J & K Richards Pty Limited v Nick Frisina Constructions Pty Limited

[2007] NSWDC 307

CITATION:	J & K Richards Pty Limited v Nick Frisina Constructions Pty Limited [2007] NSWDC 307
HEARING DATE(S):	7 November 2007
EX TEMPORE JUDGMENT DATE:	9 November 2007
JURISDICTION:	Civil
JUDGMENT OF:	Phegan DCJ
DECISION:	1. Notice of Motion dismissed; 2.Applicant/Defendant to pay plaintiff/respondents costs of the Notice of Motion; 3.Subject to any costs incurred by the respondent with regard to the order sought in paragraph 2 of the Notice of Motion in that regard costs to be costs in the cause; 4.Amended Defence to be further amended to exclude paragraphs 24 & 25; 5.Further Amended Defence to be filed within 28 days
CATCHWORDS:	Indemnity under s 151Z(1)(d) of the Workers Compensation Act - Strike Out Application - Abuse of Process - Anshun Estoppel
LEGISLATION CITED:	Civil Procedure Act 2005 Law Reform (Miscellaneous Provisions) Act 1946 Limitation Act 1969 Trade Practices Act 1974 (Cth) Workers Compensation Act 1987
CASES CITED:	Henderson v Henderson 1843 67 ER 319 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589 GIO v C R McDonald Pty Ltd (1991) 25 NSWLR 492 Bryant v The Commonwealth Bank of Australia (1995) 13 ALR 129 Ling v The Commonwealth (1996) 68 FLR 180 Air Services Australia v Zarb (1998) unreported NSWCA Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198 QBE Workers Compensation (NSW) Limited v Dolan (2004) NSWLR 42 Zavodnik v Alex Constructions Pty Limited (2005) 67 NSWLR 457 Redowood Pty Ltd v Link Mark Services Pty Ltd [2007] NSWCA 457
PARTIES:	J & K Richards Pty Limited Nick Frisina Constructions Pty Limited
FILE NUMBER(S):	836/06
COUNSEL:	Mr M Jenkins (Plaintiff/Respondent) Mr D Weinberger (Applicant/Defendant)
SOLICITORS:	TurksLegal (Plaintiff/Respondent) McCabe Terrill Lawyers Pty Ltd (Applicant/Defendant)

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JUDGMENT

1 HIS HONOUR: This is a judgment on a Notice of Motion in this matter filed by the defendant as applicant on 15 August 2007. Before I proceed to deal with the orders sought in the Notice of Motion I will, by way of background, outline the history of the matter before the commencement of the current proceedings.

2 There were, prior to these proceedings, earlier proceedings by way of an Ordinary Statement of Claim filed in the District Court at Wollongong in which the plaintiff was a Raymond Lesley Dargavel. Mr Dargavel sued as first defendant, the New South Wales Land and Housing Corporation, and as a second defendant Nick Frisina Constructions Pty Ltd, the defendant in these proceedings and the applicant in the Notice of Motion.

3 The plaintiff sought to recover damages arising out of an incident which had occurred in June 1997 on a building site at Miranda. The property was owned by the first defendant and the head contractor on site was the second defendant. The plaintiff alleged the injuries were caused when he slipped while exiting the site on muddy ground and that the defendants were each independently guilty of a breach of their duty of care to him. He was actually employed by a company known at that time as “Termimesh” which was engaged in the business of installing termite barriers. However, he did not in those proceedings join his own employer as a defendant, although a Workers Compensation Claim was made by him against his employer.

4 A Cross-Claim in the proceedings was filed by the first defendant, having obtained leave, against the GIO Workers Compensation New South Wales Pty Ltd as cross-defendant following the liquidation of the employer, whose name in the course of the history of the matter changed to J & K Richards Pty Ltd, the plaintiff in the current proceedings. The GIO was the Workers Compensation insurer of the employer and the Cross-Claim was in the nature of a claim for a contribution under the provisions of the Law Reform (Miscellaneous Provisions) Act 1946.

5 The hearing of Mr Dargavel’s claim commenced on 21 November 2004 before Gibson J in this Court and on that day the action between the plaintiff and the first defendant, the Housing Corporation, was settled by entry of a verdict in favour of the first defendant with a further order that each party pay their own costs. The Notice of Cross-Claim against the GIO was also settled, with an order that each party to the cross-claim pay its own costs. This left only the outstanding claim by the plaintiff against the defendant, Nick Frisina Constructions. However, three days later, that is three days after the initial hearing, that matter was also settled and a verdict was entered pursuant to the terms of settlement in favour of the defendant, with an order that the defendant pay the plaintiff’s costs.

6 There was considerable discussion in the course of the proceedings prior to the matter being settled, concerning the complications created for the plaintiff, who was a Vietnam veteran and was being paid a TPI pension.

7 There was considerable uncertainty, from my reading of the transcript which was in evidence before me, what the fate of that pension would be if a claim for damages on the plaintiff’s part was successful and it was very much a consequence of that uncertainty that appears to have influenced the resolution of the matter in the way that it was finally resolved. But that is largely by the way as far as these proceedings are concerned, except that it does underline the fact that at no stage did the trial proceed on the merits against the second defendant in those proceedings (the defendant in these proceedings). That remained an unlitigated matter, a fact that does become important in a resolution of the orders sought in the Notice of Motion.

8 These proceedings, brought by the plaintiff, J & K Richards Pty Ltd, but for all practical purposes the Government Insurance Office as the Workers Compensation insurer, under s 151Z(1)(d) of the Workers Compensation Act 1987 for the recovery of an indemnity against the defendant under that section. Subsection 1 commences by providing:

“If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker’s employer to pay damages in respect of the injury, the following provisions have effect.”

(d) “If the worker has recovered compensation under this Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages).”

9 The gist of the claim in this case is the recovery of the amount paid by way of compensation to the injured workman, the plaintiff in the original proceedings, by the defendant as a person liable to pay damages under s 151Z(1)(d).

10 I propose to adopt the description used in the submissions of counsel for the plaintiff respondent in the Notice of Motion, in order to avoid any possible confusion in the juxtaposition of plaintiffs and defendants in the various proceedings, to refer from this point on to the plaintiff in these proceedings as Termimesh and the defendant in these proceedings as Frisina.

11 In its amended defence, Frisina pleaded an estoppel in the following paragraphs of the defence, a matter that becomes central to this Notice of Motion:

Paragraph 24:

“In further answer to the claim as a whole, the defendant says that the plaintiff is estopped from bringing and further prosecuting these proceedings by virtue of the failure of its Workers Compensation Insurer, GIO, to issue a cross-claim against the defendant in proceedings number 103/2000 commenced in the District Court of New South Wales at Wollongong and later transferred to Sydney and allocated proceedings number 5195/2004 seeking an indemnity pursuant to section 151Z(1)(d) of the Workers Compensation Act.”

Paragraph 25 goes on to plead,

“In further answer to the claim as a whole the defendant says that the plaintiff is estopped from bringing and further prosecuting these proceedings by virtue of its failure to commence proceedings seeking an indemnity pursuant to section 151Z(1)(d) of the Workers Compensation Act and seeking to have these proceedings heard together with proceedings number 103/2000 number 5195/2004”.

12 At the risk of over-simplification, the purpose of the Notice of Motion is to elevate those defences to be resolved in advance of the hearing of the matter which is now in train. The general purpose of the Notice of Motion is to avert the necessity of a trial in circumstances where it has been submitted on behalf of Frisina the claim against Frisina is doomed for one reason or another.

13 The Notice of Motion specifically seeks the following orders: a declaration that the plaintiff is estopped from further prosecuting the Statement of Claim. With regard to that form of relief I am in some doubt as to whether this Court has the jurisdiction to make any such declaration, but this does not avoid addressing what are essentially the substance of the issues between the parties on the Notice of Motion, it simply is a matter of the appropriate relief.

14 What I understand the applicant in the Notice of Motion to be seeking in that order by way of a declaration is a ruling to the effect that the claim would be estopped for the reasons indicated in paras 24 and 25 of the Amended Defence, and that for reasons argued in support of the Notice of Motion, that is an order which ought to be made in the interests of the general purposes of the legislation governing procedures in this Court, in particular s 56 of the Civil Procedure Act 2005 which provides that the aim of civil proceedings is to facilitate, “the just, quick and cheap resolution of the real issues in the proceedings”. I am being invited, as I understand it, under that section, to dispose of the matter in these preliminary proceedings in order to meet those general aims.

15 I put aside for the moment, the appropriate form of relief. Should I be persuaded of the case made by the applicant I will take up the appropriate form of relief at that stage.

16 A parallel order, but a more specific one, is sought in the Notice of Motion by way of a declaration that the plaintiff, to the extent that the plaintiff seeks an indemnity from the defendant pursuant to s 151Z(1)(d) of the Workers Compensation Act, the payments made by the plaintiff more than six years prior to the commencement of the proceedings, are statute barred by virtue of s 14 of the Limitation Act.

17 That aspect of the Notice of Motion has been substantially resolved. The plaintiff in these proceedings, Termimesh, has conceded that at least part of the payments made under the Workers Compensation Act are now caught by the relevant limitation provisions. This would deny the plaintiff recovery in part of the original sum sought by way of indemnity of $183,000, which is effectively reduced, as I understand it, to an agreed sum of $115,826.69. In those circumstances there is no longer need for any order to be made in that respect.

18 There is a third order sought dismissing the proceedings pursuant to Part 13 Rule 41 of the Uniform Procedure Rules 2005, or alternatively, an order striking out the Statement of Claim pursuant to Part 14 Rule 28(1) of the Uniform Procedure Rules 2005.

19 I begin with the submissions made very cogently and comprehensively by counsel on both sides, with regard to the general question of estoppel, putting aside for the moment, the question of the form of order that could be made should be defendant succeed in making a case of estoppel.

20 It is almost self-evident that there is no estoppel in this case in any strict sense of the term, nor any room for the operation, again in the strict sense of the term, of the doctrine of res judicata. This arises out of the fact that this is not a case in which the matters to be resolved in these proceedings were in any way determined in the earlier proceedings. Therefore, the only basis on which any estoppel argument can be raised in this case is by way of what has become known as an Anshun estoppel based on High Court decision in the Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589.

21 In that case, in the joint judgment of Gibbs CJ and Mason and Aickin JJ, their Honours cited with approval a longstanding statement from Sir James Wigram, Vice-Chancellor in the case of Henderson v Henderson in 1843, reported in 67 English Reports 319:

“where a given matter becomes the subject of litigation in and of adjudication by a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case.” [I cannot resist the observation, with respect, that although I am often criticised for long sentences, but that is longer than most of mine]. “The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time”.

22 Their Honours in the High Court, having quoted from the judgment of Sir James Wigram, proceed (at 598-99)to caution against confusing res judicata and issue estoppel. Special care must be exercised before applying the doctrine of issue estoppel.

At 602 their Honours say,

“There is no estoppel unless it appears that the matter relied on as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it.”

And then at 603:

“It has been generally accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment.”

23 Counsel for the respondent attached particular significance to the passages that I have just quoted, namely the cautionary observation that great care should be taken before this extended doctrine is applied, even though it does go beyond strict doctrines of res judicata and issue estoppel. The Court must be sensitive to the particular need to avoid conflict with an earlier judgment.

24 It was, essentially, the case made by Mr Jenkins, counsel for the respondent Termimesh, that it was those matters that were conspicuously absent in this case. This was not a case that risked any conflict with any earlier decision on any matter that might be determined in these proceedings, and that in a more general sense there were a variety of matters, that I will come to in more detail in due course, which put this matter outside the kind of case to which an Anshun estoppel might properly apply.

25 Mr Weinberger, counsel for the applicant, put the opposite view, namely, when account was taken of the involvement of Frisina in the earlier proceedings, even though it did not give rise to the prospect of any estoppel or res judicata in the strict sense, it nonetheless created a situation where it would have been relatively easy and desirable for the GIO, that is, Termimesh, to protect its interests with regard to workers compensation by taking the very same proceedings it has now elected to take in the form of a cross-claim in the earlier proceedings.

26 Both parties were, in different roles, parties to the earlier proceedings. The receipt of workers compensation was already a fact, and the possibility that Frisina might be found liable, and therefore prospectively exposed to a claim for indemnity under s 151Z, was a live issue in a general sense but not in the sense that it had actually been raised on the pleadings.

27 In those circumstances, the submission was that this was a foregone opportunity and one which was within the general principles enunciated by the High Court in Anshun and that therefore the doctrine of estoppel in that extended sense should apply in this case to deny Termimesh the opportunity to belatedly pursue its rights for indemnity when that could have been very easily done in the earlier proceedings.

28 The question of which of those arguments prevails depends in my view very much on the existing authorities in this area, partly because the concept of an Anshun estoppel is one which is constantly under review. It is not, in any precise sense, defined in a way that eliminates room for argument as to its boundaries. A court of first instance must be guided by the way in which the doctrine has been applied in cases since the High Court decision was laid down.

29 Matters raised in the submissions of counsel for Termimesh included not only the general argument that there had never been an issue litigated in the earlier proceedings which risked duplication or inconsistency, but also, more particularly, that this was not a case in which the parties had at any stage been opposing parties in the earlier proceedings. For example, on its part, Frisina had not cross-claimed against the employer, as it might have done as a defendant in the earlier proceedings, so that they were not, from the point of view of either party, ever joined in issue.

30 Another argument of a more particular kind on which counsel for Termimesh relied, was the lack of correlation between the extant claim for damages in the earlier proceedings and the right to indemnity by way of recovery of workers compensation payments in these proceedings. They were not in any sense identical claims, and therefore, even in an extended sense, there was no prospect of estoppel arising out of the damages claim with regard to the claim for indemnity for recovery of workers compensation payments.

31 Authorities in this respect that were specifically relied on by counsel were QBE Workers Compensation (NSW) Limited v Dolan (2004) NSWLR 42 and an earlier case of GIO v C E McDonald Pty Ltd (1991) 25 NSWLR 492. In both those cases the point was made that the right to an indemnity for recovery of workers compensation payments is not identical to a claim for damages, and in both of those cases therefore a workers compensation insurer was allowed to pursue a claim for indemnity in circumstances where an earlier judgment, in Dolan by way of consent I note, and I will come back to that point in a moment, had been entered in favour of a plaintiff against another independently negligent defendant.

32 In Dolan’s case, for example, it was a negligent driver of a motor vehicle in circumstances where the car was being driven in the course of employment, so that there were potentially issues of liability on the part of both the employer and the other driver.

33 I have to say that this is one argument raised in support of the respondent’s case on the Notice of Motion with which I have some difficulty. It does seem to me that if one is to enter into the spirit of Anshun, that there is a potential issue estoppel of an extended kind in litigation of this kind.

34 The “issue” is the negligence of a defendant who is not the employer. That is an issue which becomes central to the indemnity claim, as it is to any outstanding claim for damages, irrespective of which of the defendants is the defendant in that matter. There is an issue that pervades both and is common to both - the question of liability for damages and the question of liability for an indemnity. To that extent, therefore, I do not accept that that is a basis upon which the estoppel argument can be rejected.

35 However, the decision in Dolan is still of assistance to the respondent. There was one other matter which, at least implicitly if not explicitly, influenced the Court of Appeal in that decision, and that was the fact that the issue of liability, that is the negligence of the driver in that case, had never been litigated. It was still an open question and still did not, therefore, raise the risk of duplication and/or inconsistency, which is a cornerstone of the Anshun principle as argued by the respondent.

36 To that extent I acknowledge that the Dolan decision and along with it the earlier decision in McDonald are of some relevance to this case, but there is a common issue of negligence that would be relevant to both proceedings, both to a claim for damages against Frisina, or a claim for indemnity against Frisina.

37 I will now deal with the other authorities which were given particularly careful attention by counsel in the course of their submissions. I begin with the decision of the Full Federal Court in Bryant v The Commonwealth Bank ofAustralia (1995) 13 ALR 129. In that case the Commonwealth Bank had commenced proceedings involving two claims against the defendant, Mr Bryant, in the Supreme Court, one claim for the repossession of premises which had been mortgaged to the bank and the second claim on a loan guaranteed by Bryant.

38 Mr Bryant’s defences and cross-claims raised, amongst other matters, alleged representations which had been made by the bank to him and cross-claiming for misleading and deceptive conduct under the Trade Practices Act 1974. When the matter came on for hearing, however, Mr Bryant withdrew the part of his defence in cross-claim based on the alleged misrepresentations. The matter proceeded and the bank was successful in both proceedings. Subsequently, Bryant then instituted later proceedings in the Federal Court, raising allegations of misleading and deceptive conduct.

39 The Federal Court began its analysis of the relevant principles in a case of Anshun estoppel by indicating that earlier authorities had indicated that the Anshun principle will ordinarily not apply to cross-claims, but, nonetheless, exceptions could be made. Their Honours went on to indicate that the facts in Bryant were sufficient to justify such an exception.

40 I quote from the joint judgment of the Federal Court at 139:

“Where that is so, that is, where there are justifications for not applying the principle to cross-claims, there may be no policy justification for forcing defendants to litigate their claims as cross-claims rather than as principle claims in separate actions in the forum of their choice.”

Their Honours went on to say,

“But where as here, a defendant’s claim is intimately connected with that of the plaintiff, in the sense that each arises, substantially, out of the same matters of fact, there is every reason to require that both be litigated at the one time; thereby minimising costs and avoiding the possibility of inconsistent judgments.”

41 On balance, I do not find sufficient reasons in that judgment to support the application of Anshun estoppel in this case. Bryant can be readily distinguished in one very important respect, and that is that the parties were very much at issue in the original proceedings, in the sense that they were parties against each other, unlike the proceedings in this case. But more importantly, the very matter which was the subject of the subsequent proceedings had been pleaded in the original proceedings and then abandoned prior to the trial. They, in my view, had to be matters which would have very much influenced the result in that particular case, and they are matters which do not arise in this case.

42 The next case is Ling v The Commonwealth (1996) 68 FCR 180, another decision of the Full Court of the Federal Court. Mr Ling was the provider of courses of study, in English in particular, for overseas students, especially those from the People’s Republic of China. The students who came to Australia and took part in Mr Ling’s courses paid fees for the courses in advance. As a result of a change in Commonwealth policy, students who had paid their fees in advance were then unable to obtain visas and therefore unable to undertake the courses.

43 Initially Mr Ling refused to refund the payments which he had received from these prospective students, but the Commonwealth then took an assignment of their rights with regard to the refunds and successfully sued Mr Ling for recovery of the fees on the students’ behalf. Subsequently, Mr Ling brought proceedings in the Federal Court, claiming that he had been induced to establish the courses and, as a proper part of the conduct of these courses, to obtain the fees in advance, and that he had suffered as a result of the change of government policy, which had been taken without adequate notice to him. He therefore sought to recover the loss, including the money that had been recovered by way of fees paid in advance from the Commonwealth.

44 The Commonwealth claimed an estoppel arising out of the earlier proceedings, but this was rejected. In the course of his judgment on behalf of the Full Court, Wilcox J said at 182 and 183, referring to the principle in Anshun,

“It enables courts to ensure that parties put their whole case forward at one time, thereby eliminating duplication of effort and expense and reducing the opportunity for a party to harass a weaker opponent with repeated suits. However, these benefits come at a price. The result of a court applying the principle is to shut out a claim or defence that a party wishes to pursue without determination of its intrinsic merit, on the ground that it ought to have been made in earlier litigation.”

His Honour went on, having cited a Privy Council decision,

“If the Anshun principle is too readily applied, there is a possibility of serious injustices.”

45 The fact that estoppel was not applied, does not assist the applicant. Again, its fact were very different from those in the present case and, if anything, the cautionary views expressed by Wilcox J would be of assistance to the respondent rather than to the applicant.

46 The next case is that of Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198, a decision of the Court of Appeal in which the President, and Heydon J agreed with the judgment of Handley JA. Chilcotin had purchased a business and subsequently complained of the lack of accuracy in certain financial information which had been provided as part of the warranties in the contract of sale. The initial action which was brought against the firm of accountants who had prepared the financial information was unsuccessful. The main reason for the decision was that the principal officer of the plaintiff had not in fact relied on the accuracy of the information supplied by the defendant accountant. The plaintiff company then commenced a second set of proceedings against the accountants, claiming damages for negligent misrepresentation based on the financial information contained in the annexures to the contract for sale.

47 In the course of his judgment, Handley J said:

“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.”

48 His Honour then went on to say that nevertheless, in terms of the High Court judgment in 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 the estoppel applied in that case.”

49 Again I can find very little in that decision to assist the applicant, because it was a case which was, in some very important respects, quite unlike the present.

50 There was a correlation of parties. The parties to the initial proceedings were exactly the same as the parties to the later proceedings. There was in that case a very real risk of inconsistency, given the very considerable interaction and overlap between the allegations which were made in the earlier proceedings and those on which the subsequent proceedings were based, even though they were, in a strictly legal sense, based on a different cause of action. Nonetheless, there was a very real risk that some of the matters that might ultimately have proved to be relevant in the second proceedings had already been addressed in the earlier proceedings. In those circumstances, therefore, it was entirely understandable that, in order to avoid the risk of any conflict, consistent with the general principles enunciated in Anshun, there should in that case have been an estoppel.

51 I will depart from the strict chronological order of the cases under discussion to deal with the most recent of them, Redowood Pty Ltd v Link Mark Services Pty Ltd [2007] NSWCA 286. I will do my best to avoid getting too heavily involved in the complexity of the facts in that case, which are of no particular relevance to this case, but, in order to explain the way in which the question of estoppel arose, it is necessary to give at least an outline of the facts.

52 Redowood held shares in a company by the name of Anaconda Nickel Ltd which had issued a prospectus for renouncable rights. Subsequently, an entity by the name of Mongoose announced an offer to purchase those rights and ASX-Perpetual was appointed by Mongoose to act as its agent to provide a share registry service in respect of the offer. Redowood subsequently sent in two rights acceptance forms to ASX-Perpetual with regard to two separate parcels of Anaconda rights. There was, however, some protracted discussion between a representative of Redowood and an employee of ASX-Perpetual, concerning the form of the second of those two rights acceptances. The ultimate result was that Mongoose declined the second rights acceptance form after the offer had closed and Redowood, as a consequence of that, sued Mongoose, and Mongoose in turn joined ASX-Perpetual by way of a cross-claim for the action which Mongoose had taken. By consent, the cross-claim was stayed and Redowood’s claim which proceeded against Mongoose was unsuccessful on the basis that Redowood had no contract because of the rejection of the rights acceptance form.

53 Redowood, having failed in the initial proceedings, then sought, in separate proceedings against ASX-Perpetual, damages for negligence and misleading conduct arising out of these protracted discussions to which I referred. The question of an estoppel was raised, on the grounds that this was an attempt to re-litigate a matter that was integral to the earlier proceedings, but that argument was rejected by the Court of Appeal.

54 In the course of his judgment, Hodgson JA said, at [46]:

“In the present case, if the earlier proceedings had proceeded as a tripartite contest, with the cross-claim against ASX-Perpetual being heard together with Redowood’s claim against Mongoose, then I think it would have been strongly arguable, even though there was no issue joined directly between Redowood and ASX-Perpetual, that these latter proceedings involved the same parties as the previous proceedings, that it was unreasonable for Redowood not to agitate a claim against ASX-Perpetual in the earlier proceedings, and that the present proceedings are oppressive and an abuse of process.”

55 Then, in what is a key passage, his Honour goes on to say:

“However, six weeks after the cross-claim was brought, it was stayed and ASX-Perpetual took no further part in the proceedings, and in particular it did not participate in the hearing. In those circumstances, as in Rippon, I do not think these proceedings against ASX-Perpetual can be considered oppressive”.

56 Now it is true, if one were to stop at that point in the judgment, it could be said that the cases are not necessarily on all fours. His Honour then goes on to say in at [48]:

“Redowood is not seeking any different finding of fact and the possibility that a different finding adverse to Redowood might be made by a different judge in a hearing between different parties, gives little support to Anshun estoppel”.

57 That conclusion is further support for the proposition on which the respondent relies in this case, that is, if this matter in the end has not been fully litigated, or has not been litigated at all as it turns out, there is very little room for the operation of Anshun estoppel. Again, nothing in Redowood assists the applicant.

58 That leaves one decision which is the only one that offers any support for the applicant in making a case for an Anshun estoppel in this case and that is the decision, again of the Court of Appeal, Zavodnik v Alex Constructions Pty Limited (2005) 67 NSWLR 457. I am happy to say that at least the facts of that case are a little less complex than they were in Rippon and Redowood. It was a case of a builder, Alex Constructions and the owners of a property on which building work had been undertaken. At the relevant time, the builder Alex Constructions was not licensed and in the initial proceedings brought by the builder before the Fair Trading Tribunal to recover money for variations in the building contract, the claim failed on the grounds that the company was excluded from recovery because it was not licensed.

59 The builder then brought subsequent proceedings, initially in the Consumer Trader and Tenancy Tribunal but later transferred to this Court, seeking damages by way of restitution for the value of work and materials supplied. During the earlier proceedings, there had apparently been repeated references to the possibility of a claim for restitution but that claim had never been in any proper sense pursued in the earlier proceedings. Nonetheless, the question of whether the builder was precluded from litigating the claim for restitution was raised by way of an Anshun estoppel and the Court of Appeal took the view that the doctrine in this instance did apply. Justice Handley in the course of his judgment, at [36], said:

“It is clear from the original points of claim of 24 May 2001, that was in the first proceedings, that the builders advisers were aware of the effect of the absence of a licence. In view of Pavey and Mathews Pty Limited v Paul” [a case concerned with this question of the effect of a lack of licence on a claim by a builder] “the advantages of convenience, importance and economy of time and expense favoured including an alternative claim in restitution in the original points of claim. The importance of doing so became even clearer once the proprietors lodged their cross-claim”.

60 The case does go someway to support the orders sought in the Notice of Motion. This was a case where there was an opportunity to raise matters which were not in the end resolved in the earlier proceedings because they were not litigated. It was not a case, like many of the others to which I have already referred, in which there was a risk of inconsistency or duplication of result. It was simply a case of a party ,with an opportunity to raise certain matters in the earlier proceedings, who failed to do so. However, having acknowledged that the case does go someway to supporting the application of Anshun estoppel in situations where there is no demonstrable risk of duplication or inconsistency, it was nonetheless a case in which two other factors existed which do not arise in this case. As in some of the other earlier cases, the very same parties were parties to both sets of litigation. That is not so in this case. Secondly, there was at least a canvassing, even though of the relatively inconclusive kind, of the matters which were ultimately litigated or attempted to be litigated in the subsequent proceedings. There was no such canvassing of issues, except in a very limited sense that I will return to in a moment, in this case. I have to be mindful of the cautionary observations, made in Anshun itself and in many of the cases that have followed, about the dangers of too free a use of this doctrine.

61 In the result, no earlier case in which Anshun has been applied was on all fours with this one. I cannot find authority which would support the application of an Anshun estoppel in this case. This is a case where the applicant sought to have the doctrine apply in order to avoid unnecessary expense and inconvenience, but nothing else. That was the gist of the case made in the application, that there was an opportunity foregone to litigate this issue in the earlier proceedings and it was submitted that, in itself, that should be sufficient on the applicant’s submissions, to justify the application of the doctrine. I can find no authority to support the doctrine applying in circumstances where there were not at least a number of other factors supporting the application of the doctrine. Without any such authority, I cannot justify the application of Anshun.

62 I alluded a moment ago to one qualification to the assertion that the issues, which would become central to the current proceedings, had not in any way been addressed in the earlier proceedings. That is to be found in the terms of settlement which were tendered, as I understand it, in the first stage of the resolution of the earlier proceedings, when a verdict was entered for the cross-defendant in that instance, Frisina, the applicant in these proceedings, against the cross-claimant in those proceedings, the New South Wales Land and Housing Corporation. There was a note recorded in those terms of settlement to the following effect and I quote:

“If there is a settlement between the plaintiff and a defendant for the payment of damages to the plaintiff, then one hundred percent of the workers compensation paid to or for the benefit of the plaintiff, is repayable to the cross-defendant from the damages”.

63 It might be said that this is a hint that the matters which were to become the subject of these current proceedings were contemplated to that extent. However, I do not read that as in any way assisting the applicant on the Notice of Motion. What it does is acknowledge the possibility that, ultimately, there may be funds available for meeting an indemnity claim under s 151Z and it simply preserves, to the extent that it needed to, the right to recover such indemnity.

64 That in my view, is open to two interpretations. One is that it was an acknowledgement of a foregone opportunity which is no doubt the argument the applicant would mount. On the other hand, it is confirmation of a decision and provided the decision was made on proper grounds from the point of view of the Court, to preserve, should it prove to be necessary, the right to pursue an indemnity claim at some future time. In those circumstances I do not find that the terms of settlement take the matter very much further. They certainly do not constitute a sufficient basis for treating this as a case, for example, falling within the decision in Zavodnik. It does not assist the applicant to overcome the difficulties facing the applicant on existing authority, so far as the Anshun estoppel is concerned.

65 At this point it is necessary to acknowledge a further argument pursued by counsel for the applicant and that was that somewhere between the appropriate principles applicable to a strike-out action which I will come to in a moment, and the strict application of the Anshun estoppel principle, the Court would still have a residual discretion in the exercise of its power to curb frivolous and vexatious conduct and abuse of process to dismiss the plaintiff’s claim in these proceedings on the basis of ‘lost opportunity’, that is the failure of the plaintiff in the earlier proceedings in which the plaintiff was a party. although not a party in the same role as it currently assumes, to take the opportunity in those proceedings to pursue this claim.

66 That submission presents particular difficulties. One is that it is certainly not supported as far as I can see by any authority. All of the authorities to which I was referred, either addressed the issue as one involving the application of an Anshun estoppel or they deal with the matter as one governed by the principles relevant to a to strike-out application. I can not find any middle ground of the sort it was suggested I should be prepared to adopt. Again, as a Court of first instance, I would be very reluctant to invent a principle of law that so far has not been canvassed in any appellate court to my knowledge. Even if such an avenue were open to the Court, I could not accept that this is a case to which it should be applied in the applicant’s favour. I could not say that in any sense in which the term is normally understood, the plaintiff in these proceedings has been guilty of frivolous and vexatious conduct, or has engaged in abuse of the process. If that is the case, it would not assist the applicant even if there were middle ground of the kind which was advocated in counsel’s submissions.

67 That leaves the strike-out application which falls squarely within the regime of authorities which generally come under the High Court decision in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, the leading authority on the proper principles to apply in any application to strike-out, by way of summary dismissal, a Statement of Claim. The judgment of the Chief Justice, Sir Garfield Barwick, contains a number of observations and I will briefly highlight some of them.

68 First of all there is the observation that for a strike-out application of this kind to be successful, it would normally be necessary “to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed”. His Honour then goes on to caution, at 129, against a plaintiff being denied access to the customary tribunal which deals with actions of the kind which the plaintiff has brought and following that observation, he goes on to collect together the various tests that have been applied in order to support a strike-out application:

“…so obviously untenable that it cannot possibly succeed”; “manifestly groundless;” “so manifestly faulty that it does not admit of argument”; “discloses a case which the Court is satisfied cannot succeed”; “under no possibility can there be no cause of action”; “be manifest that to allow them (the pleadings) “to stand would involve useless expense”.

69 I can not find a basis for the application for any of those criteria in this case. In fact, it might be said in fairness to the plaintiff/respondent, that it is a straightforward claim of a very familiar kind and that there is nothing in the pleadings to fall foul of any of the tests which were reiterated in General Steel Industries. There is no basis on which the Statement of Claim in this case could be struck-out on those principles and I just note in citing from that judgment I was also relying on the discussion of General Steel Industries in the Court of Appeal in the case of Air Services Australia v Zarb, an unreported decision of that Court of 1998.

70 I find that the applicant has failed to make a case for a finding by way of estoppel or for dismissing or striking out the Statement of Claim on any other ground.

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