McGEACHIE v Clarke - [2007] WASC 153

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: McGEACHIE & ORS -v- CLARKE & ANOR [2007] WASC 153

CORAM: LE MIERE J

HEARD: 7 FEBRUARY 2007

DELIVERED : 7 FEBRUARY 2007

FILE NO/S: CIV 2079 of 2006

BETWEEN: CATHERINE JOY McGEACHIE
RICHARD MITFORD ROWELL
First Plaintiffs
GRAHAM SYDNEY BENSTEAD
AURELIA MARIA MAZZOLENI
Second Plaintiffs
LEE FRANCES NASH
WESLEY IAN CHARLES NASH
Third Plaintiffs
JAN IRVINE
Fourth Plaintiff
AMRIT KENDRICK
GARY KENDRICK
Fifth Plaintiffs
AND
RICHARD MELVILLE CLARKE
First Defendant
OWNERS OF ROSNEATH FARM STRATA PLAN 35452
Second Defendant

Catchwords:

Practice and procedure - Issue estoppel - Issues in present proceedings raised by earlier District Court proceedings - Whether same question decided by District Court - Whether District Court decision final - Public policy

Legislation:

Strata Titles Act 1985 (WA), s 51

Result:

Action stayed

Category: B

Representation:

Counsel:

First Plaintiffs               :     Mr G M G McIntyre SC
Second Plaintiffs           :     Mr G M G McIntyre SC
Third Plaintiffs             :     Mr G M G McIntyre SC
Fourth Plaintiff             :     Mr G M G McIntyre SC
Fifth Plaintiffs              :     Mr G M G McIntyre SC
First Defendant             :     Mr D F Beere
Second Defendant         :     No appearance

Solicitors:

First Plaintiffs               :     Christopher Garvey
Second Plaintiffs           :     Christopher Garvey
Third Plaintiffs             :     Christopher Garvey
Fourth Plaintiff             :     Christopher Garvey
Fifth Plaintiffs              :     Christopher Garvey
First Defendant             :     Beere May & Meyer
Second Defendant         :     No appearance

Case(s) referred to in judgment(s):

Blair v Curran (1939) 62 CLR 464
Kuligowski v Metrobus (2004) 220 CLR 363

LE MIERE J: The first defendant applies for the following orders. Firstly that the writ of summons be dismissed on the grounds that the plaintiffs are estopped from raising the matters set out in the indorsement of claim incorporated in the writ of summons by virtue of an issue estoppel arising out of the decision of Judge Wisbey in District Court matter CIVO 16 of 2006. Secondly, that the plaintiffs pay the first defendant's costs of this application, such costs to be taxed and paid forthwith.
The first defendant submits that the plaintiffs' claim or claims are precluded by reason of an issue estoppel arising out of the decision of Judge Wisbey in the District Court matter CIVO 16 of 2006 ("the District Court matter"). In this action the primary relief sought by the plaintiffs is a declaration that on or before 14 January 2006 each of the plaintiffs had lawfully terminated any agreement each had with the defendant to surrender to the defendant the voting rights each had pursuant to the Strata Titles Act 1985 (WA) as a proprietor of a lot in the scheme of survey‑strata plan 35452 ("the scheme"). There are other consequential declarations and orders sought by the plaintiff.
The first defendant submits that the decision of Judge Wisbey, to which I have referred, necessarily determined that the plaintiffs had not lawfully terminated the relevant agreements which were described by Judge Wisbey as facilitation agreements. The District Court matter arose by originating summons. The plaintiff in that action (the first defendant in this action) sought a declaration that the resolution passed at a general meeting of the second defendant on 14 January 2006, that Lot 25 of the scheme be subdivided by the creation of further lots, be deemed to have been passed as a unanimous resolution.
That relief was sought pursuant to s 51 of the Strata Titles Act. Section 51 of the Strata Titles Act empowers the District Court to make an order that the resolution in question be deemed to have been passed as a unanimous resolution. That power, or the exercise of that power, is conditioned, amongst other things, upon the resolution being supported to the extent necessary for a special resolution.
The submissions of the parties before Judge Wisbey are set out as annexures to the affidavit of Dennis Frank Beere, sworn 1 November 2006, in this action. It appears from that affidavit, and it is common ground amongst the parties to these proceedings, that the first defendant in the District Court matter maintained that the resolution in question was not supported to the extent necessary for a special resolution because the facilitation agreements by which the relevant unit holders surrendered their voting rights to the first defendant in this action had been lawfully terminated.
It followed that if the facilitation agreements had been lawfully terminated, then at the time of the relevant meeting the first defendant was not entitled to exercise the voting rights of the relevant unit holders. In his decision, Judge Wisbey did not expressly address that issue. However, Judge Wisbey did set forth the following matters. In par 5 of his reasons for judgment, his Honour set out some of the history of the matter so far as he considered it to be relevant.
In subpar (xi) of that synopsis, his Honour referred to the meeting of the strata company held on 14 January 2006 and the motion which gave rise to the resolution his Honour was considering. His Honour said:
"When the motion was put to the vote the plaintiff's proxy in relation to lot 1 and lot 25 supported it, as did the plaintiff pursuant to the facilitation agreements in relation to all other lots save for lot 23. Mr Warwick Rowell, as representative of Rowell Consulting Services Pty Ltd proxy for Ms Weinert, voted against the motion. In the result support for the motion was 9880 units out of a total unit entitlement of 10,000, a percentage unit entitlement of 98.8 per cent. Accordingly, although the motion was supported to the extent necessary for a special resolution, it failed to receive the unanimous support required by the Act."
His Honour then set out his conclusions. In par 6 his Honour said:
"Pursuant to facilitation agreements the plaintiff exercised the voting rights surrendered to him by the proprietors of various lots. A number of them, had they not surrendered their voting right, would have opposed the motion because they purchased on the basis that the land would be developed along the lines of a permaculture themed echo village."
His Honour went on to make observations about the beliefs of the defendants. In par 7 his Honour said:
"In resolving the present controversy, having regard to the fact that the plaintiff cast votes surrendered to him by lot proprietors who would not themselves have supported the resolution, it becomes necessary to determine whether there is anything in the Act to preclude a proprietor of a lot from surrendering to another the voting rights which are his unit entitlement, in the manner provided for in the facilitation agreement. I am unable to find anything in the Act which supports such a proposition.
At paragraph 10 his Honour concluded on that point:
"In the result there is nothing in the Act to suggest that the surrender provision of the facilitation agreement is invalid and consequently nothing to impugn the voting support for the motion in question on 14 January 2006."
His Honour then went on to determine whether in the exercise of the Court's discretion it was proper in all the circumstances to declare the resolution sufficient to authorise the proposed re‑subdivision.
Judge Wisbey did not expressly state that the defendants in that action had not lawfully terminated the facilitation agreements. However, it is implicit in his Honour's decision that he so found. That is because his Honour found that there was nothing to impugn the voting support for the motion in question on 14 January 2006. His Honour found that the votes cast by the plaintiff in favour of the motion pursuant to the facilitation agreements had been validly cast.
It is that matter which the first defendant in these proceedings says gives rise to an issue estoppel. The requirements for an issue estoppel to apply to a proceeding were summarised in a joint judgment of the High Court in Kuligowski v Metrobus(2004) 220 CLR 363 at 373 at [21]:
"(1) that the same question has been decided; (2) that the judicial decision which is said to create the estoppel was final; and, (3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies."
In this case, the third requirement, that is identity of parties, is satisfied and the contrary has not been submitted by either party. I am satisfied that the first requirement, that is that the same question has been decided, is also satisfied.
In Blair v Curran (1939) 62 CLR 464 Dixon J, as he then was, considered the doctrine of issue estoppel at page 531 and following. At 532 Dixon J said:
"In the phraseology of Coleridge J, in R v Inhabitants of the Township of Hartington Middle Quarter [(1855) 119 ER 288] the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point at issue. Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous."
I am satisfied that the relevant question raised in these proceedings has been decided in the District Court proceedings. That question is whether the relevant facilitation agreements had been lawfully terminated or remained on foot so that the first defendant was lawfully entitled to exercise the voting rights of the relevant unit holders at the meeting on 14 January 2006.
It was necessary for Judge Wisbey to decide that point because it was on that question that the issue of whether or not the resolution was supported to the extent necessary for a special resolution turned.
The remaining or third requirement for issue estoppel to apply is that the judicial decision which is said to create the estoppel was final. The evidence before me is that the defendants in the District Court proceedings have appealed against the decision of Judge Wisbey. That appeal has not yet been heard or determined. The fact that an appeal has been commenced does not in itself make the decision of Judge Wisbey other than a final decision. In Kuligowski v Metrobus (supra), to which I have referred, the Court said at [25]:
"A 'final' decision, then, is one which is not of an interlocutory character, but is completely effective unless and until rescinded, altered or amended. The fact that an appeal lies from a decision does not make it any less final. It must be 'final and conclusive on the merits': 'The cause of action must be extinguished by the decision which is said to create the estoppel'. [Citing Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853 at 935]
If the appeal from the decision of Judge Wisbey was to be allowed on a ground which, in effect, argues that the relevant facilitation agreements had been lawfully terminated or possibly on some other grounds, then that would result in there being no relevant issue estoppel. In those circumstances, the plaintiffs would be at liberty to proceed with the current proceedings unhindered by any issue estoppel.
If these proceedings were dismissed, but an appeal found that the facilitation agreements had been lawfully terminated, then the plaintiffs would be at liberty to commence fresh proceedings. To dismiss these proceedings on the ground that the plaintiffs' claim is not maintainable because of the issue estoppel would prejudice the plaintiffs and is not in the public interest. It would prejudice the plaintiffs at least because they would be obliged to pay the defendants' costs of these proceedings to date and the costs of commencing fresh proceedings.
It is not in the public interest that proceedings should be dismissed and then commenced again raising the same issues. The proper course is to stay these proceedings pending the outcome of the appeal. The plaintiffs should not be at liberty to prosecute this action unless and until they achieve success in the appeal such that the issue estoppel no longer arises. For those reasons, I will stay the present action pending the resolution of the appeal to the Court of Appeal from the decision of Judge Wisbey.