I-Achieve v Barton

[2001] NSWSC 1003

CITATION:	I-Achieve v Barton [2001] NSWSC 1003
CURRENT JURISDICTION:	Equity Division Commercial List
FILE NUMBER(S):	SC 50107/01
HEARING DATE(S):	19.10.01
JUDGMENT DATE:	12 November 2001
PARTIES :	I-Achieve Technology Limited -v- Barton Capital Securities Pty Ltd & Albert Yue-Ling Wong
JUDGMENT OF:	Hunter J

COUNSEL :	Applicant/Defendants: A McGrath Respondent/Plaintiff: P Barham
SOLICITORS:	Applicant/Defendants: Mallesons Stephen Jaques Respondent/Plaintiff: Somerville & Co
CATCHWORDS:	Practice & procedure - application to strike out - abuse of process - re-litigation of issues by unsuccessful litigant in prior proceedings - no issue estoppel - principles upon which discretion exercised.
LEGISLATION CITED:	Foreign Acquisitions & Takeovers Act 1975 (Cth) Trade Practices Act 1974 (Cth) Fair Trading Act 1987 (NSW)
CASES CITED:	Rippon v Chilcotin [2001] NSWCA 142 State Bank of NSW v Stenhouse Ltd (1997) Aust Tort Rep 81-423 R v O'Halloran (2000) 36 ACSR 315 Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404 Reichel v Macgrath (1889) 14 App Cas 665 Walton v Gardiner (1993) 177 CLR 378 Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275 Coffey v Secretary Department of Social Security (1999) 86 FCR 434
DECISION:	Application dismissed with costs.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

HUNTER J

MONDAY 12 NOVEMBER 2001

50107/01 I-ACHIEVE TECHNOLOGY LTD -V- BARTON CAPITAL SECURITIES

REASONS FOR JUDGMENT

1 This is an application by notice of motion for an order that the proceedings be dismissed pursuant to Pt 13 r 5(1)(c) of the Supreme Court Rules which provides as follows:

“Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings…
(c) the proceedings are an abuse of the process of the Court,
the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.”

2 The proceedings brought by I-Achieve Technology Limited (I-Achieve) against Barton Capital Securities (Barton) and Albert Yue-Ling Wong (Wong) seek damages in the sum of approximately $3,400,000. There are no prior proceedings between the parties. It has not been submitted that the plaintiff’s contentions do not disclose good causes of action.

3 Having regard to the nature of the application, it is necessary I think to identify with some particularity the precise allegations relied upon by I-Achieve in these proceedings. The allegations are as follows:

(a) On 3 July 2000 I-Achieve acquired 19.9% of the issued shares of TV Satellite Group Ltd (Satellite) for $3,379,957.60 (the transaction).

(b) Barton, through its director Wong, acted as stockbroker for I-Achieve on the transaction pursuant to a retainer of 28 June 2000.

(c) At the time of the transaction, Barton and Wong knew or ought to have known that Satellite was suffering from financial and management difficulties: that the top twenty shareholders had agreed that Satellite’s founding director had to be replaced and that if he didn’t leave they intended to “dump their stock”: that announcements from the Australian Stock Exchange indicated financial difficulties of Satellite. These matters were not disclosed to I-Achieve by Barton or Wong.

(d) The transaction was subject to the provisions of the Foreign Acquisitions and Takeovers Act 1975 (Cth) and the transaction proceeded in contravention of the requirements of that Act. Barton and Wong failed to disclose those requirements to I-Achieve.

(e) At the time of the transaction Barton and Wong were in receipt of a secret commission relating to the transaction.
(f) Some of the shares acquired by I-Achieve in the transaction had not been the subject of an approved issue by the Australian Stock Exchange, a matter which Barton and Wong failed to disclose to I-Achieve.

4 In relation to those matters, it was alleged that the conduct of Barton and Wong was in contravention of s 52 of the Trade Practices Act 1974 (Cth) and that I-Achieve would not have proceeded with the transaction if proper disclosure had been made to it of the matters withheld by Barton and Wong. I-Achieve sought damages accordingly. (I-Achieve does not particularise the basis upon which Wong could be said to have contravened s 52. I have assumed that it was intended to allege that Wong was “a person involved in a contravention.”)

5 As an alternative cause of action, I-Achieve alleged that Barton and Wong owed a duty of care to I-Achieve in relation to the transaction and, in failing to make the disclosures referred to above, Barton and Wong were in breach of that duty of care. The duty was based both in tort and in contract.

6 The application is based on the concept of abuse of process as discussed in the Court of Appeal in Rippon v Chilcotin [2001] NSWCA 142 (13 July 2001), and which is aimed at striking down unjustified attempts to re-litigate issues upon which the litigant has failed in earlier litigation.

7 Resort to Rippon arises out of the reasons for judgment of Bergin J (Bergin J’s judgment) in proceedings in this Court brought by I-Achieve against Sojo (NSW) Pty Ltd (Sojo), Jonathan Owen Broster (Broster) and Gregory Joseph Fisher (Fisher) (the prior proceedings).

8 The prior proceedings arise out of the transaction. Sojo was the vendor of part of the shares acquired by I-Achieve, whereas Broster was the vendor of the balance of the shares so acquired. Fisher was the managing director of Satellite.

9 The central cause of action in the prior proceedings was based upon the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1987 (NSW), I-Achieve asserting that it was induced to enter into the transaction by misrepresentations by Sojo, Broster and Fisher which were summarised in Bergin J’s judgment as follows:

“58 In the Amended Statement of Claim the plaintiff pleaded that on 27 June 2000 in Sydney Sojo, Broster and Fisher represented that:

(a) Satellite was in a good financial position;

(b) Satellite had no liabilities;

(c) the liabilities of The Satellite Group of companies were all in subsidiaries of Satellite, mostly its property subsidiary;

(d) there were no guarantees between subsidiaries of Satellite;

(e) Satellite had no liability as guarantor of any of its subsidiaries;

(f) Satellite would incur expenses totalling approximately $2 million over the next 12 months;

(g) Satellite had a few million dollars in the bank;

(h) there had been no adverse change to the financial position of Satellite since the initial public offering of its shares;

(i) Satellite had no need to raise further funds, other than to finance expansion by its e-media subsidiary;

(j) Satellite's shares were currently trading at an undervalue; and

(k) if the plaintiff purchased Sojo's Satellite parcel and Broster's Satellite parcel it would be entitled to control the appointment of two directors to the Board of Satellite.”

10 During the course of the trial I-Achieve abandoned reliance upon the representations referred to above in sub pars (b), (c), (d), (f), (i), (j) and (k), limiting itself to the remaining allegations. In relation to the four representations relied upon, Bergin J found “that it was more probable than not that Fisher made each of these representations”. Bergin J further found that the representations in sub pars (e) and (g) were false and that Fisher had no reasonable basis for making that representation. Bergin J also found that Fisher had no reasonable basis for making the representation in sub par (a) and that “in the circumstances it was false for Fisher to [represent] that there had been no adverse change to the financial position of the company since the initial public offering of its shares” (pars 63-69).

11 Wong was a witness in the prior proceedings for I-Achieve. His involvement and that of Barton was described in Bergin J’s judgment as follows:

“The Broker and Mr Lee Ming Tee

15 Albert Yue-Ling Wong (Mr Wong) is a director of Barton Capital Holdings Ltd and Barton Capital Securities Pty Ltd (Barton Capital). Most of Mr Wong's work is in the corporate area and he described himself as an investment banker and corporate adviser. He practices as a stock broker from time to time.

16 Prior to the Satellite float in 1999 Barton Capital was approached by Satellite through a third party, Intech, to ascertain its interest in acting either as a broker to the issue or as underwriter to Satellite. After numerous discussions an "understanding" was reached that Satellite would appoint Barton Capital to act as sponsoring broker. Satellite did not proceed with this understanding but appointed Shaw Stockbroking Ltd as the underwriter and sponsoring broker.

17 Mr Wong had no further dealings with Satellite until March 2000 when he met with Fisher who informed him that he needed to raise $10 million "seed capital" for Satellite's media subsidiary. Mr Wong informed Fisher that people would not want to invest in an unlisted company and said "that sort of money should go into a listed company".

18 Sometime after this meeting Mr David Chapman, a non-executive director of Satellite, informed Mr Wong that Broster "may be prepared to sell his shares to allow another strategic investor to come on board". Mr Wong then spoke to Fisher who confirmed that "if the right deal comes along" Broster may sell his shares.

19 Between March and June 2000 Mr Wong introduced a number of potential investors to Fisher, had a number of meetings and conversations with Fisher and one or two conversations with Broster. Mr Wong said that Fisher informed him that Satellite was "trading well", that it was “reasonably cashed up" and that it was "performing". He agreed that Fisher had informed him of a change in Satellite's strategy including the possible sale of a number of properties, the development of which had formed the basis of Satellite's forecasts for the years ending 30 June 2000 and 2001. Mr Wong informed Fisher if he could get 75% majority, he thought it was appropriate to dispose of the properties. He also advised Fisher he should announce to the market that Satellite was changing its forecasts.

20 One of Mr Wong's clients is Mr Lee Ming Tee (Mr Lee), a successful businessman and "seasoned investor" from Hong Kong, who comes to Australia from time to time. The investments of Mr Lee's group, the Allied Group, are in property related investments. Mr Lee informed Mr Wong that he was looking to invest in a property related company with tax losses in it. He has an interest in Mulpha Australia Ltd which is a subsidiary of a Malaysian company, Mulpha International Bhd.

21 Mr Wong informed Mr Lee that Satellite may be an opportunity because its shares had been performing "dismally" and that he understood that Satellite had some tax losses and media assets which could be quite valuable and it needed finance to expand and develop its media business. He also informed him that there was a "catch" or a "twist" in that it was a "pink" company - associated with the gay community.

22 On 21 June 2000 Mr Wong introduced Mr Lee to Fisher and Mr Greg Gahl, executive director of Satellite's publishing business, at the Satellite offices. Fisher and Mr Gahl took Messrs Wong and Lee on a tour of the office during which they were shown the operations of Satellite Media and the property group. In a meeting in one of the offices Fisher informed Mr Lee of his involvement in founding Satellite and the aim to "capture" the gay community, not only for media publications but also for insurance, financing and other areas of Satellite's operations.

…

25 Mr Wong had further discussions about the possible investment with Mr Lee and an associate of Mr Lee's, Mr Alan Jones, the Managing Director of Mulpha Australia, which may have occurred on the telephone whilst he was overseas, for which he left on 25 June 2000. Either Mr Lee or Mr Jones informed Mr Wong that there was a problem for the company purchasing a substantial parcel of shares in Satellite because, if it did so, it would have to make a public announcement.

26 The problem arose from the fact that the holding company of Mulpha Australia Ltd, Mulpha International Bhd, was having a " rights issue in Malaysia" in relation to the publicity about Dr Mahatir and Anwar Ibrahim. If it made an investment which required a public disclosure Satellite's involvement with the gay community would cause a problem for Mulpha.”

12 I-Achieve’s introduction to the transaction was described in Bergin J’s judgment as follows:

“The plaintiff's transaction

27 Savio Chi Shing Kwong (Mr Kwong) is an executive director and the chief executive officer of the Millennium Group Ltd ( Millennium) and a director of Millennium's wholly owned subsidiary, the plaintiff. Millennium was incorporated in Hong Kong and the plaintiff was incorporated in the British Virgin Islands. Mr Kwong acquired Millennium from his "very good friend", Mr Lee.

28 Mr Kwong has had more than 17 years broad based experience in financial management, international business, mergers and acquisitions and strategic planning. He has had extensive involvement in property development and business investment, in particular in Hong Kong and the Peoples Republic of China. He is an associate member of the Institute of Chartered Accountants of Australia.

29 Mr Kwong travelled to Australia for a holiday in June 2000 arriving in Sydney on Friday 24 June 2000. When he arrived in Sydney he telephoned Mr Lee, it seems, because of a message that was left for him to do so whilst he was in Hong Kong.

30 Mr Lee informed Mr Kwong of Satellite's existence referring to it as a "media and property company" which was trying to raise $ 10 million "to fund its e-media projects which are run through a subsidiary". He informed him that it was "a good area with potential". Mr Lee also informed Mr Kwong that if he was interested, rather than buying into the e-media company "it would be better to acquire a stake of approximately twenty percent in Satellite Group itself, the holding company of the e-media subsidiary". Mr Lee continued:
You can acquire this stake from an existing significant shareholder. There are currently two significant shareholders. One is Greg Fisher who is the company's managing director. Greg will continue with the company. The stake that is available belongs to the other significant shareholder. It is slightly less than 17 million shares, a bit less than twenty percent of the holding company.


31 Mr Kwong expressed interest and an arrangement was made for him to attend the offices of Mulpha Australia Ltd on Monday 26 June 2000. Mr Kwong contacted the Chairman of Millennium, Dr Lincoln Chee (Dr Chee) in Hong Kong and informed him of "an investment opportunity in an e-media company in Australia". Dr Chee suggested that Mr Kwong should "explore it further".

32 On Monday 26 June 2000 Mr Kwong attended Mulpha's offices and met with Mr Lee and Mr Jones. During the meeting Mr Jones handed Mr Kwong a bundle of documents and said:
Here are the prospectus and annual reports for the year ended 30 June 1999, half yearly financial reports for the period ended 31 December 1999, and a performance update dated May 2000 by The Satellite Group as well as some business plans, detail of property projects and a copy of promotional brochures relevant to The Satellite Group. The company is a newly listed company, having only been listed in the second half of 1999. It is a company focusing on the gay and lesbian community with a control over eighty percent of media interests relevant to that community. It is now thinking of going into e-media and wants to raise A$10 million which is roughly equivalent to twenty percent of the value of one of its subsidiaries.
Australia has a huge population of gays and lesbians. This is a closely held community and consists mostly of high income, highly educated couples with no kids and very high disposable incomes. The community can also be said to be frequent users of computers - "netizens" [that is net citizens].

33 Mr Jones also said:

Instead of buying an interest in its e-media subsidiary, which is unlisted and has a value of between $40-50 million, why not acquire an interest in the holding company, a publicly listed company. This will give you a similar interest in the subsidiary at a cost of only $3.4 million. Further, because The Satellite Group is a public company, you will have an exit mechanism.

Initially a friend of mine, Albert Wong of Barton Capital Holdings Ltd, approached me and asked me whether I would be interested in investing in The Satellite Group. I met with management of The Satellite Group and I decided to purchase a shareholding in the holding company. Then because there was a concern about a potential negative reaction from the Malaysian government regarding The Satellite Group's relationship with the gay and lesbian community, I pulled out of the transaction at the last minute. So this leaves an opportunity for you to come in.

34 The following conversation then ensued:


Mr Kwong: This is too good to be true. What is the financial position of the company?

Mr Jones: There is going to have to be some write down of The Satellite Group's property portfolio. However, on a conservative basis the company should have a net asset value of $25-30 million. It still has approximately $3-4 million of cash in the bank. Further, the media business has started to make money.

Mr Kwong: Does the company need any further funding for its property investments?

Mr Jones: The financing for the property development has been arranged through the bank.
Mr Kwong: I need to digest the information. May I borrow this information package? In the meantime please arrange a meeting because I want to speak to Satellite's management.


At the conclusion of this discussion Mr Jones left the room and returned shortly afterwards. He informed Mr Kwong that a meeting was being held the following afternoon and "you can come to that if you wish".

35 The documents given to Mr Kwong were :

(a) The prospectus;

(b) Satellite's First Annual Report;

(c) Satellite's Director's Report dated 15 March 2000;

(d) A document entitled "Satellite Development" dated June 2000;

(e) A document entitled "Satellite Home Loans - Strategic Business Plan" dated June 2000;

(f) A document entitled "Satellite Media - Strategic Business Plan" dated June 2000;

(g) A media release dated 9 May 2000 "Satellite pursues equity raising from media business - appoints PricewaterhouseCoopers as advisors"; and

(h) A document entitled The Satellite Group Ltd Report dated May 2000.

36 Mr Kwong considered the information in the documents overnight. In considering this material he particularly noted:

(a) that according to the prospectus Satellite had:

(i) a proforma net asset value of $37,080 million as at 30 April 1999;
(ii) on a proforma combined basis as at 30 April 1999 a total shareholders equity of $37.080 million;
(iii) forecast a profit (on a proforma basis) of $4,021,000 for the period ending 30 June 2000;

(b) that according to the Director's Report of 15 March 2000 Satellite
had:

(i) $207,000 profit before amortisation of goodwill or $41,000 profit after tax attributable to members for six months to 31 December 1999;
(ii) consolidated net assets of $35,567 million as at 31 December 1999;
(iii) cash on hand and at bank amounting to $4.526 million as at 31 December 1999; and
(iv) a net tangible asset backing of $0.34 per ordinary share as at 31 December 1999.

(c) That according to the document "Satellite Media- Strategic Business Plan", PricewaterhouseCoopers Securities had valued Satellite's electronic media business at $35 million and the print media business at $7.2 million; and

(d) that according to the prospectus, BDO Nelson Parkhill had expressed an opinion in a report dated 12 August 1999 that, to the best of their knowledge, there had been no material transactions or events subsequent to 30 April 1999 other than those contained in the report.

37 Mr Kwong attended Satellite's offices on 27 June 2000. At the commencement of the meeting Mr Kwong was introduced to two people, Mr Lee Sing Huang (Lee Jnr) whom he had previously met and knew as the son of Mr Lee Ming Tee and the Director of the Lippo Group and Mr James Chen. Both were introduced to him as potential investors.”

13 It was at this meeting of 27 June 2000 that the representations by Fisher, as found by Bergin J, were made.

14 On the issue of reliance, the evidence of Kwong was summarised in Bergin J’s judgment as follows:

“40 Mr Kwong gave evidence that from these conversations he understood that there had been no material changes to Satellite's financial situation since the public offering in August 1999. He also reached an understanding that Satellite:

(a) was in a good financial business;

(b) had no liabilities;

(c) had provided no guarantees to it subsidiaries and there were no cross guarantees between Satellite's subsidiaries;

(d) estimated that it would incur in the forthcoming year, expenses totalling $2 million;

(e) had a few million dollars in the bank;

(f) had an e-media subsidiary which had an existing business value of $7 million and which had an e-media business valued at around $35 million;
(g) did not, other than to finance expansion by its e-media subsidiary, require any money; and

(h) shares were currently trading at an undervalue.

41 Mr Kwong gave evidence that based on the representations made in the conversation at Satellite's offices and the information in the documents provided to him he decided it would be worthwhile to invest in Satellite. Mr Kwong then said:

We want to come in to help roll out the company's business in e-media. We believe we have the Asian contacts and the funding capacity. So it will be a good mix. You have the content, knowledge, skill, experience and vision and we have the contacts and funding. We complement each other. How many board seats will we get if we decide to acquire a twenty percent shareholding in the holding company.


Fisher replied: "You would have two seats" to which Mr Kwong asked: "Is that all"? and Fisher replied: "Yes". Mr Kwong informed Fisher that he needed to go back to his Board and he would get back to him "in a few days".

42 Mr Kwong returned to his hotel and telephoned Dr Chee. He informed Dr Chee that based on what he had heard from the two executive directors and based on the information provided it looked like "a good buy". He continued:

For $3.4 million we will get twenty percent of a holding company with a subsidiary which has been valued at $35 million. There is a lot of potential. There are no cross guarantees and no corporate guarantees. Most of the debt is with the property division.


Dr Chee agreed that it sounded like a good idea and said that he would arrange a Director's meeting of the plaintiff the following day to discuss the purchase of the shares. The following day, 28 June 2000, a Director's meeting was held on a conference call from Hong Kong. Present were Dr Chee, Mr Kwong and Mr Fung, the plaintiff's financial controller. The minutes record that it was resolved that the "acquisition by (the plaintiff) of 16,889,288 shares in the Satellite Group Ltd, a company listed in the Stock Exchange of Australia, at a consideration of AUD 3,410,277 be hereby approved".

43 Mr Wong arrived back in Australia from overseas on 28 June 2000. On that day he had a telephone conversation with Mr Lee who asked him to contact Mr Kwong. Mr Lee informed Mr Wong that he had introduced Mr Kwong to Fisher and that Mr Kwong appeared to be interested in the Satellite Group and he should contact him.

44 Mr Wong telephoned Mr Kwong and the following conversation took place:


Mr Wong: Do you want to proceed with the Satellite share purchase?

Mr Kwong: Yes. I'll be setting up a special purchase vehicle for the shares. My chief financial officer will get in touch with you tomorrow with the details of the company.

Mr Wong: What is your or your company's relationship with Lee Ming Tee?

Mr Kwong: There is no association between me or my company with Lee Ming Tee other than the fact that we purchased this company from Lee Ming Tee and as a result of this transaction we have remained friends.
Mr Wong: Good. I am glad because I want to be absolutely sure that there's no linkage between you and Mee Ling Tee given what has occurred in the past. Do you want the transaction to proceed today?

Mr Kwong. Yes today is fine.

Mr Wong: I will forward a copy of the contract note and our trust account details to you. Given the large amounts of monies involved, we have to be sure that the funds are in our account on the date of settlement.”

15 Bergin J returned to the issue of reliance with the following introductory paragraphs:

“109 Although there may be a very proper basis for having suspicions that Mr Lee was the silent and/or joint purchaser with the plaintiff such a case is not made out on the evidence. Of more relevance is the weight and reliance Mr Kwong and the plaintiff placed upon the meeting with Mr Lee and Jones and whether Mr Kwong is to be accepted when he rejected the defendants' suggestions that it was their representations that convinced him that he should purchase the shares in Satellite.

110 In the conversation of 26 June 2000 with Messrs Lee and Jones it appears that Mr Kwong was so impressed with what they had to tell him, in particular what Mr Jones said, that he was of the view it was "too good to be true". Mr Jones informed Mr Kwong that on a conservative basis the company would have a net asset value of between 25 and 30 million dollars. He also told him that the company had 3 to 4 million dollars of cash in the bank and that the Media business had already started making money.

111 The defendants also relied on the plaintiff's abandonment of the majority of representations it pleaded submitting that such abandonment is telling in the circumstances of this case. It is submitted that the four remaining representations upon which the plaintiff proceeds could not have been relied upon by it in the circumstances. It is therefore necessary to analyse each of those representations as to whether it is more probable than not that the plaintiff relied upon those statements.”

16 In relation to Kwong’s evidence of reliance upon Fisher’s representation that Satellite was in a good financial position, Bergin J made the following finding:

“135 On this evidence it is apparent that the reliance upon the representation that the company was in a good financial position and experienced no adverse change since the float was dependent upon and very relevant to Mr Kwong's claimed reliance on the representation made by Mr Fisher that Satellite had no liability as guarantor of any of its subsidiaries.”

17 In examining the evidence as to reliance upon Fisher’s representation that Satellite had no liability as a guarantor, Bergin J, not surprisingly placed significance upon the note under “Contingent Liabilities” in Satellite’s annual report which was in the following terms:

“(v) The Company has provided a guarantee in respect of the contractual obligations of a subsequent controlled entity, The Satellite Group (Ultimo Pty Ltd) amounting to $17,800,000.”

18 Bergin J’s finding in respect of that representation is as follows:

“140 The acceptance of Mr Kwong's evidence would require the Court to accept that the general question was asked so as not to appear to be offensive. It would also require the Court to accept that notwithstanding the contingent liability disclosure in the prospectus Mr Kwong was comforted by Mr Fisher's bland response that there were no guarantees….”

19 Bergin J then addressed the representation that Satellite had a few million dollars in its bank account. Her Honour’s conclusions on reliance were as follows:

“ Conclusion on Reliance

161 Mr Stevenson submitted that I would take into account the possible cultural difference in Mr Kwong's approach to his questions of Fisher. In particular he highlighted the way in which Mr Kwong responded to some of Mr Douglas QC's questions in that he said "I tend to disagree with you". This may be characterised as a polite rejection of the propositions being put to him. However an interesting insight into Mr Kwong's capacity to deal with matters fairly directly and even bluntly is found in his cross examination as follows:

Q You did not, at the meeting which you had Mr Broster and Mr Fisher in Hong Kong on 5 July 2000, make any complaint about any representations which Mr Fisher was alleged to have made to you, did you?
A At that time, I also realised that it - the company was in deep shit.

Q Please use - a.
A Was in I am sorry your Honour, was in deep financial troubles.
(Tr. 117)

162 Additionally if Mr Kwong realised as early as 5 July 2000, that Satellite was in "deep financial troubles" it is incredible that he would, as he did, offer Fisher support if he had relied on representations that the company was in a good financial position. Even accepting the existence of cultural differences one would at least expect some questioning, in an inoffensive manner, as to why he had been given inaccurate or false information the previous week.

163 I accept the defendants' submissions that there are a number of features in the evidence that point to the possibility that Lee Ming Tee was the real decision maker and purchaser behind the plaintiff. These include the admitted close personal association between Mr Lee and Mr Kwong; Mr Lee's close interest in the transaction and his subsequent purchase of 100,000 shares in Satellite, notwithstanding his concern about the consequences in Malaysia; the lack of any discussion between Mr Wong and Mr Kwong as to the affairs of Satellite; the curious presence of Mr Lee's son at the meeting between Fisher and Kwong on 27 June 2000, and the failure of Mr Kwong to consult with the experts within Millennium who would have been able to assist in understanding the internet aspects of Satellite which apparently was the focus for the purchase.

164 Notwithstanding these matters I am not satisfied that it is more probable than not that Mr Lee and his associated entities were the real purchasers in this case.

165 However I do not accept Mr Kwong's denials of his reliance upon Mr Lee and Mr Jones. This was a large investment for this plaintiff. The rudimentary and simple analysis, to use Mr Douglas QC's expression, is inexplicable in the circumstances. As a very easy and basic step the plaintiff could have obtained the very recent ASX announcements which would have alerted it to the difficulties of which he claimed he subsequently became aware. The plaintiff's failure to do that is not properly explained in the evidence.

166 To suggest, as Mr Kwong did in cross examination that notwithstanding the disclosure in the contingent liabilities section of the prospectus of the $17.8 million guarantee, he "assumed the guarantee had been released and discharged in some way or another" is in my view also quite incredible. I am satisfied that the plaintiff's failure to make the very basic enquiries in respect of this company was because it was satisfied that this was, as Mr Jones described it, a good "opportunity" and so good that Mr Kwong thought it was "too good to be true". I am satisfied that the plaintiff saw the opportunity to purchase a company in financial distress and seized it quickly. I am of the view that it mattered not what Fisher said to Mr Kwong in the circumstances of this case.

…
169 I am satisfied the plaintiff did not rely upon the conduct of the defendants in the relevant sense and Fisher's statements did not induce the plaintiff to purchase the shares.”

20 In summary then, Bergin J found that the four representations were made by Fisher at the meeting of 27 June 2000, that they were false and there was no reasonable basis for making those representations: further, that Kwong had not relied upon those representations and that Kwong had relied upon the information provided to him by Messrs Lee and Jones as quoted earlier in these reasons.

21 The question then arises to what extent the current proceedings represent an attempt by I-Achieve, whether justified or otherwise, to re-litigate the representation case which it failed to establish in the prior proceedings, not on any onus basis of resolution, but on a positive finding that I-Achieve had failed to “make the very basic inquiries in respect of this company… because it was satisfied that this was, as Mr Jones described it, a good ‘opportunity’ and so good that Mr Kwong thought it was ‘too good to be true’ [and] the plaintiff saw the opportunity to purchase a company in financial distress and seized it quickly [and further] it mattered not what Fisher said to Mr Kwong in the circumstances of this case”. (par 166)

22 The amended defence to I-Achieve’s summons in these proceedings admits receipt of brokerage from both vendor and purchaser and, in substance, admits the failure to provide information referred to in I-Achieve’s contentions and asserts that it was information that was within the public arena, or which was in the possession of I-Achieve, or was in the nature of advice which was neither its duty, nor within its province to give.

23 Par 38 of the amended defence is in the following terms:

“38 In further answer to the whole of the matters pleaded in the SPC, the defendants say that, if (which is denied), the plaintiff has suffered loss or damage, the plaintiff, or alternatively Millenium, caused or contributed to its own loss .

Particulars

(a) The plaintiff did not make any, or any adequate inquiries before the purchase of the Satellite shares .

(b) The plaintiff, or alternatively Millenium, only conducted a rudimentary and simple analysis for a significant investment, and decided to purchase the Satellite shares in less than 48 hours .

(c) The plaintiff, or alternatively Millenium, relied upon information provided by Mr Lee Ming Tee and Mr Alan Jones in entering the transaction and made no attempt, or no adequate attempt, to verify that information.
(d) The price paid to the Satellite shares was 20 notwithstanding that the plaintiff, or alternatively Millenium, knew that the Satellite shares were trading for 16 -17.

( e) The Satellite shares were purchased notwithstanding tha t:

(i) The plaintiff knew that the price of the Satellite shares had dropped from 50 at the time of Satellite’s listing on the Australian Stock Exchange, to 16 at the time the plaintiff purchased the shares and that the total market capitalisation of Satellite was less than half of what it had been at the time of the float.

(ii) The plaintiff knew of the content of the Satellite prospectus, and, in particular, knew that Satellite would have to make virtually all of $10.7million in the six months to 30 June 2000, to meet its forecast.

(iii) The plaintiff was aware that it was a possibility that Satellite was “financially distressed.”

(iv) The plaintiff was aware that Satellite was the sort of company that might be affected by the downturn in the market.

(v) The plaintiff knew that Satellite had received $25 million from the public as a result of its float, but did not appear to have repaid any of the $35 million in borrowings disclosed in its prospectus.

(vi) The plaintiff knew that it was likely that the $25 million raised by Satellite in its initial public offering would have been on-loaned to other companies within the group to enable them to carry out their development activities, and that therefore the ability of Satellite to get that money back would depend upon the continued viability and solvency of those subsidiaries.

(vii) The plaintiff knew that a significant part of the assets of Satellite consisted of development properties which could require further borrowings in order for them to realise the value suggested in the Satellite prospectus.

(viii) The plaintiff knew of the contents of the Satellite Annual report, and therefore knew or ought to have known that Satellite had guaranteed the obligations of its controlled entity, The Satellite Group (Ultimo) Pty Limited amounting to $17.8million, and the plaintiff knew of no circumstance which could have given rise to a discharge of that obligation.
(f) The plaintiff made no specific enquiries as to whether Satellite had given third party securities .
(g) The plaintiff knew that the global market analysis and valuation of the Satellite e-media business was unrealistic and based on optimistic and unfounded projections .
(h) The plaintiff failed to consider any of the ASX announcements or press material about Satellite prior to purchasing the shares.”

24 It is reasonably clear from a reading of Bergin J’s judgment, that those allegations reflect findings made in the prior proceedings against I-Achieve.

25 In one respect it seems to me that this application is premature in so far as one does not know whether I-Achieve disputes the contentions in par 38 of the amended defence.

26 However, I have preferred to address the matter on the basis that it is open to I-Achieve to contest the allegations raised in par 38. Approached in that way it places the applicants’ case at its highest.

27 The conclusion I have reached is that these proceedings are an attempt by I-Achieve to present a case of reliance in relation to the transaction in a different form from that which founded its case in the prior proceedings and that, as the matter is presently pleaded, that may involve a re-litigation of issues upon which I-Achieve was unsuccessful in the prior proceedings.

28 To take particular allegations in these proceedings as illustrative of its relationship to the prior proceedings, in sub pars 38(a)-(c) of the amended defence Barton and Wong, in effect, repeat the findings against I-Achieve made in Bergin J’s judgment. I-Achieve has filed no reply to that defence and it may be that those allegations will be admitted.

29 However, assuming in favour of the applicants that those allegations will be denied, in those circumstances there will be involved a re-litigation of issues upon which I-Achieve has failed in the prior proceedings. A determination of such issues may result in different findings being made from those contained in Bergin J’s judgment.

30 To take another example: in relation to the allegation in these proceedings that Barton and Wong knew, or ought to have known, that Satellite was suffering from financial and management difficulties, the following particulars are provided:

“1. Mr Peter Hannah, a senior employee of Barton, expressed the view, on 15 June, 2000 that the top 20 shareholders in Satellite had agreed that Mr Greg Fisher, the founding director of the company needed to be replaced and that, if he did not leave, they intended to “all dump their stock”.”

31 In par 82 of Bergin J’s judgment the following evidence was noted:

“82 On 15 June 2000 Broster had lunch with Peter Hannah, an employee of Barton Capital and shareholder in Satellite, and Ian Hume, an AMP consultant and also a shareholder in Satellite. The following conversation took place:
Hannah: Have you seen Satellite's share price recently - its only going to get worse until you replace Greg Fisher. I do not believe that Greg is a good Managing director, if he is half decent he would resign now and if he will not, he should be made to resign. No one believes a word of what he says. He has absolutely no credibility in the market place. I have been speaking to the top 20 shareholders of Satellite and they all agree that Greg has got to go and he has got to go now. If he does not they have said to me they will all dump their stock. And let me tell you I will be doing the same. The problem is that if we put it to a vote, and it is soon going to come to that, you and Greg hold nearly 35% of the company. Where would your loyalties lie?

Broster: I am not getting into any backstabbing exercises, but if you can find somebody who wants to buy out my shareholding, that person would, of course, have the associated voting rights which they could exercise if they wanted to tackle the Greg Fisher issue. But whilst I am there I will not vote against him.

Hannah: I will think about it and discuss it with my colleagues in the office. If we had someone, you know it would only be at market rates don't you?

Broster: Fine. Just come back to me if you have someone interested.”

32 Presumably that evidence is the material upon which particular 1 relies.

33 Notwithstanding such an unsatisfactory potential for re-litigation of issues, I am of the view that these proceedings should not be stayed or dismissed, either in whole or in part, as an abuse of process.

34 It would be open to I-Achieve to accept that it acted as alleged in sub pars 38(a) – (c) of the amended defence, or be subjected to further findings to that effect, yet maintain that it would not have proceeded with the acquisition had it been made aware of the information said to have been withheld from it, including the possibility, if not a likelihood, that the major shareholders in Satellite, at the time of the transaction, were seriously considering “dumping “ their shares.

35 On the evidence before me, it has not been established that the information relating to the attitude of Satellite’s major shareholders was available to I-Achieve before the commencement of the prior proceedings. Moreover, Bergin J’s judgment does not identify the source of the evidence of that matter in the prior proceedings. However, even if I assumed that the information was available to I-Achieve before the prior proceedings and at a time when it was open to I-Achieve to join Barton and Wong in the prior proceedings on the causes of action relied upon in these proceedings, I still would adhere to the view that I-Achieve should not be precluded from litigating the issues raised in these proceedings on the ground of it being an abuse of process.

36 In my view, it should not be overlooked that I-Achieve depended upon the co-operation of Wong as a witness in the prior proceedings. However one may view the commercial standards that may be reflected in I-Achieve first using Wong and then suing him, I think, as a litigant, I-Achieve was entitled to make such a tactical decision in its own interest without the consequence of these proceedings being dismissed as an abuse of process.

37 In my view, the Court should exercise considerable caution in exercising its power to stay or dismiss proceedings as being an abuse of process where the abuse is said to arise from an unjustified attempt to re-litigate issues unsuccessfully raised by the litigant in earlier proceedings, particularly having regard to the wide protection afforded by anshun estoppel, issue estoppel and estoppel by judgment: not to mention the distinction between actions in personam and actions in rem. I think this is recognised within Rippon.

38 The facts in Rippon, which the Court of Appeal was required to consider, included the following:

“3 The proceedings arise out of the sale of a business to the first and second respondents in 1991. A contract of sale between the vendor and the first respondent entered into on 5 August 1991 (blue 1/7) was rescinded on 28 September and replaced by two contracts to sell part of the business to the first respondent and the balance to the second. Both contained warranties by the vendor and its directors, referred to as the covenantors, of the reliability and accuracy of financial information provided in annexures A to F to the contracts (1/57). Completion took place on 30 September.

4 The relevant annexures are annexure A (1/43-5), the vendor's financial statements for the years ending 30 June 1988, 1989, and 1990, and annexure D (1/47-8) which covered the same ground but included financial statements for the 1991 year. Annexure A was prepared by the accountants for the vendor, a firm comprising the appellant and the third respondent (the accountants). It was covered by a formal report on their letterhead. Annexure D was not covered by a formal report but had been prepared by the firm and their name appeared on the facsimile record.
5 The purchasers became dissatisfied with their purchase and brought proceedings against the vendor and the covenantors in the Supreme Court. The amended statement of claim (1/209) pleaded a warranty that the nett profit of the business for the year ending 30 June 1991 was $187,921 as stated in annexure D and a breach in that the correct figure was $106,713 (pars 6, 7, 8). Paragraph 14 pleaded that the representations in annexure D had been made fraudulently, and para 15 that they had been made in contravention of s 52 of the Trade Practices Act.

6 There was also an allegation that the gross income of the business for the year ended 30 June 1991 had been negligently misrepresented in annexure E.

7 The action was heard by Brownie J. The plaintiffs only pressed their claims for breach of contract and breach of s 52 (1/8). On 25 June 1996 the Judge awarded damages of $22,722 for breach of contract and dismissed the claim under s 52 because he was not satisfied that the purchasers had been misled or deceived.
…
10 Meanwhile on 10 September 1997, approximately 3 weeks before the 6 year limitation period expired, the purchasers commenced proceedings in the District Court against the accountants claiming damages for negligent misrepresentation. The claim as pleaded was based on misrepresentations in annexures A and D. The accountants were not served until 11 May 1998.
11 The statement of claim, as amended, alleged that the purchasers entered into the contracts in reliance on representations covering the 1988, 1989, 1990 and 1991 years, in annexures A and D. The earlier proceedings had been confined to the figures for the 1991 year.”

39 The position of the accountants was referred to in the judgment of Handley JA in the following terms:

“15 The accountants were not parties to the action in the Supreme Court, nor were they privies of the vendor, and they cannot claim the benefit of any cause of action estoppel or issue estoppel.
…
18 The purchasers did not make a claim based on the figures for the earlier years in annexures A and D. If, as Brownie J held, Mr Hoefl had not relied upon the representations in the 1991 figures he would hardly have been accepted if he had claimed to have relied on the earlier figures.

19 Fresh claims for misleading and deceptive conduct against the vendor based on the earlier figures would not be barred by cause of action or issue estoppel because those claims were not litigated. Nevertheless, in the terms of the joint judgment of Gibbs CJ, Mason and Aickin JJ in Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589, 602 (Anshun) those claims were "so relevant to the subject matter of the first action that it would have been unreasonable not to rely on [ them]" and they would therefore be barred by the wider form of estoppel applied in that case.

20 The purchasers could have been expected to bring forward any claims against the vendor based on the earlier figures so that all relevant issues could be determined in the one proceeding. Moreover a judgment in favour of the purchasers based on the earlier figures would conflict with the judgment in favour of the vendor based on the 1991 figures because the judgments would declare inconsistent rights in respect of the same transaction (Anshun 603-4).

21 The judgment in favour of the vendor on the cause of action for misleading and deceptive conduct created a cause of action estoppel against any claim against the vendor for negligent misrepresentation. See Trawl Industries Pty Ltd v Effem Foods Pty Ltd (1992) 36 FCR 406, 418-22. Accordingly Brownie J's decision barred all causes of action against the vendor based on the representations in annexures A and D.

22 The purchasers could have included their claim against the accountants for negligent misrepresentation, based on the 1991 figures, in their Supreme Court proceedings. They knew that the figures came from the accountants and there would have been common issues of reliance, falsity and damage. If the claims based on the earlier figures were not worth pursuing against the vendor they were not worth pursuing against the accountants either.

23 In those circumstances it could fairly have been said, in the language of the joint judgment in Anshun (602), that the claims against the accountants were so relevant to the subject matter of the first action that it was unreasonable for the purchasers not to rely upon them in that action. Compare Morris v Wentworth-Stanley [1999] QB 1004 (CA), 1011, 1017.

24 Counsel for the appellant did not contend for an Anshun estoppel, but the fact that the present claim could, and perhaps should, have been included in the Supreme Court proceedings, emphasises the close connection between the two proceedings and is relevant in considering whether the present action is an abuse of process.

25 The vendor and the covenantors might have raised cross-claims against the accountants for damages for professional negligence and negligent misrepresentation to cover any liability to the purchasers. The accountants would then have been parties to the proceedings and entitled to the benefit of res judicata estoppels arising from the judgment of Brownie J. See Sandtara Pty Ltd v Abigroup Ltd (1997) 42 NSWLR 5. Those estoppels would have been a complete answer to these proceedings.
26 The vendor now has no liability to the purchasers for misleading and deceptive conduct or negligent misrepresentation for which it could claim indemnity from the accountants. Its success in the Supreme Court proceedings thus operated for the benefit of the accountants and this further emphasises the close connection between the two proceedings.”

40 In finding the existence of an abuse of process in the proceedings against the accountants, Handley JA’s reasoning is found in the following:

“28 The present proceedings are an attempt to litigate or re-litigate issues which were either decided in or are barred by the earlier proceedings. In substance, ignoring the camouflage, the purchasers are attempting to re-litigate the issue of reliance on the 1991 figures which they lost. If they cannot succeed against anyone in respect of the 1991 figures because they did not rely on them, they could hardly succeed in establishing reliance on the earlier figures.
29 The Judge also held that the issue of reliance on the expertise of the accountants had not been litigated in the Supreme Court and that a finding of reliance on that expertise would not conflict with the findings of Brownie J. This is true enough but ignored the fundamental fact that the purchasers would first have to prove that they relied upon the figures themselves before the question of reliance on that expertise could even arise. If they did not rely on the figures, they could not possibly have relied on the expertise required for their production.
30 The substance of the matter therefore is clear. The purchasers, disappointed with their bargain, sued their vendor in contract and in misrepresentation. They lost their case in misrepresentation and were disappointed with their modest recovery in contract. A few weeks before the expiration of the limitation period they sued the accountants for what is in substance the same misrepresentations. In the first proceedings they had to prove that they relied upon those misrepresentations. This turned on the evidence of Mr Hoefl, the contemporary documents, and the surrounding circumstances. The purchasers lost that issue and seek to re-litigate it against the accountants on substantially the same evidence in the hope that this time Mr Hoefl will be believed.”

41 In my view, that line of reasoning does not result in a conclusion that these proceedings represent an abuse of process. I think that is made clear by the fact that it is possible for I-Achieve to succeed in these proceedings consistently with the findings made in the prior proceedings by Bergin J. To the extent that I-Achieve puts in issue in these proceedings matters that are the subject of findings adverse to it in the prior proceedings, it is capable of succeeding in its present case whether or not the re-litigated issues are determined in its favour.

42 Using sub pars 38(a)-(c) of the defence in these proceedings, again, as an illustration of the point: it would be open to I-Achieve to successfully establish that it would not have entered into the transaction if Barton/Wong had informed it of (a) the possibility of the principal shareholders in Satellite “dumping” their shares: (b) the fact that the transaction was being carried out in breach of the Foreign Acquisitions and Takeovers Act 1975 (Cth), or (c) the fact that Barton/Wong was in receipt of a secret commission in relation to the transaction. Such a case could stand in the face of findings in terms of sub pars 38(a)-(c).

43 In my view these proceedings do not constitute a mere “changing [of] the form of the proceedings [so as] to set up the same case” as was raised in the prior proceedings, to adopt a phrase from the speech of Lord Halsbury in Reichel v Macgrath (1889) 14 App Cas 665.

44 The concept of abuse of process as expressed by Lord Halsbury is not a novel concept and it has been the subject of frequent reference by the courts. In Walton v Gardiner (1993) 177 CLR 378 at 392 the joint judgment of Mason CJ, Deane and Dawson JJ placed this kind of abuse of process in the following context:

“None of the members of the Court of Appeal accepted the Department’s narrow view of the extent of the jurisdiction of the Supreme Court to order a stay of proceedings on abuse of process grounds. Gleeson CJ and Kirby P considered that the Court of Appeal has power to make an order staying proceedings if it is satisfied that the continuation of the proceedings would be “so unfairly and unjustifiably oppressive” as to constitute an abuse of process. Their Honours made plain that the court would only be so satisfied in an exceptional or extreme case. Mahoney JA adopted a similar approach, while formulating the appropriate test in slightly different words. His Honour considered that the question for the Court of Appeal was whether, in all the circumstances, the continuation of the proceedings before the Tribunal would involve unacceptable injustice or unfairness. In our view, the approach adopted by the members of the Court of Appeal was correct.
The inherent jurisdiction of a superior court to stay its proceedings on grounds of abuse of process extends to all those categories of cases in which the processes and procedures of the court, which exist to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness. Thus, it has long been established that, regardless of the propriety of the purpose of the person responsible for their institution and maintenance, proceedings will constitute an abuse of process if they can be clearly seen to be foredoomed to fail. Again, proceedings within the jurisdiction of a court will be unjustifiably oppressive and vexatious of an objecting defendant, and will constitute an abuse of process, if that court is, in all the circumstances of the particular case, a clearly inappropriate forum to entertain them. Yet again, proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings. The jurisdiction of a superior court in such a case was correctly described by Lord Diplock in Hunter v. Chief Constable of the West Midlands Police as “the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people.”
(at 392-393) (emphasis added)

45 I do not regard these proceedings as an attempt “to litigate anew a case which has already been disposed of by [the prior] proceedings.” I think that conclusion flows from the fact that it is open to I-Achieve to succeed in these proceedings in the face of findings made in the prior proceedings.

46 This wider concept of abuse of process was also considered by French J in Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275 as follows:

“The court is empowered by O 20, r 2 to stay or dismiss a proceeding where it appears to the court that it is an abuse of its process. Even without the benefit of that rule there is little doubt that the court has an implied incidental power to control its own process and to prevent misuse of it. It is a power which ought to be very sparingly exercised and only in exceptional cases: see Lawrance v Lord Norreys (1890) 15 App Cas 210 at 219, per Lord Herschell; Burton v Shire of Bairnsdale (1908) 7 CLR 76 at 95, per Isaacs J. The possible varieties of abuse of process are only limited by human ingenuity and the categories are not closed. An unmeritorious claim brought merely in order to put pressure on a respondent for commercial or other reasons would no doubt be treated as an abuse. Such a claim might also be attacked as frivolous or vexatious or as disclosing no reasonable cause of action. Those designations are not mutually exclusive. An attempt to litigate in the court a dispute or issue which has been resolved in earlier litigation in this or another court or tribunal may also, according to the circumstances, constitute an abuse of process even if not attracting the doctrines of res judicata or issue estoppel .”
(at 279) (emphasis added)

47 The Full Court of the Federal Court in Coffey v Secretary Department of Social Security (1999) 86 FCR 434 at 443 referred to the inherent power of the Court to prevent re-litigation of issues where it constitutes an abuse of process “even though the earlier proceedings did not give rise to a res judicata or issue estoppel”, citing Sea Culture and Walton.

48 In Rippon the Court of Appeal recognised the limitations on the application of this concept of abuse of process in citing with approval the judgment of Hunt CJ at CL in Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404 in the following passage:

"There are obviously limitations to striking out pleadings or causes of action as an abuse of process upon the basis stated in Reichel v Magrath ... The issue determined in the earlier case which is sought to be litigated in the later case must be one which the party propounding it in the latter lost in the former ... It must be an issue which was necessarily determined in the earlier case, and one of importance to the final result. It must have been properly argued - by which I mean that ... the tribunal which decided it was an appropriate one to do so, that the parties were appropriate contradictors and that the issue was regarded by them as one of importance ... In normal circumstances the decision disposing of the issue must have been a final one ... There may also be circumstances in which, notwithstanding the absence of an appeal, it is clear that the earlier decision has overlooked some binding authority, or that it has caused the unsuccessful party a manifest injustice ... all the circumstances of the determination in the earlier case may be considered ...".

(at 414)

49 The Court of Appeal adopted the identification of factors to which regard may be had in considering the presence of an abuse of process of this kind, as stated by Giles CJ Comm D, as his Honour then was, in State Bank of NSW Ltd v Stenhouse Ltd (1997) Aust Tort Rep 81-423 as follows:

"The guiding considerations are oppression and unfairness to the other party to the litigation and concern for the integrity of the system of 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 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) any plea of fresh evidence, including the nature and significance of the evidence and the reason why it was not part of the earlier proceedings; ...

(f) the extent of the oppression and unfairness to the other party if the issue was 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".

(at 64,089)

50 In R v O’Halloran (2000) 36 ACSR 315 at 343 Heydon JA placed emphasis on that aspect of the principle which drew upon the fact that it was the same party seeking to re-litigate an issue and which emphasised the need to carefully scrutinise the issues, the litigation of which was said to constitute an abuse of process, as appears from the following passage:

“108 The submission does not point out that none of the cases discussed by Giles CJ Comm Div are remotely analogous to the present. Reichel v Magrath (1889) 14 App Cas 655 was a case in which Reichel was defeated on an issue in proceedings he brought against certain parties, and it was held to be an abuse of process for him to re-agitate it in later proceedings brought against him by different parties. Walton v Gardiner (1993) 177 CLR 378 raised the issue of whether, where a moving party had brought disciplinary proceedings against medical practitioners which had been stayed, there ought to be a stay of the second set of disciplinary proceedings brought by that moving party against the same practitioners in relation to allegations substantially overlapping the allegations in the first proceedings. Hunter v Chief Constable of the West Midlands Police [1982] AC 529 was a case where an accused was convicted on the basis of an allegedly coerced confession: civil proceedings by him against the police claiming damages for injuries allegedly suffered when the confession was obtained were struck out as an abuse of process. Rogers v R (1994) 181 CLR 251 and Re Thomas Christy Ltd (in liq) [1994] 2 BCLC 527 were discussed above. Haines v Australian Broadcasting Corporation (Hunt CJ at CL, 21 July 1995, unreported) was a case in which, as Giles CJ Comm Div said at 64,088:

"Haines sued three defendants for defamation. Two of the defendants were not served. On the separate decision of the question pursuant to Pt 31 r 2 of the Rules, it was held that the matter complained of could not convey the defamatory imputations alleged. Haines then amended to continue against only one of the unserved defendants and a new party, no longer for defamation but for injurious falsehood and misleading or deceptive conduct. The representation on which he relied for these purposes was no different in substance from the imputation which had earlier been rejected. On application by the new party, it was held that the proceedings against the new party would have been struck out as an abuse of process but for the proffering of a changed and substantially different representation."


109 In all these cases the person whose role in later proceedings, whether as moving party or defendant, was characterised as an abuse of process was a person who had been a party to the earlier proceedings. The Director of Public Prosecutions was not party to the civil proceedings before the Supreme Court. In all of these cases, too, the persons said to have abused process had lost on an issue in the earlier proceedings. The fact that some arguments of the Australian Securities Commission advanced by it in furtherance of the public interest of having the "legal issues of concern to it clarified" (see Fame Decorator Agencies Pty Ltd v Jeffries Industries Ltd (1998) 28 ACSR 58 at 59 per Gleeson CJ) were not accepted by Cohen J does not necessarily mean it suffered "loss" or had an "issue" decided against it. No relief was sought against it; it sought no relief; it filed no cross claim:13 ACLC 1334 at 1338. It filed a Notice of Cross-Appeal, but did not pursue it in the Court of Appeal.

110 Further, the appellant's submission does not refer to a statement by Hunt CJ at CL, as construed by, and evidently approved by, Giles CJ Comm Div in State Bank of New South Wales Ltd v Stenhouse Ltd at 64,088 that "there will not be abuse of process if someone not a party to the earlier case wishes to re-litigate an issue decided in that case in favour of the opposite party" (emphasis added). The criteria set out by Giles CJ Comm Div quoted in the appellant's submission must be read in the light of these matters.

….

112 … of the seven factors listed in State Bank of New South Wales v Stenhouse Ltd (1997) Aust Torts Reports 81-423 at 64,077, the first four expressly turn on precise identification of the issues…”
(at 343-344 )

51 It is not without significance that, in these proceedings, the source of any re-litigation of issues will stem, largely, from the allegations in par 38 of the amended defence.

52 While the consequence of permitting I-Achieve to re-litigate such issues, if it so choses, is clearly unsatisfactory, I am firmly of the view that the Court should exercise its power to stay or strike out proceedings as constituting an abuse of process of this kind with great caution, and, for the reasons given, the application is dismissed with costs.

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Last Modified: 11/28/2001