Lakatoi Universal Pty Ltd v La Walker

[2000] NSWSC 561

CITATION:	Lakatoi Universal Pty Ltd & Ors v LA Walker & Ors [2000] NSWSC 561
FILE NUMBER(S):	SC 50035/98
HEARING DATE(S):	10/05/00, 11/05/00
JUDGMENT DATE:	21 June 2000
PARTIES :	Lakatoi Universal Pty Ltd & Ors v Langley Alexander Walker & Ors
JUDGMENT OF:	Einstein J

COUNSEL :	VRW Gray (Plaintiff) BR McClintock SC, R Hollo (Mr Walker)) P Kerr (Walker Consolidated) RJ Powell (Remaining Defendants))
SOLICITORS:	Gye Associates (Plaintiff) Minter Ellison (Mr Walker) Allen Allen & Hemsley (Walker Consolidated) Perkes & Stone (Remaining Defendants)
CATCHWORDS:	Practice and Procedure - Cases claims - Application following judgment for leave to file cross-claim
CASES CITED:	Albion Insurance Company Ltd v Government Insurance Office of New South Wales (1969) 121 CLR 342 Craythorne v Swinburne (1807) 14 Ves Jun 160 Henderson v Henderson (1843) Hare 100; 67 ER 313 Idoport v National Australia Bank Ltd [2000] NSWC 338 Morgan Equipment Company v Rogers (1993) 32 NSWLR 476G-477B NRMA Ltd v Morgan ( No. 3) [1999] NSWSC 768, unreported Giles J Pedler vs Richardson (Unreported, Supreme Court of New South Wales, October 16, 1997, Young J.) Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589 Official Trustee in Bankruptcy v Citibank (1995) 38 NSWLR 116 Rahame v Commonwealth Bank of Australia unreported NSW Court of Appeal 20 December 1991 Tindle v Ansett Transport Industries (Operations) Pty Ltd (1990) 21 NSWLR 492
DECISION:	Notice of Motion dismissed.

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

EINSTEIN J

Wednesday 24 May 2000
Revised 21 June 2000

50035/98 LAKATOI UNIVERSAL PTY LTD & ORS v LANGLEY ALEXANDER WALKER AND ORS.

JUDGMENT ON WALKER CONSOLIDATED’S APPLICATION SEEKING LEAVE TO FILE A CROSS-CLAIM AGAINST MR WALKER

1    These proceedings were heard together with several other sets of proceedings between September and December 1999. Judgment was delivered on 10 March 2000. Subject to further questions in respect of which leave was reserved to the parties to address further submissions, the judgment decided the principal issues on the matters which had been litigated. 2    On 10 and 11 May 2000 further submissions were taken on matters in respect of which leave to further address had been reserved. The Court is now in a position in which subject to the application now before the Court, a further judgment will be delivered dealing with all outstanding issues. Final orders can then be made. 3    During the proceedings all of the defendants were represented by the same set of counsel instructed by Perkes & Stone solicitors. 4    The position which now obtains is that Walker Consolidated has retained new legal advisers for the purpose of seeking the leave of the Court to file a cross-claim against Mr Walker in the proceedings. At the same time and presumably for the purpose of dealing with the cross-claim issues, Mr Walker has also retained new legal advisers. 5    There is before the Court a Notice of Motion filed on 24 May 2000 by Walker Consolidated seeking leave to file such a cross-claim against Mr Walker. The proposed cross-claim is relatively short. It is in the following terms:

(i) The Cross-Claimant on the cross-claim denies the claims made against it in the Fourth Amended Summons on the grounds set out in the Second Further Amended Defence and Further Amended Cross-Claim to the Summary of the Plaintiff's Contentions contained in the Third Amended Summons
(ii) If the Cross-Claimant is liable to the plaintiffs (which is denied) then the Cross-Claimant makes, for the purposes of this cross-claim only, the allegations set out below

Contribution

(iii) The Cross-Claimant repeats the allegations against the First, Second, Fourth, Sixth and Seventh Defendants to the Fourth Amended Summons in these proceedings
(iv) By reason of the matters referred to in paragraph 3 above the Cross-Defendant is liable to the Plaintiffs in breach of contract and breach of fiduciary duty in respect of the same loss and damage in respect of which the Cross-Claimant is liable to the Plaintiffs
(v) The Cross-Claimant is thereby entitled, in equity, to contribution from the Cross-Defendant in respect of any judgment against the Cross-Claimant in these proceedings
(vi) The Cross Claimant claims:
(a) A declaration that the Cross-Claimant is entitled to contribution in equity from the Cross-Defendant amounting either to a complete indemnity against any liability of the Cross-Claimant or in such other amount as the Court may determine
(b) An order that the Cross-Defendant pay to the Cross-Claimant contribution amounting either to a complete indemnity against any liability of the Cross-Claimant or in such other amount as the Court may determine
(c) Costs of the cross-claim
(d) Such further or other order as the Court may think fit.
Threshold Questions

6 There are some threshold questions as to the power of the Court to allow separate representation of Mr Walker and of Walker Consolidated on the issue of contribution. 7 Section 63 of the Supreme Court Act provides:

"The Court shall grant, either absolutely or on terms, all such remedies as any party may appear to be entitled to in respect of any legal or equitable claim brought forward in the proceedings so that as far as possible, all matters in controversy between the parties may be completely and finally determined, and all multiplicity of legal proceedings concerning any of those matters avoided"

8    Clearly this section encapsulates the policy that, where possible, all issues of controversy between the parties should be dealt with during the same proceedings to avoid unnecessary multiplicity of proceedings. 9    In Tindle v Ansett Transport Industries (Operations) Pty Ltd (1990) 21 NSWLR 492, Kirby P. Clarke and Handley JJA, said:

"The threshold question was whether, as a matter of power, it was open to Enderby J to permit the one party to have separate representation… There is no doubt that the Supreme Court has ample powers to order it’s business, both under the inherent power of the Court and under section 23 of the Supreme Court Act. It would be a mistake to adopt a narrow or rigid approach to the powers of a judge to permit unusual arrangements for representation of a party in peculiar circumstances. So infinite are the varied problems which must daily be resolved in the Court that it would be an error, in the absence of a particular statutory provision covering the point to adopt a constricted view of the arrangements which a judge might permit for the conduct of a trial. Thus in a case being heard by a judge, without a jury and where all of the parties, concurred in this course, we are not convinced that a judge of the Supreme Court would lack the power to allow the same party to be represented by different Counsel" [at page 498E-F]

10    Clearly the Supreme Court is a superior court of record and as such it has an inherent jurisdiction in addition to its specific statutory jurisdiction. [Cf Idoport v National Australia Bank Ltd [2000] NSWC 338] 11    In those circumstances the Court has in my view, power to allow Walker Consolidated and Walker to be separately represented on distinct issues should leave be granted to Walker Consolidated to file a cross-claim against Mr Walker in these proceedings.

Questions which arise

12    At least the following questions arise in relation to the present application:

(i) Why it is said to be appropriate to have the trial judge decide the cross-claim issues?

(ii) The basis of the proposed cross-claim and a precise analysis of just what the issues are likely to include on the cross-claim.

(iii) A precise analysis of the possible effect on the 10 March Judgment of granting leave to include the cross-claim matters in these proceedings.

(iv) Whether either of the parties proposes to take an Anshun point?

(v) The extent to which the plaintiffs are to be drawn into or have an inherent right to be heard in relation to and to participate during the course of the hearing of the cross-claim.

(vi) Whether the cross claim may be directed to be heard as a separate matter so that the plaintiffs will not be affected by the hearing and/or so that the 10 March Judgment will not be affected?

(vii) Whether it would be open to me, if the proposed cross-claim issues were to simply be raised in separate proceedings, to hear those separate proceedings on the basis, for example, that the parties to the cross-claim agreed that all the evidence which had been before the court in the first proceedings was taken as evidence in the second proceedings? In short why is the cross-claim not to be pursued by separate proceedings?

13    Clearly both Mr Walker as well as Walker Consolidated are bound by my findings and conclusions in the 5 Volume Judgment. An extremely important question is as to whether the additional issues proposed to be litigated or likely to be litigated in the proposed cross-claim would give rise to possible inconsistent findings or conclusions, or at least to further evidence which might lead to different findings or conclusions. [See NRMA Ltd v Morgan( No. 3) [1999] NSWSC 768, unreported Giles J. at paragraph 6 7]

The Deeds of Indemnity

14    It appears to be common ground that 2 Deeds of Indemnity [one is described as ‘Deed of Indemnity - By an Appointing Company’; the other is described as ‘Deed of Indemnity - By a Company to its own Director’] were entered into on or about 30 October 1998 in each case between Walker Corporation [as Appointor in the first Deed and as "Company" in the second Deed] of the one part and Mr Walker [as "Director" ] of the second part. 15    The first Deed recited that the director had at the request of the appointor agreed to continue to act as a director of a Subsidiary Company and may from time to time agree to act as a director of a Subsidiary Company. This Deed further recites that it is a condition of the Director agreeing to act as a director of a Subsidiary Company that the Appointor indemnify the director on the named terms. 16    The operative provisions under the heading "Indemnity" include as clause 1.1 the following:

"The Appointor indemnifies the Director, to the maximum extent permitted by law, against any liability incurred by the Director or as a director or an executive of a Subsidiary Company, other than:
(a) liability to the Subsidiary Company or a related body corporate of the Subsidiary Company; or
(b) liability arising out of conduct involving a lack of good faith"

17    The second Deed recites that the Director has been appointed as a director of the Company. The Deed then recites that it is a condition of the Director agreeing to continue to act as a director of the Company that the Company indemnify the Director on terms then set out. The operative term is almost word perfect to that already set out. Clause 1.1 provides:

“The Company indemnifies the Director, to the maximum extent permitted by law, against any liability incurred by the Director as a director of the Company, other than:
(a) liability to the Company or a related body corporate of the Company; or
(b) liability arising out of conduct involving a lack of good faith"

The submissions of Walker Consolidated

18    The claim for contribution is said to be based upon Albion Insurance Company Ltd v Government Insurance Office of New South Wales (1969) 121 CLR 342 where at 349-350 Kitto J. said:

"The first… principle is that persons who are under coordinate liabilities to make good the one loss… must share the burden pro rata. The general doctrine of contribution forms part of the common law… the basic concept was accepted by both law and equity as one of natural justice. The principle proceeded… on a principle of law that… where several persons are debtors all shall be equal"

19    Coordinate liability is said to exist where any obligor owes, with another, the duty to a third party and is liable with that other to a common demand. The submissions of Walker Consolidated cite the following passage from Meagher, Gummow and Lehane, Equitable Doctrines and Remedies, 2nd edition:

"… contribution may be recovered where the liabilities of the co-obligors to the principal claimant are such that the enforcement by him against either co-obligor would diminish that obligor in his material substance to the value of the liability"

20    Such an obligation is said to exist between Mr Walker and Walker Consolidated in these proceedings where both have been found liable to have contributed to the loss suffered by the plaintiffs and for which the plaintiffs are to be paid an amount by way of damages and costs. 21    Walker Consolidated further submits that the law relating to the assessment of contribution was stated by Lord Eldon in Craythorne v Swinburne (1807) 14 Ves Jun 160 at 165 that:

"The principle of equity operates… upon the maxim that the equality is equity: the creditor who can call upon all shall not be at liberty to fix one with payment of the whole debt, and upon that principle, requiring him to do justice, if he will not the courts will do it for him"

22    On this basis Walker Consolidated submits that the apportionment of damage should be divided equally between it and Mr Walker rather than seeking to apportion liability. 23    Walker Consolidated in its submissions cites paragraphs 937,938 and 939 of the Judgment dealing with the courts findings as to the First Representations. These findings are said to relate solely to Mr Walker and breaches are said to be breaches solely of Mr Walker. Walker Consolidated then submits:

"The breach goes to the very heart of the case which has been found in the reasons to have been made out by the Plaintiffs namely that the rezoning of the Lady Carrington Estate could be delivered by Mr Walker"

24    Walker Consolidated then refer to the findings as to the Further Representations [Judgment paragraphs 942, 943 and 944]. The submissions then refer to the finding at Judgment paragraph 946. Here the finding was as follows:

"The evidence further establishes to my satisfaction that on the face of and in reliance upon the first representations as have been held by the Court to have been made and on such of the further representations as have been held by the Court to have been made and pursuant to their oral agreement Mr Hogarth and Mr Walker entered into the Heads of Agreement which established the framework of the joint venture agreement between them in relation to the Ensile land"

25    The submissions of Walker Consolidated then refer to the findings as to reliance on the representations and to the findings on the best endeavours case [Judgment paragraphs 1063,1403-1410]. 26    The submissions of Walker Consolidated then refer to the findings as to joint liability of Mr Walker and Walker Consolidated on the best endeavours case. Walker Consolidated refers to specific findings which are said to clearly support an equal apportionment of liability as between Walker Consolidated and Mr Walker. The submission is that these findings mean that it is not now open to Mr Walker to suggest otherwise. These findings are said to strongly support a conclusion that Mr Walker should contribute equally to any damages payable for those breaches. 27    For these reasons Walker Consolidated submits that in relation to the finding of liability against Walker Consolidated and Mr Walker under the "the best endeavours" case, Mr Walker ought be ordered to contribute 50% of the total of the damages payable to the plaintiffs. 28    Walker Consolidated submits that it should be granted leave to file a cross claim for contribution against Mr Walker because:

(i) By leave being granted, matters in controversy between the two defendants may be completely and finally determined, and further legal proceedings concerning those matters are avoided, thus being the most efficient use of the Courts time
(ii) I am said to be the Judge most familiar with the facts and legal arguments relating to this matter and it is said to be an efficient use of the Courts time for me to hear the matter of contribution, rather than for the matter to be re-ventilated by the commencement of fresh proceedings
(iii) There is said to be no prejudice to the plaintiffs or other defendants in these proceedings. Further or in the alternative, it is submitted that any prejudice to Mr Walker is outweighed by the fact that the granting of leave is the most efficient use of the Courts time
The submissions of Mr Walker

29    Mr Walker opposes the grant of leave to file a cross-claim. No submissions are advanced in relation to the question of separate representation. 30    Mr Walker submits that leave should not be granted for three reasons. 31    The first relates to the lateness of the application, it being common ground that leave to file the proposed cross claim is only sought after the conclusion of the substantive hearing of the proceedings and after the delivery on 10 March 2000 of the reasons for judgment. Mr Walker’s submissions point out that no explanation, or in the alternative, no satisfactory explanation, has been given by Walker Consolidated for the lateness in bringing the application. The submission is that if Walker Consolidated now has a right to contribution in equity in these proceedings, it has always been open to it to plead such a case by cross claim 32    The second reason asserts that the proposed cross-claim raises new facts and issues. 33    The submission is that the proposed cross-claim is not just a different legal framework for use of facts and issues already in the proceedings [see NRMA vs Morgan (No 3) supra at paragraph 66] 34    The submission is that the proposed cross-claim raises at least two issues:

(i) Is Walker Consolidated entitled to contribution in equity from Mr Walker?
(ii) If the answer to (i) is yes, how is such contribution to be apportioned?

35    The second of these issues is said to raise areas of factual and legal inquiry as to the relationship, contractual and otherwise, between Mr Walker, Walker Consolidated and the Walker group generally, which have not been the subject of evidence or argument in the proceedings. The submission is that if the right of contribution does exist, the law does not necessarily prescribe that the burden should fall equally among co-obligors: see for example Morgan Equipment Company v Rogers (1993) 32 NSWLR 476G-477B; Official Trustee in Bankruptcy v Citibank (1995) 38 NSWLR 116 at 119G-120E. 36 The submission is that the determination of the issues of contribution or defences to the right of contribution will require further evidence. The submission is that that evidence, is likely to include the existence of contractual indemnities given to Mr Walker by the Walker group and evidence of the relationship between Mr Walker and Walker Consolidated prior to and following the execution of the HUTA . 37 The submission is further that the determination of the additional issues likely to arise on the hearing of the cross claim would, or at least may, give rise to possible inconsistent findings or conclusions or at least to further evidence which might lead to different findings or conclusions: NRMA vs Morgan (No 3) at paragraph 67 38    It is further submitted that it is likely that Mr Walker would have run his case differently had he known that Walker Consolidated was seeking contribution from him. An example is given of the approach postulated in the reasons for Judgment [paragraph 1408], by arguing that his contractual obligations under the Heads of Agreement ended upon execution of the HUTA . 39    It is then submitted that the proposed cross-claim can be brought by way of separate proceedings. 40    The third reason relates to delay in pronouncement of final orders. The submission is that if leave were granted to file and serve a cross-claim, Mr Walker is not in a position to be ready to have the cross-claim now heard. It is put that this will necessarily mean that the determination of final orders in the proceedings will be further delayed.

The Courts Decision

41    In my view the application should be rejected. The new facts and issues would seem clearly to cover and to require evidence to cover, the contractual relationship between Mr Walker and Walker Consolidated prior to the execution of the HUTA and after the execution of the HUTA. The court is informed by counsel now appearing for Mr Walker that the area to be litigated in this regard would traverse the relationship between Mr Walker and Walker Consolidated over this period of time. Clearly the contractual indemnities would play presumably an important part in the determination of the relevant contractual relationship. Equally clearly Walker Consolidated is entitled to have the court examine whether or not in the particular circumstances, Mr Walker is entitled to rely on the deeds of indemnity. No suggestion is presently made of a proposed collateral attack on the Deeds of Indemnity. If such an attack was to be mounted and if the Deeds of Indemnity survive such collateral attack, questions going to whether or not Mr Walker's liability the subject of the findings in the 10 March Judgment was incurred by him acting as a director or executive or arose out of conduct involving a lack of good faith , will clearly, as both Mr Kerr and Mr McClintock accepted, require to be investigated and determined. 42    It is clearly difficult in the extreme where the pleadings on the cross-claim issue are at such an early stage of preparation, for the court to be able to discern with any specificity the exact nature of the factual issues which may fall to be determined in the examination of whether Mr Walker's liability the subject of the findings in the judgment, was incurred by him whilst acting as a director or executive or arose out of conduct involving a lack of good faith. It will be recalled that as noted in the judgment at paragraph 1371 Mr Ellicott did not shrink from strongly submitting that the court should make a finding that the real purpose of the Walker Group throughout was to achieve its float and to obtain the profits which came from the float. Mr Ellicott sought in specific terms a finding "that the real purpose of the conduct of Walker in October/November through (sic) was to achieve what we have referred to as blue sky but to achieve a commitment in relation to the Helensburgh lands that they could use for the purposes of the prospectus, that that was their object in doing this, that it led to great profits to Mr Walker hugely substantial profits of $138.7 million I think it is, and that the subdivision was not something which was other than a subsidiary part of their motives and intention at the time… they didn't see it as their major commitment, their major commitment was to get the float and to get the profits which came from the float" 2 The findings at paragraphs 1372, 1373 and 1374 were in the following terms:

1372 Whilst the evidence clearly leaves a hiatus as to how or why it came about that the Walker Group adopted such a light, insubstantial and ill thought through approach in relation to the Commission of Inquiry, the evidence does not permit of a finding as to whether or not the real purpose of the Walker Group was as suggested by Mr Ellicott QC

1373 The characterisation of the conduct of the Walker Group suggested by Mr Ellicott in the passage extracted above would require detailed proof as it would suggest grave wrongdoing of the highest order in relation to a prospectus. [ Pedler vs Richardson (Unreported, Supreme Court of New South Wales, October 16, 1997, Young J.)]
1374 In the result, the allegation remains but an allegation
[See generally the sections of the Judgment dealing with the Prospectus in the context of inclusion of the Helensburgh lands, Judgment paragraphs 413-417, 892-921, 1050, 1334, 1436]

44    The whole question of motive would have had relevance to the so called ‘hiatus’ and to the best endeavours case generally’. 45    If as seems squarely to be correct, it is the case that an answer put to use of the Deed of Indemnity will require the court, in examining the conduct of Mr Walker in terms of the propriety of his actions, in terms of the capacity in which he acted and in terms of questions going to good faith in his actions, to go into evidentiary areas which had Mr Walker elected to give evidence in the proceedings, would be likely to have been examined and tested, quite clearly the additional issues would give rise to possibly inconsistent findings or conclusions to the findings and conclusions in the principal judgment. This would be invidious indeed and provides a good example, possibly only one of many which could be extracted from the complex of issues litigated in the proceedings, of the crucial significance of not permitting matters already litigated to be reopened without very special reason. 46    Reference is also made by Mr McClintock to the judgment at para 341 where the following two sentences appear to towards the end of the judgment:

"Bearing in mind the fact that the earlier document was a Heads of Agreement document, I infer that the personal signatories to the Heads of Agreement signed in a representative capacity intending to generally represent their respective relevant corporate interests. The only significance of the matter is probably where it may be suggested that the later HUTA did not cover certain areas provided for in the earlier Heads of Agreement."

47    It is inappropriate, as it seems to me, on this application for the Court to examine the context in which para 341 appears in the judgment or the proper construction of that paragraph. Mr McClintock's submission however was that this is an area in respect of which, on his submission, it is possible that the proposed cross claim litigation may give rise to, so he submitted, findings or conclusions inconsistent with findings or conclusions in the principal judgment. 48    As already pointed out, the court is particularly concerned at any suggestion that further evidence to be led on the proposed cross-claim might lead to different findings or conclusions from those already the subject of decision in the 10 March Judgment. It is one thing for the court to case manage proceedings in terms of carrying out its best endeavours to ensure that unnecessary multiplicity of proceedings are avoided wherever possible. It is entirely another thing once a complex hearing extending over some 10 weeks is then followed by detailed findings on a multiplicity of issues binding all the parties, for one party then and only then, to seek to proceed against another party on a cross-claim, relying upon aspects of the judgment to sustain that claim. One clear example of such reliance is the suggestion that Walker Consolidated may, as in fact it does, seek to submit that the findings strongly support a conclusion that Mr Walker should contribute equally to any damages payable for the breaches of contract in relation to the best endeavours case. Mr Walker’s submissions are that had the cross-claim been brought at an appropriate time and heard together with the principal proceedings, particular findings may well have either not been made or been made in different terms. 49    Further the court is entitled in exercising its discretion to take into account the plaintiff's interests. Had the cross-claim been brought at an appropriate time and heard together with the principal proceedings then, if Mr Walker for example is to be called as a witness in the cross-claim contribution litigation, he would have been exposed to cross-examination by the plaintiffs counsel. The exercise may well have led to entirely different findings in the main proceedings. The plaintiffs may have succeeded in obtaining significantly improved relief then they ultimately obtained. Why should the court now and after the main proceedings have been fully heard and when the court is about to deliver the supplementary judgment and to make final orders, facilitate, presumably as a separate question for separate determination, litigation of the cross-claim in a manner and at a time and in circumstances which would leave the plaintiffs unable to participate and thence to obtain as part of their case, such forensic advantages as might otherwise have been able to be obtained had the cross-claim been litigated together with the main proceedings? 50    Yet a further consideration of special importance as it seems to me is the inchoate nature of what is to be possibly involved in these cross-claim proceedings. The court is informed that Mr Walker may well himself have rights of contribution or indemnity against other of the defendants. At this time Mr Ulman of Minter Ellison who is Mr Walker's Solicitor on the cross-claim, has not completed investigations into such rights which Mr Walker may have. He has however received general instructions to make a claim on behalf of Mr Walker to enforce any such a rights of contribution or indemnity as Mr Walker may have against other persons. The situation is extremely unsatisfactory as the range of possible areas of evidence for examination on cross-claim issues is so imprecise and provides a further reason as it seems to me for the Court dismissing the Walker Consolidated application for leave to file a cross-claim which may well have the posited ripple effect. 51    A further consideration to be taken into account is the strength of the suggestion that Walker Consolidated may be met, in the event that it takes separate proceedings for contribution, with an argument that it is to be estopped upon the principles discussed by the High Court in Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589. That concerned facts not entirely dissimilar to these. Port of Melbourne Authority and Anshun had both been found to be negligent. It was held that the Authority should receive a ninety percent contribution from Anshun and Anshun a ten percent contribution from the Authority. The Authority's later action in which it sought an indemnity from Anshun pursuant to an agreement was held to be estopped as it was not and ought reasonably to have been raised in the original proceedings. 52 The principle to be derived from Anshun was stated by Priestley JA with whom Meagher JA and Hope AJA agreed in Rahame v Commonwealth Bank of Australia unreported NSW Court of Appeal 20 December 1991 as follows with the emphasis supplied by Giles J, as his Honour then was, in NRMA Limited v Morgan (unreported NSW Supreme Court 4 August 1999)

"1. That Wigram VC's extended principle as stated in Henderson [that is Henderson v Henderson (1843) Hare 100; 67 ER 313] is accepted as good law by the High Court;
2. That the principle applied, inter alia, to...a proceeding in which a party is asserting a cause of action which could have been raised but was not, in a previous proceeding in which the same party was asserting a different cause of action based on substantially the same facts against the same party as the second proceeding is being brought;
3. That the extended principle of Henderson will be applied to the second proceedings when it was unreasonable for the party asserting the cause of action in that second proceeding to refrain from raising it in the earlier proceeding against the same opponent party."

53    To my mind it is extremely unlikely that Walker Consolidated would be burdened by an Anshun estoppel here for two reasons. First, in the original proceedings Walker Consolidated was asserting no cause of action against Mr Walker and Mr Walker was asserting no cause of action against Walker Consolidated. Neither sought a contribution from the other. Thus it could not be said, it seems to me, that Walker Consolidated has necessarily failed to agitate this cause of action "in a previous proceeding in which the same party was asserting a different cause of action based on substantially the same facts against the same party." Second, the fact that Walker Consolidated and Mr Walker decided to present a united legal front to the Court and did not opt for separate representation may well be said to provide a reasonable basis for the failure to agitate the cross claim in the original proceedings. 54    Plainly it is inappropriate presently for the Court to seek in any fashion to pre-determine any Anshun estoppel issue which may be called for consideration in subsequent proceedings. Nothing that I have said should be read as any such attempt. 55    However whether or not I be correct or incorrect as to the likelihood or unlikelihood of an Anshun estoppel being pressed it is simply not the function of the Court after litigation has been regularly completed and adjudicated upon, to then protect a party which may be subject to an Anshun estoppel from the operation of any such defence. In any event whatever effect an Anshun defence may have nothing the Court can do now can save Walker Consolidated from it. There has been a hearing and reasons for judgment. Formal judgment in final terms and final orders only remain. In the words of Giles J in NRMA v Morgan "any Anshun damage has already been done." 56    Nor can it be said that in these proceedings the defendants were otherwise than well versed in relation to matters of commerce. This is not a case in which the suggestion could be for a moment that Walker Consolidated as well as Mr Walker could not have had access to independent legal advisers as and when necessary had they been disposed to seek such advice. The selection of a joint legal team to represent all defendants was itself an exercise of a right to present a consolidated front to the court. In this way the contention that the joint representation provides a real justification for the failure to address the cross-claim type matters earlier is seen to lack substance. 57    It seems to me also appropriate to take into account the possibility which is of course not foreclosed by this decision rejecting the entitlement of Walker Consolidated to proceed with the cross-claim in these proceedings, of Walker Consolidated commencing fresh proceedings to deal with the cross-claim issues and seeking, should it be disposed so to do, for me to hear those separate proceedings. Obviously any such application would have to be determined at the appropriate time on its then merits. It may well be vigorously opposed and many of the same type of arguments as have been presented on the application now being dealt with may then be repeated. Arguably there would-be force in the submission that it was simply inappropriate for me to hear those separate proceedings because of an overlap of evidence as between the two sets of proceedings and/or because of the possibility of inconsistent findings or conclusions. 58    In my view Mr Walker's submissions already set out in relation to the lateness of the application are of substance. 59    To my mind and for the reasons given above, the cross-claim litigation goes well beyond or certainly has the clear potential to go well beyond, being simply a different legal framework for use of facts and issues already in the proceedings. 60    Finally I accept as of substance the submission that a delay in handing down of final orders in the proceedings, if this were to be an inevitable concomitant of inclusion of the cross claim in the proceedings, would require also to be taken into account on the exercise of the Court's discretion as to whether or not to grant leave to file the cross claim in the proceedings. At the end of the day this factor does not appear to be one which requires to be taken into active consideration for the reason that in the way in which the matter was argued, there was no suggestion by any party that to permit the cross claim issues to be litigated as part of a separate question determination, would involve at all a delay in handing down final orders in the principal proceedings or the supplementary judgment which is close to being delivered. 61    In those circumstances, those are the reasons for judgment and I propose to make a formal order dismissing the notice of motion.

COUNSEL ADDRESSED ON COSTS

62    HIS HONOUR: A question has arisen as to whether or not the plaintiff's costs of attending in court on the hearing of the motion ought be ordered to be paid by Walker Consolidated. In my view, where the application for leave to file the cross claim was to file the cross claim in these proceedings, the plaintiffs had every right to be present to hear the respective sets of submissions, against the event for example, as could have been the case it seems to me, that the plaintiff's interests would have been affected. 63    It is indeed an unusual circumstance in which, after the completion of a ten week hearing, defendants previously represented by one set of legal representatives retain other legal representatives and seek to cross claim as between each other but in these proceedings. 64    To my mind the appropriate order in those circumstances is, and I order as follows:

1) The notice of motion filed on 24 May 2000 by Walker Consolidated is dismissed.
2) The costs of Langley Alexander Walker of and in relation to that motion are to be paid by Walker Consolidated.
3) Walker Consolidated is to pay the plaintiff's costs of the attendance of legal advisers in court today on the hearing of the motion.


I certify that paragraphs 1 - 64
are a true copy of the reasons
for judgment herein of
the Hon. Justice Einstein
given on 24 May 2000
and revised on 21 June 2000

___________________
Susan Piggott
Associate

21 June 2000

Last Modified: 09/26/2000