a claim for indemnity (at [52]), we accept that his Honour’s analysis in this part of his reasons correctly addressed why FPH should reasonably have prosecuted claims in respect of the Whale Beach loan as part of the proceedings before White J, and that FPH’s submissions on the appeal do not meaningfully address this analysis. As the respondent submits, this is particularly so given FPH’s clear recognition at the relevant time of the need to amend its pleadings and establish a right in respect of interest on the Whale Beach loan, as well as the unexplained failure to exercise the leave to amend granted by White J to plead a claim in relation to the Whale Beach loan in March 2020.
As the primary judge explained in relation to FPH’s claim for indemnification for the interest on the Whale Beach loan (at [54]), having sought to advance that claim and then withdrawn it when it became untenable because the necessary facts as to the capacity in which the loan was taken out were not pleaded or proved, an Anshun estoppel arose.
Further, insofar as FPH is critical of the primary judge’s use of the language of “could” rather than “should” (at [55]), that is to say his Honour’s conclusion that there was no reason why the point concerning the status of the Whale Beach loan could not have been pleaded earlier, we do not accept these criticisms. As we have made clear, we accept the respondent’s submission, that the primary judge was obviously aware of the circumstances in which the issue of whether the Whale Beach loan was a properly incurred trust expense arose. His Honour’s detailed and careful reasons for judgment make this entirely clear, and we do not consider that they disclose any impermissible reasoning based on possibility only. The final sentence of the paragraph, which concludes that “[t]he issue was in my view ‘so closely related to’ the issues in [the proceeding before White J] that it was not reasonable to fail to raise it”, makes this clear.
FPH’s claim that there were special circumstances
Ground 4 contends that the primary judge was in error not to conclude that in all the circumstances relating to the Whale Beach loan there were not “special circumstances” such that the rule of preclusion did not arise. Ground 5 puts the point in different language, advancing the contention that in the circumstances the refusal of leave to amend the earlier proceedings to include a claim for indemnity for interest on the Whale Beach loan and (alternatively) a claim for indemnity in relation to the Whale Beach loan, itself constituted a “special circumstance” such that the rule of preclusion did not arise.
In support of these grounds FPH refers to the observations of the primary judge in relation to “special circumstances” (at [50]), and in particular his Honour’s reference to Wong v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 146 FCR 10 at [38] (Emmett, Conti and Selway JJ). FPH submits that whether “special circumstances” exist is a further, separate and broader inquiry from that of reasonableness, referring in this regard to Mandeville v Better Lending Pty Ltd (2021) 139 SASR 1 at [109]-[112] (Doyle, Livesey and Bleby JJA); Inghams Enterprises Pty Ltd v Francis Hannigan [2021] NSWCA 309 at [25] (Gleeson JA, Simpson AJA agreeing); Palmer v Citic Ltd (No 7) [2023] WASC 202 at [77] (Lundberg J). FPH submits that the primary judge appeared to accept that this was so.
In this context FPH refers explicitly to the view of Powell JA in Macquarie Bank at 618-619, where his Honour considered that a refusal of leave itself constituted “special circumstances”. FPH submits that the primary judge did not expressly address the question of whether leave being refused constitutes special circumstances, but instead noted the debate in the context of what FPH describes as the earlier question: that is, whether there could be an Anshun estoppel where there was not an omission to raise the issue, but rather only a late refusal of leave to do so. FPH submits that his Honour considered the matter to be one of “refraining” from litigating the point (using the language of Anshun).
FPH contends that in this regard the reasoning of Powell JA in Macquarie Bank at 618-619 is to be preferred. It is submitted that Powell JA set out, at 618, the statement of principle in Henderson and noted that it arose from “omission”, being “negligence, inadvertence, or even accident”. Powell JA considered that a refusal of leave to amend could not be characterised as negligence, inadvertence, or accident. Relying on this obiter statement, FPH submits that in the present circumstances, despite the “omission” of the claim, the fact of a refusal to amend was a special circumstance and that such reasoning should have been employed in respect of the Whale Beach loan interest payments. FPH submits that the primary judge erred by not doing so, and that there is no High Court authority or seriously considered dicta against the proposition for which it contends.
We do not accept FPH’s submissions in support of grounds 4 and 5. In particular, we do not accept that the primary judge’s analysis of the applicable principles can properly be criticised on the basis that his Honour did not expressly address the point of leave being refused as constituting special circumstances. As we have indicated, we apprehend no difficulty with the primary judge’s conclusion (at [48]) that an Anshun estoppel can arise where a point was not litigated, not through negligence, inadvertence or accident (or because of deliberate choice), but because a party successfully resisted it being raised, and we agree that the view of Powell JA in Macquarie Bank, is not properly to be regarded as a statement of legal principle. We reiterate, however, our further observations above at [46] as to the way in which Powell JA’s observations in Macquarie Bank should be understood.
It follows that grounds 4 and 5 fail also.
CONCLUSION
In all the circumstances there can be no sequel to the extensive litigation which proceeded before White J, particularly on issues that were plainly contemplated in the course of those proceedings. The appeal having failed on all grounds it will be dismissed. The respondent’s notice of contention thus falls away.
There was no suggestion that costs should not follow the event, and so there will be an order to this effect also.
I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Cheeseman, Goodman and McEvoy. Associate:
Dated: 12 March 2025
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