Hana v Shad Legal Services Pty Ltd

[2021] NSWCA 258

Court of Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

Hana v Shad Legal Services Pty Ltd [2021] NSWCA 258

Hearing dates:

15 September 2021

Date of orders:

27 October 2021

Decision date:

27 October 2021

Before:

Bathurst CJ at [1];
Payne JA at [6];
Brereton JA at [70]

Decision:

(1)   Summons seeking leave to appeal dismissed.

(2)   Applicant to pay the costs of the respondent.

Catchwords:

CIVIL PROCEDURE — pleadings — striking out — abuse of process — where statement of claim pleads fact inconsistent with finding of Court of Appeal in earlier proceedings — statement of claim constitutes collateral attack on Court of Appeal’s decision — statement of claim struck out as abuse of process

Legislation Cited:

Supreme Court Act 1970 (NSW), s 101

Cases Cited:

Abriel v Levitt [2004] NSWCA 258

Cleary v Jeans (2006) 65 NSWLR 355; [2006] NSWCA 9

D’Orta-Ekenaike v Victorian Legal Aid (2005) 223 CLR 1; [2005] HCA 12

Driclad Pty Ltd v Federal Commissioner of Taxation (1968) 121 CLR 45 at 64; [1968] HCA 91

Ekes v Commonwealth Bank of Australia [2014] NSWCA 336

Foukkare v Angreb Pty Ltd [2006] NSWCA 335

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

Harris v Rapisarda [2019] NSWSC 1088

Mekhail v Hana; Mekail v Hana; In the Estate of Nadia Mekhail (No 3) [2018] NSWSC 1452

Mekhail v Hana; Mekail v Hana [2019] NSWCA 197

O’Shane v Harbour Radio Pty Ltd (2013) 85 NSWLR 698; [2013] NSWCA 315

Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45

Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198; [2001] NSWCA 142

Rogers v Roche (No 1) [2017] 2 Qd R 306; [2016] QCA 340

State Bank of New South Wales v Stenhouse (1997) Aust Tort Reports ¶81-423

Tobin v Ezekiel (2012) 83 NSWLR 757; [2012] NSWCA 285

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

TriCare (Hastings) Ltd v Allen [2015] NSWCA 344

Walpole v Partridge and Wilson [1994] QB 106

Texts Cited:

A Zuckerman, Civil Procedure (2003, LexisNexis)

Category:

Principal judgment

Parties:

Georgette Hana (Applicant)
Shad Legal Services Pty Ltd (Respondent)

Representation:

Counsel:
JE Sexton SC, JC Lee, BJS Smith (Applicant)
G Ng (Respondent)

Solicitors:
Darby Jones Lawyers (Applicant)
YPOL Lawyers (Respondent)

File Number(s):

2021/185289

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Common Law

Citation:

[2021] NSWSC 601

Date of Decision:

31 May 2021

Before:

Beech-Jones J

File Number(s):

2020/313930

HEADNOTE

[This headnote is not to be read as part of the judgment]

On 12 December 2014, the late Ms Nadia Mekhail executed a will naming the applicant, Ms Georgette Hana, executor and sole beneficiary (the “2014 Will”). The Will had been prepared by Mr Thomas Liondos, an employed solicitor of the respondent, Shad Legal Services Pty Ltd, on instructions conveyed to him by Ms Hana’s son and followed a single consultation with Ms Mekhail, at which Ms Hana was also present. The will revoked an earlier will made in 2001, in which Ms Mekhail made a number of gifts to the Coptic Orthodox Church and left the residue of her estate to her husband or, if he predeceased her, to her five nephews through marriage (the “2001 Will”).

Following Ms Mekhail’s death, two of her nephews who were residuary beneficiaries under the 2001 Will commenced proceedings seeking a grant of probate in respect of the 2001 Will or, alternatively, a claim for family provision. By cross‑claim, Ms Hana sought a grant of probate of the 2014 Will. On 5 October 2018, Slattery J granted Ms Hana probate of the 2014 Will and dismissed the family provision claims. His Honour found that, although there were suspicious circumstances surrounding the making of the will, he was satisfied that Ms Mekhail knew and approved the contents of the 2014 Will and comprehended the effect of what she was doing.

On 14 August 2019, the Court of Appeal set aside the orders of Slattery J and granted probate of the 2001 Will. The Court found that, in light of the full nature of the suspicious circumstances attending the 2014 Will, Ms Hana had not discharged her onus of proving that the 2014 Will reflected Ms Mekhail’s true testamentary intention.

On 3 November 2020 Ms Hana commenced proceedings against the respondent firm alleging professional negligence in relation to the preparation and execution of the 2014 Will. On 29 January 2021, the primary judge struck out Ms Hana’s statement of claim as an abuse of process. The primary judge found that the predicate of Ms Hana’s statement of claim, Ms Mekhail’s testamentary intention in making the 2014 Will, was inconsistent with the Court of Appeal’s finding on the ultimate issue in the probate proceedings. The statement of claim constituted an abuse of process. The primary judge gave Ms Hana leave to file an amended statement of claim which did not call into question the correctness of the Court of Appeal’s finding.

The principal issue in this appeal is whether Ms Hana’s statement of claim constituted an abuse of process as involving a collateral attack on the Court of Appeal’s decision in the probate proceedings.

The Court (per Payne JA, Bathurst CJ and Brereton JA agreeing) held, dismissing the summons seeking leave to appeal:

1. The Court has inherent jurisdiction to prevent any use of its procedures which would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute: [1] (Bathurst CJ); [36]-[37] (Payne JA); [70] (Brereton JA).

   Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28; State Bank of New South Wales v Stenhouse (1997) Aust Tort Reports ¶81-423 followed.

2. Not all attempts to relitigate an issue which was already resolved in prior proceedings will amount to an abuse of process. Whether this is so depends on the particular circumstances of the case: [1] (Bathurst CJ); [42]-[43] (Payne JA); [70] (Brereton JA).

   State Bank of New South Wales v Stenhouse (1997) Aust Tort Reports ¶81-423 followed.

3. The statement of claim as pleaded is an abuse of process because it is premised on a factual issue which was resolved adversely to the applicant in the probate proceedings. The findings contended for in the statement of claim are directly inconsistent with, and amount to a collateral challenge to the correctness of, the Court of Appeal’s finding on the ultimate issue in those proceedings: [1] (Bathurst CJ); [47]-[49], [51]-[52] (Payne JA); [70] (Brereton JA).

   State Bank of New South Wales v Stenhouse (1997) Aust Tort Reports ¶81-423 applied. Harris v Rapisarda [2019] NSWSC 1088 distinguished.

4. Consideration of whether the applicant may properly be able to formulate a repleaded claim: [3]-[5] Bathurst CJ; [55], [67] (Payne JA); [70]-[72] (Brereton JA).

   Cleary v Jeans (2006) 65 NSWLR 355; [2006] NSWCA 9; Rogers v Roche (No 1) [2017] 2 Qd R 306; [2016] QCA 340 considered.

Judgment

1. BATHURST CJ: I have had the advantage of reading the judgment of Payne JA in draft. I agree with the orders proposed by his Honour and subject to what I have written below with his Honour’s reasons.

2. Notwithstanding the views expressed by Payne JA, like the primary judge I have some doubt as to whether the applicant’s claim can be properly reformulated in such a manner as not to constitute an abuse of process.

3. It is undoubtedly correct, proceedings can be brought against a solicitor (or counsel) claiming damages for loss suffered as a result of the negligent conduct of litigation. However, such litigation does not amount to a collateral attack on the judgment given in the previous proceedings as the judgment or order in those proceedings provides the foundation on which the claim is made. That is the rationale behind both the cases referred to by Payne JA: Cleary v Jeans (2006) 65 NSWLR 355; [2006] NSWCA 9 and Rogers v Roche (No 1) [2017] 2 Qd R 306; [2016] QCA 340.

4. However, there may well be a difference where the claim effectively is a claim for a loss of opportunity for Ms Mekhail to execute a different will even if essentially in the same terms (see Payne JA at [67]). Ultimately such a claim may give rise to the issue of whether a will in the terms of the 2014 Will would have reflected the true will of the testator. If that is the case it could well be that such a claim amounted to an abuse of process.

5. However, it is not necessary to express a definitive view on this issue. The applicant has been granted leave to replead and any consideration of whether any amended pleading amounts to an abuse of process can only be considered in the context of the pleading as formulated.

6. PAYNE JA: The late Ms Nadia Mekhail passed away on 2 April 2015 after a sustained battle with cancer. On or about 12 December 2014, she executed a will prepared by Mr Thomas Liondos, an employed solicitor of the respondent, Shad Legal Services Pty Ltd. That will appointed the applicant, Ms Georgette Hana, as executor and left to the applicant the entirety of her (Ms Mekhail’s) estate (the “2014 Will”). The 2014 Will had been prepared by Mr Liondos based on instructions conveyed to him by the applicant’s son, Mr Bishoy Adel Hana, and followed a single consultation with Ms Mekhail, at which the applicant was also present.

7. Ms Mekhail had previously made a will in 2001, in which she made a number of gifts to the Coptic Orthodox Church and left the residue of her estate to her husband or, if he predeceased her, to her five nephews through marriage (the “2001 Will”).

8. Following Ms Mekhail’s death, two of her nephews who were residuary beneficiaries under the 2001 Will (by reason of Ms Mekhail having survived her husband), Messrs Magdy Mekhail and Yousseff Mekail (who I will refer to as “the nephews”), commenced proceedings in the Equity Division of the NSW Supreme Court against the applicant seeking a grant of probate in respect of the 2001 Will (the “Probate Proceedings”). By cross-claim, the applicant sought a grant of probate of the 2014 Will.

9. On 5 October 2018, Slattery J dismissed the proceedings brought by Ms Mekhail’s nephews and granted the applicant probate of the 2014 Will: Mekhail v Hana; Mekail v Hana; In the Estate of Nadia Mekhail (No 3) [2018] NSWSC 1452. His Honour found that the nephews had established “suspicious circumstances” surrounding the making of the 2014 Will. Although a number of suspicious circumstances were identified, his Honour focused on the two “quite sufficient” suspicious circumstances that:

1. the applicant and the applicant’s son, Mr Bishoy Adel Hana, had led Mr Liondos to believe that they had a relationship of mother, daughter and grandson and did not disabuse him of those relationships in a way that would allow him to give the complete advice to Ms Mekhail that he would otherwise have given (at [310]); and

2. this conduct led to the 2014 Will falsely describing the applicant as Ms Mekhail’s “daughter”, and the applicant’s husband, Mr Adel Hana, as Ms Mekhail’s “son in law” (at [311]).

10. However, Slattery J was ultimately satisfied that Ms Mekhail “knew and approved the contents of [the 2014 Will] and comprehended the effect of what she was doing” (at [312]), and had testamentary capacity when she executed that will on 12 December 2014 (at [327]).

11. On 14 August 2019, this Court set aside the primary judge’s orders: Mekhail v Hana; Mekail v Hana [2019] NSWCA 197. Leeming JA (with whom Basten JA and Emmett AJA agreed) found that the primary judge had adopted an “unduly circumscribed” approach by “expressly refrain[ing] from examining the quantity and quality of the matters giving rise to suspicion once he had concluded that the onus had shifted”, and should instead have “determine[d] the full nature of the suspicious circumstances – ‘the source and nature of any doubt or suspicion’ – as part of the evaluation of whether [the applicant’s] burden had been discharged” (at [136]). Leeming JA identified an additional eight “suspicious circumstances” (listed at [147]) which should have formed part of Slattery J’s assessment, which added to the suspicion surrounding the execution of the 2014 Will, and which were not sufficiently dispelled by the applicant so as to discharge her onus of proof (at [162]). Those eight matters which caused the applicant to bear the onus of proving the crucial fact of Ms Mekhail’s testamentary intention at the time she made the 2014 Will were:

1. the 2014 Will was drafted on instructions from the applicant’s son rather than from Ms Mekhail;

2. the 2014 Will left nothing to the Coptic Church, and there was no explanation for a dying woman to change her testamentary intentions so as to leave nothing to the Church;

3. it was anticipated that the 2014 Will might be contested;

4. the applicant and her son were present when the 2014 Will was made;

5. Mr Liondos made various factual errors that were reflected in the drafting of the 2014 Will and which were because of lies told to him by the applicant’s son with the applicant’s full knowledge;

6. there was an unexplained change in instructions relating to the executor and beneficiary under the will;

7. the applicant’s son attempted to obtain two powers of attorney for Ms Mekhail; and

8. the 2014 Will and documentation were made with a sense of urgency.

12. The Court was not satisfied that Ms Mekhail knew the contents of the will and appreciated the effect of what she was doing so that it could be said that the 2014 Will contained her real intention and reflected her true will as testator, applying Tobin v Ezekiel (2012) 83 NSWLR 757; [2012] NSWCA 285.

13. A critical finding made by the Court was that the applicant and her son had lied to Mr Liondos about the nature of their relationship with Ms Mekhail; Mr Liondos was told that the applicant was Ms Mekhail’s daughter and Mr Bishoy Adel Hana was Ms Mekhail’s grandson. The Court found that those lies told to Mr Liondos prevented an inquiry into why Ms Mekhail no longer wished to leave part of her property to the Coptic Church and her deceased husband’s nephews:

“[159]   …Those propounding the will lied to the solicitor who drafted and witnessed it, and yet seek to rely upon his opinion at the time that the will reflected Nadia’s real intention and true will. That cannot be sufficient. The solicitor gave evidence that he would have undertaken different inquiries had he appreciated that this was not the will of a dying woman leaving the entirety of her estate to her only daughter, but instead was leaving the entirety of her estate to an unrelated friend. His evidence is inherently plausible. The lies told to Mr Liondos by Bishoy prevented those inquiries from taking place. The lies prevented Mr Liondos from investigating why Nadia no longer wished to leave part of her property to the church, with the balance to her deceased husband’s nephews. The lies prevented Mr Liondos from being able to form an opinion that notwithstanding the errors on the face of the will, Nadia was freely leaving all of her property to her unrelated friend, and thereby assist in dispelling the suspicion associated with the execution of the will.”

14. This Court set aside the grant of probate of the 2014 Will, and granted probate of the 2001 Will in solemn form.

The present case

15. On 3 November 2020, the applicant commenced proceedings against the respondent, Shad Legal Services Pty Ltd, alleging professional negligence in relation to the preparation and execution of the 2014 Will. The terms of the Statement of Claim need to be addressed in detail.

16. The first matter to notice is that the pleading is anchored by reference to the actual 2014 Will, which is a defined term in the Statement of Claim, and not by reference to a hypothetical will (even one in the same terms) which would or might have been made absent the pleaded negligence:

“16   The Deceased only attended upon the defendant’s offices once, being on 12 December 2014.

17   The Deceased conferred with the defendant in the presence of the plaintiff.

Particulars

(a)   Mr Thomas Liond[o]s of the defendant, the Deceased and the plaintiff were the persons present in the conference.

18   During the conference, the Deceased gave instructions regarding the preparation of the Will.

19   Those instructions were, in part, to leave her entire estate to the plaintiff.

20   Those instructions were, in part, to appoint the plaintiff as executrix of her estate.

21   Those instructions were, in part, to revoke all prior wills the Deceased had executed.

22   The Deceased made on will [sic] on 12 December 2014 (the Will).

Particulars

(a)   the Will was prepared by Mr Thomas Liond[o]s of the defendant.

23   The Will left the entire estate of the Deceased to the plaintiff.

24   The Will appointed the plaintiff as executrix of the Deceased’s estate.

25   As at December 2014 the Deceased had testamentary capacity to make the Will.

Particulars

(a)   expert evidence to be served.

26   As at December 2014 the Deceased intended the plaintiff to be the sole beneficiary of her estate.”

17. The Statement of Claim then pleaded that the respondent owed a duty to Ms Mekhail as its client to take reasonable care in “the preparation and drafting” of the 2014 Will. It was alleged that Ms Mekhail’s testamentary intentions were for the applicant to be the sole beneficiary of her estate pursuant to the 2014 Will. Accordingly, the respondent also owed a duty of care to the applicant, as there was a coincidence between Ms Mekhail’s alleged testamentary intention and the applicant’s interest as sole beneficiary. The risk of harm to the applicant was said to be that no probate would be granted of the 2014 Will.

18. The applicant alleged that the respondent breached its duty by failing to give Ms Mekhail “independent advice” without the applicant being present, and by not having a medical practitioner present in conference with Ms Mekhail who could thereby certify her testamentary capacity. The applicant pleaded that if not for the respondent’s breach, Ms Mekhail would have given the same instructions in relation to the preparation of the 2014 Will but in the absence of the “suspicious circumstances” identified in the Probate Proceedings; any challenge to probate being granted of the 2014 Will therefore either would not have been brought or would have been unsuccessful, and the applicant would have enjoyed the benefits of Ms Mekhail’s estate. Critically, for present purposes, the Statement of Claim made allegations of breach of duty by the respondent, absent which, it was alleged, probate of the 2014 Will would have been granted to the applicant.

Decision of the primary judge

19. On 29 January 2021, the respondent filed a notice of motion seeking orders that the proceedings be dismissed or stayed, or the Statement of Claim be struck out on the basis that the proceedings are an abuse of process and/or the principles in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45 (“Anshun”) applied.

20. The primary judge observed that abuse of process provides a broader principle than Anshun estoppel as it extends to persons who were neither a party to earlier proceedings, nor the privy of a party to those earlier proceedings.

21. In identifying the basis of the abuse of process claim, the primary judge assessed the considerations set out by Giles CJ Comm Div in State Bank of New South Wales v Stenhouse (1997) Aust Tort Reports ¶81-423 (“Stenhouse”) (quoted at [43] below). His Honour concluded that “[a] consideration of these factors points strongly to a finding that the defendant has satisfied the heavy onus cast upon it of proving an abuse of process”. Chief among these factors was the identity between the relevant issues in the Probate Proceedings and in the Statement of Claim (factors (a) and (d) in Stenhouse). The primary judge considered that there was in substance no difference between:

1. the entire predicate of the Statement of Claim, being that it was Ms Mekhail’s intention when executing the 2014 Will to leave the entirety of her estate to the applicant; and

1. the ultimate issue in the Probate Proceedings, being whether “the testator or testatrix knew the contents of the [2014 Will] and appreciated its effect, so that it can be said that the will contains the real intention and reflects the true will of the testator or testatrix” (at [131] NSWCA judgment).

22. Given that the issue, common to both the Probate Proceedings and the Statement of Claim, was finally disposed of in this Court in a manner adverse to the applicant, this supported the respondent’s claim for abuse of process.

23. The other Stenhouse factors which also assisted the respondent in discharging the onus of demonstrating abuse of process included:

1. to the extent there was “fresh evidence”, this was merely counterfactual evidence that might have been available if the respondent had acted differently, and in any case only sought to contradict the critical finding in the Probate Proceedings;

2. oppression and unfairness to the respondent if the issue is relitigated, in light of the relief granted in the Probate Proceedings;

3. absence of any injustice flowing to the applicant from denying her the ability to contend that, but for the respondent’s negligence, she might have had additional evidence to prove now what she could not in the Probate Proceedings.

24. The primary judge then addressed the principle of finality which informs the doctrine of abuse of process. His Honour found that the premise of the applicant’s Statement of Claim was directly inconsistent with the Court of Appeal’s finding on the ultimate issue in the Probate Proceedings. The Statement of Claim therefore undermined the finality of the Probate Proceedings by challenging “precisely the same ultimate finding made in those proceedings” and was an abuse of process.

25. Having found that the Statement of Claim should be struck out as an abuse of process, strictly speaking the primary judge did not need to consider the Anshun estoppel point. However, his Honour suggested that, if it were necessary to decide the point, the respondent’s Anshun estoppel argument would not have succeeded as he was “not satisfied that it was unreasonable for [the applicant] not to bring a cross-claim against [the respondent] in the probate proceedings”.

26. Ultimately the primary judge concluded that the Statement of Claim should be struck out as an abuse of process but granted leave to replead. On 31 May 2021, his Honour made the following orders:

1. The statement of claim be struck out;

2. The plaintiff file and serve any amended statement of claim on or before 27 June 2021;

3. The proceedings be listed for directions before the Registrar at 9.00am on 6 July 2021;

4. The plaintiff pay the defendant’s costs of its notice of motion dated 29 January 2021; and

5. The notice of motion be otherwise dismissed.

Application for leave to appeal

27. On 28 June 2021 (the day after the applicant was due to file and serve any amended statement of claim in accordance with the primary judge’s orders) the applicant filed a summons seeking leave to appeal. The Draft Notice of Appeal contains two grounds:

1. The primary judge erred in finding that the proceedings are an abuse of process.

2. The primary judge erred in finding at J[26]-[27] that the plaintiff’s cause of action was premised on making a finding inconsistent with the Court of Appeal’s finding in Mekhail v Hana; Mekail v Hana [2019] NSWCA 197 as to the Deceased’s testamentary intention in December 2014.

Consideration

28. Although, in writing, the applicant submitted that if the primary judge’s orders were not overturned, she could not reformulate her claim, at the commencement of Senior Counsel for the applicant’s oral address in this Court it was stated that “at the outset it's accepted that there would be the need to re‑plead”.

29. As I have said, the primary judge gave the applicant an opportunity to replead. Whilst it is true that when doing so the primary judge expressed some scepticism, which I do not share, about the ability of the applicant properly to reformulate her claim in a manner that does not constitute an abuse of process, the orders actually made by the primary judge, striking out the pleading and giving the applicant an opportunity to replead, were correct.

30. The application for leave to appeal is made pursuant to s 101(2)(e) of the Supreme Court Act 1970 (NSW), which permits an appeal to be brought, with leave, against “an interlocutory judgment or order in proceedings in the Court”. A “judgment or order” in this context means an operative judicial act and not the reasons for judgment: Driclad Pty Ltd v Federal Commissioner of Taxation (1968) 121 CLR 45 at 64; [1968] HCA 91; TriCare (Hastings) Ltd v Allen [2015] NSWCA 344 at [10]. The applicant for leave to appeal does not dispute that the orders made by the primary judge were correct. For that reason, I would refuse leave to appeal.

Legal principles

31. In Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 (“Tomlinson”), French CJ, Bell, Gageler and Keane JJ explained that the doctrine of abuse of process is related to and overlaps with Anshun estoppel, but is also more extensive in that it is not confined to instances where the parties (or their privies) are the same:

“[24]   The doctrine of abuse of process is informed in part by similar considerations of finality and fairness [as estoppel]. Applied to the assertion of rights or obligations, or to the raising of issues in successive proceedings, it overlaps with the doctrine of estoppel. Thus, the assertion of a right or obligation, or the raising of an issue of fact or law, in a subsequent proceedings can be simultaneously: (1) the subject of an estoppel which has resulted from a final judgment in an earlier proceeding; and (2) conduct which constitutes an abuse of process in the subsequent proceeding.

[25]   Abuse of process, which may be invoked in areas in which estoppels also apply, is inherently broader and more flexible than estoppel. … It can … be available to relieve against injustice to a party or impairment to the system of administration of justice which might otherwise be occasioned in circumstances where a party to a subsequent proceeding is not bound by an estoppel.”

32. In O’Shane v Harbour Radio Pty Ltd (2013) 85 NSWLR 698; [2013] NSWCA 315 (“O’Shane”), Beazley P (McColl JA and Tobias AJA agreeing) ^[1] said:

“[105]   The relevance, for present purposes, of an abuse of process not being dependent upon the existence of an estoppel, is that a court may intervene to prevent an abuse, notwithstanding that the subsequent proceedings are not between the parties or their privies. As the authorities state, the court will act upon an abuse of process where the use of the court’s procedures would bring the administration of justice into disrepute.”

1. A bench of five judges was empaneled to hear this appeal in relation to defamation proceedings brought by a magistrate, as it raised questions of judicial immunity and the implied freedom of speech. Beazley P wrote the principal judgment, with which McColl JA and Tobias AJA agreed. Basten JA (with whom McCallum J agreed) dissented on the question of judicial immunity and was therefore not required to answer the questions in relation to abuse of process. However, as observed by Tobias AJA, his Honour’s obiter remarks on those questions were consistent with those of Beazley P so that, if required, his Honour would have joined with the majority in relation to abuse of process.

33. The respondent in the present proceedings was not a party in the Probate Proceedings. Nor was the respondent a privy of a party to those proceedings so as to be able to assert an estoppel against the applicant. It can hardly be said that the respondent had a legal interest in the Probate Proceedings which was represented by the nephews. It is not enough that there might be said to be some alignment between the “interests” of the applicant as proponent of the 2014 Will and of the respondent as the firm of solicitors instructed to prepare and procure the execution of the 2014 Will. This is because the interest of the privy must be a legal interest: Tomlinson at [35].

34. In a case where the respondent was neither party nor privy to the earlier Probate Proceedings, Anshun estoppel does not supply the appropriate test to determine whether the later proceedings should be allowed or restrained. In Ekes v Commonwealth Bank of Australia [2014] NSWCA 336 Bathurst CJ (Beazley P and Emmett JA agreeing) said:

“[132]   As the appellant submitted, in Redowood Hodgson JA suggested at [45] (Mason P and Bryson AJA agreeing) that in a case where an Anshun estoppel is sought to be raised against a third party, unreasonableness is either not conclusive or of such a nature that the latter proceedings are an abuse of process: see also Solak at [67]-[71]. It was not suggested in the present case that what his Honour said was incorrect, something which would be quite inappropriate to decide on a summary application.”

35. Instead, as his Honour then explained, where the party resisting the bringing of the latter proceedings was not a party to the earlier proceedings:

“[139]   … the guiding principles are oppression and unfairness to the other party and concern for the integrity of the system of administration of justice.”

36. The Court has an inherent jurisdiction to prevent an abuse of its procedure. Such an abuse of process may arise from two bases: oppression to a party, or disrepute to the administration of justice. As explained in Tomlinson:

“[25]   … Although insusceptible of a formulation which comprises closed categories, abuse of process is capable of application in any circumstances in which the use of a court’s procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute.” (footnotes omitted)

37. Those bases of oppression and disrepute to the administration of justice had been earlier recognised by Giles CJ Comm Div in Stenhouse:

“This Court’s jurisdiction to stay its proceedings for abuse of process extends to all those categories of cases in which the processes of the Court, which exist to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness. It is important that freedom of access to the Courts should be preserved, and that defendants should not be encouraged to seek a stay on flimsy grounds for tactical reasons, but the fundamental policy considerations informing the jurisdiction are that the Court must ensure that its processes are used fairly as between the parties to the litigation and that the Court must avoid the erosion of public confidence through concern that its processes may lend themselves to oppression and injustice. So there have been identified as aspects of abuse of process first, oppression and unfairness to the other party to the litigation and, secondly, that the matter complained of will bring the administration of justice into disrepute.”

38. The doctrine of abuse of process is also informed by the principle of finality of litigation, in that if finality is violated this could both prejudice the other party to that litigation and bring disrepute to the administration of justice by throwing doubt on the conclusiveness of a court’s determination.

39. In D’Orta-Ekenaike v Victorian Legal Aid (2005) 223 CLR 1; [2005] HCA 12, Gleeson CJ, Gummow, Hayne and Heydon JJ said of the doctrine of finality:

“[34]   A central and pervading tenet of the judicial system is that controversies, once resolved, are not to be reopened except in a few, narrowly defined, circumstances. That tenet … finds reflection in the doctrines of res judicata and issue estoppel. Those doctrines prevent a party to a proceeding raising, in a new proceeding against a party to the original proceeding, a cause of action or issue that was finally decided in the original proceeding. …” (footnotes omitted)

40. Their Honours also observed that to the extent that there are “qualification[s]” to the rule against reopening controversies, such as the appeal process and the “fresh evidence rule”, these exceptions still abide by the concept of finality (at [35]).

41. Abuse of process is not confined to instances where a party seeks to relitigate a positive finding of fact or law, but also covers instances where an issue was raised (but not necessarily determined) or should have been raised (and therefore certainly was not determined by reason of its omission) in those earlier proceedings. So much was determined by the High Court in Tomlinson:

“[26]   Accordingly, it has been recognised that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel. Similarly, it has been recognised that making such a claim or raising such an issue can constitute an abuse of process where the party seeking to make the claim or to raise the issue in the later proceeding was neither a party to that earlier proceeding, nor the privy of a party to that earlier proceeding, and therefore could not be precluded by an estoppel.” (footnotes omitted)

42. However, not all attempts to litigate issues already resolved in prior proceedings will amount to an abuse of process. As I will explain, there are principles, particularly drawn from solicitor’s negligence cases, which are applicable in considering the case the applicant submitted that she wished to advance in an amended pleading.

43. A useful non-exhaustive list of considerations which may inform a finding of abuse of process is set out in Stenhouse. As noted by Beazley P in O’Shane at [107], the approach in Stenhouse was approved by this Court in Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198; [2001] NSWCA 142; it has been applied on a number of occasions since: see eg. Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231; Foukkare v Angreb Pty Ltd [2006] NSWCA 335; Abriel v Levitt [2004] NSWCA 258. The matters identified by Giles CJ Comm Div in Stenhouse were the following:

“It is apparent from this brief review of the decisions that whether proceedings are, or an aspect of proceedings is, an abuse of process because a party seeks to relitigate an issue already decided depends very much on the particular circumstances. The guiding considerations are oppression and unfairness to the other party to the litigation and concern for the integrity of the system of the administration of justice, and amongst the matters to which regard may be had are:

(a)   the importance of the issue in and to the earlier proceedings, including whether it is an evidentiary issue or an ultimate issue;

(b)   the opportunity available and taken to fully litigate the issue;

(c)   the terms and finality of the finding as to the issue;

(d)   the identity between the relevant issues in the two proceedings;

(e)   the extent of the oppression and unfairness to the other party if the issue is relitigated and the impact of the relitigation upon the principle of finality of judicial determination and public confidence in the administration of justice; and

(g)   an overall balancing of justice to the alleged abuser against the matters supportive of abuse of process.”

44. The High Court has cautioned that the party asserting the abuse of process bears a heavy onus. As explained by Beazley P in O’Shane:

“[111]   The authorities also state that the power to stay proceedings permanently on the ground that they are an abuse of process should be exercised with caution: Moore v Inglis (1976) 50 ALJR 589 at 593 and only in the most exceptional or extreme case: Walton v Gardiner at 392, per Mason CJ, Deane and Dawson JJ (approving the Court of Appeal’s formulation of the test in Gill v Walton (1991) 25 NSWLR 190. The onus of satisfying the court that there is an abuse of process lies upon the party alleging it and that the onus is a ‘heavy one’: Williams v Spautz (1992) 174 CLR 509 at 529 per Mason CJ, Dawson, Toohey and McHugh JJ.”

45. Both parties referred to the decision of Stevenson J in Harris v Rapisarda [2019] NSWSC 1088 (“Harris”). The primary judge and the respondent distinguished the present case from Harris. In Harris, the plaintiff was only partly successful in claiming damages from a builder for defective building work, which was subject to a set-off for amounts payable to the builder under the building contract. The plaintiff then commenced proceedings for negligence against the firm of architects responsible for drafting the building contract. Stevenson J described the subsequent claim against the architects as involving:

“[40]   … consideration of the quality of the work that would or should have been undertaken by the Second Builder, had the contract have provided for a ‘higher standard’ of workmanship on the part of the Second Builder, and had the Architects supervised the Second Builder’s work and ensured that a ‘high standard’ was achieved. In effect, the Executor will run an ‘alternative transaction’ case which will proceed on this hypothesis.” (italics added)

Resolution of the present case

46. The applicant’s principal submission was that the primary judge erred in holding that her Statement of Claim was premised on a finding inconsistent with a finding made in the Probate Proceedings. It was submitted that the factual premise was not that Ms Mekhail intended to leave the entirety of her estate to the applicant when she executed the 2014 Will, but rather that “the proceedings below would be conducted on a different evidentiary basis to the Probate Proceedings and would involve a counterfactual inquiry as to whether the applicant would have succeeded in the Probate Proceedings with different evidence”.

47. I am unable to agree. The critical factual issue underpinning the present proceedings, as pleaded, was that it was Ms Mekhail’s intention when executing the 2014 Will to leave the entirety of her estate to the applicant pursuant to that Will. The “ultimate issue” in the Probate Proceedings, was whether “the testator or testatrix knew the contents of the [2014 Will] and appreciated its effect, so that it can be said that the will contains the real intention and reflects the true will of the testator or testatrix” (at [131] NSWCA judgment).

48. I agree with the primary judge that the respondent satisfied the heavy onus cast upon it of proving an abuse of process. The risk of inconsistent findings about the critical issue raised in each case was a significant one. It is not correct that the proceedings, as pleaded, would entail “an inquiry into a different (hypothetical) set of events and their legal consequences”, which is distinguishable from “an inquiry into the same events with additional evidence”.

49. The findings contended for by the applicant’s pleading amount to a collateral challenge to the correctness of the Court of Appeal’s finding and an abuse of process as they necessarily raise the prospect of inconsistent findings about an issue which has been determined to finality. The primary judge was correct to conclude that in the Probate Proceedings, the applicant had the opportunity to fully litigate the making of the 2014 Will, which was finally disposed of in a manner that was adverse to her.

50. It is correct, as the applicant submitted, that this Court in the Probate Proceedings did not make any “positive finding about what the deceased’s actual subjective testamentary intentions were”. As I will explain, it is for that reason that a case pleaded about a failure to give effect to those testamentary intentions, rather than to have a particular document (the 2014 Will) admitted to probate, could properly be advanced. At the risk of repetition, this was not the case pleaded by the applicant and addressed by the primary judge. The primary judge did not err in describing the “ultimate issue”, as pleaded, as being “whether the 2014 Will reflected Ms Mekhail’s ‘real intention’”.

46. Finally, in relation to the applicant’s reliance on Harris, the primary judge was correct that the present case differs from Harris. In the present case both sets of proceedings, as pleaded, are predicated on a finding about Ms Mekhail’s intention in executing the 2014 Will. The applicant’s pleaded cause of action was premised on the establishment of a fact directly inconsistent with the Court of Appeal’s finding on the ultimate issue, namely the extent to which the 2014 Will contained the real intention, and reflected the true will, of Ms Mekhail.

47. The pleaded cause of action could only succeed by establishing that, contrary to the findings of and relief granted by this Court, probate should have been granted under the 2014 Will. I am satisfied that, as formulated, the applicant’s Statement of Claim was an abuse of process.

48. The primary judge made clear that his decision to strike out the Statement of Claim as an abuse of process was based upon “the precise manner in which the statement of claim is framed.” I agree with his Honour’s analysis.

49. Despite the primary judge expressing doubt about the applicant’s ability properly to replead (which doubt I do not share), the significant point is that the primary judge granted the applicant leave to amend her pleading. His Honour was correct to do so.

Possible repleading

55. I will now explain why the applicant, if she had chosen to do so, could properly have pleaded a case against the respondent relating to the deceased’s testamentary intentions which did not involve any abuse of process.

56. Two cases referred to by the applicant in this Court make it clear that such a case may be pleaded: Cleary v Jeans (2006) 65 NSWLR 355; [2006] NSWCA 9 and Rogers v Roche (No 1) [2017] 2 Qd R 306; [2016] QCA 340.

57. In Cleary v Jeans, Mr Cleary was a bank officer of the Commonwealth Bank which in June 1998 loaned money to the respondent’s company, Deangrove Pty Ltd, secured by a personal guarantee executed by the respondent, Mr Jeans. The loan transaction was implemented by Mr Cleary, who purported to attest to the respondent’s execution of the guarantee.

58. The respondent and his company commenced proceedings against the Bank in the Federal Court, alleging misleading and deceptive conduct and seeking an order setting aside the respondent’s guarantee; the Bank cross-claimed to enforce the guarantee. In his pleadings, the respondent admitted that he had executed the guarantee. After trial had commenced and the respondent was cross-examined on the document, the respondent sought leave to withdraw his admissions in the pleadings that he had executed the guarantee. Leave was refused, on the basis that the respondent was estopped from resiling from the representation contained in the admissions, as the Bank had conducted the proceedings in reliance on those admissions and would suffer prejudice if they were withdrawn: at [16]-[19]. Special leave was ultimately refused by the High Court.

59. The respondent subsequently commenced Supreme Court proceedings against Mr Cleary alleging fraud. The respondent claimed that Mr Cleary had forged his signature on the deed, and that he had relied on Mr Cleary’s fraudulent misrepresentation in the attestation clause on the guarantee when he admitted that his signature was genuine. Handley JA (with whom Young CJ in Eq agreed) found that the Supreme Court proceedings did not constitute an abuse of process. There was no inconsistency between the Federal Court judgment, that the appellant was estopped from withdrawing his admissions, and a decision of the Supreme Court “based on the truth”: at [21]. This Court explained that a party may bring a claim for negligence against legal representatives whose conduct in the management of earlier court proceedings resulted in an adverse judgment (at [25]-[26]) without attracting the doctrine of abuse of process. As Handley JA put it:

“[27]   An action against a solicitor for negligence in which damages are claimed for the loss of an earlier case is not a collateral challenge to the earlier decision where the plaintiff claims that but for the negligence there would have been a more favourable result. In Walpole v Partridge and Wilson [1994] QB 106 at 124-125, Ralph Gibson LJ said:

‘If there is a sufficiently arguable case to show that the defendant solicitors, by their breach of duty, put the plaintiffs in the position of being unable properly to contest the first decision, so that the plaintiffs were reasonably compelled to submit to judgment on the issue, then, in my judgment, the plaintiff’s claim is not shown to be an abuse of the process of the court merely because it will, if it succeeds, require the court to assess damages on the basis that the prior decision of the court would not have been made if the solicitors had not been in breach of duty.’”

60. Handley JA concluded that there was no collateral attack upon the Federal Court judgment or abuse of process by the respondent contesting his signature to the guarantee in the Supreme Court, since he was denied a full opportunity to litigate that issue in the earlier proceedings by reason of estoppel:

“[29]   If the respondent establishes that he was induced by the appellant’s fraudulent representation in the attestation clause to conduct his case in the Federal Court until the third day of the trial on the basis that he had executed the guarantee and thus estop himself, as against the Bank, from alleging otherwise he was ‘unable properly to contest’ the decision to enforce the guarantee against him and lacked ‘a full opportunity’ to litigate the signature issue against the Bank.

[30]   Although proof of his damages will require the respondent to establish that the signature on his guarantee was not genuine, for the reasons given, these proceedings are not a collateral attack on the judgment of the Federal Court and are not an abuse of process.”

61. Bryson JA, who dissented in the result, acknowledged that a “collateral attack” on an earlier decision may not constitute an abuse of process in some circumstances, referring (like Handley JA) to the example of a claim against legal advisors for negligent conduct of earlier litigation:

“[43]   A collateral attack on an earlier decision of a court is not necessarily an abuse of process. It may be quite legitimate to make such an attack, and to show that an earlier judgment was based on a wrong view of fact or of law, or that a chance was lost of persuading the earlier court that some other view should have been adopted in a finding of fact, in the application of a legal standard or in some other matter. Claims against legal advisers relating to the manner in which earlier litigation was conducted provide ready examples where collateral attacks on earlier decisions have been made.” (italics added)

62. The applicant acknowledged in oral submissions that the decision “was quite a different case factually” and that “it’s quite a different case to this one” in that it did not involve a solicitor. Nevertheless, Cleary v Jeans provides important guidance on the distinction drawn in the application of the abuse of process doctrine to cases where claims against legal advisers relate to the manner in which earlier litigation was conducted.

63. The second decision referred to by the applicant, Rogers v Roche (No 1), is much closer to the present facts and makes the point even more emphatically. The appellant, Mr Rogers, was injured while riding a jet ski. The appellant made a successful claim against the resort’s operator for economic loss arising from personal injury. He subsequently commenced proceedings against his solicitors claiming that, by reason of their negligence, in the first case the damages he recovered did not fully compensate him for his loss. In this second case the appellant pleaded that the respondents negligently failed to obtain evidence necessary properly to prove his economic loss in the earlier proceedings. The appellant thereby lost a chance to receive a higher award of damages.

64. Fraser JA (with whom Gotterson JA and Burns J agreed) summarised the substance of the appellant’s submissions that there was no abuse of process:

“[41]   In relation to re-litigation abuse of process, the appellant argued that none of his claims contend that the personal injuries judgment should have been different. He argued that he does not contend for any error by the trial judge upon the evidence adduced in that litigation; his claims merely avoid double recovery by allowing a set off of the amount of the economic loss component of the personal injuries judgment against the value of a hypothetical judgment in hypothetical personal injuries litigation, or against the value of a hypothetical settlement (or opportunity to settle) which he would have obtained during the [pre-litigation] processes or the personal injuries litigation. …”

65. Fraser JA accepted that the second case amounted to a collateral challenge to the personal injury judgment but concluded that the collateral challenge did not amount to an abuse of process because:

1. The mere fact that a person against whom a re-litigation abuse of process is alleged was a party in two sets of proceedings and seeks to litigate an issue decided in the earlier proceedings is not of itself sufficient to give rise to abuse of process. It may be an abuse to rely upon a claim which was determined adversely to the litigant in previous litigation, but this will turn on the precise circumstances on the case: at [46];

2. Where the earlier litigation was decided adversely to the appellant as a result of wrongful conduct of the respondents, it is difficult to see how a claim for redress against the respondents whose wrongful conduct in connection with litigation was responsible for the appellant’s misadventure in the earlier civil case is unjustifiably oppressive to the respondents or would be likely to bring the administration of justice into disrepute: at [47].

66. Fraser JA’s ultimate conclusion bears repeating:

“[50]   It is an aspect of all parts of the appellant’s claim that he was deprived of a full opportunity of obtaining the entire amount of his economic loss by the wrongful conduct of the first and second respondents. To shut out litigation of this part of the appellant’s claim would be more likely to bring the administration of justice into disrepute than would conflicting judicial decisions about the appellant’s economic loss reached upon different evidence.”

67. Applying these principles, there may be a number of ways that the applicant may have been able to replead without seeking to relitigate the extent to which the 2014 Will itself contained the real intention, and reflected the true will, of Ms Mekhail. Some of those possible cases were explored in submissions by Senior Counsel for the applicant. It would be, for example, quite a different thing to plead that by reason of the alleged negligence of Mr Liondos, the applicant lost an opportunity to share in a distribution from Ms Mekhail’s estate. In the relevant hypothetical, the question would not be whether the 2014 Will should have been admitted to probate but rather whether, by reason of Mr Liondos’ negligence, the applicant lost a chance for Ms Mekhail to execute a different will, even if in essentially the same terms, leading the applicant to obtain a distribution from the deceased’s estate. No doubt such a case would need to confront the evidence about what Mr Liondos’ was told by the applicant’s son with the applicant’s knowledge (characterised by Leeming JA in the Probate Proceedings as “a series of lies”). Formidable though the factual challenges may be for the applicant in such a case, it would not be an abuse of process by reason of challenging the finality of the Probate Proceedings.

68. If any attempt is made by the applicant to exercise, out of time, the liberty to replead there will no doubt be discretionary questions to consider. Those considerations will be matter for a judge in the Common Law Division.

Orders

69. For the foregoing reasons I propose the following orders:

1. Summons seeking leave to appeal dismissed;

2. Applicant to pay the costs of the respondent.

70. BRERETON JA: I have had the benefit of reading in draft the judgment to be delivered by Payne JA, with which I agree.

71. In principle, no abuse of process is involved in a claim against a solicitor for negligence in which damages are claimed for the loss of an earlier case founded on the proposition that but for the alleged negligence there would have been a different and more favourable result. ^[2] Thus, if the facts supported it, the applicant would not have been precluded from advancing a case that had her solicitors obtained and adduced at the trial relevant available evidence, the outcome would have been different and the 2014 Will would have been admitted to probate. In such a case there is not truly a collateral attack on the earlier judgment, which to the contrary is relied upon for the purpose of proving the loss. ^[3] However, that is not the case put here: the applicant’s claim, as presently pleaded, is founded on the contention that Ms Mekhail’s intentions, when she executed the 2014 Will were for the applicant to be the sole beneficiary of her estate pursuant to that Will. That specific issue was resolved adversely to the applicant by this Court’s judgment in the earlier proceedings. The hypothetical (non-negligent) counterfactual proposed is not that available evidence was obtained and adduced, which might have resulted in a different outcome; but that the deceased executed the 2014 Will in circumstances which did not attract suspicion. In substance, that amounts to a contention that the earlier judgment was wrong to reject the proposition that the 2014 Will embodied her testamentary intentions. That involves a collateral attack on the earlier adverse conclusion. It may well be open to the applicant to plead that the deceased’s intention was to leave her entire estate to her, and that by reason of the respondent’s (alleged) negligence that intention was defeated – but not by contending that, contrary to the earlier judgment, the 2014 Will in fact embodied her testamentary intentions. As the claim as presently pleaded depends on that contention, the primary judge was right to conclude that it was an abuse of process.

    2. Cleary v Jeans (2006) 65 NSWLR 355; [2006] NSWCA 9 at [26]-[30] (Handley JA), [43] (Bryson JA), [61]-[69] (Young CJ in Eq); Rogers v Roche (No 1) [2017] 2 Qd R 306; [2016] QCA 340; Walpole v Partridge and Wilson [1994] QB 106 at 124-125 (Ralph Gibson LJ).

    3. Cleary v Jeans (2006) 65 NSWLR 355; [2006] NSWCA 9 at [68]-[69] (Young CJ in Eq), citing A Zuckerman, Civil Procedure (2003, LexisNexis) at [24.82].

72. As Payne JA explains, that is not to say that no permissible claim arising out of substantially the same facts could be formulated, and that course is not precluded by the orders of the primary judge, which reserved leave to replead. The primary judge rightly considered that the respondent’s Anshun estoppel argument would not have succeeded, as it was not unreasonable for the applicant not to bring a cross-claim against her solicitors in the probate proceedings. Although, like Payne JA, I do not share his Honour’s scepticism as to whether a permissible claim could be formulated, his Honour was right to strike out the pleading as an abuse of process, with leave to replead.

73. Leave to appeal should be refused. I agree with the orders proposed by Payne JA.

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Endnotes

Decision last updated: 27 October 2021