Mango Boulevard Pty Ltd v Spencer - [2010] QCA 207

SUPREME COURT OF QUEENSLAND

CITATION:

Mango Boulevard P/L v Spencer & Ors [2010] QCA 207

PARTIES:

MANGO BOULEVARD PTY LTD
ACN 101 544 601
(plaintiff/appellant)
v
RICHARD WILLIAM SPENCER
(first defendant/first respondent)
SILVANA PEROVICH
(second defendant/second respondent)
MIO ART PTY LTD
ACN 121 010 875
(fourth defendant/third respondent)
KINSELLA HEIGHTS DEVELOPMENT PTY LTD
ACN 100 373 368
(third defendant/not party to the appeal)
PAUL DESMOND SWEENEY AND TERRY GRANT VAN DER VELDE as trustees of the property of RICHARD WILLIAM SPENCER
(fifth defendants/not party to the appeal)
PAUL DESMOND SWEENEY AND TERRY GRANT VAN DER VELDE as trustees of the property of SILVANA PEROVICH
(sixth defendants/not party to the appeal)

FILE NO/S:

Appeal No 14571 of 2009
SC No 1999 of 2006

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

6 August 2010

DELIVERED AT:

Brisbane

HEARING DATE:

9 June 2010

JUDGES:

Muir and Fraser and White JJA
Separate reasons for judgment of each member of the Court, each concurring as to the orders made

ORDERS:

1.   Appeal allowed;

2.   Set aside the order made by McMurdo J that the order made by the Chief Justice on 3 April 2007 be varied by deleting subparagraph (d) and the word “and” at the end of subparagraph (c) from paragraph 7 of that order;

3.   Otherwise dismiss the appeal;

4.   Appellant to pay the respondents’ costs of the appeal to be assessed on the standard basis.

CATCHWORDS:
ESTOPPEL – FORMER ADJUDICATION AND MATTERS OF RECORD OR QUASI OF RECORD – FORMER ADJUDICATION – JUDGMENT INTER PARTES – RES JUDICATA DISTINGUISHED FROM ISSUE ESTOPPEL – where the plaintiff, first defendant (as trustee) and second defendant were parties to a joint venture conducted through the third defendant company – where the plaintiff held half the shares and the first and second defendants held twenty-five percent respectively – where the plaintiff claimed declarations that the first and second defendants were in default under the Shareholders Deed entitling it to an option to acquire their shares – where the first and second defendants defended the claim and made a counterclaim for the plaintiff’s shares – where the first and second defendants defaulted in disclosure and a self-executing order was made – where the fourth defendant replaced the first defendant as trustee and filed a defence and counterclaim – where the first, second and fourth defendants defaulted in disclosure and further orders struck out the fourth defendant’s defence and counterclaim and gave summary judgment to the plaintiff – where the primary judge dismissed the plaintiff’s application for summary judgment and varied part of the self-executing order – where the plaintiff appealed against the orders of the primary judge arguing that the orders were inconsistent with res judicata or issue estoppel under the self-executing order – whether the primary judge’s orders gave rise to res judicata or issue estoppel under the self-executing order – whether the primary judge’s orders gave rise to res judicata or issue estoppel under the further orders

ESTOPPEL – FORMER ADJUDICATION AND MATTERS OF RECORD OR QUASI OF RECORD – FORMER ADJUDICATION – JUDGMENT INTER PARTES – ISSUE ESTOPPEL – RESPECTING WHAT MATTERS DECISION CONCLUSIVE – MATTERS NECESSARY TO THE DECISION – whether the self-executing order operated as a judgment – whether the self-executing order gave rise to an issue estoppel which precluded the fourth defendant from relying on a defence to the plaintiff’s claim – whether the primary judge erred in concluding that the fourth defendant’s counterclaim did not plead a defence

ESTOPPEL – FORMER ADJUDICATION AND MATTERS OF RECORD OR QUASI OF RECORD – FORMER ADJUDICATION – JUDGMENT INTER PARTES – RES JUDICATA DISTINGUISHED FROM ISSUE ESTOPPEL – whether the further orders gave rise to an issue estoppel against the fourth defendant, precluding its defence relating to the plaintiff’s default

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER THE RULES OF COURT – PLEADING – DEFENCE AND COUNTERCLAIM – whether the primary judge erred in determining that the further order was concluded on the ground that the fourth defendant’s proceeding was an abuse of process as opposed to a res judicata arising from the self-executing order

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER THE RULES OF COURT – PLEADING – DEFENCE AND COUNTERCLAIM – whether the primary judge erred in rejecting the plaintiff’s contention that it would be an abuse of process to allow the first, second and fourth defendants to rely on their defence relating to the plaintiff’s default

PROCEDURE – COURTS AND JUDGES GENERALLY – JUDGES – DISQUALIFICATION FOR INTEREST OR BIAS – IN GENERAL – ORDINARY RULE – whether a fair minded observer would have a reasonable apprehension that Muir JA would not decide the case impartially or without prejudice

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170; [1981] HCA 39, cited
Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27, cited
Armour v Bate [1891] 2 QB 233, cited
Arthur J S Hall & Co v Simons [2000] 3 WLR 543; [2000] UKHL 38, cited
Australian Energy Limited v Lennard Oil NL (No 2) [1988] 2 Qd R 230, cited
Autodesk Inc v Dyason [No 2] (1993) 176 CLR 300; [1993] HCA 6, cited
Bailey v Marinoff (1971) 125 CLR 529; [1971] HCA 49, cited
Baines v State Bank of NSW (1985) 2 NSWLR 729, cited
Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256; [2006] HCA 27, cited
Birkett v James [1978] AC 297, cited
Blair v Curran (1939) 62 CLR 464; [1939] HCA 23, cited
Bomanite Pty Ltd v Slatex Corporation Aust Pty Ltd [1991] FCA 536; (1991) 32 FCR 379, cited
Branir Pty Ltd v Owston Nominees [No 2] Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833, cited
Brocx v Hughes [2010] WASCA 57, cited
Burrell v The Queen (2008) 238 CLR 218; [2008] HCA 34, cited
Carl Zeiss Stiftung v Rayner & Keeler Ltd [No 2] [1967] 1 AC 853, cited
Chamberlain v Deputy Commissioner of Taxation (Cth) (1988) 164 CLR 502; [1988] HCA 21, cited
Chanel Ltd v F W Woolworth& Co Ltd [1981] 1 WLR 485; [1981] 1 All ER 745, cited
Clairs Keeley (a firm) v Treacy (2003) 28 WAR 479; [2003] WASCA 277, cited
Clout & Ors v Klein & Ors [2001] QSC 401, cited
Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33, cited
Cropper v Smith (1884) 26 Ch D 700, cited
D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1; [2005] HCA 12, cited
FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268; [1988] HCA 13, cited
Fitzgerald v Director of Public Prosecutions (1991) 24 NSWLR 45, cited
Fox v Star Newspaper Co Ltd [1900] AC 19, cited
Freeman v Rabinov [1981] VR 539, cited
Frikton v Plastiras [2010] QSC 5, cited
Goodwin v Southern Tablelands Finance Co Pty Ltd (1968) 42 ALJR 309, cited
Hart v Hall & Pickles [1969] 1 QB 405, cited
Hume v Munro (No 2)(1942) 42 SR NSW 218, cited
Jackson v Goldsmith (1950) 81 CLR 446; [1950] HCA 22, cited
Jeffery & Katauskas Pty Limited v SST Consulting Pty Ltd (2009) 239 CLR 75; [2009] HCA 43, cited
Johnson v Johnson (2000) 201 CLR 488; [2000] HCA 48, cited
Jorgensen v Slater and Gordon Pty Ltd [2008] VSCA 110, cited
KGK Constructions Pty Ltd v East Coast Earthmoving Pty Ltd [1985] 2 Qd R 13, cited
Kok Hoong v Leong Cheong Kweng Mines Ltd [1964] AC 993, cited
Kuligowski v Metrobus (2004) 220 CLR 363; [2004] HCA 34, cited
Kwan v Kang [2003] NSWCA 336, cited
Liftronic Pty Ltd v Unver (2001) 75 ALJR 867; [2001] HCA 24, cited
Linprint Pty Ltd v Hexham Textiles Pty Ltd (1991) 23 NSWLR 508, cited
Mango Boulevard P/L v Spencer & Ors [2009] QSC 389, cited
Mango Boulevard P/L v Spencer & Ors [2008] QCA 274, cited
Mango Boulevard Pty Ltd v Spencer & Ors [2008] QSC 117, cited
New Brunswick Railway Company v British and French Trust Corporation Ltd [1939] AC 1, cited
Pople v Evans [1986] 3 WLR 97; [1969] 2 Ch 255, cited
R v Masters (1992) 26 NSWLR 450, cited
Ramsay v Pigram (1968) 118 CLR 271; [1968] HCA 34, cited
Rankin v Agen Biomedical Ltd [1999] 2 Qd R 435; [1998] QCA 282, cited
Re JRL; Ex parte CJL (1986) 161 CLR 342; [1986] HCA 39, cited
Re South American and Mexican Co; Ex parte Bank of England [1895] 1 Ch 37, cited
Rogers v Legal Services Commission (SA) (1995) 64 SASR 572, cited
Samuels v Linzi Dresses Ltd [1981] QB 115, cited
Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275; [1991] FCA 523, cited
State Bank of New South Wales Ltd v Stenhouse Ltd [1997] Aust Torts Reports, 81 – 423, cited
Thirteenth Corp Pty Ltd v State (2006) 232 ALR 491; [2006] FCA 979, cited
Todd v Novotny [2000] WASC 308, cited
University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481; [1985] HCA 28, cited
Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9, cited
Whistler v Hancock [1878] 3 QBD 83, cited
Williams v Zupps Motors Pty Ltd [1990] 2 Qd R 493, cited

Supreme Court of Queensland Act 1991(Qld), s 80, s 119
Uniform Civil Procedure Rules 1999 (Qld), r 5, r 7, r 223, r 225, r 293, r 374, r 660, r 661(3), r 668

COUNSEL:

J D McKenna SC, with T J Bradley, for the appellant
F M Douglas QC, with K Connor SC, and D D Keane, for the respondent

SOLICITORS:

Minter Ellison for the appellant
Delta Law for the respondent

MUIR JA: I have had the benefit of reading Fraser JA’s reasons and gratefully adopt his statements of facts. My conclusions and reasons are generally consistent with those of Fraser JA but having regard to the chequered history of this matter I thought it desirable to give reasons, albeit somewhat truncated, of my own. The first issues for determination are the nature of the order of 3 April 2007 and whether it was able to be, or was properly, varied.

Did the order of 3 April 2007 take effect in accordance with its terms upon the filing of an affidavit by the solicitors for the respondent meeting the requirements of paragraph 7 of the order?

The primary judge held that for the 3 April 2007 order to operate as a judgment, a separate judgment had to be pronounced and filed. In his Honour’s view, the 3 April 2007 order was prospective in terms and fell within a class of self-executing orders which provide that unless the order is complied with, the innocent party has a right to enter judgment. His Honour found it difficult to accept that a judgment could come into effect upon the solicitors for one of the parties filing an affidavit deposing to default on the part of the other parties.

I readily accept that the matter last mentioned was a consideration relevant to the construction of the order. It left it to the solicitors for the appellant to do the act which would bring about judgment for the appellant on the counter-claim and the striking out of parts of the defence. That created the likelihood of a dispute as to whether there had, in fact, been the default deposed to by the solicitors. However, the filing of an affidavit by the solicitor for the appellant would not have deprived the respondents of the opportunity of challenging the existence of any default deposed to by the appellant’s solicitors.

In my respectful opinion, there is no ambiguity in the terms of paragraph 7 of the order which would warrant the conclusion that the order was not intended to be truly self-executing. Paragraph 7 provides:
“7. Unless by 4:00pm on 27 April 2007:
(a) The first defendant has complied with the orders in paragraphs 1 and 2 above; and
(b) The second defendant has complied with the orders in paragraphs 4 and 5 above;
Then upon the solicitors for the plaintiff filing an affidavit deposing to the failure of the first and/or second defendants to do so:
(c) Paragraphs 8, 10 and 22 to 285 of the amended defence and counterclaim filed on 29 March 2007 shall be struck out; and
(d) There shall, be judgement for the plaintiff against the first and second defendants on the counterclaim and an order that the first and second defendants pay the plaintiff’s costs of and incidental to the counterclaim of the first and second defendants to be assessed on the standard basis.”
If a further judicial step was contemplated in order to give judgment, one would have expected to see the addition to paragraph 7(d) of the order of words to the effect that the appellant then be at liberty to enter judgment.[1]
[1]C.f. Samuels v Linzi Dresses Ltd [1981] QB 115.

It is correct, as the primary judge held, that paragraph 7 is worded prospectively, but it is so worded that upon the filing of the relevant affidavit, without further judicial intervention, the amended defence and counter-claim is struck out and the plaintiff is given judgment against the first and second defendants on the counter-claim.

The language of the self-executing order in Bailey v Marinoff[2], which was held, at least implicitly, to have taken effect in accordance with its terms, was that in default of the appellant filing and serving appeal books on or before a particular date, “the appeal is to stand dismissed for want of prosecution …”. “Stand dismissed” is commonly used terminology[3] but is frequently departed from as the following examples show: “In the event that the defendant fails to comply with the order … the action be dismissed with costs”;[4] “the defence and counter-claim … be struck out”;[5] “if the documents … were not delivered within 10 days the action be struck out”;[6] and “Unless a statement of claim were delivered within a week the action should be at an end”.[7]
[2](1971) 125 CLR 529 at 538.
[3]See e.g. Bailey v Marinoff (1971) 125 CLR 529 at 542; Goodwin v Southern Tablelands Finance Co Pty Ltd, 42 ALJR 309 (note); and Jorgensen v Slater and Gordon Pty Ltd [2008] VSCA 110.
[4]Freeman v Rabinov [1981] VR 529.
[5]KGK Constructions Pty Ltd v East Coast Earthmoving Pty Ltd [1985] 2 Qd R 13.
[6]Rankin v Agen Biomedical Limited [1998] QCA 282.
[7]Whistler v Hancock [1878] 3 QBD 83.

Rule 661(3) of the Uniform Civil Procedure Rules 1999 (Qld), which requires an order to be filed, if it is a judgment or another final order, does not create any difficulty for the appellant. It is the order which gives judgment and it was filed on 17 April 2007.

There is no doubt about the Court’s power to make an order which will take effect upon the non-fulfilment of a condition or requirement imposed by the Court or upon the happening of a future event. Section 80 of the Supreme Court of Queensland Act 1991 (Qld) provides:
“If a court has power to make an order, give a direction or leave, or do another thing, the court may make the order, give the direction or leave, or do the other thing on the conditions the court considers appropriate.”
Section 119 of the same Act provides that:
“The court may make an order, give a direction or leave or do anything else that it is authorised to do on such terms and conditions (if any) as the court considers appropriate.”
Rule 660 of the Uniform Civil Procedure Rules 1999 (Qld) provides that, “… the court may order that an order takes effect as of an earlier or later date”.

If I had come to a contrary conclusion on the construction of the 3 April 2007 order, I would have concluded that the primary judge erred in varying the order by deleting paragraph 7(d). The first and second respondents failed in an application before Wilson J, decided on 4 October 2007, to extend time for compliance with the order under r 7 or, alternatively, for relief under r 668. Such relief was sought on the basis that facts had arisen or had been discovered after the making of the order, which gave rise to a discretion under r 668. It does not appear that the first or second respondents contended before Wilson J that the order needed to be perfected by the entering of a judgment.

The third respondent filed an application on 4 February 2008 seeking orders that it be substituted as first defendant in place of the first respondent and an order, “that to the extent it may be found necessary, an order varying the …” 3 April 2007 order. Chesterman J made an order on 3 March 2008 that the third respondent be joined as the fourth defendant in the proceeding. The third respondent did not persist with its application for the variation of the 3 April 2007 order. The second respondent and the third respondent were represented at the hearing before Chesterman J, but made no application to vary the 3 April 2007 order.

It does not appear to have been argued before Chesterman J that any further step, such as the entering of judgment, needed to be taken for the order to take effect in accordance with its terms. Chesterman J observed:[8]
“The judgment of 3 April 2007 was self-executing. Upon the defendants’ failure to serve their lists of documents by the specified time and on the filing of the plaintiff’s affidavit deposing to the failure, paragraphs 8 and 10 of the defence were struck out and there was judgment for the plaintiff against the first and second defendants on their counter-claim. No separate order giving effect to that judgment was taken out, or passed and entered. Nothing, I think, turns on that. The judgment in question was, I think, one entered in default of pleading, the counter-claim having been struck out.”
[8]Mango Boulevard Pty Ltd v Spencer & Ors [2008] QSC 117, para [30].
The third respondent appealed against Chesterman J’s decision. The other respondents did not appeal and were not represented on the hearing of the appeal. On the appeal no issue was taken about any alleged lack of finality of the 3 April 2007 order.

If the 3 April 2007 order remained interlocutory in nature, application could have been made for its variation, but considerations relevant to the Court’s determination on such an application would “include the risk of conflicting decisions, unnecessary vexing of respondents, judge-shopping, the diminution of certainty in the conduct by [the parties] of their affairs, the potential harm to public confidence in the integrity of judicial decisions, and the unnecessary expenditure of time and money which re-litigation involves …”.[9] The public interest in the finality of litigation would be an important consideration.[10] It was observed in the joint reasons in D’orta-Ekenaike v Victoria Legal Aid[11] that even in appellate proceedings “the importance of finality pervades the law”.
[9]Clairs Keeley (a firm)v Treacy [2004] WASCA 277.
[10]Autodesk Inc & Another v Dyason & Others (No. 2) (1992) 176 CLR 300 at 302, 317.
[11](2005) 223 CLR 1.

In Chanel Ltd v F W Woolworth& Co Ltd,[12] the Court observed:
“Even in interlocutory matters a party cannot fight over again a battle which has been fought unless there has been some significant change of circumstances, or the party has become aware of facts which he could not reasonably have known, or found out, in time for the first encounter.”
[12][1981] 1 WLR 485 at 492 - 493.
The respondents had not sought to argue in the past that the order did not take effect as a final judgment. Indeed, they proceeded on the basis that it was a final judgment and, initially, sought to have it set aside or varied. In my view, the fact that the construction of the order had not been raised previously, did not mean that there was no impediment to the respondents’ raising the point before the primary judge. In the interests of finality parties are expected to bring forward at the first appropriate opportunity all relevant arguments in support of their respective cases.

Paragraph [98] of the joint reasons in Aon Risk Services Australia Ltd v Australian National University[13] explains the meaning of “just resolution” in the ACT equivalent of r 5(1) of the Uniform Civil Procedure Rules 1999 (Qld). Their Honours there said:[14]
“… Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account. The Rule’s reference to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs.”
[13](2009) 239 CLR 175 at 213 per Gummow, Hayne, Crennan, Kiefel and Bell JJ.
[14]Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [98] per Gummow, Hayne, Crennan, Kiefel and Bell JJ.

The joint reasons proceed to explain that “justice cannot always be measured in money” and that emotional and financial strain on litigants who are natural persons and financial stress on corporations are relevant considerations, as are the effect of uncertainty on business and other plans and on the deployment of resources.

The present Chief Justice of Australia, when a judge of the Federal Court, referring to a statement of principle to the effect that a party could be protected by a costs order, observed:[15]
“… That may well have been so at one time, but it is no longer true today … Non-compensable inconvenience and stress on individuals are significant elements of modern litigation. Costs recoverable even on an indemnity basis will not compensate for time lost and duplication incurred where litigation is delayed or corrective orders necessary.”
[15]Bomanite Pty Ltd v Slatex Corporation Australia Pty Ltd (1991) 32 FCR 379 at 392.
The decision in Aon acknowledges, at least implicitly, what has long been recognised: delay is productive of significant increases in the costs of litigation. Such costs have long been a concern of legislators, judges, lawyers and members of the public. The approach in Aon and the discipline it imposes on litigants addresses these concerns.

In Coulton v Holcombe,[16] Gibbs CJ, Wilson, Brennan and Dawson JJ, approved the following observations of the Court in University of Wollongong v Metwally [No. 2]:[17]
“It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so.”
[16](1986) 162 CLR 1 at 8.
[17](1985) 59 ALJR 481 at 483.
Their Honours, in Coulton v Holcombe, observed that:[18]
“The first respondents must be bound by the conduct of their case at the trial. It would not be fair to the appellants to subject them at this stage of the proceedings to what is virtually a new trial on an entirely different issue to that which has been litigated. In the pursuit of such a course, the interests of expedition, finality and justice are denied.”
[18]Coulton v Holcombe (1986) 162 CLR 1 at 11.
In Liftronic Pty Ltd v Unver,[19] McHugh J said:[20]
“It is an elementary rule of law that a party is bound by the conduct of his or her case.”
[19](2001) 75 ALJR 867.
[20]At 875, para [44].
His Honour then quoted the above passage from the reasons in University of Wollongong v Metwally [No.2]. Referring to the failure by the defendant’s counsel on trial to object to instructions to the jury by the judge in the course of his summing-up which left open the possibility of a reduction in the plaintiff’s damages for contributory negligence of between five and 75 per cent, McHugh J said:[21]
“Despite the defendant’s failure to rely on it, I mention it because it seemed to me wrong in principle that a party can acquiesce in a jury making a particular finding and then appeal against a finding of the jury that is consistent with the party’s acquiescence.”
[21]At 875.
The principles discussed above strongly suggest that even if the 3 April 2007 order was interlocutory, in the circumstances described earlier, the respondents would have needed to point to some exceptional circumstances to justify its variation. It is unnecessary, however, to take this issue further because of my earlier conclusion on the construction of the order.

There was another obstacle in the way of a variation of the order. The 3 April 2007 order was made pursuant to r 374(5)(a) and on notice to the first and second respondents. The application for the order expressly stated that it was made under r 374. Accordingly, it could be set aside only on appeal.[22] As the question of whether the time for compliance with such an order could be extended pursuant to r 7 was not addressed in argument, there is no need to discuss it on this appeal.
[22]Uniform Civil Procedure Rules 1999 (Qld), r 374(8)(b).

Abuse of process

At first instance, counsel for the appellant argued that it would be an abuse of process for the respondents to re-agitate the Thomson point and other defences, as they formed part of pleadings which had been struck out and in respect of which “there was explicitly no leave given to amend”.

In Appeal No. 3514 of 2008, reliance was placed on Chesterman J’s holding that the Thomson point was not to be exempted from the order that the defence and counter-claim of the third respondent filed by leave on 3 March 2008 be struck out.[23]
[23]Reasons, 20 March 2008, para [77].

His Honour concluded that the claim which the third respondent wished to advance was the same as that which the respondents were prevented from litigating by reason of the guillotine order. In paragraph [27] of his reasons, his Honour stated:[24]
[24]Record, 858, 859.
“[27]In my opinion both analyses demonstrate that the claim which Mio Art wishes to adumbrate is the same as that which the defendants were prevented from litigating by reason of the guillotine order. The essentials have not changed. Both cases raise for decision:
1.Whether Mr Thompson’s appointment put the plaintiff in default under the deed.
2.Whether any such default deprived the plaintiff of the right to issue a notice of default to the defendants in the event that they were themselves in default under the deed.
3.The extent of the defendants’ indebtedness when the plaintiff delivered the notices of default to them.
4.Whether the plaintiff refused to consent to a mortgage of the defendants’ shares –
(a)unreasonably
(b)unconscientiously
5.Whether the refusal deprived the defendants of the ability to pay their debts.”
It will be seen that his Honour did not differentiate between defences and counter-claims. On appeal, in Appeal No. 3514 of 2008, it was not submitted that paragraph [27] of Chesterman J’s reasons were affected by error. Rather, it was submitted on behalf of the third respondent that the first and second respondents:
“… defended and counter-claimed on the bases:
6.1 They were not insolvent.
6.2 The Thomson point. …”
In relation to the Thomson point it was submitted that:
“The unfairness and the adverse reflection on the administration of justice [which caused Chesterman J to find abuse of process] was clearly limited to litigation on the insolvency issue as the documents which were not disclosed related solely to that issue.”
It was the fact, however, that the Thomson point was not raised in the first and second respondent’s defence. I have concluded, on balance, that it was not raised in the counter-claim. It was pleaded that at the time the appellant issued its default notices it was in default of the Shareholders Deed, but it is not possible to discern from the pleading that it was being alleged that the appellant, as a result of the alleged default, was not a “non-defaulting party” and thus not entitled to give a default notice. I accept, with respect, Fraser JA’s analysis of the first and second respondent’s defence and counter-claim.

The Thomson point was first pleaded clearly in the amended defence and counter-claim of 3 March 2008 of the third respondent. It was apparent, however, that the first and second respondents were aware of the point when they filed and served their first defence. It referred to a dispute notice requiring arbitration which squarely raised the point.

The concept of abuse of process was explained in the joint reasons in Jeffery & Katauskas Pty Limited v SST Consulting Pty Ltd in this way:[25]
“It has been said repeatedly in the judgments of this Court that the categories of abuse of process are not closed.In Walton v Gardiner the majority adopted the observation in Hunter v Chief Constable of the West Midlands Police that courts have an inherent power to prevent misuse of their procedures in a way which, although not inconsistent with the literal application of procedural rules of court, would nevertheless be ‘manifestly unfair to a party to litigation … or would otherwise bring the administration of justice into disrepute among right-thinking people’. This does not mean that abuse of process is a term at large or without meaning. Nor does it mean that any conduct of a party or non-party in relation to judicial proceedings is an abuse of process if it can be characterised as in some sense unfair to a party. It is clear, however, that abuse of process extends to proceedings that are ‘seriously and unfairly burdensome, prejudicial or damaging’ or ‘productive of serious and unjustified trouble and harassment’.” (footnotes deleted)
[25](2009) 239 CLR 75 at 93, 94.
In his separate reasons in SST Consulting, Heydon J expounded the general principles applicable to abuse of process as follows:[26]
“In Hunter v Chief Constable of the West Midlands Police Lord Diplock said that the court had inherent power ‘to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people’. That statement has been approved in this Court by Mason CJ, Deane and Dawson JJ as stating the law ‘correctly’. They also said that abuse of process arises in ‘all those categories of cases in which the processes and procedures of the court, which exist to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness’. They quoted certain statements by Richardson J pointing to two aspects of the public interest. One was that the ‘public interest in the due administration of justice necessarily extends to ensuring that the Court’s processes are used fairly’. The second aspect of the public interest lay ‘in the maintenance of public confidence in the administration of justice. It is contrary to the public interest to allow that confidence to be eroded by a concern that the Court’s processes may lend themselves to oppression and injustice’. ‘Abuse of process’ extends to proceedings that are ‘seriously and unfairly burdensome, prejudicial or damaging’ or ‘productive of serious and unjustified trouble and harassment’. There is a ‘general principle empowering a court to dismiss or stay proceedings which are … an abuse of process and the rationale for the exercise of the power to stay is the avoidance of injustice between parties in the particular case’. A stay or dismissal prevents abuse of process: ‘[t]he counterpart of a court’s power to prevent its processes being abused is its power to protect the integrity of those processes once set in motion.” (footnotes deleted)
[26]At 103, 104.
A little later in his reasons, Heydon J said:[27]
“Words like ‘unfair’, ‘unjust’, ‘oppressive’, ‘seriously and unfairly burdensome, prejudicial or damaging’, ‘productive of serious and unjustified trouble and harassment’ and ‘bring the administration of justice into disrepute among right-thinking people’ are not words of exact meaning. Nor are the words ‘abuse of process’ themselves. That notion is not ‘very precise’. Hence it is not surprising that, as Lord Diplock said, ‘[t]he circumstances in which abuse of process can arise are very varied’. ‘What amounts to abuse of court process is insusceptible of a formulation comprising closed categories. Development continues.” (footnotes deleted)
[27]At 105.
The “failure to take, as well as the taking of, procedural steps and other delay in the conduct of proceedings are capable of constituting an abuse of the process of the court”.[28]
[28]Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256 at 267.

In the following passage from the reasons of Giles CJ in State Bank of New South Wales Ltd v Stenhouse Ltd,[29] quoted with approval by Chesterman J in Mango Boulevard Pty Ltd v Spencer & Ors[30] and by Wilson J in Frikton v Plastiras,[31] some of the matters relevant to a consideration of whether particular conduct constitutes abuse of process were usefully identified:
[29][1997] Aust Torts Reports, 81 - 423.
[30][2008] QSC 117.
[31][2010] QSC 5.
“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;
(b) the opportunity available and taken to fully litigate the issue;
(c) the terms and finality of the finding as to the issue;
(d) the identity between the relevant issues in the two proceedings;
(e) any plea of fresh evidence, including the nature and significance of the evidence and the reason why it was not part of the earlier proceedings; all part of –
(f) the extent of the oppression and unfairness to the other party if the issue is relitigated and the impact of the relitigation upon the principle of finality of judicial determination and public confidence in the administration of justice; and
(g) an overall balancing of justice to the alleged abuser against the matters supportive of abuse of process.”
The principles discussed in paragraphs [17] to [27] above are also relevant for present purposes.

The conduct and circumstances which support the view that it would be an abuse of process for the respondents to defend the appellant’s claims on the basis of the Thomson point may be summarised as follows. The Thomson point was not raised as such but was adverted to in the counter-claim the subject of the 3 April 2007 order. The respondents were aware of the point at that time. The first and second respondents did not succeed in persuading Wilson J to give relief against the consequences of the order, which was self-executing, and intended to extinguish the third respondent’s rights in respect of the counter-claim.

It was decided by Chesterman J that it would be an abuse of process for the third respondent to re-agitate the counter-claim, the Thomson point and the defences in the third respondent’s defence. The third respondent’s defence (save for paragraph 1) and counter-claim were struck out with no leave to re-plead and judgment was given on the counter-claim. Chesterman J’s decision was upheld on appeal. An application for special leave to appeal against the Court of Appeal’s decision was abandoned.

Some two and a half years elapsed between 3 April 2007 and 30 October 2009, the date of the hearing before the primary judge. There had been prior delays and disputes and the matter was on the commercial list: a list, the function of which, to ensure the expert, prompt and efficient determination of commercial disputes.

The above narrative shows that there are cogent reasons for concluding that for the respondents to ventilate the Thomson point again in the proceedings would be “seriously and unfairly burdensome” to the appellant, contrary to the interests of expedition and finality and not sit comfortably with the principle that parties are bound by the conduct of their cases.

There are, however, matters which weigh against the conclusion that the agitation of the Thomson point by way of defence would be an abuse of process. The Thomson point was first raised by way of defence by the third respondents in the defence filed by leave in the proceedings before Chesterman J. His Honour concluded that the Thomson point had been raised in the pleadings which existed at the time of the 3 April 2007 order. That finding did not distinguish between the allegations in the first and second respondent’s amended defence and the allegations in their amended counter-claim.

The 3 April 2007 order struck out some paragraphs of the amended defence and gave judgment on the counter-claim only. The order thus did not contemplate that the first and second respondents not be permitted to amend their defence or that they not be permitted to raise the Thomson point by way of defence.

Before Chesterman J, the third respondent pleaded defences in respect of which inadequate disclosure had been given without there being any assurance that due disclosure would be given. There was no offer to abandon that part of the pleading. However, by the time of the hearing before the primary judge, the respondents were relying on a pleading which raised only the Thomson point: essentially a short point of contractual construction which required little, if any, further disclosure by the respondents. It was not suggested in this appeal that the Thomson point was not fairly arguable or that it could not be heard and determined promptly. The primary judge noted that it was not suggested that the lapse of time would make a fair determination of the case problematic.

The primary judge said:
“Nevertheless, the present question is whether the defendants should be precluded from raising a specific case as a defence. They should not be precluded from doing so as some penalty for their previous misconduct. And because that misconduct would not affect the fair determination of this question, and there are no other circumstances which it is said would do so, there is no proper basis now for precluding the litigation of that question.”
I accept that the punishment of a defaulter is not a relevant consideration[32] but the past conduct of the respondents and its consequences in terms of delay and expense cannot lightly be put aside. The question posed by the primary judge, in my respectful opinion, was too narrow. It was necessary to decide whether, having regard to the principles discussed earlier, the mounting of the Thomson defence would be an abuse of process.
[32]Cropper v Smith (1884) 26 Ch D 700.

To my mind, the considerations for and against are fairly evenly balanced but the following matters, in particular, persuade me that the primary judge was correct in deciding as he did. The first is the financial loss which would be likely to result from the loss of their joint venture interests by the respondents if their construction of the Deed is held to be correct: they have already suffered the loss of their right to claim the benefit of the Thomson point in relation to the appellant’s shares.

The appellant took no steps to finalise the proceedings and the hearing before the primary judge arose from an application by the respondents. The proceedings remained, and still remain, on foot.

Having regard to the defences of the respondents, which depend essentially on questions of contractual construction, there is good reason to suppose that the proceedings can not be disposed of promptly. In that regard, it is significant that the primary judge, a Commercial List judge, saw no difficulty in that regard. Finally, at least since the filing of the third respondent’s defence and counter-claim, there has been no suggestion of misconduct by the respondents, apart from the question of whether this attempt to agitate the Thomson point constituted an abuse of process.

Res Judicata - issue estoppel

Like Fraser JA, I am of the view that when Chesterman J’s reasons are read as a whole, as they ought be, his Honour refrained from determining that the 3 April 2007 order resulted in a res judicata or issue estoppel. That question was also left undetermined in the appeal from Chesterman J’s decision. The 3 April 2007 order could not give rise to a res judicata in respect of the Thomson point, which precluded reliance on it as a defence, as it was not raised in the first and second respondents’ defence. As for issue estoppel, the obscurity of the wording of the counter-claim makes it difficult to conclude that the defences of the respondents in the current pleadings are “necessarily and with complete precision decided by” the order of 3 April 2007.[33] The 3 April 2007 order, not being a decision after a hearing on the merits, falls to be considered in accordance with the principles stated in the following passage from the reasons in New Brunswick Railway Company v British and French Trust Corporation Ltd[34] quoted with approval in Kok Hoong v Leong Cheong Kweng Mines Ltd:[35]
“… that default judgments, though capable of giving rise to estoppels, must always be scrutinised with extreme particularity for the purpose of ascertaining the bare essence of what they must necessarily have decided and, to use the words of Lord Maugham L.C.., they can estop only for what must ‘necessarily and with complete precision’ have been thereby determined.”
[33]Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853 at 946.
[34][1939] AC 1.
[35][1964] AC 991 at 1012.

It has been long established that a default judgment or order may give rise to a res judicata.[36] In Linprint Pty Ltd v Hexham Textiles Pty Ltd,[37] it was held that an order dismissing a plaintiff’s claim after it had withdrawn from a trial of the proceeding, gave rise to a res judicata. In his reasons, Clarke JA, with whom Samuels JA agreed, referring to Fox v Star Newspaper Co Ltd;[38] Armour v Bate[39] and Re South American and Mexican Co; Ex parte Bank of England,[40] said:
“I take it that these authorities establish that if a plaintiff withdraws from the trial and an order is made in its absence dismissing its claim then that order will, unless set aside or successfully appealed from, ground a later plea of res judicata in the event that a later attempt is made to litigate the same case. The position is no different than that which arises under a default judgment …”
[36]Kok Hoong v Leong Cheong Kweng Mines Ltd [1964] AC 993 at 1010-1013; Linprint Pty Ltd v Hexham Textiles Pty Ltd (1991) 23 NSWLR 508; New Brunswick Railway Co v British & French Trust Corporation Ltd [1939] AC 1; Hume v Munro (No 2) (1942) 42 SR NSW 218 at 229, 230; Re South American and Mexican Co [1895] 1 Ch 37, 45; Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853; and Spencer, Turner and Handley, The Doctrine of Res Judicata, 3^rd ed, paras 44 - 51.
[37](1991) 23 NSWLR 518 at 526, 527.
[38](1900) AC 19.
[39][1891] 2 QB 233 at 235.
[40][1895] 1 Ch 37 at 45.
It is established though that a judgment or order dismissing proceedings for want of prosecution is not a decision on the merits and thus does not give rise to a res judicata.[41] That is also the case with a judgment or order dismissing a claim or defence for failure to comply with an order for discovery.[42]
[41]Birkett v James [1978] AC 297; Pople v Evans [1969] 2 Ch 255; and Thirteenth Corp Pty Ltd v State (2006) FCA 979 at para [33].
[42]Baines v State Bank of NSW [1985] 2 NSWLR 729; Thirteenth Corp Pty Ltd v State [2006] FCA 979 at para [33].

This Court was not referred to any decisions in which it has been held that the striking out of an action or defence for failure to comply with an order of the nature of the 3 April 2007 order on the grounds of abuse of process gave rise to issue estoppel or res judicata. The rationale for regarding default judgments as enlivening the doctrines of estoppel or res judicata is unclear[43] and it was not suggested by counsel for the appellant that any basis existed for arguing, by analogy or otherwise, that the principles applicable to default judgment should apply to orders such as the 3 April 2007 order and the order of Chesterman J.
[43]Kok Hoong v Leong Cheong Kweng Mines Ltd [1964] AC 993 at 1010 - 1013.

The principles discussed in Aon provide a rational basis for a rule that, where a claim or defence is dismissed or struck out as an abuse of process, the defaulting party should not be permitted to re-agitate the issues central to the claim or defence. The doctrines of res judicata and issue estoppel are both founded in the public interest in finality in judicial determinations and on the right of the individual to be protected from vexatious and oppressive conduct arising from re-litigating the same issues.[44]
[44]Jackson v Goldsmith (1950) 81 CLR 446 at 468; and Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853 at 909 - 933.

Abuses of process, however, may be perpetrated in a great many ways. Where the conduct which constitutes the abuse has ceased, it is apparent that the innocent party may not be prejudiced by the defaulting party being permitted to prosecute its claim or mount its defence. It may be, as appears to be the case here, that the abandonment of parts of the claim or defence may mark the end of the difficulties which led to the finding of abuse of process.

The interests of justice are likely to be better served if courts have the ability to assess whether the further agitation of a claim or defence, dismissed otherwise than on the merits, amounts to an abuse of process than by an inflexible rule which results in the irretrievable loss of a defaulting party’s rights in respect of the matters the subject of a claim or defence struck out or dismissed for abuse of process.

For the above reasons, I would conclude that the respondents were not prevented from raising the Thomson point by either of the doctrines under consideration. Because of this conclusion, I have not attempted to address separately the position of the second respondent, which is not necessarily identical to that of the other respondents.

Application for a declaration that a fair minded lay observer might entertain a reasonable apprehension that Muir JA might not bring an impartial, unprejudiced and independent mind to the resolution of the requestions required to be decided on the appeal.

I was requested by counsel for the respondents to recuse myself from the appeal on the grounds of apprehended bias. I declined to do so, indicating at the commencement of the hearing of the appeal that I would publish my reasons later. These are my reasons.

The substance of the arguments advanced by counsel for the respondents was:

(a) In determining the appeal it would be necessary for me to consider the meaning and effect of the reasons given by me in Appeal No. 3514/08 and a fair minded observer might perceive that I may have an interest in maintaining, contrary to the implicit finding of the primary judge, that I did not err in holding that the 3 April 2007 order gave rise to a res judicata;

(b) There is an implicit criticism of the Court of Appeal’s decision in the primary judge’s reasons: he has held that the Court of Appeal overlooked the issue of whether there was in law a “judgment” for the purpose of the doctrine of res judicata;

(c) This Court will have to construe the reasons of the Court in Appeal No. 3514/08. That would require me and the other members of the Court to construe those reasons objectively but no reasonable person could be satisfied that I could exclude “any subjective or other extraneous matter”;

(d) In my reasons in Appeal No. 3514/08 I stated my “position” in relation to the construction of the order of 3 April 2007 and in relation to whether the order of Chesterman J gave rise to a res judicata. Although the observations about res judicata may have been obiter, it would not be possible for me to objectively consider the issue afresh.

I will address the submissions in the order in which they were made. It was not contended before the Court of Appeal that the 3 April 2007 order did not give judgment on the counter-claim. The point is an entirely new one and there could be no reason for a fair minded observer to conclude that I would be unable to deal with it on its merits. The notional fair minded observer is a rational person not unacquainted with judicial obligation, training, practice, and obligations of dispassionate decision making.[45]
[45]Johnson v Johnson (2000) 201 CLR 488.

There was no implicit criticism by the primary judge as asserted. The primary judge, and any fair minded observer, would be well aware that courts should and do decide cases on the arguments advanced by the parties. In Appeal No. 3514/08 and previously, the 3 April 2007 order had been treated by both parties as giving judgment on the counter-claim.

The fact that a judge has expressed prior views on a question of law which arises for determination in a later case is not a disqualifying factor. Nor is it a basis for disqualification that a member of a court has decided an issue in a particular way and is likely to decide it in the same way when it arises again.[46]
[46]Fitzgerald v Director of Public Prosecutions (1991) 24 NSWLR 45 at 50; R v Masters (1992) 26 NSWLR 450 at 471; Kwan v Kang [2003] NSWCA 336. See also JRL; Ex parte CJL (1986) 161 CLR 342 at 352.

The following observations of Mason J in Re JRL; Ex parte CJL[47] are pertinent to the respondent’s submissions:
“It needs to be said loudly and clearly that the ground of disqualification is a reasonable apprehension that the judicial officer will not decide the case impartially or without prejudice, rather than that he will decide the case adversely to one party. There may be many situations in which previous decisions of a judicial officer on issues of fact and law may generate an expectation that he is likely to decide issues in a particular case adversely to one of the parties. But this does not mean either that he will approach the issues in that case otherwise than with an impartial and unprejudiced mind in the sense in which that expression is used in the authorities or that his previous decisions provide an acceptable basis for inferring that there is a reasonable apprehension that he will approach the issues in this way.”
[47](1986) 161 CLR 342 at 352.
As for the submissions based on the construction of reasons, judges are frequently obliged to construe orders and reasons: not infrequently, orders and reasons they have made or given themselves. The task, like the construction of documents, is one which is inherently unlikely to cause a fair minded observer, in the absence of some further facts which could give rise to concern, to apprehend that I may be unable to approach such a routine task objectively and decide it with due regard to the arguments presented.

Conclusion

I agree with the orders proposed by Fraser JA for the above reasons.

FRASER JA: The plaintiff in proceedings in the trial division (“Mango Boulevard”), the first defendant (“Spencer”) as trustee of the Spencer Family Trust and the second defendant (“Perovich”) were parties to a joint venture to be conducted through the third defendant company (“Kinsella Heights”). Mango Boulevard held fifty per cent of the shares in the third defendant. Perovich held twenty-five per cent. Spencer held the remaining twenty-five per cent in his capacity as trustee.

The litigation arose out of disputes about the operation of the “Shareholders Deed” to which Mango Boulevard, Spencer (as trustee), Perovich and Kinsella Heights were parties. Mango Boulevard claims declarations that Spencer and Perovich were in default under the Shareholders Deed with the consequence that Mango Boulevard is entitled to options to acquire Spencer’s and Perovich’s shares. Spencer and Perovich defended the claim and made a reciprocal counterclaim for Mango Boulevard’s shares. Following a litany of defaults by Spencer and Perovich in disclosing documents, on 3 April 2007 the Chief Justice made a self-executing order which struck out some paragraphs of their defence and provided that there should be judgment for Mango Boulevard on the counterclaim.

Subsequently the fourth defendant (“Mio Art”) replaced Spencer as trustee of the Spencer Family Trust and in that capacity succeeded to his shares. Mio Art then filed a defence to Mango Boulevard’s claim to Spencer’s shares and commenced a counterclaim for a declaration that Mio Art was entitled to Spencer’s shares and for related orders. Spencer, Perovich and Mio Art persisted in default of their disclosure obligations with the result that on 20 March 2008 Chesterman J ordered that Mio Art’s defence (apart from a paragraph which contained admissions) and counterclaim be struck out, with no leave to re-plead, and his Honour gave summary judgment for Mango Boulevard on Mio Art’s counterclaim.[48]
[48]Mango Boulevard Pty Ltd v Spencer & Ors [2008] QSC 117.

On 3 December 2009 McMurdo J dismissed Mango Boulevard’s application for summary judgment and varied that part of the 3 April 2007 self-executing order which provided for judgment against Spencer and Perovich.[49]
[49]Mango Boulevard P/L v Spencer & Ors [2009] QSC 389.

Mango Boulevard has now appealed against McMurdo J’s orders. The respondents to the appeal are Spencer, Perovich and Mio Art. The fifth and sixth defendants, the trustees in bankruptcy of the property of Spencer and Perovich respectively, apparently have no interest in contesting Mango Boulevard’s claim. They did not appear at the hearing in the trial division and undertook to abide the order of the court except as to costs. The respondents disclaimed any point about their absence as parties to this appeal.

The issues in the appeal may more readily be understood after I have referred in more detail to the dispute and the litigation.

The dispute and the litigation

McMurdo J outlined the dispute and the litigation in the following passages:
“[3] By cl 9.1 of the [Shareholders] Deed the shareholders agreed not to transfer any of their shares or any interest in them except according to that clause, which required that any shareholder wishing to transfer its shares to offer them first to the others. Clause 10 provided for the compulsory sale of the shares of a party which was in default under the Deed, as follows:
‘10.2 If a party is in default of its obligations under this Deed as described in sub-clause 10.1 (‘Defaulting Party’) then another party may give:
(a) a notice in writing setting out the default (‘Default Notice’) to the Defaulting Party; and
(b) a copy of the Default Notice to the Company’s accountants together with an instruction to determine within 30 days of the [sic] their receipt of a copy of the Default Notice, at the cost of the Defaulting Party:
(i)the value of the Shares held by the Defaulting Party at the end of the last preceding Financial Year under the principles set out in clause 11; and
(ii) the damages sustained by the other shareholders (‘Non-Defaulting Parties’) resulting from the default by the Defaulting Party (‘Damages’).
10.3 On serving a Default Notice on the Defaulting Party, the Non-Defaulting Party has, in addition and without prejudice to the Non-Defaulting Party’s other rights at law or in equity, an option (‘Option’) to acquire the Defaulting Party’s Shares at a price per Share determined by the Company’s accountants under paragraph 10.2(b)(i).
10.4 The Non-Defaulting Party (‘Acquiring Party’) may, within 60 days of receiving the determination of the Company’s accountants under paragraph 10.2(b)(i), by notice in writing to the Defaulting Party exercise the Option.
10.5 Completion of the sale of the Defaulting Party’s Shares must take place within 14 days of the date that notice under sub-clause 10.4 exercising the Option is given to the Defaulting Party at a time and place to be agreed by the Acquiring Party and the Defaulting Party or, failing agreement, at 10.00am on the next Business Day after the 14 day period at the Company’s registered office.’
Clause 10.1 provided that a shareholder would be in default under this Deed if:
‘(d)it commits an act of bankruptcy, becomes bankrupt or unable to pay its debts or suspends payment of its debts within the meaning of the Bankruptcy Act 1966;
(e) any change occurs in its shareholders or its directors; …’
[4]On 22 February 2006, Mango Boulevard gave a notice of default to Spencer and Perovich. In each case the alleged default was that the recipient was unable to pay his or her debts.
[5]On 28 March 2006, each of Spencer and Perovich gave a notice of default to Mango Boulevard. The alleged defaults were under cl 10.1(e). It was said that Mango Boulevard changed its directors on 11 August 2003 and again on 30 June 2004. That second change involved the appointment of a Mr Thomson.
[6]Mango Boulevard commenced these proceedings by a claim and statement of claim filed on 9 March 2006. It pleaded the various shareholdings in Kinsella Heights, the terms of the Shareholders Deed upon which it relied, the alleged defaults of Spencer and Perovich and the delivery of its notices of default to them together with copies to the accountants of Kinsella Heights under cl 10.2(b). Paragraph 12 of the statement of claim pleaded, and still pleads, as follows:
‘In the premises –
(a) Mango Boulevard is entitled to an option to acquire Mr Spencer’s shares in Kinsella Heights in accordance with clause 10 of the Shareholders Deed; and
(b) Mango Boulevard is entitled to an option to acquire Ms Perovich’s shares in Kinsella Heights in accordance with clause 10 of the Shareholders Deed.’
[7]The relief claimed was and remains declaratory relief as follows:
‘1. A declaration that as at 22 February 2006 the first defendant [Spencer] was in default under the Shareholders Deed.
2. A declaration that as at 22 February 2006 the second defendant [Perovich] was in default under the Shareholders Deed.
3. A declaration that the plaintiff is entitled to an option to acquire the first defendant’s Shares in accordance with clause 10 of the Shareholders Deed.
4. A declaration that the plaintiff is entitled to an option to acquire the second defendant’s Shares in accordance with clause 10 of the Shareholders Deed.’
[8]Spencer and Perovich filed a defence and counterclaim on 1 June 2006. Each denied that he or she was in default. That was the only substantive defence which was then pleaded. There was no plea within the defence that Mango Boulevard was disentitled to act under cl 10 because it was itself in default and was therefore not a ‘Non-Defaulting Party’.[50] Their counterclaim pleaded that neither was in default and that Mango Boulevard’s notices had not set out sufficiently the default upon which it was relying. They also alleged that Mango Boulevard was in default, as they had asserted in their own default notices. They pleaded that Mango Boulevard had purported to exercise its options to purchase by notices dated 19 May 2006. But again, in the counterclaim Spencer and Perovich did not plead that the defaults by Mango Boulevard disentitled it to act under cl 10. Rather they went only to an allegation that Spencer and Perovich were then entitled to elect to acquire Mango Boulevard’s shares.
[9]Their counterclaim also claimed that they had been wrongly denied permission by Mango Boulevard to mortgage their shares and that it was thereby in breach of a fiduciary duty owed under the Shareholders Deed. The relief for which they counterclaimed was for declarations declaring Mango Boulevard’s notices as having no effect, for injunctions to prevent the transfer of their shares and an unquantified claim for ‘damages for breach of fiduciary duty’.
[10]Mango Boulevard filed a reply and answer on 4 July 2006. It admitted receipt of the default notices given by Spencer and Perovich. Further, and importantly for present purposes, it admitted the alleged changes in its directors. [It admitted that Mr Thomson was appointed on 30 July 2004 rather than 30 June 2004 as they had alleged but nothing comes from the difference.] It denied that Spencer and Perovich were entitled to issue such notices or that the notices had effect. The pleaded reasons for that denial were as follows. Mango Boulevard alleged that by necessary implication the power under cl 10.2 was to be exercised ‘fairly and in good faith’. It alleged that Spencer and Perovich had not acted in good faith, because it was in the interests of the joint venture that these changes to Mango Boulevard’s directors occur and there had been an unreasonable delay between those changes and the defendants’ reliance upon them. It pleaded that Spencer and Perovich had impliedly consented to the changes of 11 August 2003. [Reply and answer paragraph 10(d).] There was not an allegation in the same terms in relation to Mr Thomson’s appointment. Mango Boulevard pleaded that his appointment was not a default because had he not been appointed, Mango Boulevard would have been in breach of its obligations to act in the interests of the joint venture. [Paragraph 17 of the annexure to the reply and answer].
[11]There then followed what previous judgments have described as a serious and prolonged non-compliance by Spencer and Perovich with their obligations to make disclosure of documents. In particular, they failed to disclose documents relevant to their alleged insolvency. This led to an application by Mango Boulevard which, as filed, sought orders to strike out the defence and counterclaim and for judgment on the counterclaim, or alternatively for a self-executing order that the same results should follow unless there was proper disclosure relating to their respective financial positions.”
[50]Mango Boulevard contends that there was a plea in the defence and counterclaim of the kind described in the words I have emphasised in this paragraph and in paragraph [21] of McMurdo J’s reasons.

The defaults by Spencer and Perovich up to this point were summarised by Chesterman J:[51]
“On 2 June 2006 the defendants were ordered to make disclosure by 14 July 2006. On 6 July the date was extended to 28 July 2006. They did not serve a list until 15 September 2006. The list was inadequate and details of the inadequacy were identified by Ms Smith in her affidavits of 9 October 2006, 21 November 2006, 13 February 2007, 19 February 2007, 21 March 2007, 2 April 2007, 30 April 2007, 30 May 2007, 14 June 2007 and 15 June 2007. On 12 occasions between 1 August 2006 and 5 February 2007 the plaintiff’s solicitors complained to the defendants’ solicitors about their inadequate disclosure. The inadequacy was the subject of three separate orders; 21 November 2006, 20 March 2007 and 3 April 2007.”
[51]Mango Boulevard Pty Ltd v Spencer & Ors [2008] QSC 117 at [52].
The orders of 2 June 2006 which required Mango Boulevard, Spencer and Perovich to make disclosure by 14 July 2006 also included an order that the matter be placed on the Commercial List and undertakings by the parties to preserve the status quo in relation to the disputed exercises of options. These provisions reflected the manifest desirability of expedition by all parties in this litigation, which involved a corporate deadlock and cross undertakings by the parties pending resolution of the litigation. Instead, the litigation immediately bogged down because of Spencer’s and Perovich’s defaults in making disclosure upon the issue of their insolvency.

Eventually, Byrne J made orders on 20 March 2007, requiring Spencer and Perovich to serve lists of all the documents in their possession or under their control which were directly relevant to the allegations that at specified dates they were unable to pay their debts. His Honour added a self-executing order under which, if Spencer and Perovich failed to serve a list of documents and to deliver to Mango Boulevard copies of documents “in purported compliance” with the orders for disclosure, then:
“. . . upon the solicitors for the plaintiff filing an affidavit deposing to the failure of the first and second defendants to do so, the following Orders shall apply:
(c) Paragraphs 8, 10 and 22 to 55 of the defence and counterclaim filed on 1 June 2006 shall be struck out; and
(d) There shall be judgment for the plaintiff against the first and second defendants on the counterclaim and an· order that the first and second defendants pay the plaintiff’s costs of and incidental to the counterclaim of the first and second defendants to be assessed on the standard basis.”
Spencer and Perovich purported to comply with the orders for disclosure made by Byrne J but in fact they remained in substantial default of their disclosure obligations.

I return to McMurdo J’s summary:
“[12]      Between the filing and the determination of that application [Mango Boulevard’s application to strike out the defence and counterclaim and for judgment on the counterclaim, or alternatively for a self-executing order that the same results unless there was proper disclosure relating to Spencer and Perovich’s respective financial positions], Spencer and Perovich amended their pleading. There was no material change to the Defence. The counterclaim, however, was much expanded. The alleged breaches of fiduciary duties by Mango Boulevard were said to have resulted in loss to Spencer, in his capacity as trustee of the Spencer Family Trust, of the order of $100 million. Further, Spencer and Perovich pleaded that they had exercised their options to purchase the shares of Mango Boulevard in consequence of its defaults and there was a claim for an order that a transfer of those shares to them be registered.
[13]On 3 April 2007, the Chief Justice ordered the provision of a further list of documents by each of Spencer and Perovich and made a self-executing order in these terms:
‘7.       Unless by 4:00pm on 27 April 2007:
(a)The first defendant has complied with the orders in paragraphs 1 and 2 above; and
(b) The second defendant has complied with the orders in paragraphs 4 and 5 above;
Then upon the solicitors for the plaintiff filing an affidavit deposing to the failure of the first and/or second defendants to do so:
(c) Paragraphs 8, 10 and 22 to 285 of the amended defence and counterclaim filed on 29 March 2007 shall be struck out; and
(d) There shall be judgment for the plaintiff against the first and second defendants on the counterclaim and an order that the first and second defendants pay the plaintiff’s costs of and incidental to the counterclaim of the first and second defendants to be assessed on the standard basis.’
[14]As appears from subsequent judgments, the defaults of Spencer and Perovich in making disclosure had related to the issue alleged of their insolvency. There was no complaint that they had failed to disclose documents (if any) which were directly relevant to the alleged defaults of Mango Boulevard, by its changing its directors.
[15]Spencer and Perovich failed to comply with those further orders for disclosure and on 30 April 2007 an affidavit deposing to such defaults was filed. However, no judgment was entered, or, as UCPR r 611[52] now provides, filed. There is a note on the file that a deputy registrar was of the view that ‘in particular order 7 [of the order of 30 April 2007[53]] on the face of it, does not require a judgment to be signed by the Registrar’. That view was incorrect. A final judgment had to be filed according to r 661(3).[54]
[52](sic) This was intended as a reference to r 661.
[53](sic) This was intended as a reference to 3 April 2007.
[54]Mango Boulevard contends that the Deputy Registrar was correct in thinking that the 3 April 2007 itself operated as a judgment and that no further judgment was necessary.
[16]On 8 May 2007 Spencer and Perovich filed an application to vary the order of 3 April 2007 to delete that paragraph of the order which I have set out above or alternatively, to amend it so that it would affect only their pleadings in relation to insolvency. Their application was dismissed by a judgment of Margaret Wilson J, [[2007] QSC 276]] against which there was no appeal. Her Honour found that the response of Spencer and Perovich ‘to the self-executing order had been casual and their attempts at compliance desultory’. [[2007] QSC 276 at [28]]. Her Honour’s view of the then state of the litigation was as follows:
‘[30]    In consequence of the first and second defendants’ non-compliance with the self-executing order, the issues on the plaintiff’s claim are very narrow – the construction of the Shareholders Deed and the exercise of the discretion in relation to declaratory relief. If the self-executing order were set aside, the issue of their solvency would again be a live one on the claim. It would also be relevant to the counterclaim, in that the plaintiff alleges that the first and second defendants were themselves in default and so not entitled to issue a default notice against it. The first and second defendants’ response to their disclosure obligations so far provides no basis for confidence that they would meet those obligations fully if the self-executing order were set aside or varied. The plaintiff would be prejudiced in the litigation by incomplete disclosure.’
[17]By that stage Spencer and Perovich had each been made bankrupt. Subsequently Spencer retired as trustee of the Spencer Family Trust and was succeeded by Mio Art Pty Ltd (‘Mio Art’).
[18]Further applications were argued over two days in March 2008 before Chesterman J. Mango Boulevard then applied for and obtained leave to proceed against Spencer and Perovich (which was necessitated by their bankruptcies) and for the joinder of their trustees in bankruptcy who became the fifth and sixth defendants. Mio Art applied to be substituted for Spencer. Chesterman J ordered that it be joined as a defendant but not substituted for Spencer.
[19]At this same hearing, Mio Art was then given leave to read and file what was said to be an amended defence and counterclaim, but which was, of course, its original pleading. Mango Boulevard then applied for an order that various paragraphs of that pleading be struck out and that it have judgment against Mio Art upon its counterclaim pursuant to UCPR r 293.
[20]The Mio Art pleading largely corresponded with what had been Spencer’s pleading which, for the most part, had been struck out by the order of 3 April 2007. However, Mio Art also pleaded in its Defence as follows:
‘9.       In relation to the directors of Mango Boulevard:
(a)On or about 30 July 2004 Russell John Thomson (‘Thomson’) was appointed a director of Mango Boulevard (‘the Appointment’).
(b) At no time from the date of the Appointment until 10 April 2006 were any formally constituted Board Meetings of KHD held.
(c)       Perovich and RW Spencer:
(i)first learned of the Appointment on 24 March 2006;
(ii) issued a Notice of Default under clause 10 of the SHD on 28 March 2006; and
(d) In the premises pleaded in paragraphs (a) to (c) herein, from the date of the Appointment, Mango Boulevard was and remained in default under paragraph 10.1(e) of the SHD.
…
22.        …
(b) on the proper construction of the SHD, clause 10 did not entitle Mango Boulevard to deliver notices of default to Perovich and RW Spencer, because it was itself in default within the meaning of clause 10 of the SHD as particularised in paragraph (9) above.’
[21]Mio Art’s counterclaim repeated the allegations in its Defence, and sought, amongst other relief, an injunction to restrain Mango Boulevard for ‘acting in reliance’ upon its notice of default. Spencer and Perovich had pleaded a breach of the Shareholders Deed by a change in the directors of Mango Boulevard by the appointment of Thomson. But they had done so in their counterclaim, to the end of making a claim for the shares of Mango Boulevard. They had not pleaded this defence raised by Mio Art, which was that upon the proper construction of the Shareholders Deed, a party which was itself in default could not be the ‘Non-Defaulting Party’ thereby entitled to an option to purchase under cl 10.[55] It is that case, which I will call the Thomson case, which counsel for Spencer, Perovich and Mio Art now argue is a complete defence to this claim.
[55]Mango Boulevard contends that Spencer and Perovich had pleaded this in their counterclaim: see footnote 4.
[22] Chesterman J ordered that Mio Art’s defence and counterclaim (save for its first paragraph which contained admissions) be struck out and that there would be no leave to re-plead. At the same time, he gave judgment for Mango Boulevard upon Mio Art’s counterclaim pursuant to r 293. He held that certain parts of Mio Art’s pleading were on their face embarrassing and raised no arguable case. Those parts did not include the Thomson case. He further held that it was an abuse of process for Mio Art, as the successor of Spencer, to effectively re-plead what had been struck out of Spencer’s pleading. Thirdly, his Honour discussed and ultimately accepted the argument for Mango Boulevard that Mio Art was precluded from advancing anything which had been struck out by the order of 3 April 2007 because, in consequence of that order and the non-compliance with it, any such case was res judicata. But he remarked that he had reached that conclusion with some hesitation and that he preferred not to base his judgment upon it. In relation to the Thomson case, he concluded as follows:
‘[77] The appropriate relief in the circumstances is to order that the defence and counterclaim … be struck out. There should be no leave to re-plead because the proceedings are an abuse of process. There is no point in exempting the defence from Thomson’s [appointment] from the order. It is res judicata.’ [Mango Boulevard Pty Ltd v Spencer & Ors [2008] QSC 117.]
[23]An appeal against that judgment was dismissed. [Mango Boulevard P/L v Spencer & Ors [2008] QCA 274.] Mio Art argued that at least the Thomson case should have been left open and that Chesterman J had refused leave to re-plead that case upon the reasoning that it was res judicata. It further argued that there was no res judicata. Each argument was rejected. The Court of Appeal held that Chesterman J had considered that the entirety of that which had been struck out was an abuse of process, including the Thomson case, and that there was no error in that finding. This made it unnecessary for the court to consider whether there was a res judicata from the order of 3 April 2007.[56] However, that question was considered, and the view of Chesterman J in this respect was also upheld.
[24]Perovich was not a party to that appeal. But there is no suggested basis for distinguishing her case, or that of her trustees in bankruptcy, from that of Mio Art.
[25]They are the circumstances in which these present applications are made. Mango Boulevard seeks summary judgment, pointing to the fact that there is effectively no pleading by any defendant which raises a defence. And the insolvency of each of Spencer and Perovich as at 22 February 2006 is now conceded. But the argument on behalf of Spencer, Perovich and Mio Art is that Mango Boulevard cannot succeed because of the Thomson case, notwithstanding the conclusions of the Court of Appeal.
[26]Their principal argument is that the Thomson case involves questions which must be pleaded and proved by Mango Boulevard. It is said that Mango Boulevard is entitled to acquire these shares only if it was not in default when it gave its notice, and that it must allege in its statement of claim either that it was not in default or that, for some reason, its default does not disentitle it to the defendants’ shares. Because it has not pleaded or proved such a case, it should not be given judgment and, indeed, the defendants should be given judgment upon the plaintiff’s claim.
[27]Alternatively, it is argued that the grant of declaratory relief is discretionary, and the court should decline to grant this relief to a party which is itself in default.”
[56]Mango Boulevard took issue with these conclusions.

The issues in the appeal

The application for summary judgment by the respondents to this appeal (Spencer, Perovich and Mio Art) was premised upon their argument that Mango Boulevard had failed to plead a viable case because it failed to plead that it was not in default when it gave the default notices to Spencer and Perovich. McMurdo J rejected that argument and dismissed the respondents’ application for summary judgment. There is no appeal against that order, although the respondents advance the same argument under a notice of contention in support of the orders made by McMurdo J.

McMurdo J refused Mango Boulevard’s application for summary judgment on its claim for declarations that as at 22 February 2006 Spencer and Perovich were in default under the Shareholders Deed and that Mango Boulevard is entitled to options to acquire their shares. Mango Boulevard has appealed against that refusal with a view to this Court now making those declarations.

McMurdo J made the more limited declaration that as at 22 February 2006, each of Spencer and Perovich was, in terms of clause 10.1(d) of the Shareholders Deed dated 4 July 2003, unable to pay his or her debts. The respondents had admitted as much in the hearing before McMurdo J. They have not appealed against that declaration. They do not complain about being shut out in that way from litigating the insolvency issue.

McMurdo J ordered that paragraph 7 of the 3 April 2007 self-executing order be varied by deleting subparagraph (d) and the word “and” at the end of subparagraph (c). Mango Boulevard has appealed against that order.

The intended effect of McMurdo J’s orders was as follows:
(a)        The respondents should be precluded from denying at trial that Spencer and Perovich were unable to pay their debts when on 22 February 2006 Mango Boulevard gave them the default notices relying upon their inability to pay their debts as an alleged default under clause 10.2 of the Shareholders Deed.[57]
(b)        Although the present defences by Spencer and Perovich and Mio Art’s separate defence relevantly contain only express or deemed admissions of Mango Boulevard’s allegations, they should be permitted to defend Mango Boulevard’s claim to the Spencer and Perovich shares on the basis of the “Thomson case” (described in paragraphs 20 and 21 of McMurdo J’s reasons) and on the basis of any other allegation that Mango Boulevard was itself in default, provided that none of those respondents should be allowed to raise any issue about the insolvency of Spencer and Perovich.[58]
(c)        Mango Boulevard should be prevented from filing a judgment against Spencer and Perovich on the counterclaim in terms of paragraph 7(d) of the 3 April 2007 order to avoid what McMurdo J considered was “the potential injustice that Mango Boulevard could obtain relief to which it may not be entitled on the merits and where the determination of those merits would not involve, in the circumstances now existing, any fairness or abuse of process.”[59]
[57]Mango Boulevard P/L v Spencer & Ors [2009] QSC 389 at [63].
[58]Mango Boulevard P/L v Spencer & Ors [2009] QSC 389 at [62], [63], [65].
[59]Mango Boulevard P/L v Spencer & Ors [2009] QSC 389 at [67].
Mango Boulevard is aggrieved by the results in (b) and (c). It argued that McMurdo J’s orders were inconsistent with res judicata or issue estoppels under the 3 April 2007 order and under the judgment on Mio Art’s counterclaim given by Chesterman J and that McMurdo J’s orders expose Mango Boulevard to an abuse of process by the respondents.

The respondents argued that McMurdo J’s orders were appropriate. They emphasised that no earlier orders had struck out the defence filed by Spencer and Perovich or the defence filed by Mio Art and that McMurdo J’s orders merely prevented Mango Boulevard from exploiting the earlier orders in an unintended way. The respondents no longer seek to pursue a counterclaim. They argued that no earlier order gave rise to an issue estoppel which prevented them merely from defending Mango Boulevard’s claim in reliance upon the Thomson case or otherwise, and that it is inappropriate for this Court to interfere with what they characterised as an exercise of discretion by McMurdo J. Under the respondents’ notice of contention they argued that even in the absence of any pleaded defence it was inappropriate to give summary judgment because Mango Boulevard failed to plead and it could not prove that Mango Boulevard was not in default when it gave the default notices to Spencer and Perovich.

Res judicata and issue estoppel – Order of the Chief Justice of 3 April 2007

What is really in issue under this heading is issue estoppel rather than res judicata, since the respondents do not seek to revive their previous counterclaims or to make any claim. They seek only to defend Mango Boulevard’s claim by raising an issue which Mango Boulevard contends was determined against them by a judgment on the counterclaim under the Chief Justice’s 3 April 2007 order or under Chesterman J’s 20 March 2008 order.

The distinction was explained by Deane, Toohey and Gaudron JJ in Chamberlain v Deputy Commissioner of Taxation:[60]

“Although the defence in the second action uses the language of estoppel, it is apparent that what the appellant relies upon is res judicata. The matter was so argued. The point was made by Gibbs CJ, Mason and Aickin JJ in Port of Melbourne Authority v Anshun Pty Ltd in this way:
“The distinction between res judicata (in England called ‘cause of action estoppel’) and issue estoppel was expressed by Dixon J in Blair v Curran in these terms: ‘in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.’

Abuse of process and re-agitation of prior issues

McMurdo J considered that there had been a change in circumstances. His Honour considered that because the insolvency of each of Spencer and Perovich was now conceded and neither made a claim for Mango Boulevard’s shares there was no identifiable prejudice to Mango Boulevard from the respondents being allowed to argue the Thomson case. There was no suggestion that any document relevant to that case as a defence to Mango Boulevard’s claim had been withheld. It was not suggested that the passage of three or four years since the relevant events would make the fair determination of that case problematical.

Mango Boulevard argued that McMurdo J was in error in failing to conclude that the act of the respondents in now defending Mango Boulevard’s claim on a basis which had previously been pleaded and struck out, with orders for judgment and without leave to re-plead, would itself be an abuse of process. Specifically, it would be an abuse of process for the respondents to defend Mango Boulevard’s claim on the basis of the Thomson case pleaded in the amended counterclaim of Spencer and Perovich filed on 29 March 2007 or on a basis that could have been pleaded in that counterclaim. It would also be an abuse of process for Mio Art to defend the claim on the basis pleaded in its defence and counterclaim filed on 3 March 2008 or on a basis that could have been alleged in that pleading. Mango Boulevard argued that the general policies which underlined the rules concerning res judicata, issue estoppel and the court’s powers to deal with abuse of process remained applicable: a defendant should not be troubled twice for the same reason that there is “a general public interest in the same issue not being litigated over again”;[137] and the courts’ powers to deal with abuse of process extend to preventing the waste of judicial resources and include the necessity of maintaining confidence in, and respect for, the authority of the courts.[138] The respondents might earlier have abandoned those pleadings which raised the insolvency issue and confined their cases to defences which raised the Thomson case alone. Their failure to do so might have been deliberate. At a hearing in December 2007 before Chesterman J, Mio Art’s then senior counsel foreshadowed that it might confine its proposed pleading to exclude those parts of Spencer’s and Perovich’s case which gave rise to the complaint of failure to make disclosure of documents on the issue of insolvency and which formed the basis of the 3 April 2007 order. Mango Boulevard argued that this constituted an election not to confine the claim in the way in which it was ultimately confined in argument before McMurdo J at the hearing in October 2009.
[137]Arthur J S Hall & Co v Simons [2000] 3 WLR 543 per Hoffman LJ at 572.
[138]See Sea Culture InternationalPty Ltd v Scoles (1991) 32 FCR 275 per French J at 279.

Mango Boulevard argued that in the context of a proceeding which ought to have been determined very quickly the respondents ought not to be permitted belatedly to confine the case in that way. Reference was made to the factors which tell against re-litigation of an application which has been fully argued and judicially determined in an interlocutory hearing, including the risk of conflicting decisions, unnecessary vexing of respondents, judge-shopping, the diminution of certainty in the conduct by the parties of their affairs, the potential to erode public confidence in the integrity of judicial decisions, and the unnecessary expenditure of time and money which re-litigation involves.[139] Mango Boulevard acknowledged that a further order might be appropriate when new facts come into existence, or are discovered which render the enforcement of the order unjust, but those changed circumstances must be established by evidence.[140] There was no such evidence here. Mango Boulevard’s argument stressed the delay in the progress of the litigation resulting from Spencer’s and Perovich’s defaults, the findings in the earlier proceedings that Spencer and Perovich had been made bankrupt in August 2007 on petitions by one of the creditors whose debt Mango Boulevard had alleged they were unable to pay but which debt Spencer and Perovich had denied, and that Mango Boulevard had been put to costs and delay by the respondents’ failure to comply with rules and orders by conduct which had been found to be an abuse of process.
[139]See Clairs Keeley (a firm) v Treacy & Ors [2004] WASCA 277; (2003) 28 WAR 139 per Steytler, Templeman and McKechnie JJ referring to Todd v Novotny [2000] WASC 308 per Parker J.
[140]Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 per Gibbs CJ, Aickin, Wilson and Brennan JJ at 178.

Mango Boulevard referred to the decision of the Western Australian Court of Appeal in Brocx v Hughes,[141] in which Newnes JA expressed the relevant principles in the following passages:[142]
[141][2010] WASCA 57.
[142]Brocx v Hughes [2010] WASCA 57 at [79], [92]-[98].
“What constitutes an abuse of process cannot be reduced to hard and fast rules or closed categories because notions of justice and injustice, as well as other considerations that bear on public confidence in the administration of justice, must reflect contemporary values and, as well, take account of the circumstances of the case: Ridgeway v The Queen[1995] HCA 66; (1995) 184 CLR 19, 74–75; Batistatos [9]. However, the failure to take, as well as the taking of, procedural steps and other delay in the conduct of proceedings is capable of constituting an abuse of the process: Batistatos v Roads & Traffic Authority of New South Wales[2006] HCA 27 [15]; (2006) 226 CLR 256.
…
In Australia, the question of whether a second action constituted an abuse of process came before the Federal Court in Deangrove Pty Ltd (Receivers and Managers Appointed) v Commonwealth Bank of Australia[2001] FCA 173; (2001) 108 FCR 77. In that case, an earlier proceeding had been dismissed following the applicants’ failure to comply with a self-executing order which required the applicants to file a statement of claim by a specified date. The applicants subsequently commenced a fresh proceeding on the same grounds and the respondent applied to have it dismissed as an abuse of process. Sackville J considered Janov and Re Jokai but concluded that it was unnecessary to decide whether the principles described in those cases applied in the Federal Court. The applicants had provided an explanation of their conduct in the earlier proceeding which indicated that the failure to comply with the self-executing order was not the product of contumacious behaviour, but rather was based on counsel’s advice that the proceedings were not properly constituted and should not be pursued. The failure to comply with the order did not reflect wilful disobedience or disregard of the order such that the applicants might be expected to flout directions given by the court in the fresh proceedings.
It is evident, however, that in Australia, as in England, there has in more recent times been a change in the approach of the courts to the conduct of litigation and there is now a much greater focus on the effect that the way in which parties conduct litigation has on the court and other litigants. In that connection, the principles referred to in the older cases now fall to be considered in the light of the decision of the High Court in Aon Risk Services Australia Ltd v Australian National University[2009] HCA 27; (2009) 239 CLR 175. In that case, the court pointed out that the rules concerning civil litigation no longer are to be considered as directed only to the resolution of the dispute between the parties to a proceeding. The achievement of a just but timely and cost-effective resolution of a dispute has an effect upon the court and upon other litigants. Whilst parties have the right to invoke the jurisdiction and the powers of the court in order to seek a resolution of their dispute, where a party has had a sufficient opportunity to plead his or her case, it may be necessary for the court to make a decision which may produce a sense of injustice in that party, for the sake of doing justice to the opponent and to other litigants.
Whilst those observations were, of course, made in respect of a late application to amend a pleading, in my view they are of general application. They were made in the context of rules of court which find their counterpart in this court in O 1 r 4B. That rule provides, in effect, that the rules and the processes and procedures of the court are to be applied so as best to attain the just determination of litigation, the efficient use of the resources of the court, and the timely disposal of the business of the court at a cost affordable by parties.
It is axiomatic that peremptory orders are made to be obeyed and they are generally made only where the party in default has already failed to comply with an order of the court, or has failed to pursue the action in accordance with the rules of court and has been responsible for serious delay. As Auld LJ noted in Hytec Information Systems Ltd v Coventry City Council [1997] 1 WLR 1666, at 1676, an order of this kind is by its nature intended to mark the end of the line for such a party who fails to comply with it. A springing order is a clear message that the willingness of the court to overlook further non-compliance with its procedures has come to an end. Such orders will often be made before the limitation period has expired and where it is therefore possible for the defaulting party to commence a fresh action of the same nature. It is also notorious that a party who persistently fails to comply with the rules or orders of the court inevitably takes up a disproportionate amount of court time and resources, and unnecessarily increases the costs of the litigation.
The resources of the court are limited and the demands upon them are great. In light of the objects set out in O 1 r 4B, the public interest in the efficient use of those resources and the right of other litigants to have their disputes resolved in an efficient and timely way are properly matters to be taken into account in determining whether proceedings instituted in circumstances such as the present are an abuse of the process of the court. Parties have the right to invoke the jurisdiction and the powers of the court in order to seek a resolution of their dispute and must be afforded a sufficient opportunity to resolve their dispute by that process. But that opportunity is not unlimited.
Where a party demonstrates a disregard for the orders or procedures of the court and as a result their claim is dismissed, their right again to invoke the jurisdiction in respect of that same claim cannot be unlimited if the public interest in the efficient use of court resources and the rights of other litigants are to be given due recognition. It cannot be the case that so long as the limitation period has not expired a party can ignore the rules and orders of the court, secure in the knowledge that if the worst happens and the action is struck out they can simply start again. It would bring the administration of justice into disrepute, and be “productive of serious and unjustified trouble and harassment” to the defendant, if a party whose action had been dismissed by reason of their contumacious conduct could simply institute and proceed with a fresh action and, until the limitation period ran out, could continue to repeat that if and when the same fate befell them. To the extent that statements in the older cases, including Birkett v James and Tolley v Morris, may be understood to suggest that such a party is entitled as of right to prosecute a fresh action, I would not follow them. The High Court pointed out in Batistatos:
The “right” of the plaintiff with a common law claim to institute an action is not at large. It is subject to the operation of the whole of the applicable procedural and substantive law administered by the court, whose processes are enlivened in the particular circumstances. This includes the principles respecting abuse of process [65].
Each case must, of course, depend upon its own circumstances. But, in my view, where an action has been dismissed by reason of the failure of a party to comply with a springing order in circumstances where that party’s conduct was contumacious, a second action by that party to enforce the same claim will generally be an abuse of process. I do not, however, consider that the fact an action was dismissed for failure to comply with a springing order establishes, of itself, that the conduct of the party in default was contumacious. I do not understand the cases to which I have referred to suggest otherwise. In each case, the court found that the conduct was contumacious in the absence of an explanation which showed that it was not. (I think that for all practical purposes “contumelious” and “contumacious” have generally been used interchangeably in the cases as denoting a wilful and obstinate resistance or disobedience to authority.) As Heydon JA (as his Honour then was) pointed out in Micallef v ICI Australia Operations Pty Ltd[2001] NSWCA 274:
‘A satisfactory explanation on affidavit might negate an inference that the plaintiff’s defaults were not [sic] intentional or contumelious. But the absence of any explanation permits that inference to be drawn [54].’”
I agree with Muir JA’s analysis of the relevant authorities on this question. I would reject Mango Boulevard’s argument for the following reasons.

Mango Boulevard’s argument was persuasive, particularly in light of the extent of the respondents’ earlier defaults, their quite inappropriate use of the court’s resources to the detriment of Mango Boulevard and potentially other litigants, the earlier default judgments, the respondents’ earlier choice not to abandon those aspects of their pleadings in respect of which they had failed to make proper disclosure, and their delay in deciding to confine their arguments in that way. However I have ultimately concluded that Mango Boulevard has failed to demonstrate any error in McMurdo J’s decision.

There are four matters which strike me as important considerations in opposition to what is otherwise a powerful case of abuse of process.

First, there could be a fair trial between the parties and one which would not unduly impose upon other litigants’ access to justice in light of the respondents’ belated concession as to the insolvency of Spencer and Perovich and the abandonment of a claim for Mango Boulevard’s shares. That was a very important factor in favour of allowing the respondents to defend. It is true that Mio Art’s pleading had admitted the insolvency of Spencer and Perovich and that it did not make a claim against Mango Boulevard for its shares, but Mio Art’s pleading had raised issues about the extent of Spencer’s debts and it had alleged that Mango Boulevard has acted wrongly in failing to allow him to mortgage his trust’s shares to remedy his personal insolvency. On that pleading, the extent of the insolvency remained in issue. That was no longer the case before McMurdo J. His Honour was entitled to treat that as a significant change in circumstances. The cause of the earlier vexation had gone and there was every indication that a fair and efficient trial could be had without further undue delay.

Secondly, there had been no termination of the litigation. Mango Boulevard had not obtained judgment on its claim. Mango Boulevard still faced a hearing at which it was required to persuade the court to exercise the discretion to make the declarations Mango Boulevard seeks. Chesterman J struck out Mio Art’s defence and declined to give leave to amend but that was an interlocutory order which might be varied, at least if there were a change of circumstances. Spencer and Perovich had filed defences and only parts of those defences had been struck out. There was no order which precluded any of the respondents from applying to amend their defences. None of the previous orders had struck out the entirety of any defence and Mango Boulevard was not motivated to apply for summary judgment until the respondents themselves applied for summary judgment.

Thirdly, there is the related point that the Thomson case raises a narrow defence and one which turns in part upon the construction of the very contract upon which Mango Boulevard relies to claim the declarations it seeks. Allowing the defence to be run does require Mango Boulevard to go to trouble and expense to seek to establish its case and the matters of reply it has pleaded, but the issues are relatively narrow ones. The respondents have flagged other possible defences but the Court can be confident that the future management of the proceedings will not allow the respondents to raise defences which enliven the spectre of delay of a kind which they caused by their past defaults.

Finally, though the court has the power to preclude a defendant from raising a defence which is not plainly untenable that is a very strong step to take. The shares might be valuable property. The potential injustice to the respondents in depriving them of a potential defence must be weighed in the scales against the effect of the respondents’ earlier disregard of their obligations upon their opponent and the efficient running of the court.

I am not persuaded that McMurdo J did not have proper regard to the interests of Mango Boulevard, the court and the community in the prompt determination of the litigation. McMurdo J was appraised of the detailed history of the litigation, acknowledged that the respondents’ earlier procedural defaults and the content of some of their pleadings warranted the strong criticism appearing in earlier judgments, and noted that the orders that had been made were necessary to ensure that this dispute be determined fairly and with the expedition which litigants should be entitled to expect; but his Honour attributed greater weight to the countervailing consideration that the previous misconduct would not affect the fair determination of the Thomson case when it was pleaded only as a defence to Mango Boulevard’s claim, there were no other circumstances which would do so, and the respondents should not be precluded from doing so as a penalty for their previous misconduct.[143] As the commercial list judge managing the litigation, his Honour was particularly well placed to form that view. It involved a value judgment to which this Court must afford respect in the course of deciding whether there was any error which requires appellate correction.[144]
[143]Mango Boulevard P/L v Spencer & Ors [2009] QSC 389 at [53].
[144]See Warren v Coombes (1979) 142 CLR 531 at 551 and Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424, per Allsop J, at [24].

The competing considerations are quite evenly balanced, but I have ultimately concluded that McMurdo J was right to reject Mango Boulevard’s contention that it would be an abuse of process to allow the respondents to rely upon the Thomson case as a defence to Mango Boulevard’s claim.

Variation of the 3 April 2007 order

McMurdo J considered that the 3 April 2007 order involved the potential injustice that Mango Boulevard could obtain relief to which it might not be entitled on the merits where the determination of those merits would not involve any unfairness or abuse of process, where the only benefit to Mango Boulevard from entering judgment on the counterclaim would be that it might result in an issue estoppel, and where that would be an unfair windfall for Mango Boulevard.[145]
[145]Mango Boulevard P/L v Spencer & Ors [2009] QSC 389 at [67].

My conclusions that the 3 April 2007 order operated as a judgment for Mango Boulevard on the counterclaim, and that rule 374(8) of the UCPR precluded an order setting aside that judgment otherwise than on appeal, suggest that McMurdo J was not empowered to make an order which would set aside that judgment. Furthermore, it follows from my view that the judgment did not preclude the respondents from agitating the Thomson case as a defence to Mango Boulevard’s claim that no variation to the self-executing order was necessary. I would therefore allow Mango Boulevard’s appeal against this order and set it aside.

The notice of contention

In the result I favour it is unnecessary to rule upon the respondents’ argument that McMurdo J should have found that Mango Boulevard’s status as a non-defaulting party was an essential element of its claim which it was obliged to plead and prove. However I record my agreement with McMurdo J’s decision that the Thomson case was not something which Mango Boulevard had to confront in its own statement of claim.

Proposed orders

I would allow the appeal and set aside the order made by McMurdo J that the order made by the Chief Justice on 3 April 2007 be varied by deleting subparagraph (d) and the word “and” at the end of subparagraph (c) from paragraph 7 of that order, but I would otherwise dismiss the appeal. I would order the appellant to pay the respondents’ costs of the appeal to be assessed on the standard basis.

WHITE JA: I have read the reasons for judgment of Fraser JA and the further reasons of Muir JA. Fraser JA has set out in detail the background and previous decisions which underpin this appeal and there would be no useful purpose to do so again. I agree with his Honour’s analysis and the orders which he proposes. Muir JA’s reasons are very much in agreement with those of Fraser JA save in two matters of emphasis rather than difference. Accordingly, my reasons can be brief.

I agree with what Fraser JA has written about the order of the Chief Justice of 3 April 2007 and in particular that it operated as a judgment without a further judgment being filed after the affidavit attesting to the default had been filed. I also agree with the further elaboration of this question by Muir JA.

The self-executing order is a particularly useful weapon to be deployed when a litigant demonstrates a repeated failure to abide by his or her implied undertaking to proceed expeditiously[146] in the conduct of the litigation and to abide by the rules and orders of the court. Because the consequences are severe there may be disagreement, real or contrived, about the circumstances which bring a self-executing order into being. Not only should care be exercised in drawing such orders generally but the conditions which must be satisfied to prevent the order from becoming operative ought not be ambiguous nor unduly complex. But none of those sorts of concerns were raised here.
[146]UCPR r 5(3) and (4).

I agree with the analysis of Fraser JA on the other issues which arose for decision on this appeal and the additional analysis by Muir JA whether to permit the respondents to raise the Thomson point by way of defence constitutes an abuse of process.

I agree with the orders proposed by Fraser JA.

CITATION:	Mango Boulevard P/L v Spencer & Ors [2010] QCA 207
PARTIES:	MANGO BOULEVARD PTY LTD ACN 101 544 601 (plaintiff/appellant) v RICHARD WILLIAM SPENCER (first defendant/first respondent) SILVANA PEROVICH (second defendant/second respondent) MIO ART PTY LTD ACN 121 010 875 (fourth defendant/third respondent) KINSELLA HEIGHTS DEVELOPMENT PTY LTD ACN 100 373 368 (third defendant/not party to the appeal) PAUL DESMOND SWEENEY AND TERRY GRANT VAN DER VELDE as trustees of the property of RICHARD WILLIAM SPENCER (fifth defendants/not party to the appeal) PAUL DESMOND SWEENEY AND TERRY GRANT VAN DER VELDE as trustees of the property of SILVANA PEROVICH (sixth defendants/not party to the appeal)
FILE NO/S:	Appeal No 14571 of 2009 SC No 1999 of 2006
DIVISION:	Court of Appeal
PROCEEDING:	General Civil Appeal
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	6 August 2010
DELIVERED AT:	Brisbane
HEARING DATE:	9 June 2010
JUDGES:	Muir and Fraser and White JJA Separate reasons for judgment of each member of the Court, each concurring as to the orders made
ORDERS:	1. Appeal allowed; 2. Set aside the order made by McMurdo J that the order made by the Chief Justice on 3 April 2007 be varied by deleting subparagraph (d) and the word “and” at the end of subparagraph (c) from paragraph 7 of that order; 3. Otherwise dismiss the appeal; 4. Appellant to pay the respondents’ costs of the appeal to be assessed on the standard basis.
CATCHWORDS:	ESTOPPEL – FORMER ADJUDICATION AND MATTERS OF RECORD OR QUASI OF RECORD – FORMER ADJUDICATION – JUDGMENT INTER PARTES – RES JUDICATA DISTINGUISHED FROM ISSUE ESTOPPEL – where the plaintiff, first defendant (as trustee) and second defendant were parties to a joint venture conducted through the third defendant company – where the plaintiff held half the shares and the first and second defendants held twenty-five percent respectively – where the plaintiff claimed declarations that the first and second defendants were in default under the Shareholders Deed entitling it to an option to acquire their shares – where the first and second defendants defended the claim and made a counterclaim for the plaintiff’s shares – where the first and second defendants defaulted in disclosure and a self-executing order was made – where the fourth defendant replaced the first defendant as trustee and filed a defence and counterclaim – where the first, second and fourth defendants defaulted in disclosure and further orders struck out the fourth defendant’s defence and counterclaim and gave summary judgment to the plaintiff – where the primary judge dismissed the plaintiff’s application for summary judgment and varied part of the self-executing order – where the plaintiff appealed against the orders of the primary judge arguing that the orders were inconsistent with res judicata or issue estoppel under the self-executing order – whether the primary judge’s orders gave rise to res judicata or issue estoppel under the self-executing order – whether the primary judge’s orders gave rise to res judicata or issue estoppel under the further orders ESTOPPEL – FORMER ADJUDICATION AND MATTERS OF RECORD OR QUASI OF RECORD – FORMER ADJUDICATION – JUDGMENT INTER PARTES – ISSUE ESTOPPEL – RESPECTING WHAT MATTERS DECISION CONCLUSIVE – MATTERS NECESSARY TO THE DECISION – whether the self-executing order operated as a judgment – whether the self-executing order gave rise to an issue estoppel which precluded the fourth defendant from relying on a defence to the plaintiff’s claim – whether the primary judge erred in concluding that the fourth defendant’s counterclaim did not plead a defence ESTOPPEL – FORMER ADJUDICATION AND MATTERS OF RECORD OR QUASI OF RECORD – FORMER ADJUDICATION – JUDGMENT INTER PARTES – RES JUDICATA DISTINGUISHED FROM ISSUE ESTOPPEL – whether the further orders gave rise to an issue estoppel against the fourth defendant, precluding its defence relating to the plaintiff’s default PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER THE RULES OF COURT – PLEADING – DEFENCE AND COUNTERCLAIM – whether the primary judge erred in determining that the further order was concluded on the ground that the fourth defendant’s proceeding was an abuse of process as opposed to a res judicata arising from the self-executing order PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER THE RULES OF COURT – PLEADING – DEFENCE AND COUNTERCLAIM – whether the primary judge erred in rejecting the plaintiff’s contention that it would be an abuse of process to allow the first, second and fourth defendants to rely on their defence relating to the plaintiff’s default PROCEDURE – COURTS AND JUDGES GENERALLY – JUDGES – DISQUALIFICATION FOR INTEREST OR BIAS – IN GENERAL – ORDINARY RULE – whether a fair minded observer would have a reasonable apprehension that Muir JA would not decide the case impartially or without prejudice Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170; [1981] HCA 39, cited Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27, cited Armour v Bate [1891] 2 QB 233, cited Arthur J S Hall & Co v Simons [2000] 3 WLR 543; [2000] UKHL 38, cited Australian Energy Limited v Lennard Oil NL (No 2) [1988] 2 Qd R 230, cited Autodesk Inc v Dyason [No 2] (1993) 176 CLR 300; [1993] HCA 6, cited Bailey v Marinoff (1971) 125 CLR 529; [1971] HCA 49, cited Baines v State Bank of NSW (1985) 2 NSWLR 729, cited Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256; [2006] HCA 27, cited Birkett v James [1978] AC 297, cited Blair v Curran (1939) 62 CLR 464; [1939] HCA 23, cited Bomanite Pty Ltd v Slatex Corporation Aust Pty Ltd [1991] FCA 536; (1991) 32 FCR 379, cited Branir Pty Ltd v Owston Nominees [No 2] Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833, cited Brocx v Hughes [2010] WASCA 57, cited Burrell v The Queen (2008) 238 CLR 218; [2008] HCA 34, cited Carl Zeiss Stiftung v Rayner & Keeler Ltd [No 2] [1967] 1 AC 853, cited Chamberlain v Deputy Commissioner of Taxation (Cth) (1988) 164 CLR 502; [1988] HCA 21, cited Chanel Ltd v F W Woolworth& Co Ltd [1981] 1 WLR 485; [1981] 1 All ER 745, cited Clairs Keeley (a firm) v Treacy (2003) 28 WAR 479; [2003] WASCA 277, cited Clout & Ors v Klein & Ors [2001] QSC 401, cited Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33, cited Cropper v Smith (1884) 26 Ch D 700, cited D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1; [2005] HCA 12, cited FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268; [1988] HCA 13, cited Fitzgerald v Director of Public Prosecutions (1991) 24 NSWLR 45, cited Fox v Star Newspaper Co Ltd [1900] AC 19, cited Freeman v Rabinov [1981] VR 539, cited Frikton v Plastiras [2010] QSC 5, cited Goodwin v Southern Tablelands Finance Co Pty Ltd (1968) 42 ALJR 309, cited Hart v Hall & Pickles [1969] 1 QB 405, cited Hume v Munro (No 2)(1942) 42 SR NSW 218, cited Jackson v Goldsmith (1950) 81 CLR 446; [1950] HCA 22, cited Jeffery & Katauskas Pty Limited v SST Consulting Pty Ltd (2009) 239 CLR 75; [2009] HCA 43, cited Johnson v Johnson (2000) 201 CLR 488; [2000] HCA 48, cited Jorgensen v Slater and Gordon Pty Ltd [2008] VSCA 110, cited KGK Constructions Pty Ltd v East Coast Earthmoving Pty Ltd [1985] 2 Qd R 13, cited Kok Hoong v Leong Cheong Kweng Mines Ltd [1964] AC 993, cited Kuligowski v Metrobus (2004) 220 CLR 363; [2004] HCA 34, cited Kwan v Kang [2003] NSWCA 336, cited Liftronic Pty Ltd v Unver (2001) 75 ALJR 867; [2001] HCA 24, cited Linprint Pty Ltd v Hexham Textiles Pty Ltd (1991) 23 NSWLR 508, cited Mango Boulevard P/L v Spencer & Ors [2009] QSC 389, cited Mango Boulevard P/L v Spencer & Ors [2008] QCA 274, cited Mango Boulevard Pty Ltd v Spencer & Ors [2008] QSC 117, cited New Brunswick Railway Company v British and French Trust Corporation Ltd [1939] AC 1, cited Pople v Evans [1986] 3 WLR 97; [1969] 2 Ch 255, cited R v Masters (1992) 26 NSWLR 450, cited Ramsay v Pigram (1968) 118 CLR 271; [1968] HCA 34, cited Rankin v Agen Biomedical Ltd [1999] 2 Qd R 435; [1998] QCA 282, cited Re JRL; Ex parte CJL (1986) 161 CLR 342; [1986] HCA 39, cited Re South American and Mexican Co; Ex parte Bank of England [1895] 1 Ch 37, cited Rogers v Legal Services Commission (SA) (1995) 64 SASR 572, cited Samuels v Linzi Dresses Ltd [1981] QB 115, cited Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275; [1991] FCA 523, cited State Bank of New South Wales Ltd v Stenhouse Ltd [1997] Aust Torts Reports, 81 – 423, cited Thirteenth Corp Pty Ltd v State (2006) 232 ALR 491; [2006] FCA 979, cited Todd v Novotny [2000] WASC 308, cited University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481; [1985] HCA 28, cited Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9, cited Whistler v Hancock [1878] 3 QBD 83, cited Williams v Zupps Motors Pty Ltd [1990] 2 Qd R 493, cited Supreme Court of Queensland Act 1991(Qld), s 80, s 119 Uniform Civil Procedure Rules 1999 (Qld), r 5, r 7, r 223, r 225, r 293, r 374, r 660, r 661(3), r 668
COUNSEL:	J D McKenna SC, with T J Bradley, for the appellant F M Douglas QC, with K Connor SC, and D D Keane, for the respondent
SOLICITORS:	Minter Ellison for the appellant Delta Law for the respondent