Idoport Pty Ltd v National Australia Bank Ltd - [2006] NSWCA 202

NEW SOUTH WALES COURT OF APPEAL

CITATION: Idoport v National Australia Bank Limited & Anor [2006] NSWCA 202

FILE NUMBER(S):
40681/05

HEARING DATE(S): 7 April 2006

DECISION DATE: 24/07/2006

PARTIES:
Idoport Pty Limited (Appellant)
National Australia Bank Limited (First Respondent)
National Markets Group Limited (Second Respondent)

JUDGMENT OF: Mason P Beazley JA Ipp JA

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S): SC 50046/05

LOWER COURT JUDICIAL OFFICER: Bergin J

COUNSEL:
B Walker SC; J Harris SC; J Stephenson (Appellant)
T F Bathurst QC; R A Dick (Respondents)

SOLICITORS:
Sarvaas Ciappara (Appellant)
Freehills (Respondents)

CATCHWORDS:
ORDER – party barred by the court from bringing new proceedings in same cause of action or claim for relief – construction of barring order – whether new proceedings were “concerning any cause of action or the whole or any part of any claim for relief” that arose in earlier proceedings – new proceedings against entities not in existence previously – previous proceedings broad enough to encompass new proceedings
ABUSE OF PROCESS – courts inherent power to prevent abuse of its processes – proceedings brought without costs being paid for first action

LEGISLATION CITED:
Supreme Court Act 1970 (NSW) s 101(2)(e)
Supreme Court Rules 1970 (NSW) Pt 40 r 8, Pt 53 r 4

DECISION:
The appeal is dismissed with costs.

JUDGMENT:

- 47 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40681/05
MASON P
BEAZLEY JA
IPP JA
24 July 2006

IDOPORT PTY LIMITED
v
NATIONAL AUSTRALIA BANK LIMITED & ANOR

Headnote

Facts

The appellant brought proceedings (the present proceedings) against the respondents claiming the payment of amounts owed, both presently and in the future, under a Consulting Agreement.

The appellant had previously brought proceedings against the respondents claiming the payment of amounts owed under the same Consulting Agreement. Those proceedings were dismissed by Einstein J in the Supreme Court Equity Division due to the failure of the appellant to provide security for costs as had previously been ordered by the Court. In addition, Einstein J made a barring Order prohibiting the bringing of “fresh proceedings concerning any cause of action or the whole or any part of any claim for relief by it in these proceedings, until costs in these proceedings have been paid in full”.

The respondents applied by Notice of Motion to set aside, dismiss, or stay the present proceedings. The Notice of Motion came before Bergin J who ordered that the present proceedings be dismissed. The appellant brought this appeal against her Honour’s order, the issue on appeal thereby being whether the present proceedings were barred by the terms of the barring Order.

The respondents filed a Notice of Contention claiming, inter alia, that the Court should dismiss the present proceedings in the exercise of its inherent power to prevent an abuse of its own processes.

Held per Beazley JA (Mason P and Ipp JA agreeing):

(i) The present proceedings came within the terms of the barring Order.

(ii) The word “concerning” in the phrase “concerning any cause of action or the whole or any part of any claim for relief” in the barring Order means “regarding, touching, in reference to or relation to; about” and should be read broadly.

Minister for Immigration and Ethnic Affairs v Ah Hin Teoh (1995) 183 CLR 273 (applied)

(iii) The causes of action and claims for relief in the present proceedings did not have to be the same or substantially the same as those in the Main Proceedings to be caught by the barring Order. The claims made in the Main Proceedings were wide enough to capture every claim in the present proceedings.

(iv) The Court has an inherent jurisdiction to prevent its procedures being abused.

Wentworth v Graham [2003] NSWCA 307 (followed); Bhamjee v Forsdick(No 2) [2003] EWCA Civ 1113; Wickramaratna v Cambridge University Chemistry Dept [2004] EWCA Civ 1532; Commonwealth Trading Bank v Inglis (1974) 131 CLR 311 (discussed)

(v) The present proceedings ought to be dismissed in the exercise of the Court’s inherent power to prevent abuse of its own processes as:

(a) The present proceedings were brought in breach of the general law principle that a plaintiff must not bring a second action in the same cause and against the same defendant until the costs of the first action have been paid.
Bowen v Hickey (1958) 78 WN (NSW) 820 (applied); Reichel v Magrath (1889) 14 App Cas 665 (followed); Walton v Gardiner (1993) 177 CLR 378; Rogers v The Queen (1994) 181 CLR 251 (discussed); Rippon v Chilcotin Pty Limited (2001) 53 NSWLR 198
(b) The same issues were raised in each proceeding.

Sinclair v British Telecommunications plc [2001] 1 WLR 38 (discussed); State Bank of New South Wales Ltd v Stenhouse Ltd (1997) Aust Torts Reports 81-423 (64,077) (followed)

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40681/05
MASON P
BEAZLEY JA
IPP JA
24 July 2006

IDOPORT PTY LIMITED
v
NATIONAL AUSTRALIA BANK LIMITED & ANOR

Judgment

MASON P: I agree with Beazley JA.
BEAZLEY JA: The question on this appeal is whether the appellant is entitled to bring the proceedings subject of the appeal (the present proceedings) without first having paid the respondents’ costs in earlier proceedings between the same parties. That question involves the construction of an Order made by Einstein J on 29 January 2002 barring the bringing of fresh proceedings concerning any cause of action or the whole or any part of any claim for relief in the earlier proceedings unless the costs of those proceedings were first paid (the barring Order), whether the present proceedings come within the terms of the barring Order and whether the present proceedings should be stayed in the exercise of the Court's inherent power to prevent abuse of its own processes. There is also an argument based on estoppel. These latter two questions arise on the respondents’ Notice of Contention.
Background
The appellant commenced the present proceedings against the respondents by Summons filed on 1 April 2005 claiming the payment of Performance Bonuses allegedly owing under a Consulting Agreement, dated 13 September 1996, entered into between the appellant, the respondents and Australian Market Automated Quotation (Ausmaq) System Limited (the Consulting Agreement). The Summons also includes a claim for a declaration as to the appellant’s entitlement to be paid Performance Bonuses in the future. The precise nature and extent of the appellant’s claim in the present proceedings is at the heart of this appeal.

The appellant had brought two sets of earlier proceedings (Supreme Court Equity Division proceedings nos. 50113/1998 and 50026/1999) against the respondents claiming the right to be paid Performance Bonuses under the Consulting Agreement. There was also a claim relating to the obligation to continue to pay Performance Bonuses. Those proceedings have become known as the Main Proceedings. Subsequently, the appellant commenced further proceedings in the Equity Division being proceedings no. 3991/2000. In those proceedings, the appellant also sought the payment of Performance Bonuses in respect of the revenue of additional Operating Entities, specified in the pleading, and which had become part of the subsidiaries of one or both of the respondents after the commencement of the Main Proceedings. In the history of the litigation between these parties, proceedings no. 3991/2000 became known as the MLC Proceedings. I will continue to use the terminology of the Main and the MLC Proceedings.
Einstein J ordered that the Main Proceedings and the MLC Proceedings be heard together: Idoport Pty Limited & Anor v National Australia Bank Ltd & Ors [2000] NSWSC 945 essentially because of the “enormous overlap of material issues” in these two proceedings: see judgment at [23].
On 29 January 2002, an order was made by Einstein J dismissing the Main Proceedings and the MLC Proceedings due to the appellant's failure to provide security for costs as ordered by the Court on 24 September 2001: Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors; Idoport Pty Limited & Anor v Donald Robert Argus; Idoport Pty Limited "JMG" v National Australia Bank Limited [2002] NSWSC 18.
At the time of dismissing the proceedings, Einstein J also made a barring Order in each proceeding within the Main Proceedings and in the MLC Proceedings. The barring Order in each matter was in identical terms (except to the extent that there were references to cross-claims and cross-claimants in proceedings no. 50113/1998, being one of the proceedings in the Main Proceedings). The terms of the barring Order (omitting reference to the cross-claim) were:
"That the [appellant] be barred from bringing fresh proceedings concerning any cause of action or the whole or any part of any claim for relief by it in these proceedings, until costs in these proceedings have been paid in full."
It will be convenient in these reasons to refer to the barring Order in the singular unless the context otherwise requires a reference to the barring Orders (plural).
An appeal against the Orders dismissing the Main Proceedings and the MLC Proceedings was itself dismissed (leave to appeal having first been granted): Idoport Pty Ltd v National Australia Bank Ltd & Ors; Idoport Pty Ltd v Argus; Idoport Pty Ltd v National Australia Bank Ltd & Ors [2002] NSWCA 271. An application for special leave to appeal to the High Court was refused. On the appeal in that matter, the appellant had also argued that the costs orders were unjust and ought to be set aside and that the barring Orders were precedented but unduly burdensome.
Mason P, with whom Stein and Giles JJA agreed, observed that the costs arguments were barely developed. In relation to the barring Orders, Mason P stated at [83]:
"If and when the appellant commences fresh proceedings it will, in the normal course, have to pay or secure the respondents' costs of the dismissed proceedings before being allowed to prosecute those proceedings (Bowen v Hickey (1958) 78 WN (NSW) 820; Sinclair v British Telecommunications plc [2001] 1 WLR 38 at 40). Einstein J did no more than spell this out explicitly."
The respondents have subsequently sought costs in the Main Proceedings in an amount slightly in excess of $63 million. Those costs have not been paid. However, the appellant has paid the costs in the MLC Proceedings. The appellant paid those costs so as to enable it to bring fresh proceedings against MLC, the appellant acknowledging that part of its claim in the present proceedings is the same as that brought in the MLC Proceedings. It submits however that the barring Orders do not prevent it from bringing the balance of its claim in the present proceedings.
There were further proceedings between the parties in 2004 when the respondents became concerned that the appellant was proposing to commence proceedings in a foreign country in relation to the matters that were subject of the Main Proceedings. Those proceedings were heard and determined by Burchett AJ: National Australia Bank Limited v Idoport Pty Limited [2004] NSWSC 212. The respondents had initially sought an anti-suit injunction to restrain the appellant from proceeding with any such claim in a foreign jurisdiction. The injunction application was not pursued. Instead, the respondents sought a declaration as to the effect of the barring Orders that had been made by Einstein J on 29 January 2002.
Burchett AJ construed the Orders made by Einstein J in terms of the following Declarations, ordered and entered on 22 April 2004:
"THE COURT:
1.Declares that Order 3 of the orders made by Justice Einstein on 29 January 2002 (the "Orders") in each of Proceedings 50113 of 1998, 50026 of 1999 and 3991 of 2000 (the "Proceedings") has the following effect:
(a) …
(b)Idoport Pty Limited cannot commence (including by filing originating process) fresh proceedings concerning any cause of action or the whole or any part of any claim for relief by it in Proceedings 50026 of 1999 until it has paid the costs of Proceedings 50026 of 1999 in full …"
An essentially identical Declaration to that made in (b) was made in respect of proceedings no. 50113 of 1998, but included reference to the cross-claim. Declarations (a) and (b) dealt with the Main Proceedings. An identical Declaration to that made in (b) was made in (c) in respect of the MLC Proceedings (proceedings no. 3991/2000).
Burchett AJ’s determination is the foundation for the claim in the Notice of Contention that an issue estoppel arises from his Honour’s judgment.
The appellant having commenced the present proceedings, the respondents applied by Notice of Motion for an order to set aside or dismiss the proceedings or alternatively for an order that the proceedings be stayed.
The Notice of Motion was heard by Bergin J who ordered that the present proceedings be dismissed: Idoport Pty Limited v National Australia Bank Limited & Anor [2005] NSWSC 752. Her Honour held, at [40], that the word "concerning" contained in the barring Order meant: "regarding, touching, in reference or relation to; about" and it should be read broadly: Minister for Immigration and Ethnic Affairs v Ah Hin Teoh (1995) 183 CLR 273 at 289 per Mason CJ and Deane J. Her Honour found that the cause of action for the payment of the Performance Bonuses in respect of the Operating Entities referred to in the present proceedings concerns a cause of action and part of the relief claimed in the Main Proceedings. She held, therefore, that the present proceedings were barred by the barring Order, and that it followed that the proceedings were an abuse of the process of the Court: see judgment at [55].
The appeal
The appellant has brought this appeal against her Honour's Order. A preliminary question arose as to whether leave to appeal was required, the Order made by Bergin J being interlocutory: Supreme Court Act 1970 (NSW) s 101(2)(e). The respondents filed a Notice of Motion seeking to have the appeal dismissed as incompetent.
The matter proceeded before this Court on the basis of full argument as if on appeal, with the question of whether leave was required being deferred for determination in the course of the determination of the matter as a whole. By the conclusion of the argument, it was apparent that this was a matter where leave should be granted and an order granting leave was made. Accordingly, the Court dismissed the Notice of Motion as to competency, with no order as to costs.
Issues on the appeal
The central, and indeed only issue on the appeal, is whether the present proceedings are barred by the terms of the barring Order made by Einstein J. The appellant contends that, having paid the costs of the MLC Proceedings, it was entitled to bring the present proceedings because the claims in the present proceedings are for Performance Bonuses on revenue of Operating Entities not the subject of claims in the Main Proceedings. It was submitted that the Main Proceedings did not extend to the recovery of Performance Bonuses from whatever future entities performed work into an indefinite time in the future. Rather, the appellant contends that the present proceedings are concerned with the recovery of moneys relating to Performance Bonuses earned by entities that were not in existence at the time that the Main Proceedings were dismissed. Those claims constitute different causes of action in the present proceedings from those pursued in the Main Proceedings and in the MLC Proceedings, as the causes of action sought to be pursued in the present proceedings had not accrued at the time that Einstein J made his Orders.
The respondents contend, however, that the barring Order made in the Main Proceedings prohibited the bringing of the present proceedings unless and until the costs of the Main Proceedings have been paid in full. They submit that these proceedings "concern”, in the sense of touch or relate to, a cause of action brought in the Main Proceedings, being a claim for Performance Bonuses under the Consulting Agreement, together with the declaratory and other relief sought in the Main Proceedings to ensure the payment of the Performance Bonuses, including the payment of Performance Bonuses on revenue earned by Operating Entities in the future. They do not dispute, however, that the appellant is seeking to recover moneys in relation to Performance Bonuses earned by entities that did not exist at the time that the barring Order was made, and, it follows, had not been earned at the time of that Order.
The respondents also contend, by way of Notice of Contention, that Bergin J could, in any event, have made the Order dismissing the present proceedings in the inherent jurisdiction of the Court, and further, that her Honour ought to have concluded that the appellant is estopped from bringing the present proceedings by reason of an issue estoppel arising from the judgment of Burchett AJ: [2004] NSWSC 212 at [5] and [24].
The appellant does not contend that the barring Order was made in excess of the Court's jurisdiction. However, the appellant submitted that the principle that a Court can only make orders that are within jurisdiction could be called in aid of the construction of the barring Order.
The respondents submitted that the argument in this matter has always proceeded on the basis that the barring Order was within power regardless of how it was construed. The respondents further submitted that the appellant should not be to be permitted to raise the question of power, as that question had not previously been argued. The respondents also point to the view that Mason P took of the barring Order in his judgment on appeal at [83] set out above. They submit that if the barring Order is of the nature stated by his Honour, then it is clearly within power.
This argument was not developed beyond the submissions as I have stated them. It is not productive, therefore, to attempt to give any particular or restrictive meaning to the barring Order based on that principle. Rather, the construction exercise should be undertaken having regard to the words used. In this regard, it is relevant to observe that the appellant does not contend that the construction given to the barring Order by the trial judge gives the Order an operation which is beyond power. Rather, it contends that the construction is not helpful. This is referred to further below.
It is convenient at this point to raise a further matter. Although there was no dispute that the barring Orders made by Einstein J were within power, there appears to be some confusion as to the basis upon which the Orders were made. In the appeal proceedings ([2002] NSWCA 271), Mason P stated that the barring Orders were made under Pt 53 r 4 of the Supreme Court Rules 1970 (NSW) (the Supreme Court Rules), which is contained in Div 1 of that Part. Division 1 relates to security for costs. Rule 4 provides:
"Where a plaintiff fails to comply with an order under this Division, the court may, on terms, order that the proceeding on any claims by the plaintiff for relief in the proceedings be dismissed."
On the hearing of the appeal in this matter, senior counsel for both the appellant and the respondents stated that the barring Orders were made under Pt 40 r 8. Part 40 r 8(2) provides:
"Where:
(a)the Court makes an order for the dismissal of proceedings so far as concerns any cause of action or the whole or any part of any claim for relief by any party,
(b) the Court orders that party to pay any costs, and
(c)before payment of the costs, the party brings against a party to whom the costs are payable further proceedings on the same or substantially the same cause of action or for the same or substantially the same relief,
the Court may stay the further proceedings until those costs are paid."

The barring Order made in this case is not made precisely in terms of either Pt 40 r 8 or Pt 53 r 4. Rather, it appears to operate as an injunction preventing the appellant from bringing such proceedings as fall within its terms until the costs have been paid.
Apart from the provisions of Pt 40 r 8 and Pt 53 r 4, the Court has an inherent jurisdiction to prevent abuse of its process. Mason P referred to this in the passage set out at [8] above.
Whilst it appears that nothing turns on the precise power that authorised the making of the barring Order, the nature and extent of the Court’s inherent jurisdiction is relevant, as the respondents contend that if the present proceedings are not caught by the reach of the barring Order the trial judge’s Order should be upheld as being within the Court’s inherent jurisdiction. I will return to the Court’s inherent jurisdiction later in these reasons.
The Consulting Agreement
An understanding of the arguments of the parties requires an appreciation of the operation of the Consulting Agreement, which is the background to the dispute.
The Consulting Agreement was entered into on 13 September 1996 and related to an on-line securities transaction, information and portfolio administration and reporting service known as the Ausmaq Service, (Fourth Further Amended Statement of Claim in the Main Proceedings 8.1). Explained in general terms, as is sufficient for present purposes, the appellant was to be paid for consulting services in respect of the operation of the Ausmaq Service by various entities that fell within the meaning of Operating Entities in the Consulting Agreement. It was also entitled to the payment of Performance Bonuses.
It is not necessary to refer to the Consulting Agreement in detail as only certain defined terms and cls 2 and 7 are relevant. Before referring to these provisions, an understanding of some internal terminology in the Consulting Agreement is required. A reference to 'Company' is a reference to the second respondent. A reference to 'System' is a reference to Ausmaq System Limited. A reference to 'the Bank' is a reference to the first respondent. I will retain the Consulting Agreement’s terminology in relation to these three entities. However, I will use the term 'the appellant' for ease of identification of the appellant and to avoid confusion due to a change in the appellant’s identity from JMG to Idoport and the occasional interchangeable use of those two terms.

The following terms are defined:
"Ausmaq Service means the service of providing an automated securities trading system and related services known as the Australian Market Automated Quotation System or Ausmaq System or Euromaq regardless of its name and includes but is not limited to, the holding of Securities and Entitlements for clients, the provision of a related deposit facility, execution of Securities transactions with related client portfolio administration and reporting and any service with equivalent or similar functionality, and any enhancements, modifications and additions to the service anywhere in the world.
…
Group means the Company, System and any of their related bodies corporate from time to time who accede to this Agreement.
…
Operating Entity means an entity established by the Bank that has the use of the System IP Rights for the purposes of commercialisation of the Ausmaq Service and includes System.
…
Performance Bonuses means the amounts payable to [the appellant] with reference to the financial performance of each Operating Entity under clause 7.
Payer means the entity nominated by the Company for the purpose of payment of the Performance Bonuses and includes the Company (who is the Payer for the Performance Bonuses calculated with reference to System's financial performance).
Right means the right to receive Performance Bonuses in respect of a particular Operating Entity.
…
System IP Rights means the Intellectual and Industrial Property in the software and other information, materials and Works used to provide the Ausmaq Service and the Intellectual and Industrial Property in any developments for the purpose of enhancing or expanding the Ausmaq Service (in Australia or elsewhere) during the term of this Agreement whether in existence on the Completion Date or subsequently developed or provided by [the appellant], the Group or any other person."
There was no express period of duration of the Consulting Agreement. Rather, cl 2 provided:
"2. DURATION
This Agreement binds the parties as from the Completion Date and (subject to the rights of termination in this Agreement) continues in force until the System IP Rights permanently cease to be used for any reason by all related bodies corporate of the Company and all Operating Entities and the Company offers [the appellant] a licence of the System IP Rights at that time on such terms as the Company offers in its absolute discretion at that time."
The payment of Performance Bonuses was governed by cl 7. It provided:
"7.          PERFORMANCE BONUSES
The Company will pay or procure the payment of periodic payments by way of performance bonuses as additional consideration for the Services of [the appellant] on the following terms:
(a)The payments will be calculated by reference to the financial performance of each Operating Entity, and will be paid (in respect of an Operating Entity) by:
(i)           the Company; or
(ii)by the Operating Entity itself if it is a Group member,
at the election of the Company.
(b)In the case of System, the Performance Bonuses will be paid by the Company and this Agreement constitutes the Company’s binding obligation to do so. In the case of each other Operating Entity, the Company will procure that the proposed Payer enter into a binding agreement to pay the Performance Bonuses in respect of that Operating Entity within 60 days of the relevant Operating Entity commencing business.
(c)The amount of the Performance Bonuses will be determined in accordance with Schedule 2.
(d)Performance Bonuses will be payable by each Payer:
(i)as to 75% of the total annual amount of the Performance Bonus payable as estimated by the Payer at that time, by the end of the financial year of the relevant Operating Entity; and
(ii)as to the balance of the Performance Bonus payable, based on the annual audited accounts of the relevant Operating Entity and within 120 days of the end of the financial year of the relevant Operating Entity.
(e)The Company will cause the Payer to deliver to [the appellant] the Payer’s calculation of the Performance Bonus payable for the relevant financial year within 90 days of the end of the financial year of the relevant Operating Entity. [The appellant] or an accountant appointed by it may review that calculation and will notify the Payer within 30 days of receipt of the calculation if [the appellant] objects to the calculation. If no notice of objection is received from [the appellant] within that 30 day period, [the appellant] will be deemed to have approved the calculation.
…
(h)On the Completion Date the Bank will provide the Guarantee in the form annexed to this Agreement."
Do the present proceedings concern any cause of action or the whole or any part of any claim for relief in the Main Proceedings?
Both parties agree that the critical question for determination is the reach of the expression "concerning any cause of action or the whole or any part of any claim for relief" in the barring Order.

The appellant acknowledges from the outset that the Consulting Agreement underlies the claims in both sets of proceedings. However, it submits that that is not determinative of the question in issue. Rather, it contends that the question is whether, as a matter of substance, the claims for relief in the present proceedings answer the description of any claim for relief by any of the parties in the Main Proceedings.
The appellant’s argument proceeds by analysing the meaning of the phrase “claim for relief” in the barring Order. The appellant contends that that phrase must be understood as referring to the consequences that flow from a party establishing its cause of action. Accordingly, it contends that in seeking to determine the reach of the barring Order, it is not sufficient merely to have regard to the nature of the relief claimed in the present proceedings. It is necessary to look at the basis of the specific cause of action said to give rise to the relief. In other words, it is necessary to look at the specific facts and circumstances alleged that are said to constitute the cause of action and in respect of which it is claimed there is an entitlement to relief. Thus, by way of simple example, it is not sufficient to ascertain whether a damages claim is made in each set of proceedings. Rather, using the ‘damages’ example, the focus must be upon the damages to which a party claims it is entitled based upon the pleaded cause of action that arises out of a given set of facts.
Although not challenging her Honour’s construction of the word “concerning” as meaning "regarding, touching, in reference or relation to; about” and which must be read broadly, the appellant contends that that construction is of no assistance in resolving the matter in issue. It was submitted that her Honour erred in equating the fact that the claims made in the present proceedings and those that were made in the Main Proceedings arose out of the same contract as being sufficient to fall within the terms of the barring Order. It was not sufficient, on the appellant’s argument, to simply find that the same contract was alleged. It was submitted that her Honour’s reasons amounted to no more than a finding to that effect.
The appellant submitted that the phrase "concerning any cause of action or the whole or any part of any claim for relief” did not extend the reach of the barring Order to proceedings that were different both in substance and in fact and did not prevent the bringing of a claim based upon the same contract. Rather, the barring Order was directed to preventing the bringing of a claim that would have the effect of "seeking vindication of" or "alleging" what was claimed in the earlier proceedings. Thus, upon its proper construction, the barring Order meant that a claim is barred, unless and until the costs of the Main Proceedings have been paid, if the new claim seeks vindication of a cause of action that is pleaded in the Main Proceedings. To seek vindication of such a cause of action, a new claim would have to allege the same facts and circumstances as would have been sought to be proved in the Main Proceedings in order to ground the relief claimed on the pleaded cause of action. It was not permissible, on the appellant's construction, to consider the barring Order solely by reference to the relief sought, without reference to the underlying causes of action.
The appellant’s contention is that a claim for relief, seeking the payment of moneys owed under the Consulting Agreement, to entities that did not exist at the time that the Main Proceedings were dismissed, being a claim in respect of a cause of action that had not accrued at the time of the dismissal of the Main Proceedings was, in substance and in fact, a different claim from that made in the Main Proceedings.
Further, it was contended that the nature of the appellant’s case against the respondents in the present proceedings was of a different juristic nature to that claimed in the Main Proceedings. The claim in the present proceedings is brought in debt pursuant to the terms of the Consulting Agreement and a Guarantee. In the Main Proceedings a variety of relief was sought, but there was no claim pleaded in debt. The appellant further contends that the causes of action in the Main Proceedings are not all based upon entitlements arising from contract. In particular, not every claim made in the Main Proceedings arises out of a relationship of privity.
I do not agree with the appellant’s suggested construction of the barring Orders. If it was correct, the word "concerning" in the phrase "concerning any cause of action or the whole or any part of any claim for relief" would have little or no work to do. It would only have been necessary for the barring Order to bar the bringing of the same causes of action or the whole or any part of any claims for relief. Nor do I agree that it was necessary to construe the barring Order by considering the relief sought through the prism of the pleaded causes of action. The barring Order was not intended to have such a narrow operation. By the same token, a claim for moneys owed under an entirely different contract would not be barred, notwithstanding that the same generic relief was sought in the Main Proceedings. That is because the purpose of the barring Order is to prevent an abuse of the Court's process. There must be some commonality of subject matter and relevant issues for the barring Order to operate. Either additionally or alternatively, the relief sought must be cast in terms that would cover the claims made in the new proceedings.
In my opinion, the trial judge’s construction of the barring Order was correct. That construction gives the word "concerning" appropriate work to do in circumstances where the Court was clearly concerned to prevent an abuse of its processes. That said, it does not resolve the question whether the present proceedings do come within the reach of the barring Order properly construed. To do so, the present proceedings must, to pick up two of the words of her Honour’s construction, "touch" or be "about" the causes of action or claims for relief, or part thereof, in the Main Proceedings. They do not have to be the same or substantially the same as the causes of action in the Main Proceedings.
In seeking to resolve the question whether the present proceedings were barred, her Honour summarised the claims in each set of proceedings as follows ([2005] NSWSC 752 at [30] – [31]):
"30The Main Proceedings brought by [the appellant] and Market Holdings Pty Limited, its associated company, against [the respondents] and certain other companies, made two sets of interrelated claims. The first set of claims included allegations that there had been a failure to commercialise the System, the subject of the Consulting Agreement, pleaded in a variety of ways, including breach of contract, breaches of fiduciary duties or obligations, and contraventions of the Trade Practices Act, 1974, all of which were alleged to lead to a claim for damages in the amount of approximately $29 billion. The second set of claims was for payment for Performance Bonuses. It was alleged that certain of the Bank’s wealth management services had “similar and equivalent functionality” to the System and that [the appellant] was entitled to Performance Bonuses pursuant to clause 7 of the Consulting Agreement.
31Both the Main Proceedings and the MLC Proceedings called for the construction of the same terms of the Consulting Agreement. The present proceedings call for the construction of those same terms. Both the Main Proceedings and the MLC Proceedings sought payment of Performance Bonuses. The present proceedings seek payment of Performance Bonuses. Both the Main Proceedings and the MLC Proceedings involved an issue of whether or not systems developed without the use of the Ausmaq rights, were systems of similar and equivalent functionality. The present proceedings involve the same issue. Both the Main Proceedings and the MLC Proceedings would have required the court to determine precisely what the Ausmaq system was. The present proceedings require such determination."
Her Honour then engaged in a more detailed analysis of the claims. It will be necessary to repeat that process for the purposes of this judgment.
The Main Proceedings were commenced by Summons claiming relief on the basis of causes of action pleaded in a Statement of Claim. The pleadings were amended from time to time. At the time that the Main Proceedings were dismissed, the relevant pleadings were an Amended Summons and a Fourth Further Amended Statement of Claim. I will refer to the pleadings in the Main Proceedings as 'the Amended Summons in the Main Proceedings' and 'the Statement of Claim': (there is no Statement of Claim in the present proceedings).
The relief sought by the appellant in the Statement of Claim in the Main Proceedings is set out at para 55. Paragraph 55.7 purports to deal with injunctive and declaratory relief. It sets out a series of assertions including at (d) where it is alleged that the second respondent:
"… is and will continue to be bound to account for and to pay to [the appellant] Performance Bonuses in respect of each of
(A) [The second respondent], and
(B) Ausmaq Systems, and
…
(I)Each other Operating Entity as defined in the Consulting Agreement,
for Australia and throughout the world as pleaded in paragraph 15 and 28 to 50 above and otherwise in accordance with the Consulting Agreement." (Emphasis added)
The first observation to be made is that the parties to the present proceedings were parties in both the Main Proceedings and the MLC Proceedings although there were additional parties in those proceedings to those in the present proceedings. There were also different and more extensive claims made in the Main Proceedings as compared to the present proceedings, as has already been observed.
The principal argument of the respondents was that even though the entities in respect of which claims for the payment of Performance Bonuses were made in the present proceedings were not in existence at the time of the dismissal of the Main Proceedings, the new entities were all Operating Entities within the definition of the Consulting Agreement and that claims relating to such entities were made in the Main Proceedings.
Nature of claims in the proceedings
The appellant's claim in the Main Proceedings was summarised at [30] in her Honour's judgment set out above. The appellant's contractual pleading in the Statement of Claim was contained in para 15 and was based expressly upon cls 1.1 and 7 of the Consulting Agreement. Relevantly, the pleading was in the following terms:
"15.1That as consideration for [the appellant] entering into the Consulting Agreement … [the second respondent] would pay or procure the payment to [the appellant] of periodic payments by way of Performance Bonuses (as defined in the Consulting Agreement) in respect of each Operating Entity … being an entity established by [the first respondent] having the use of the System IP Rights … for the purpose of commercialisation of the Ausmaq Service … including but not limited to AUSMAQ Systems.
15.2.1That [the second respondent] would itself and would procure any other Operating Entity … liable as a Payer ... to pay to [the appellant] Performance Bonuses … calculated by reference to the financial performance of each such Operating Entity.
…
15.6That the payments of the Performance Bonus referred to in 15.1 above would be calculated by reference to the financial performance of each Operating Entity … being an entity established by [the first respondent] having the use of the System IP Rights … and would be of an amount determined in accordance with Schedule 2 of the Consulting Agreement.
15.7That [the second respondent] would pay the performance bonuses so calculated for itself and for any Operating Entity … being an entity established by [the first respondent] having the use of the System IP Rights … which was not a member of the Group … being any part of the related bodies corporate of [the second respondent] or AUSMAQ Systems which was or part of which was an Operating Entity … but which had not acceded to the Consulting Agreement by executing a Deed of Accession as provided in the Consulting Agreement.
15.8That [the second respondent] would procure that any Operating Entity other than AUSMAQ Systems enter into a binding agreement with [the appellant] to pay the Performance Bonus in respect of the Operating Entity within 60 days of that Operating Entity commencing business and using the System IP Rights … for the purpose of commercialising the Ausmaq Service …"

The breaches in relation to the Performance Bonus were alleged in paras 28 to 49N of the Statement of Claim. In those paragraphs the appellant alleges that the second respondent breached cl 7 of the Consulting Agreement by a failure to pay Performance Bonuses on the basis of the earnings of various business units or subsidiaries of the first respondent who used the System IP Rights for the purpose of developing services of similar or equivalent functionality to the Ausmaq Service.
The first series of claims relates to a service called The Gateway Service, which it was alleged was a service within the definition of the Ausmaq Service as defined in the Consulting Agreement, being a service with equivalent or similar functionality to the Ausmaq Service.
Paragraph 33.1 of the Statement of Claim pleaded a breach of cl 7 being the second respondent's failure to pay the Performance Bonuses, relevantly in respect of National Australia Financial Management Ltd (NAFM). The respondents allege that the same claim is made in para C 67 of the Summons in the present proceedings. This is also dealt with below: see [61], [65] and [69].
The Statement of Claim also included a claim that:
"55.7(g)[The second respondent] and [the first respondent] and each of them are bound to do everything on the part of each necessary and reasonable to develop and commercialise and exploit the AUSMAQ Service and the Ausmaq IP and/or the System IP Rights throughout the world by [the second respondent] or the NMG Group or by way of an Operating Entity as defined in the Consulting Agreement and in connection with the Consulting Agreement."
(Trial judge's emphasis)
The nature of the dispute in the present proceedings, as pleaded in the Summons is, relevantly, as follows:
"A.1… Pursuant to cl 7 and Schedule 2 of the Consulting Agreement, [the second respondent] is required to pay [the appellant] amounts referred to as "Performance Bonuses" calculated by reference to the "Gross Operating Revenue" of "Operating Entities" as defined in clause 1.1 of the Consulting Agreement.
…
A.3The obligation to pay "Performance Bonuses" pursuant to the Consulting Agreement arises in respect of services called "MasterKey" being provided by companies and/or a division and/or a business unit or units within the National Australia Bank Group. "MasterKey" services fall within the definition of "Ausmaq Service" in clause 1.1 of the Consulting Agreement. [The appellant] claims against [the second respondent] in respect of the non-payment of the "Performance Bonuses".
A.4[The appellant] and [the first respondent] are parties to a Guarantee dated 6 November 1996 ('the Guarantee') pursuant to which [the first respondent] guaranteed, amongst other things, payment of the "Performance Bonuses" by [the second respondent]. [The appellant] also claims against [the first respondent] under the Guarantee in respect of the non-payment of the "Performance Bonuses" by [the second respondent]."
The claims were based on cl 7 of the Consulting Agreement as were the claims in the Main Proceedings.
The issues identified in the Summons (see Summons Part B) as arising in the present proceedings were:
"(a)The proper construction of the definition of "Ausmaq Service" in clause 1.1 of the Consulting Agreement;
(b)The proper construction of the definition of "Operating Entity" in clause 1.1 of the Consulting Agreement;
(c)Whether the "MasterKey" Services are within the definition of "Ausmaq Service";
(d)The identification of the appropriate "Operating Entities" for the purpose of calculating the Performance Bonuses; and
(e)The calculation of the amount of the "Performance Bonuses" pursuant to clause 7 and schedule 2 of the Consulting Agreement."
The respondents submit that the whole of the appellant's claim in both the present proceedings as well as in the Main Proceedings ultimately depends upon the issue identified in para (a) above, namely, the proper construction of the definition of "Ausmaq Service" in cl 1.1 of the Consulting Agreement. This, as I understand it, is accepted by the appellant, the appellant’s submission being that that is not sufficient for the present proceedings to fall within the barring Order.
The other issues save for that raised in para (c) are all issues in the Main Proceedings.
The MasterKey Services, referred to in para (c) were not expressly referred to in the Main Proceedings. The respondents submit that that is irrelevant, because under the Consulting Agreement it was expected that the respondents would establish entities from time to time to use services with the same functionality as the Ausmaq Service and that the appellant would be entitled to Performance Bonuses on the earnings of such entities in respect of the use of such services: see generally the definition provisions in cls 1.1 and 7 of the Consulting Agreement. Further, and importantly, para 55.7(g) of the Statement of Claim pleaded the requirement, under cl 7, for the respondents to develop such services. The pleading in the Statement of Claim in relation to the Gateway Service is an example in the Main Proceedings of a claim being made in relation to a service with the equivalent or similar functionality to the Ausmaq Service as defined in the Consulting Agreement. The MasterKey Services, on the respondents' case, also fell within the terms of the Consulting Agreement. This submission is plainly correct. Indeed, it is at the heart of the appellant's case in the present proceedings. However, that may not be sufficient for the purposes of determining whether the barring Order operates. Whether it does operate will depend upon whether the MasterKey Services' claim is caught by the phrase "and otherwise" in the Statement of Claim, or whether there are other parts of the pleadings that, by their terms, cover this claim. In this regard, I have in mind the Declarations sought in para 14.3A of the Amended Summons in the Main Proceedings. I deal with this below: see [91]-[103].
The allegations in the present proceedings upon which the appellant bases its claims are set out in the Summons: Part C. This portion of the Summons identifies, in effect, the causes of action upon which the appellant relies. The parties to the proceedings are identified in paras C 1 to C 4. Paragraphs C 5 to C 17 deal with the Consulting Agreement. Relevantly, the appellant pleads cl 7 of the Consulting Agreement, as it interacts with the definition provisions in cl 1.1: see, in particular, paras C 6 and C 10 where the pleading is in the following terms:
"C 6It is a term of the Consulting Agreement that each entity established by the [first respondent] that has the use of "System IP Rights" as defined in clause 1.1 … for the purposes of commercialisation of the "Ausmaq Service" as defined in clause 1.1 … and results in [the appellant] having an entitlement to be paid "Performance Bonuses" calculated pursuant to schedule 2 of the Consulting Agreement in respect of that Operating Entity.
…
C 10It is a term of the Consulting Agreement that the [second respondent] would procure that the balance of the Performance Bonuses payable in respect of each Operating Entity based on the annual audited accounts of the relevant Operating Entity would be paid to [the appellant] by either the Operating Entity or [the second respondent] within 120 days of the end of the financial year of the Operating Entity."
In paras C 18 to C 21 the pleading relates to the Guarantee entered into in November 1996 whereby the first respondent had guaranteed to the appellant certain obligations owed by the second respondent to the appellant under the Consulting Agreement. The Guarantee is not the express vehicle by which the appellant's claim is made against the first respondent in the Main Proceedings. However, in my opinion, it is implicitly so, given that its obligation to pay Performance Bonuses derives solely from the Guarantee.
Paragraphs C 22 to C 66 relate to the MasterKey Services. These paragraphs are the foundation for the breaches that are alleged at paras C 67 to C 72. It is sufficient to refer to them briefly.
C 27 relates to Flexiplan and alleges that Flexiplan had the use of the System IP Rights for the purposes of commercialisation of various specified services (the specified services) for a period from about 30 June 2000 to about 1 February 2004. It is alleged that the specified services have equivalent or similar functionality to the Ausmaq Service and are within the definition of Ausmaq Service in cl 1.1 of the Consulting Agreement.
Paragraphs C 28 to C 66 relate to the entities MLC Investments, MLC, MLC Nominees, MLC Holdings, National Wealth Management Services, NAFM and Wealth Management Division (WMD). The Summons alleges that each of these entities is an Operating Entity within cl 1.1 of the Consulting Agreement: see paras C 58 – C 65. Alternatively, it is alleged that each is a business unit or units within each of these entities so as to satisfy the definition of Operating Entity in cl 1.1 of the Consulting Agreement: see para C 66. It will be recalled that para 55.7(g) of the Statement of Claim pleaded that the respondents had an obligation to develop and commercialise and exploit the Ausmaq Service.
The Summons alleges in respect of the entities referred to in para C 28 to C 66, that each has had the use of the System IP Rights for the purpose of commercialisation of the specified services. A commencement date for the use of the System IP Rights by each of the entities is specified. However, no end date for the use is specified.
These paragraphs describe circumstances where the respondents have performed that obligation and the appellant seeks to enforce its claim to be paid Performance Bonuses accordingly.
Allegations of breach of the Consulting Agreement are made in paras C 67 to C 72.
In para C 67 it is alleged that the second respondent has failed to pay to the appellant Performance Bonuses in respect of the sales revenue of the entities identified in paras C 27 to C 66 (and relevantly including NAFM), for each of the financial years ending in the period from 30 June 2000. No end date is specified.
In para C 68, a more general allegation of breach is made. The allegation is in the following terms:
"In breach of the terms of the Consulting Agreement … [the second respondent] has failed to procure that either [the second respondent] or the Operating Entity entered into a binding agreement with [the appellant] to pay Performance Bonuses in respect of each Operating Entity calculated in accordance with the terms of the Consulting Agreement … within 60 days of the Operating Entity commencing business or at all."
Further general allegations of breach due to the failure of the second respondent to comply with various provisions of the Consulting Agreement in relation to "each Operating Entity" are made in paras C 69 to C 71. Paragraph C 72 relates to audited statements and is not relevant to the question in issue.
Paragraph C 73 then claims that as a result of the breaches of the Consulting Agreement, the appellant has suffered loss and damage.
In paras C 74 – C 75, the appellant alleges breach of a term of the Guarantee by the first respondent by its failure to pay Performance Bonuses in respect of the sales revenue of Flexiplan, MLC Investments, MLC, MLC Nominees, MLC Holdings, National Wealth Management Services, NAFM and/or WMD and/or business units within those entities for each of the financial years ending in the period from 30 June 2000.
The specific claims for relief are made in para C 76. This paragraph replicates the Orders sought in the Summons which are dealt with below.
Relief sought in the proceedings
The relief sought in the Amended Summons in the Main Proceedings included a claim for a declaration that:
"14.3A[The second respondent] is and will continue to be bound to account for and to pay to [the appellant] Performance Bonuses in respect of each of
(A) [the second respondent], and
(B) Ausmaq Systems, and …
(H)Each other Operating Entity as defined in the Consulting Agreement,
for Australia and throughout the world as pleaded in paragraphs 15 and 28 to 50 of the Third Amended Statement of Claim and otherwise in accordance with the Consulting Agreement." (Emphasis added)
(This claim was also made in para 55.7(d) of the Statement of Claim.)
Claims were also made, relevantly, for injunctions and for the payment of moneys, as follows:
"5AAn order that each of [the respondents] be restrained from, by himself or itself, or its or their servants and agents:
…
(b)dealing in any way or procuring or inducing any person or corporation (including other respondents) to deal in any way with the part or parts of the respective assets, business and undertakings of NAB and NAFM and any other company in the NAB's Group of Companies or any other relevant entity which comprise or comprises or is or are employed in or is or are used for the purposes of NAB's Project Maple Leaf/Project First Choice (as referred to in paragraphs 49H to 49N of the Third Amended Statement of Claim) or NAB's Gateway Service, Premium Automated Lending Service and FX Auto-Dealing Service (as referred to in paragraphs 29 to 49 of the Third Amended Statement of Claim) or any other service within the definition of the Ausmaq Service … or the System IP Rights … except in and by NMG or the NMG Group or by way of an Operating Entity as defined in the Consulting Agreement; and
(c)conducting or carrying on or exploiting or implementing or dealing in any way with any service or with any business using or exploiting NAB's Project Maple Leaf/Project First Choice (as referred to in paragraphs 49H to 49N of the Third Amended Statement of Claim) or NAB's Gateway Service, Premium Automated Lending Service and FX Auto-Dealing Service (as referred to in paragraphs 29 to 49 of the Third Amended Statement of Claim) or any other service within the definition of the Ausmaq Service (as defined in the Consulting Agreement) or the System IP Rights (as defined in the Consulting Agreement) except in and by NMG or the NMG Group or by way of an Operating Entity as defined in the Consulting Agreement.
…
12.3An order that NAB pay to [the appellant] or to its account all amounts due in respect of Performance Bonuses by or for NMG, AUSMAQ Systems, AUSMAQ (NZ), itself and all other Operating Entities as defined in the Consulting Agreement for Australia and throughout the world as pleaded in paragraphs 14 and 28 to 50 of the Third Amended Statement of Claim and otherwise and calculated in accordance with the Consulting Agreement.
…
14.3Declaration that NMG has failed to account to [the appellant] for and to pay the Performance Bonus in accordance with the Consulting Agreement and [the appellant] has not received Performance Bonuses in accordance with the Consulting Agreement.
…
14.7[This paragraph was in relevantly identical terms to para 14.3A]
14.8NAB is bound to pay to [the appellant] or to its account all amounts due in respect of Performance Bonuses by or for NMG, AUSMAQ Systems, AUSMAQ (NZ), itself and all other Operating Entities as defined in the Consulting Agreement for Australia and throughout the world as pleaded in paragraphs 14 and 28 to 50 in the Third Amended Statement of Claim and otherwise and calculated in accordance with the Consulting Agreement." (Judgment of Bergin J, [32] and [33])
(Trial judge's emphasis)
(The parties identified as NAB, NMG and NAFM are the National Australia Bank, National Markets Group Limited [the respondents], and National Australian Financial Management Limited respectively; the party identified as [the appellant] is the appellant; the references to the Third Further Amended Statement of Claim should be understood as extending to the further amendments in the Fourth Further Amended Statement of Claim.)
The relief sought in the present proceedings was:
1.An order that the first respondent pay the appellant monies referred to in cl 7 and sch 2 of the Consulting Agreement calculated in respect of the sales revenue of the following named entities for each of the financial years ending in the period from in or about 30 June 2000: "Flexiplan", "MLC Investments", "MLC", "MLC Nominees", "MLC Holdings", "National Wealth Management Services", "NAFM" and "WMD".
2. The same order was sought in respect of the second respondent.
3. & 4.The appellant sought damages from each of the respondents.
5.A declaration that the appellant "is entitled to be paid "Performance Bonuses" in the future calculated pursuant to cl 7 and sch 2 in respect of the gross operating revenue as defined", of the entities named in order 1. (Emphasis added)
6.An order that the second respondent procure either the second respondent or the operating entity to enter into a binding agreement with the appellant to pay Performance Bonuses in the future in respect of each Operating Entity, calculated in accordance with the terms of the Consulting Agreement.
9.An order that the second respondent procure the balance of the Performance Bonuses accruing in the future in respect of each Operating Entity based on the annual audited accounts of the relevant Operating Entity, other than Performance Bonuses in respect of the National Margin Lending, be paid to the appellant by either the Operating Entity or the second respondent within 120 days of the financial year of the Operating Entity.
7.,8. & 10.Orders 7., 8. and 10. were based on other aspects of terms of cl 7 of the Consulting Agreement. As I don't propose to refer to these paragraphs, it is not necessary to set them out.
The respondents submit that it is apparent that the Summons in the present proceedings, by its terms, includes an entirely general claim for Performance Bonuses at least from the period commencing June 2000, in respect of any entity, including the entities expressly identified in the Summons and any entity that at any time in the future, satisfies the definition of Operating Entity. The appellant seeks relief by way of damages, the payment of the Performance Bonuses which have accrued and orders to secure payments in the future. The appellant’s claim for the payment of these moneys, past and future, is based upon the Consulting Agreement, which is the very basis of the claim made in the Main Proceedings.
The respondents point out that the Summons involves a construction of the Consulting Agreement, a consideration of what constitutes the Ausmaq Service, and a consideration of what constitutes Systems IP Rights within the meaning of that expression in the Consulting Agreement. They contend, accordingly, that it is apparent from a comparison of the pleadings in the Main Proceedings that the claims made in the present proceedings are effectively the same as, or at least sufficiently relate to, those made in the Main Proceedings, so as to be caught by the barring Order.
In particular, the respondents contend that the substance of the appellant's claim in each set of proceedings is that once a specified entity uses a system having a similar or equivalent functionality to the Ausmaq Service, then the appellant is entitled to a proportion of the revenue earned by the use of that system in accordance with the schedule to the Consulting Agreement.
An analysis of the relief sought in the present proceedings supports these submissions. Paragraph 1 seeks an order that the first respondent pay it an amount of money referred to in cl 7 and sch 2 of the Consulting Agreement for each of the financial years ending in the period from in or about 30 June 2000. No end period is specified. The respondents recognised that the claim did not extend into the future for an unlimited time and had to be confined by the duration of the Consulting Agreement. However, the duration of the Consulting Agreement is not for a specified time but continues in force until the System IP Rights permanently cease to be used as specified in cl 2 and the second respondent offers the appellant a licence of those rights. The respondents' short point is that the claim is made for a period into the future, its end point being defined only by the happening of an event.

Paragraph 2 is in the same terms relating to the second respondent.
The open-ended nature of the claim is also apparent in the terms of para 5. In that paragraph the appellant seeks a declaration that it is to be paid Performance Bonuses in the future, again calculated by reference to cl 7 and sch 2 of the Consulting Agreement.
The relief sought in paras 1, 2 and 5 is limited to the payment of Performance Bonuses on the gross operating revenue of the entities specified in para 1. The appellant's essential argument on the appeal has been that those entities did not exist at the time that the barring Order was made. This is not precisely correct, as the appellant made a claim relating to NAFM in the Main Proceedings: see para 5A of the Statement of Claim set out at [76] above. There is a further response to this argument, and that is that the entities specified in the claims made in the present proceedings are encompassed by the 'claim' made in the Main Proceedings that the respondents are bound to pay Performance Bonuses for "all other Operating Entities as agreed in the Consulting Agreement … and otherwise": see Amended Summons in the Main Proceedings: paras 12.3, 14.3A, 14.7 and 14.8. I deal with this argument more fully at [90]-[102].
The general and overarching nature of the claims made in the present proceedings is also apparent from paras 6 and 9 of the Summons. Paragraph 6 seeks an order that the second respondent procure either itself or the Operating Entity to enter into a binding agreement with the appellant to pay Performance Bonuses in the future in respect of each Operating Entity. Paragraph 9 seeks an order that the second respondent procure the balance of the "Performance Bonuses" in the future in respect of each Operating Entity.
These claims are not limited to the entities specified by name in the Summons, as is the case in paras 1 and 5. Rather, paras 6 and 9 seek orders in general terms in respect of "each Operating Entity". It will be recalled that an Operating Entity means “an entity established by the Bank that has the use of the System IP Rights for the purposes of commercialisation of the Ausmaq Service and includes System”: Consulting Agreement cl 1.1. An Operating Entity did not have to exist at the time that the Consulting Agreement was entered into. The first respondent could establish entities from time to time and give to them the use of the "System IP Rights for the purposes of commercialisation of the Ausmaq Service".
The Orders sought in paras 6 and 9 therefore are covered by the terminology in the Amended Summons in the Main Proceedings namely: “all other operating entities as defined in the Consulting Agreement for Australia and throughout the world” being the pleadings in paras 14 and 28 to 50. The trial judge dealt with this at [44] in her judgment which is set out below at [92].
The respondents also relied on the correspondence between para 15 of the Statement of Claim and para C 6 of the Summons in the present proceedings. These paragraphs are set out respectively at [51] and [61] above. They submitted that, although the wording in para 15 is not identical to the contractual pleading in para C 6 in the Summons in the present proceedings, it is in substance the same.
In my opinion, this submission is also made out. Paragraph 15 in the Statement of Claim deals with the second respondents' obligation to pay or procure payment of Performance Bonuses in respect of each Operating Entity being an entity established by the first respondent having the use of the System IP Rights for the purpose of the commercialisation of the Ausmaq Service. The appellant then seeks relief, relevantly, by way of declarations and payment of moneys. Paragraph C 6 pleads the above as a term of the Consulting Agreement in relevantly identical terms:
"C 6It is a term of the Consulting Agreement that each entity established by the [first respondent] that has the use of "System IP Rights" as defined in clause 1.1 for the purposes of commercialisation of the "Ausmaq Service" … results in [the appellant] having an entitlement to be paid "Performance Bonuses" …"
The appellant then alleges breach and claims relief by way of an Order for the payment of money.
The respondents had also submitted to the trial judge that the relief claimed in the Main Proceedings extended to every service and every Operating Entity whether or not expressly referred to by name. The submission was that if a particular entity fell within the definition of Operating Entity in the Consulting Agreement, then it was, or could be, included in the claims made in the Main Proceedings. On that basis, the claims made in the Main Proceedings included entities and services the subject of the present proceedings. This argument focused on the express terminology of the claims made in the Main Proceedings and in particular the use of the phrase “and otherwise”, especially in paras 12.3, 14.3A, 14.7 and 14.8 of the Amended Summons in the Main Proceedings. The appellant had submitted, and submits again on the appeal that the phrase simply meant "and as otherwise pleaded elsewhere in the Summons”.
The trial judge accepted the respondents' argument. She said:
"44In my view paragraph 12.3 of the Amended Summons in the Main Proceedings sought an injunction against NAB to pay to the plaintiff the Performance Bonuses in respect of three categories of entities. The first was for the specifically named entities, NAB, NMG AUSMAQ Systems, and AUSMAQ NZ. The second category was “all other operating entities as defined in the Consulting Agreement for Australia and throughout the world as pleaded in paragraphs 14 and 28 to 50” of the then relevant pleading. The third category was that covered by the words “and otherwise”.
45I am of the view that the words, “and otherwise”, in their context in paragraph 12.3 of the Amended Summons in the Main Proceedings, … mean “all other operating entities as defined in the Consulting Agreement for Australia and throughout the world” otherwise than as pleaded, or in addition to those pleaded, in paragraphs 14 and 28 to 50 of the then relevant pleading. I am satisfied that those words in this context do not mean as pleaded elsewhere in the relevant pleading. If that had been intended there was no need to identify in the prayer for relief any paragraphs in the relevant pleading. All that would have been needed in that instance was a claim for Performance Bonuses in respect of “all other operating entities as defined in the Consulting Agreement for Australia and throughout the world” as pleaded in the then relevant pleading." (Trial judge’s emphasis)
Her Honour considered that the same reasoning applied to the relief sought in paras 14.3A and 14.8 of the Amended Summons in the Main Proceedings: see trial judge's judgment at [46] and [47].
The trial judge considered that her construction of the phrase "and otherwise" in the Amended Summons in the Main Proceedings was reinforced by the opening of the appellant's counsel before Einstein J on 24 July 2000. In that opening, senior counsel for the appellant stated:
"Your Honour, an independent and in a way parallel part of [the appellant’s] case relates to the Bank’s own e-commerce services which the Bank established after it obtained the AUSMAQ Service and which [the appellant] was able to include in these proceedings. These services are the Gateway All In One service, the Automated Margin Lending service, the FX Auto Dealing Service and Operation First Choice.
…
[The appellant] says that the effect of the Consulting Agreement and the obligations under or surrounding it is to require these services and indeed all the e-commerce of the National Australia Bank, or substantially all, to be put into NMG, National Markets Group, and developed and exploited by National Markets Group and an appropriate performance bonus paid to [the appellant] in respect of them. In a sense, with the growth of e-commerce, one way [the appellant] puts its case is that National Markets Group may or should have been or should be, if properly exploited, become the major part of the National Australia Bank. (Emphasis added)
…
[The appellant] says this is a wide obligation because of the wide, actual and potential function of the AUSMAQ Service as it was in 1996 and, for that matter, as it is or should be now.
…
This part of the case is important because these proceedings relate only to the four services that I’ve named in relation to the similar and equivalent functionality issue. But [the first respondent] is developing other services and the decision in these proceedings may well affect [the appellant's] entitlement in respect of performance bonuses in respect of those other services. There may be evidence in the case in due course about those other services." (Trial judge's emphasis)
The appellant submitted that the trial judge failed to have regard to the further part of that opening which, it was said, was particularly relevant to the extent of the appellant's claims in the Main Proceedings. Senior counsel had also said in his opening address:
"The similar and equivalent functionality issue will involve comparisons between each of the four extant services and the AUSMAQ Service. We don't seek to go beyond those issues.
…
This part of the case is important because these proceedings relate only to the four services that I've named in relation to the similar and equivalent functionality issue." (Emphases added).
It was submitted that her Honour's failure to have regard to these passages led to a misunderstanding of the nature of the appellant’s case in the Main Proceedings. However, with respect to this submission, her Honour’s analysis of the appellant’s case was far more extensive than the passages referred to above. To understand the full extent of her Honour’s analysis it is necessary again to refer in some detail to her Honour’s reasons.
After having referred to the opening, set out at [94] above, her Honour at [50], [51] and [52] also referred to the appellant’s written Outline of the opening and its written reply to the respondents' opening;
"50A written Outline of the opening relating to issues in the pleadings was provided to Einstein J. That Outline stated that the definition of AUSMAQ Service in the Consulting Agreement 'is ambulatory for the duration of the Consulting Agreement' and 'catches any service with equivalent or similar functionality'. It was noted that the term 'functionality' was not defined in the Consulting Agreement but that it 'must be understood in the light of the AUSMAQ Service’s actual and potential functionality'.
51In respect of 'operating entity' the written outline stated as follows (emphasis added):
67.          It is [the appellant's] case:
(1)That [the first respondent] and any other entity whether a body corporate or otherwise, which is developing, exploiting, commercialising or marketing each of the four NAB services, is doing so in respect of services with equivalent or similar functionality to the AUSMAQ Service as defined in the Consulting Agreement.
…
70.Furthermore, the definitions of System IP Rights and AUSMAQ Service are inter-related and of ambulatory effect during the continuance of the Consulting Agreement.
…
71.          Consequently,
(1)   'entity' as used in the definition of 'Operating Entity' in clause 1.1 of the Consulting Agreement includes:

all branches, divisions, sections of [the first respondent] or of the NAB Group, being entities established by [the first respondent] (using the System IP Rights for the time being), and hence [the first respondent] itself as a corporate entity acting by those unincorporated entities, and
subsidiaries and related corporations of [the first respondent] being entities established by [the first respondent] (using the System IP Rights for the time being), and
each of the bodies corporate or unincorporate as pleaded in paragraphs 29 to 49H of the Third Further Amended Statement of Claim being entities established by [the first respondent] (using the System IP Rights for the time being).
52[The appellant's] written Reply to [the respondents'] Opening in the Main Proceedings, handed to Einstein J on 15 December 2000 (after the MLC proceedings had been commenced and ordered to be heard with the Main Proceedings), included the following:
4.3.2Further, as became apparent during [the respondents'] opening, there is a difference between the definitions used in the Consulting Agreement dated 13 September 1996 and those used in the Restructuring Agreement of the same date. See in particular the definition of System IP Rights in the Consulting Agreement compared to that used in the Restructuring Agreement. The definition in the Consulting Agreement is much wider and includes the intellectual and industrial property in any developments for the purpose of enhancing or expanding the Ausmaq Service (in Australia or elsewhere) during the term of the Consulting Agreement whether in existence on the Completion Date as defined (6 November 1996) or subsequently developed or provided by [the appellant]. the Group or any other person. The only reason that such a wider definition was used by the parties was to give the definition a wider operation in the context of the Consulting Agreement." (Trial judge's emphasis)

Her Honour concluded that the phrase “and otherwise” in the pleading was intentional, had work to do and was not a mere drafting slip. She said:
"53… The words 'and otherwise' were [appropriate] for the broad nature of the claims made by [the appellant] in the Main Proceedings. Those words were not a slip or a drafter’s flourish. They were totally consistent with the very high and wide claims made in relation to systems 'whether in existence' in 1996 or 'subsequently developed' by [the second respondent] 'or any other person' and operating entities whether named or not.
54The Summons in the present proceedings makes claims in respect of operating entities that, except for NAFM, have not previously been expressly named in the Main Proceedings … I am satisfied that [the appellant] was, by its pleadings in the Main Proceedings and, by its Senior Counsel’s opening in the Main Proceedings, concerned to ensure, and did ensure, that the Main Proceedings would be determinative of the very issues raised for determination in these proceedings."
I agree with her Honour's reasons. The claims made in the Main Proceedings were exceptionally wide – wide enough to capture every claim made in the present proceedings. It is conceivable that at some stage during the hearing of the Main Proceedings there may have been an argument about particulars in the sense that the respondents may have conceivably sought to limit the ambit of the claims sought to be pursued because there had been no particularisation of e.g. a particular entity or a particular operating system with the same functionality of the Ausmaq Service. But the appeal was not fought on particulars.
Further, not only were the pleadings cast widely, the appellant had sought to maintain the broad platform on which the claim was made. As her Honour pointed out, this was apparent from senior counsel's opening address.
That leads to another point raised in senior counsel's opening address. It will be recalled that senior counsel had said:
"But [the first respondent] is developing other services and the decision in these proceedings may well affect [the appellant's] entitlement in respect of performance bonuses in respect of those other services. There may be evidence in the case in due course about those other services."
The only point of seeking to adduce evidence "about those other services" was if it related to a matter in issue in the proceedings. Otherwise it would be irrelevant and therefore inadmissible. It must be assumed that senior counsel well understood this and would only have raised it on the basis that such evidence would be relevant and admissible. An examination of the pleadings indicates that such evidence would appear to be relevant at least to the Declaration sought in para 14.3A of the Amended Summons in the Main Proceedings. That being so, it again becomes apparent that the present proceedings concern a claim or part of a claim made in the Main Proceedings.
It follows, in my opinion, that her Honour was correct in finding that the present proceedings came within the terms of the barring Order and should be dismissed.
Notice of contention
The respondents raised two matters by way of contention. It is only necessary to deal with the second contention, as I have concluded that the contention point should be upheld.
The respondent contends that the commencement of the present proceedings was in breach of the general law principle that a plaintiff must not bring a second action in the same cause and against the same defendant until the costs of the first action are paid and that the proceedings ought to have been dismissed in the inherent jurisdiction of the Court.
In Bowen v Hickey (1958) 78 WN (NSW) 820 the Court’s inherent jurisdiction was explained by the Court (Street CJ; Owen and Manning JJ) in these terms, at 822:
"It has long been established that where a plaintiff has failed in an action and seeks to bring a second action based on the same facts against the same defendant, the general rule is that the Court will stay proceedings in the second action until costs of the first action are paid."
In that case the plaintiff was non-suited in a negligence action brought against the Tattersalls Club and the trainer of a horse that had kicked the plaintiff as the horse was being led across a lawn at Randwick Racecourse. Subsequently, the plaintiff commenced fresh proceedings against the same parties. He had not paid the costs that he had been ordered to pay in respect of the first action. It appears from the report that the new proceedings were framed in contract. Their Honours observed that the second action was based upon the same matter as the first: the incident complained of was the same and the damage alleged was identical. It followed, in their Honours' view, that, notwithstanding the difference in the pleading, the second proceedings should be stayed pending payment of the costs or, in that case, until security had been given. Their Honours stated, at 822:
"[The] rule that a second action in the same cause and against the same defendant shall be stayed until the costs of the first action are paid is because, prima-facie, unless they are paid, the second action is in the eyes of the Court vexatious".
The rule is an old one. In Reichel v Magrath (1889) 14 App Cas 665, Lord Halsbury said at 668:
"[I]t would be a scandal to the administration of justice if, the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same case again.
…
I believe there must be an inherent jurisdiction in every Court of Justice to prevent such an abuse of its procedure …"
Reichel v Magrath has been accepted as good law in Australia: see Walton v Gardiner (1993) 177 CLR 378 at 393; Rogers v The Queen (1994) 181 CLR 251 at 287-288. See also Rippon v Chilcotin Pty Limited (2001) 53 NSWLR 198. In Rogers v The Queen McHugh J observed at 286:
"Inherent in every court of justice is the power to prevent its procedures being abused. Although the categories of abuse of procedure remain open, abuses of procedure usually fall into one of three categories: (1) the court's procedures are invoked for an illegitimate purpose; (2) the use of the court's procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court's procedures would bring the administration of justice into disrepute." (Footnote omitted)
In Sinclair v British Telecommunications plc [2001] 1 WLR 38, Judge LJ at 50, with whom Peter Gibson LJ agreed, observed that in that case, the commencement of new proceedings by a party who had taken an assignment of a cause of action, being a cause of action that had been brought in previous proceedings but had been dismissed, had the effect of circumventing "the ordinary principles in relation to costs which govern the conduct of second or further proceedings arising out of the same issues…" (emphasis added).

In this case, given the identity of issues and the costs order against the appellant, it would be both unjustifiably oppressive to the respondents for the appellant to be permitted to prosecute the present proceedings as well as bringing the administration of justice into disrepute.
In State Bank of New South Wales Ltd v Stenhouse Ltd (1997) Aust Torts Reports 81-423 (64,077) Giles CJ Comm D (as he then was) also dealt with the question of abuse of process in seeking to re-litigate an issue. His Honour said:
"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 an ultimate issue …
(d)the identity between the relevant issues in the two proceedings …"
I have already said sufficient to indicate that there is an identity of the central issue in the present proceedings such as to make those proceedings an abuse of the Court's process.
The nature of the Court’s inherent jurisdiction has been reviewed recently by this court in Wentworth v Graham [2003] NSWCA 307. In Wentworth v Graham, Ipp JA said at [6]:
"The Court has inherent power to protect its process from abuse: Commonwealth Trading Bank v Inglis (1974) 131 CLR 311 at 320; Grepe v Loam (1888) 37 Ch D 168. In Bhamjee v Forsdick (No 2) [2003] EWCA Civ 1113. the Master of the Rolls, Lord Phillips (in delivering the judgment of the Court of Appeal), said:
'The power to protect its processes from abuse is vested in every court. The starting point is the judgment of Baron Alderson in Cocker v Tempest (1840-41) 7 M&W 501:
‘[T]he power of each court over its own process is unlimited; it is a power incident to all courts, inferior as well as superior; were it not so, the court would be obliged to sit still and see its own process abused for the purpose of injustice. The exercise of the power is certainly a matter for the most careful discretion.’
Clear modern restatements of the principle are to be found in the extracts from the speeches of Lord Morris of Borth-y-Gest in Connelly v DPP [1964] AC 1254, 1301 and Lord Diplock in Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corporation Ltd [1981] AC 909, 999 which Lord Woolf CJ quoted in Taylor v Lawrence [2002] EWCA Civ 90 at [52]-[53]; [2002] 3 WLR 640. In the former Lord Morris said that a court must enjoy the powers necessary to enable it to act effectively within its particular jurisdiction in order, among other things, to suppress any abuses of its process. In the latter Lord Diplock said that it would be conducive to legal clarity if the use of the two expressions, the inherent power and the inherent jurisdiction of the court, was confined to the doing by the court of acts which it needs must have power to do in order to maintain its character as a court of justice. The following year, in Hunter v Chief Constable of West Midland Police [1982] AC 529, 536, Lord Diplock said that the circumstances in which abuse of process can arise are very varied, and that it would be most unwise to say anything that might be taken as limiting to fixed categories the kinds of circumstances in which the court has a duty to exercise this salutary power'.
…
Lord Phillips concluded:
'It is now well settled … at common law … that a court has power to regulate its affairs in such a way that its processes are not abused'."
See also Wickramaratna v Cambridge University Chemistry Dept [2004] EWCA Civ 1532.
The Court's inherent jurisdiction to prevent an abuse of its processes attaches to extant proceedings. The Court is not empowered to make an order, in general terms, that a party cannot commence legal proceedings without the leave of the Court. As Barwick CJ, McTiernan and Walsh JJ stated in Commonwealth Trading Bank v Inglis (1974) 131 CLR 311 at 319:
"There is an essential difference … between regulating the conduct of … an action so as to prevent the court's process from being abused, on the one hand, and impeding a particular person in the exercise of a right of access to the court, on the other hand".
The Order dismissing the present proceedings did not constitute shutting the appellant out of a right of access to the Court. Rather, the position was that the appellant engaged the resources of the Court and the respondents in order to mount a case of mammoth proportions. It was entitled to do so, but only within the construct of the Court's processes. Not being able to comply with the Court's Order in relation to security for costs, the Court is entitled to exercise its inherent jurisdiction to prevent its process being abused. For the reasons I have already discussed, the claims now attempted to be mounted by the appellant fall within the terms of the Declaration sought in para 14.3A of the Amended Summons in the Main Proceedings. For that reason, the present proceedings fall within the terms of the barring Order and in any event are an abuse of the Court's process.
Given the conclusion that the present proceedings were barred by the barring Order, it is a moot point as to whether the Court's inherent jurisdiction is wider either than that provided by the rules: Pts 40 r 8 and 53 r 4 respectively, and/or the barring Order, except possibly for one matter. In Sinclair v British Telecommunications, Judge LJ said that the Court's inherent jurisdiction extended to "further proceedings arising out of the same issues" (emphasis added). As I have already analysed in some detail, the present proceedings raise the same essential issues that were raised in the Main Proceedings. Admittedly, the appellant would have had to adduce different or additional evidence to make out its claims in the present proceedings to that which would have been necessary to make out its claims in the Main Proceedings. That, however, is not necessarily the test, although it might be a relevant consideration in a given case. That is not so here. In my opinion, the issues in the two sets of proceedings are relevantly the same and the Court would exercise its inherent jurisdiction to dismiss the present proceedings.
I should add that senior counsel for the appellant stated that he had not come prepared to argue the matter on that basis. Notwithstanding that, I am of the opinion that this Court is entitled to consider the matter. The question is raised by the Notice of Contention and Sinclair v British Telecommunications was referred to by Mason P in his judgment in [2002] NSWCA 271 at [83]. Further, senior counsel was well able to argue the matter when it was raised in discussion during the course of the appeal.
Accordingly, for these reasons, I would propose that the appeal be dismissed with costs.
IPP JA: I agree with Beazley JA.

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LAST UPDATED: 25/08/2006