Pezzano v Hoffman
[1999] WASC 231
PEZZANO -v- HOFFMAN & ANOR [1999] WASC 231
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [1999] WASC 231 | |
| Case No: | CIV:1647/1999 | 11 & 16 NOVEMBER 1999 | |
| Coram: | MASTER BREDMEYER | 16/11/99 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| PDF Version |
| Parties: | ROCCO DOMENICO PEZZANO TREVOR DAVID HOFFMAN HOFFMANS (A FIRM) |
Catchwords: | Pleading Application to strike out action as an abuse of process on the basis of Anshun estoppel, res judicata and abandonment of claim |
Legislation: | Nil |
Case References: | Henderson v Henderson (1843) 3 Hare 100 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 Walter Developments Pty Ltd & Ors v Roberts, unreported; FCt SCt of WA; Library No 950359; 26 July 1995 West Australia Land Authority v Simto Pty Ltd & Anor, unreported; FCt SCt of WA; Library No 980560; 25 September 1998 Baines v State Bank of New South Wales [1985] 2 NSWLR 729 Bayne v Blacke (No 3) (1909) 9 CLR 366 Brinds Ltd v Chapmans Ltd (1985) 10 ACLR 97 Bryant v The Commonwealth (1995) 57 FCR 287 Buckland v Palmer (1984) 3 All ER 554 Coles v Wood [1981] 1 NSWLR 723 Currabubula Holdings Pty Ltd v Mita Copiers Australia Pty Ltd, unreported; FCt of A (Burchett J); Library No 307/95; 5 May 1995 Fenier v Domachuk (1994) 35 NSWLR 485 Forsayth NL v Australian Gold Mines No 3 (1992) 8 WAR 176 Grundt v Great Boulder Gold Mines Ltd (1937) 59 CLR 641 Macquarie Bank v National Mutual Life (1996) 40 NSWLR 543 Makhoul v Barnes (1995) 60 FCR 572 Metwally v University of Wollongong (1985) 60 ALR 68 Moore & Ors v Inglis (1976) 50 ALJR 589 Price v Price (1910) 27 WN (NSW) 114 Renowden v McMullin & Anor (1970) 123 CLR 584 Scanlan's New Neon Ltd v Toohey's Ltd (1945) 62 WN (NSW) 53 Scott v Beneficial Finance Corp Ltd, unreported; FCt Fed C of A; Library No 9405645; 31 May 1994 Scott v Beneficial Finance Corp Ltd, unreported; Fed C of A; Library No 938/93; 17 December 1993 Shillito v Bent (1973) WR 762 Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332 The Commonwealth v Verwayen (1990) 170 CLR 394 Thoday v Thoday [1964] P 181 Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 108 ALR 335 Triantafillidis v National Australia Bank (1995) V Conv R 54 Verwayen v Commonwealth (1990) 170 CLR 394 Williams v Spautz (1992) 112 ALR 191 Yovich v Collyer [1972] WAR 143 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
TREVOR DAVID HOFFMAN
First Defendant
HOFFMANS (A FIRM)
Second Defendant
Catchwords:
Pleading - Application to strike out action as an abuse of process on the basis of Anshun estoppel, res judicata and abandonment of claim
Legislation:
Nil
Result:
Application dismissed
(Page 2)
Representation:
Counsel:
Plaintiff : Dr J T Schoombee
First Defendant : Mr R G Walton
Second Defendant : Mr R G Walton
Solicitors:
Plaintiff : G D Crocket & Co
First Defendant : Hoffmans
Second Defendant : Hoffmans
Case(s) referred to in judgment(s):
Henderson v Henderson (1843) 3 Hare 100
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418
Walter Developments Pty Ltd & Ors v Roberts, unreported; FCt SCt of WA; Library No 950359; 26 July 1995
West Australia Land Authority v Simto Pty Ltd & Anor, unreported; FCt SCt of WA; Library No 980560; 25 September 1998
Case(s) also cited:
Baines v State Bank of New South Wales [1985] 2 NSWLR 729
Bayne v Blacke (No 3) (1909) 9 CLR 366
Brinds Ltd v Chapmans Ltd (1985) 10 ACLR 97
Bryant v The Commonwealth (1995) 57 FCR 287
Buckland v Palmer (1984) 3 All ER 554
Coles v Wood [1981] 1 NSWLR 723
Currabubula Holdings Pty Ltd v Mita Copiers Australia Pty Ltd, unreported; FCt of A (Burchett J); Library No 307/95; 5 May 1995
Fenier v Domachuk (1994) 35 NSWLR 485
Forsayth NL v Australian Gold Mines No 3 (1992) 8 WAR 176
Grundt v Great Boulder Gold Mines Ltd (1937) 59 CLR 641
Macquarie Bank v National Mutual Life (1996) 40 NSWLR 543
Makhoul v Barnes (1995) 60 FCR 572
(Page 3)
Metwally v University of Wollongong (1985) 60 ALR 68
Moore & Ors v Inglis (1976) 50 ALJR 589
Price v Price (1910) 27 WN (NSW) 114
Renowden v McMullin & Anor (1970) 123 CLR 584
Scanlan's New Neon Ltd v Toohey's Ltd (1945) 62 WN (NSW) 53
Scott v Beneficial Finance Corp Ltd, unreported; FCt Fed C of A; Library No 9405645; 31 May 1994
Scott v Beneficial Finance Corp Ltd, unreported; Fed C of A; Library No 938/93; 17 December 1993
Shillito v Bent (1973) WR 762
Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332
The Commonwealth v Verwayen (1990) 170 CLR 394
Thoday v Thoday [1964] P 181
Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 108 ALR 335
Triantafillidis v National Australia Bank (1995) V Conv R 54
Verwayen v Commonwealth (1990) 170 CLR 394
Williams v Spautz (1992) 112 ALR 191
Yovich v Collyer [1972] WAR 143
(Page 4)
1 MASTER BREDMEYER: This is an application by the defendants to strike out the plaintiff's action as frivolous and an abuse of process. This jurisdiction should be exercised with great care and caution as it deprives the plaintiff of a hearing of his case on the merits. The matter has be argued at length and competently by both sides and I propose in the interests of giving an ex tempore judgment to give but brief reasons.
2 The first action CIV 1218 of 1997 between essentially the same parties resulted in two judgments of Wallwork J. The first was given on 4 February 1998 and the second on 31 March 1999 which I will refer to as the first and second judgments.
3 The defendants' first submission is that the present action is barred on the Anshun estoppel principle. The starting point for an understanding of this principle is a passage from Henderson v Henderson (1843) 3 Hare 100 quoted by the High Court in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 598:
"where a given matter becomes the subject of litigation in and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time."
4 Gibbs CJ, Mason and Aickin JJ in Anshun at 602 - 603 said this:
"In this situation we would prefer to say that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that
(Page 5)
- the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding. In this respect, we need to recall that there are a variety of circumstances, some referred to in earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings e.g. expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few. See the illustrations given in Cromwell v County of Sac (1876) 94 US [24 Law Ed, at p 199].
It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment. In this respect the discussion in Brewer v Brewer (1953) 88 CLR 1 is illuminating.
…
The likelihood that the omission to plead a defence will contribute to the existence of conflicting judgments is obviously an important factor to be taken into account in deciding whether the omission to plead can found an estoppel against the assertion of the same matter as a foundation for a cause of action in a second proceeding. By 'conflicting' judgment we include judgments which are contradictory, though they may not be pronounced on the same cause of action. It is enough that they appear to declare rights which are inconsistent in respect of the same transaction."
5 I also quote from the judgment of Ipp J, with whom the other two Judges concurred, in Walter Developments Pty Ltd & Ors v Roberts, unreported; FCt SCt of WA; Library No 950359; 26 July 1995 at 9 and 10:
Although the issue in the Port of Melbourne Authority v Anshun Pty Ltd concerned the question whether a defendant was estopped from raising a defence which should have been raised in an earlier action, the principle is capable of being applied to successive claims brought by plaintiffs: O'Brien v Tanning Research Laboratories Inc (1988) 14 NSWLR 601 at 611 (per Kirby P).
(Page 6)
- As Davies J observed in Namol Pty Ltd v A W Baulderstone Pty Ltd (1992) 35 FCR 89 at 94, the applicability of the Anshun principle depends upon 'whether an issue sought to be raised in second proceeding so concerned the matter litigated in the first proceeding that it ought to have been raised and dealt with in those proceedings.'
…
As their Honours explain, the potential for conflicting or inconsistent judgments, and the need to avoid that occurring, is critical to the application of the Anshun principle..."
6 There was only one cause of action pleaded in the first action, namely that by an agreement made in May 1993 in consideration of the plaintiff releasing the defendant from any liability for failing to pursue the bankruptcy petition, the costs order against the plaintiff, failure to advise the plaintiff of that and of the need to pay it, and the failure to obtain security for costs, the defendant agreed not to charge the plaintiff for the remainder of the Ballato litigation except as to disbursements.
7 The present action pleads four causes of action:
1. Breach of contract, that is the contract of retainer, by failing to make Mrs Ballato bankrupt.
2. Negligence by the defendant in relation to the same matter.
3. An agreement made in July 1993 not to charge fees after July 1993, and
4. Promissory estoppel arising out the promise made by Hoffman in July 1993 that he would not charge fees from then on except disbursements. In other words if there was no agreement to that effect reached in July 1993, it was at least a promise not to charge fees, acted on by the plaintiff to his detriment.
8 Anshun (supra) said at 603 - 604 that an important factor to look at in considering this question is whether the defendants failure to plead a defence in the first action could lead to conflicting judgments. Conflicting judgments are not limited to those which conflict overtly. The High Court said:
(Page 7)
- "It is enough that they appear to declare rights which are inconsistent in respect of the same transaction."
- Anshun is an example of that. The result of the first action was that the owner of the crane was 90 per cent liable and hirer of the crane 10 per cent liable for the plaintiff's loss. The result of the second action, if it had been allowed to go on, and if the plaintiff won, would be that the hirer was 100 per cent liable for the loss. They are clearly conflicting judgments.
9 The Anshun principle applies to plaintiffs as well as defendants. In this case the first action, ie the trial before Wallwork J, dismissed the plaintiff's claim. It determined that there was no agreement in May 1993 to forego legal costs from then on. If the plaintiff is successful in the second action on the third cause of action it will produce an order that, because of the July 1993 agreement the plaintiff does not have to pay legal costs from then on. I consider that would not be a contradictory order. The first case said no contract not to pay costs from May 1993, the second said there was a contract in July 1993 not to pay costs effective from July 1993. The first case did not declare that the solicitor's bill was due and payable. It was silent on that because it was not the subject of a counter-claim. So the first decision was silent on Hoffman's rights as it were. It did not say that his bill of costs was good.
10 The other three causes of action in the present action are clearly different from the first - damages for breach of retainer, namely the failure to make Mrs Ballato bankrupt, negligence for the same failure, and an estoppel arising out of the July 1993 statement or promise said to have been made by Hoffman.
11 I consider it was not unreasonable for the plaintiff to have pleaded the first case in the narrow way that he did. There are many precedents for that. For example, a plaintiff may have a claim for damages against a defendant for something, saying arising out of a building contract, and the parties compromise that and the defendant signs an acknowledgment of debt for a certain sum. It is common to sue on the acknowledgment of debt only, suing on it as a contract, rather than suing also on the original cause of action. It saves expense and it pleads one cause of action instead of two and, because of the signature of the defendant on the acknowledgment of debt, the plaintiff may well consider it is much easier to prove than the initial breaches of the building contract or the builder's negligence. That is what the plaintiff did in this case. He sued on the compromise agreement. I consider there is no Anshun estoppel in this case.
(Page 8)
12 The defendants' second argument is res judicata by virtue of the prior action. The defendants' argument is that the minute of amendments before Wallwork J dealt with in his second judgment pleaded the agreement of July 1993 and promissory estoppel arising out of that agreement which are two of the present four causes of action. Wallwork J in his second judgment refused to let the plaintiff amend in that way. So that action was decided against the plaintiff hence there is now said to be res judicata on those issues, subject of course to an appeal. An appeal is pending but I consider Wallwork J's second judgment is final until the appeal sets it aside. There is no stay of execution.
13 I do not agree with the defendants' analysis. The trial Judge rejected the amendments in his second judgment. But his decision on the action was a dismissal of the plaintiff's claim on the statement of claim as it appears in the book of pleadings. That is all that was decided, that there was no agreement reached between the parties in May 1993 not to charge fees from then on. That does not prevent the plaintiff from alleging in the new action that there was such an agreement reached in July 1993 - an agreement not to charge legal fees from then on.
14 The third argument for the defendants is that the plaintiff abandoned all reliance on estoppel in the first action in a hearing before Owen J and is bound by his conduct at the trial. If a party abandons a point at trial it cannot argue that point on appeal. See Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 and West Australia Land Authority v Simto Pty Ltd & Anor, unreported; FCt SCt of WA; Library No 980560; 25 September 1998 per Malcolm CJ.
15 The statement of claim of 29 October 1997, found at p 7 of Mr Posa's affidavit, raised estoppel and I quote:
"16. In the premises the defendant agreed to represent the plaintiff without charge subsequent to 31 May 1993 in the Ballato litigation, save as to reasonable disbursements. Alternatively, the defendant's conduct induced the plaintiff to believe that the said arrangement as to fees would govern the relationship between the parties thereafter, and the plaintiff permitted the defendant to continue to conduct the Ballato litigation in reliance thereon and the defendant is estopped from denying the said agreement."
(Page 9)
16 I have read the transcript of the hearing before Owen J on 3 November 1997 where, after some discussion with the Judge, the plaintiff's counsel agreed to have the estoppel plea dropped. The stumbling block for the Judge were the words in it "the defendant's conduct". How wide was that? All the defendant's conduct over the several years of his relationship with the plaintiff, or something narrower? I have read the transcript regarding the plaintiff's counsel's opening and closing addresses and clearly estoppel was not claimed.
17 The defendants argue that the plaintiff's counsel deliberately, and after discussion with Owen J, abandoned the plea of estoppel in par 16 of the statement of claim. I make three observations on that:
1. It was abandoned pre-trial not at trial. It was abandoned on 3 November before Owen J. The trial started on 17 November before Wallwork J. The authorities cited relate to abandonment at trial.
2. The plaintiff is not seeking to raise a contrary point on appeal. He is trying to raise it a new action. I consider he is not precluded from doing that. As mentioned on the Anshun (supra) point above, I consider it reasonable for the plaintiff to have limited the first action to the compromise agreement.
3. The estoppel abandoned referred to estoppel coming out of the May 1993 representation of the defendant. The words used in par 16 quoted above were:
"Alternatively, the defendant's conduct induced the plaintiff to believe …"
That phrase "the defendant's conduct" means, in that context, the words uttered to the plaintiff in May 1993. The plea of estoppel in the present action refers to the defendant's representation of July 1993.
18 I consider that none of the four causes of action in this new action were abandoned in the first action so they can be relied on this action.
19 I consider there is no abandonment or estoppel on the Verwayen point and I agree with the plaintiff's submissions on that.
20 On the pleading point I consider par 33.1 of the statement of claim needs to have these words added:
"and was charged substantial costs by Hoffman after July 1993."
(Page 10)
- I will make that amendment. Par 34 repeats par 12 and I consider that appropriate. It is an important part of the narrative. It is not otiose. It states that the plaintiff was successful in his defence of the Ballato litigation and obtained the costs order but was unable to recover any costs from Mrs Ballato due to her lack of means.
21 This application will be dismissed.
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