Phillip Morris Ltd v Attorney-General (Vic)

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 7476 of 1997

PHILLIP MORRIS LIMITED	Appellant
PHILLIP MORRIS LIMITED	v.
THE ATTORNEY-GENERAL FOR THE STATE OF VICTORIA
THE ATTORNEY-GENERAL FOR THE STATE OF VICTORIA	First Respondent
and
DAVID JAMES LINDSEY	Second Respondent

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JUDGES:	MAXWELL, P., ORMISTON and EAMES, JJ.A.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	5 September 2005
DATE OF JUDGMENT:	21 February 2006
MEDIUM NEUTRAL CITATION:	[2006] VSCA 21

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Practice and Procedure – Vexatious litigant – Application for leave to commence legal proceedings – Whether court could be satisfied that proposed proceeding not an abuse of process – Supreme Court Act s. 21(4) – Successful application for leave following eight unsuccessful applications to different judges – Whether making of repeated applications was vexatious or constituted “judge shopping” – Whether applicant’s failure to pay costs of previous proceeding against proposed defendant required refusal of leave – Whether “outstanding costs principle” applicable – No error shown – Appeal from grant of leave dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr J.R. Sackar, QC with Mr S.A. O’Meara	Allens Arthur Robinson
For the First Respondent	No appearance
For the Second Respondent	Mr Lindsey in person

MAXWELL, P.:

On 16 July 1998, the second respondent (“Mr Lindsey”) was declared a vexatious litigant on the application of the Attorney-General for Victoria. The Attorney-General is the first respondent to the present appeal, but has taken no part in the proceedings, either at first instance or in this Court.

Kellam, J., who made the declaration, was satisfied that a number of proceedings which Mr Lindsey had initiated –

“were vexatious proceedings in the sense that they disclosed no reasonable cause of action or were or are oppressive, embarrassing and an abuse of the process of the Court... Each of [the relevant files] contain pleadings which were or are oppressive, embarrassing and were or are so untenable as to have no prospect of being successfully established at trial.”

His Honour was further satisfied that each of those proceedings had been brought without any reasonable grounds and had been instituted both “habitually and persistently”, within the meaning of s.21(2)(a) and (b) of the Supreme Court Act 1986 (“the Act”).

Having declared Mr Lindsey to be a vexatious litigant pursuant to s.21(2) of the Act, his Honour further ordered that Mr Lindsey –

“must not, without the leave of this Honourable Court, continue or commence legal proceedings in this Court or any inferior Court or Tribunal.”

That order was made pursuant to s.21(3) of the Act.

On 7 January 2005, Mr Lindsey made application to the Court pursuant to s.21(3) of the Act for leave to commence a proceeding against the appellant (“Phillip Morris”), claiming damages for injuries suffered as a result of smoking cigarettes manufactured by it. The application came on before the Judge in the Practice Court on 12 January 2005. The application was ex parte. The Judge granted Mr Lindsey leave to bring a proceeding in the County Court.

As Mr Lindsey explained in the affidavit filed in support of his application, he had made previous applications to the Court seeking leave to bring a civil proceeding for damages against Phillip Morris. Applications were refused by Judges of the Court on 17 March, 1 May and 21 May 2003, 30 June, 8 October, 19 October, 1 December and 16 December 2004, respectively.

Having been notified of the grant of leave, Phillip Morris applied by summons to the Judge who had made the order, seeking to have the order set aside. Although Phillip Morris had not been a party to the application for leave, his Honour was satisfied that the company had an interest in the outcome of the application, because the grant of leave “set in train a course of events which ultimately affects its interests.” It followed, in his Honour’s view, that Phillip Morris had the right to bring the application seeking to set aside the order granting leave.

The learned Judge treated the application by Phillip Morris as a rehearing of the original application for leave. Section 21(4) of the Act provides as follows:

“(4)Leave must not be given unless the Court... is satisfied that the proceedings are not or will not be an abuse of the process of the Court, inferior court or tribunal.”

Accordingly, the learned Judge considered the question for determination on the application by Phillip Morris to be –

“whether Mr Lindsey, as a vexatious litigant, has satisfied the Court that the proposed proceeding will not be an abuse of the process of the Court.”

His Honour dismissed the application by Phillip Morris. He stated his conclusions as follows:

“After considering the additional material and the submissions of Phillip Morris, I am satisfied in all the circumstances that the proceeding instituted by Mr Lindsey in the County Court is not an abuse of process of the Court. It follows that I am not persuaded to vacate the order that I made on 12 January 2005.”

By leave granted on 22 April 2005, Phillip Morris appeals from that decision.

The nature of the appeal

The power to grant leave to a vexatious litigant is discretionary. The effect of s.21(4) of the Act, however, is that the power is unavailable unless the Court is satisfied that the proceeding in respect of which leave is sought is not or will not be an abuse of process.

Accordingly, this appeal raises two discrete issues. The first is whether the Judge erred in concluding that he was satisfied that the proceedings would not be an abuse of process. In approaching that issue, this Court is in as good a position as was his Honour to consider the question of abuse of process. If Phillip Morris established that his Honour did err in this respect, then the appeal must succeed. It would follow that the pre-condition to the exercise of the power to grant leave had not been satisfied.

If, on the other hand, Phillip Morris failed to show that his Honour was in error as regards abuse of process, the second issue would arise, namely whether his Honour erred in the exercise of his discretion to grant leave. That being a discretionary decision, this Court could only intervene if it were shown that the discretion miscarried in accordance with the principles laid down in House v The King.[1]
[1](1936) 55 CLR 499 at 505.

Abuse of process

Phillip Morris submitted that the question of abuse of process should be approached by reference to what Mason, C.J. in Rogers v The Queen[2] identified as its two aspects, namely –

“... first, the aspect of vexation, oppression and unfairness to the other party to the litigation and, secondly, the fact that the matter complained of will bring the administration of justice into disrepute.”[3]

[2](1994) 181 CLR 251.

[3]Ibid at 256.

Earlier, Mason, C.J. had said:

“The concept of abuse of process is not confined to cases in which the purpose of the moving party is to achieve some foreign or ulterior object, in that it is not that party’s genuine purpose to obtain the relief sought in the second proceedings. The circumstances in which abuse of process may arise are extremely varied and it would be unwise to limit those circumstances to fixed categories.”[4]

[4]Ibid at 255.

His Honour noted the recognition by the majority of the High Court in Williams v Spautz,[5] that –

“the concept [of abuse of process] extends beyond use of court processes for ulterior purposes to the use of such processes so as to cause vexation or oppression.”[6]

[5](1992) 174 CLR 509.

[6](1994) 181 CLR 251 at 255.

Phillip Morris also relied on what was said by McHugh, J. in Rogers v The Queen, where his Honour said that abuse of process usually fell into one of three categories, as follows:

(a) the Court’s procedures are invoked for an illegitimate purpose;

(b) the use of the Court’s procedures is unjustifiably oppressive to one of the parties;

(c) the use of the Court’s procedures would bring the administration of justice into disrepute.[7]

[7]Ibid at 286.

In Walton v Gardiner,[8] Mason, C.J., Deane and Dawson JJ. said that the jurisdiction to stay proceedings that are an abuse of process –

“extends to 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.”

[8](1993) 177 CLR 378.

Their Honours gave the following examples of abuse of process:

(a) where the proceedings can be clearly seen to be foredoomed to fail;

(b) where the court in which the proceedings are instituted is, in all the circumstances, a clearly inappropriate forum;

(c) notwithstanding that the circumstances do not give rise to an estoppel, the continuance of the proceeding would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings.[9]

[9]Ibid at 393.

Appellant’s submission on abuse of process

Phillip Morris did not submit that the proposed proceeding was “foredoomed to fail”. Instead the submission was that –

“the material before the Court... did not provide a sufficient basis for the Court to conclude that Mr Lindsey’s proposed proceeding had ‘realistic prospects of success’ and would be a ‘case of substance’.”

The last part of that submission alludes to what was said by the English Court of Appeal in Becker v Teale,[10] which will be considered more fully below.
[10][1971] 3 All ER 715 at 716.

Prospects of success apart, Phillip Morris submitted that Mr Lindsey had failed to satisfy the “high onus” upon him to show that his proposed proceeding “was not and would not be an abuse of process for pleading, evidentiary, factual, procedural and other reasons.” Phillip Morris advanced the following arguments in support of that proposition:

(a) it was relevant that Mr Lindsey’s past conduct before the courts had been described as “habitual and persistent”, “without cause”, and “obsessional”, and as showing a “stubborn determination”;

(b) it was inevitable that the proposed proceeding in the County Court would give rise to procedural and evidentiary difficulties, as well as the expenditure of significant effort and resources on the part of the County Court and Phillip Morris itself;

(c) Mr Lindsey was clearly unable or unwilling to pay the sum of $96,494.00 in costs owing to Phillip Morris from proceedings unsuccessfully brought by him against Phillip Morris in the Federal Court;

(d) permitting Mr Lindsey to continue to pursue litigation against Phillip Morris while those costs remained unpaid risked bringing the administration of justice into disrepute;

(e) the proposed pleading was deficient as it was ambiguous in several respects;

(f) Mr Lindsey’s bringing of nine previous applications in the Supreme Court for leave to commence proceedings against Phillip Morris in a period of 25 months suggested that he was simply “hawking the application from judge to judge in a search for a successful outcome”;[11]

(g) the ninth application for leave, which succeeded before the trial Judge, should have been dismissed on the basis that it was “no more than an attempt to re-litigate a matter that had already been determined.”[12]

[11]The submission referred to Nominal Defendant v Manning (2000) 50 NSWLR 139 at 168 per Foster, A.J.A.; and to D A Christie Pty Ltd v Baker [1996] 2 VR 582 at 602 per Hayne, J.A. Those decisions are discussed in detail below.

[12]The submission referred to D A Christie (supra) at 604 per Hayne, J.A. and to Moevao v Department of Labour [1980] 1 NZLR 464 at 480-1 per Richardson, J.

The unsuccessful applications

As noted earlier, in the period March 2003-December 2004 Mr Lindsey had made no fewer than eight unsuccessful applications for leave to bring the damages proceeding in the County Court. It is instructive to examine what was said by the respective judges in dismissing the earlier applications.

On 17 March 2003, Bongiorno, J. said:

“... I am not satisfied that [Mr Lindsey] has produced the material necessary to permit him to now sue Phillip Morris Ltd. The principal defects in the material which he produces relate to the alleged cause of action which he would have to particularise against Phillip Morris. There is nothing in the material which raises any sort of case of any tort against Phillip Morris. Evidence to implicate it in the disease which [Mr Lindsey] now says he suffers from is sparse, perhaps non existent. It does not justify permitting him to sue.”[13]

[13][2003] VSC 94 at [8].

On 1 May 2003, Smith, J. said:

“While [the material relied upon] supports the applicant’s assertion that he is suffering from lung disease and that it is connected with his smoking, he does not have evidence which would support a case of actionable fault on the part of Phillip Morris that is connected causally to the present lung disease. In addition, he frankly acknowledged that the medical advice he has received is that if he ceased smoking his medical condition would improve at least in some aspects. He would need evidentiary material addressing that issue. ... He also needs material that causally links the lung disease of which he now complains to the proposed defendant Phillip Morris.
In these circumstances, I cannot be satisfied that the proposed proceedings are not or will not be an abuse of process and am therefore obliged to refuse the application for leave.”[14]

[14][2003] VSC 132 at [4]-[5].

The third application came on before Coldrey, J. on 21 May 2003. His Honour said:

“[The draft statement of claim] is a revamped and more detailed statement of claim than the one which is contained in the applicant’s earlier affidavit... but it does not, and cannot, of itself overcome the evidentiary deficiencies alluded to in the previous judgments. Nothing in the material presented on this application alters the situation which existed when the previous applications were considered.”[15]

[15][2003] VSC 176 at [4].

His Honour did not, however, foreclose the possibility of a further application. On the contrary, he recommended that Mr Lindsey seek legal advice about how to present his claim:

“In the matter of the proposed action against Philip Morris, it would certainly, in my view, be advisable for the applicant to obtain legal advice as to the procedural and evidentiary requirements to get any claim off the ground. I have suggested that such advice be sought from a community legal centre or some similar organisation, having regard to what the applicant has told me about difficulties in obtaining advice from both private solicitors and indeed the Legal Aid Commission whilst he carries with him the tag of a vexatious litigant. Whether the applicant wishes to take that advice is, of course, entirely a matter for him.”

The next application came on before Hollingworth, J. on 30 June 2004. After referring to each of the three prior applications, and to the Federal Court proceedings, her Honour said:

“The applicant has produced a further proposed statement of claim. Whilst this goes further in terms of the provision of some particulars than earlier attempts by him, unfortunately it still does not comply satisfactorily with the rules of pleading and in particular does not disclose a causal link between the proposed defendant’s conduct and any harm suffered by the applicant.”

In her Honour’s view, neither the medical reports nor newly-exhibited photographs went –

“far enough to establish the necessary causal link. I make this comment in relation to causation because it is a matter which has troubled the other judges who have dealt with this matter...”

Her Honour concluded by endorsing the recommendation which Coldrey, J. had made, that Mr Lindsey –

“obtain legal advice as to the procedural and evidentiary requirements he needs to get any claim off the ground. It seems fruitless for him to continue bringing applications before this Court without getting proper advice, which I and other Judges of the Court are not in a position to give to him as to precisely what is deficient about his proposed application. Whether the applicant wishes to take that advice is of course entirely a matter for him.”

In discussion following the refusal of the application, her Honour said this:

“My own view is that it is highly unlikely that, if you continue drawing your own pleadings like this, you are going to get over the necessary pleading threshold, even assuming that you properly address the evidentiary matters. There is no limit under the legislation as to the number of times you can come before the Court, but it is a matter for discretion in each case as to whether the Judge will hear you. The staff at the Prothonotary’s Office are entitled not to take your documents without the leave of the Judge. Nothing I say will bind any other judge, but it is a matter for you whether you really think that continuing to make these applications has any merit.” (emphasis added)

The fifth application came on before Smith, J. on 22 September 2004. In a judgment given on 8 October 2004, his Honour said:

“Mr Lindsey has made a further major effort to gather material and present it as well. He has, in particular, obtained a further medical report from Dr Strangward which among other things supports a link between Mr Lindsey’s smoking and the development of emphysema.
... The problem remains for Mr Lindsey, however, of establishing a causal connection between the alleged tortious conduct of Phillip Morris and the development of the emphysema. ... It remains unclear on the material... how it is put that Phillip Morris was negligent and how that negligence caused the present emphysema.
… Even if there was evidentiary material placed before the Court which clearly identified the alleged negligent acts or omissions and supported a connection between the alleged negligence of Phillip Morris and the contracting of the emphysema, Mr Lindsey has yet to produce a satisfactory statement of claim. I have no doubt that he has used his best endeavours to produce a satisfactory statement of claim. The task is not easy at the best of times but it is extremely difficult in a case of this nature. In Mr Lindsey’s recent applications, Judges have urged Mr Lindsey to seek legal assistance. His attempts, so far, have been unsuccessful... The fact remains... that unless he obtains legal assistance, the problems in presenting the material required to obtain leave are likely to be insurmountable.”[16]

[16][2004] VSC 383 at [2], [3] and [4] (emphasis added).

The sixth application came on before Morris, J. on 19 October 2004. His Honour referred to the five previous applications and said:

“On each occasion when application has been made, a critical concern that has been raised about the proposed action is whether a causal connection can be shown between the damages (sic) said to be suffered by Mr Lindsey and the alleged negligence of Phillip Morris. This is a matter to which I will return because, in my opinion, it lies at the heart of whether or not the proposed proceeding might be an abuse of process.”

Later, his Honour said that he was –

“troubled by the prospect of Mr Lindsey being able to establish a causal connection between his smoking (before 1973) and the alleged tortious conduct of Phillip Morris.
I am concerned that this action, if allowed to proceed, is likely to be an action that would amount to an abuse of process. I am satisfied on the balance of probabilities that the action is devoid of any realistic prospect of success. It is likely to simply waste the time and resources of the court. Because I have formed this view of the proposed case, I cannot be satisfied, as the statute requires, that the proceedings are not, or will not be, an abuse of the process of the court.”

The seventh application came on before Whelan, J. on 1 December 2004. In dismissing the application, his Honour said:

“I am bound to refuse this application. I do so for similar reasons to the reasons why a similar application was refused by Smith, J. on 8 October 2004. This application, in contrast to that before Smith, J., no longer seeks to bring a claim on the basis of negligence, but the problem remains the same. The statement of claim is unsatisfactory. It seems to me to be virtually certain that substantial portions of it would be struck out if leave were given and an application to strike out was made. Like Smith, J., it seems to me that without legal assistance Mr Lindsey’s problems in obtaining leave are likely to be insurmountable.” (emphasis added)

The eighth application came on before Hansen, J. on 10 December 2004. The application was supported by an affidavit sworn by Mr Lindsey the previous day, to which he exhibited the reasons for judgment delivered in respect of each of his previous unsuccessful applications. Mr Lindsey stated:

“I have once again read all reasons of their Honours so as I could determine once and for all time where I was failing, and I now know where it was - the legal definition of cause and causal, that the two are separate and distinct, in other words in the previous applications seeking leave where I have filed a document, ‘Draft Statement of Claim’ showing cause, I may not and/or did not show causation.”

After noting Smith, J.’s statement on 8 October 2004 that he had “yet to produce a satisfactory statement of claim”, Mr Lindsey said:

“... to date no Justice of this Jurisdiction has ever said to me, David go away you do not have an arguable case against Phillip Morris...”

Mr Lindsey stated that on 3 December 2004 he had found, in the library at Victoria Legal Aid, a copy of the Lawyers Practice Manual published by Springvale Legal Service, which contained “the format, basis, foundation of a satisfactory pleaded statement of claim.” Exhibited to the affidavit was a draft statement of claim dated 9 December 2004, of which Mr Lindsey said:

“... This time I have got it right, I know I have, I know I have already established a prima facie case against Phillip Morris Limited. My draft statement of claim... shows the well-established causal connection between the alleged tortious conduct of Phillip Morris and the development of the emphysema.”

Hansen, J. refused the application for leave. In his reasons for judgment dated 16 December 2004, his Honour referred to the previous unsuccessful applications and said:

“Leave has thus far been denied to the applicant because he has not produced a statement of claim that discloses a case of substance. In particular he has foundered on the issue of causation in the sense of linking any and what smoking a product of Phillip Morris to the suffering of lung disease or otherwise the condition from which he suffers. In addition the proposed statements of claim have been deficient or contained unnecessary or embarrassing material such that judges have suggested the applicant obtain legal assistance in the drafting of the claim. It is a suggestion I would repeat.”[17]
His Honour said later:
“It seems to me, as it did to Morris, J., that although the damage suffered by the applicant from smoking is likely to have been caused, or contributed to, by the fact that he smoked cigarettes over a long period of 30 years, it seems improbable, and there is no evidence to establish it, that the damage to his health is the result of the smoking that took place before the introduction of Government health warnings in early 1973. This goes to the critical issue of causation and to this there is the related and fundamental allegation that the plaintiff became addicted and was not able to exercise a choice to not smoke.
... I note that in the statement of claim Morris, J. was considering the applicant proposed to allege that he used Marlboro cigarettes from later 1972/early 1973 through to 1987 and then a different brand from 1987 to 1999. In the present proposed statement of claim the applicant has wound back the period when he commenced to smoke Marlboro by one year, to late 1971/early 1972. It is reasonably apparent that the purpose of doing so is to seek to establish a case of addiction prior to the introduction of government health warnings on cigarette packets. This suggests a refashioning of the case to meet a point discussed by Morris, J. in his judgment. Morris, J. said that he was troubled by the prospect of the applicant being able to establish a causal connection between his smoking before 1973 and the alleged tortious conduct of Phillip Morris.”[18]
His Honour concluded as follows:
“In my view, regarding the matter overall, the probability is not merely that the case would fail but that it would never really get off the ground because of procedural, factual, legal and evidentiary difficulties. It is likely that it would require a substantial devotion of time and resources of the proposed defendant and the court. In the circumstances I am unable to be satisfied that the proceeding is not or would not be an abuse of the process of the court.”[19]
[17][2004] VSC 523 at [8] (emphasis added).
[18]At [12] (emphases added).
[19]At [13].

“Refashioning”

In this Court, Phillip Morris submitted that the alleged “refashioning” of the case referred to by Hansen, J.[20] was a strong indication that the proposed proceeding would be an abuse of process. In my opinion, this submission should be rejected. Mr Lindsey has sworn an affidavit in connection with this appeal in which he has given an explanation of the change in the date on which his smoking is said to have commenced.[21] There is nothing to indicate that this explanation has been concocted. On the contrary, it seems on its face to be plausible, supported as it is by reference to a contemporaneous document. I note in passing that, both at first instance and in this Court, Phillip Morris eschewed any suggestion that the change reflected any lack of honesty on Mr Lindsey’s part.
[20]See preceding paragraph.
[21]Affidavit sworn 18 July 2005 pp.21-2.

Whether the explanation – and, more importantly, the alleged commencement date - are to be accepted will be key matters to be determined by the tribunal of fact, presumably after cross-examination of Mr Lindsey. It is not possible on a leave application under s.21(3) of the Act – nor, therefore, on an appeal from a grant of leave - for the Court to decide these questions. It follows, in my view, that no inference adverse to Mr Lindsey can be drawn from his having amended the allegation regarding the date on which his smoking is said to have commenced. The submission by Phillip Morris that the amendment betokens abuse of process must therefore be rejected.

“Hawking” and “re-litigating”

I turn now to consider the arguments referred to in paragraphs 17(f) and (g) above, namely that –

· Mr Lindsey’s bringing of nine previous applications in the Supreme Court for leave to commence proceedings against Phillip Morris in a period of 25 months suggested that he was simply “hawking the application from judge to judge in a search for a successful outcome”;

· the ninth application for leave, which succeeded before the trial Judge, should have been dismissed on the basis that it was “no more than an attempt to re-litigate a matter that had already been determined.”

It is important to point out that these submissions are, in terms, directed at showing that the ninth application for leave was itself an abuse of process. That question is, of course, separate and distinct from the question which arises under s.21(4) of the Act, namely, whether the proposed proceeding (to which the leave application related) is or would be an abuse of process. It is also an anterior question since, if the leave application is itself an abuse of process, the application should be stayed or dismissed in limine. In those circumstances, the court would have no occasion to address the merits of the leave application, that is, whether the proposed proceeding would be an abuse of process.

It follows, in my opinion, that the submission that the ninth application was an abuse of process should properly have been made to the learned Judge who was to hear the application. As I have said, it would have been a submission that the application should be stayed or dismissed in limine, without the Court needing to proceed to consider the merits: compare r.23.01(c).

The decision of this Court in Christie v Baker[22] illustrates the point. There, an application had been made under s.23A of the Limitation of Actions Act 1958 for an extension of time within which to bring an action in respect of an alleged injury. The application failed because of a lack of explanation for a period of delay. A second application was made, to a different judge of the County Court, supported by further evidence giving an explanation for the delay. That application was granted. On appeal, this Court (by majority) held that the second application should have been stayed as an abuse of process (in which case it would not have proceeded to a determination on the merits).
[22][1996] 2 VR 582.

The transcript of the hearing before the Judge on 4 March 2005 reveals that the submissions advanced on behalf of Phillip Morris dealt exclusively with the merits of the application for leave, that is, with the question whether the proposed proceeding would be an abuse of process. No submission was advanced, nor was it at any stage suggested, by Phillip Morris that the leave application was itself an abuse of process, not even after the following exchange had taken place between the Judge and Mr Lindsey:

“MR LINDSEY: ... What took place before this court [on the previous applications] took place. I’ve learnt from it, and through those applications – and Justice Hollingworth said there is no limited (sic) on how many applications I can make seeking leave.
HIS HONOUR: I hear what her Honour said but it may reach a point where that will no longer apply, Mr Lindsey. But don’t let’s debate that now. It may reach a point where you may be stopped because you just keep coming back taking up court time and not changing the position. But don’t let’s debate that yet. I wouldn’t go around proceeding on the assumption this court will always be open to Mr Lindsey.
MR LINDSEY: No, I doubt very much whether it will, your Honour.
HIS HONOUR: But anyway, put that to one side. At the moment her Honour said that and you are before me and you are being heard. So, go on, continue.”

In my opinion, it is not open to Phillip Morris on this appeal to argue, for the first time, that the application for leave was itself an abuse of process and should have been dismissed in limine. Any decision to dismiss, or stay, the leave application on that ground would have been made in the exercise of his Honour’s discretion. Appellate intervention following a refusal to exercise that discretion would have been governed by the usual restrictions. The submission not having been made to his Honour, Phillip Morris cannot now ask the appeal court to proceed as if it had been.

The attempt to convert a complaint that the leave application was an abuse into an argument that the proposed proceeding will be an abuse is impermissible on two grounds – first, because Phillip Morris is in substance asking this Court to exercise a discretion which it was for the trial Judge, alone, to exercise; and secondly, because the two questions are in any event mutually exclusive. As to the latter point, either the leave application was an abuse (in which case the judge did not need to consider the s.21(4) question at all) or it was not an abuse (in which case the consideration of the s.21(4) question could proceed (as it did) by reference to the proposed proceeding.) On this analysis, the circumstances of the leave application would have no bearing on the s.21(4) consideration. And that is precisely how Phillip Morris - and the learned Judge – approached the leave application on the rehearing.

Since, however, the question whether the leave application was itself an abuse was fully argued on the appeal, I set out my reasons for concluding that the attack would, in any event, have failed.

I deal first with the argument that Mr Lindsey simply “hawked” his application around. The submission relies on what Hayne, J.A. (with whom Brooking, J.A. agreed) said in Christie, as follows:

“The prospect of there being successive applications under s.23A suggests not only the possibility that there may be conflicting decisions given with the inevitable harm that follows from that but also that a respondent to such an application may be vexed by successive applications until the applicant either produces sufficient material to warrant the grant of an extension of time or tires of the task. It is not fanciful to conclude that the making of successive applications may well engender a belief in a respondent that the applicant had, in effect, hawked the application from judge to judge until a judge had been found who was willing to accede to the applicant’s arguments. The vice of such a result is apparent.”[23]

[23]at 602 (emphasis added).

His Honour’s reference to a respondent being “vexed by successive applications” anticipated a reference (later in the judgment) to the statement in Walton v Gardiner[24] that proceedings can constitute an abuse if –

“their continuance would be unjustifiably vexatious and oppressive...”.

[24](supra) at 393.

In Christie, the additional material sought to be relied on in the second application had all been available to the applicant at the time of the first, unsuccessful, application. In the view of Hayne, J.A., to allow the applicant to make a second application in those circumstances would produce “unacceptable consequences”, which his Honour explained as follows:

“First, as I have already noted, the respondent to the application has no certainty; the first decision has not finally resolved the question whether the applicant may institute proceedings out of time. Second, matters which may have been the subject of extensive debate in the course of the first hearing and about which the judge disposing of that application may have made findings based, perhaps, on the credibility of witnesses, must all be regarded as open for debate afresh. Thus let it be assumed that in the course of the first hearing the applicant was cross-examined about why the application was not made sooner than it was and the judge rejected the explanation proffered, and disbelieved the applicant on his oath, whether because the judge more readily drew inferences adverse to the applicant because of the absence of some evidence or for some other reason. If the applicant can renew the application and for the purposes of that second application put forward further evidence, is the whole question of the credibility of the applicant to be open for fresh debate? If Baker’s submissions are to be accepted, the second judge would come to the matter afresh and would determine the second application without regard to what had happened in the determination of the first.”[25]

[25][1996] 2 VR 582 at 604.

Charles, J.A. dissented in the result, but agreed with Brooking and Hayne, JJ.A. that it was –

“highly undesirable that an unsuccessful applicant for relief under s.23A be permitted to make subsequent successive applications, in the interests both of the courts and the respondent.”[26]
His Honour went on:
“It should be said that while, in my view, the making of a second interlocutory application for an extension of time upon additional relevant facts would not of itself amount to abuse of process, the making of a third or subsequent application after a second rejection would almost inevitably amount to an abuse of process. As to the second application, a number of matters would be relevant to the question whether an abuse of process was involved. The making of a second application on the basis of fresh evidence (if that be possible) or fraud could plainly not constitute an abuse. However a second application on facts and submissions identical to those previously rejected, would almost certainly be rejected on discretionary grounds, accompanied, one would expect, by an order for indemnity costs. A second application made on such a basis would also usually amount to an abuse of process.”[27]

[26]at 606.

[27]at 611-12 (emphasis added).

Hayne, J.A. had proposed a general rule to the effect that –

“a second application [under s.23A] is an abuse unless there is proof of fraud or it is sought to adduce fresh evidence, ‘fresh’, that is, in the sense in which that expression is used in connection with the admission of evidence on appeals.”[28]

[28]at 605.

It was just such a rule which Charles, J.A. concluded that it was not possible for the Court to adopt.[29]
[29]at 611.

A very similar question arose subsequently in the New South Wales Court of Appeal, in Nominal Defendant v Manning.[30] That Court, by majority,[31] declined to follow the majority decision in Christie v Baker, in particular, the preclusive rule enunciated by Hayne, J.A.[32] In the view of the majority, whether a second or subsequent application should be stayed as abuse of process was, ultimately, a matter for the discretion of the Court. According to Heydon, J.A. –

“The real evils to which Hayne, J.A. referred in D A Christie Pty Ltd v Baker (at 602-603) – the risk of conflicting decisions, the unnecessary vexing of respondents, judge-shopping and the diminution of certainty in the conduct by respondents of their affairs – and others – damaging public confidence in the integrity of judicial decisions, expending time and money on litigation unnecessarily – are evils which each court in its individual discretion will rightly strain to avoid.
But the risk of the evils must be balanced against all the circumstances of the case relevant to whether it is fair and just that leave should be granted, and in particular whether a trial which is just and fair for all parties can be held. It must be remembered that the present context concerns the issue of whether an applicant for an extension of a limitation period will ever be able to have the case considered on the merits: failure in the application will prevent any judicial examination of the applicant’s substantive claim, which may in turn have catastrophic consequences for the applicant and the applicant’s family.”[33]

[30](2000) 50 NSWLR 139.

[31]Heydon J.A. and Foster A.J.A.; Mason, P. contra.

[32]at 155 [71]-[72] per Heydon J.A.; 167 [122]-[124] per Foster, A.J.A.

[33]at 156 [72]-[73].

In the view of Foster, A.J.A., there was no flaw in the exercise by the primary Judge of a discretion to admit and consider, on the second application, evidence explaining delay in seeking the extension of time.

“It was not necessary, for its admission, that it be established that it was, despite due diligence, unavailable for the first hearing. The fact that the appellant was subjected to a second application and hearing because of default in relation to the first hearing was, of course, a matter to be taken into account in the exercise of his Honour’s discretion. The weight to be attributed to that fact was a matter for his Honour.”[34]

[34]at 167 [123].

Foster, A.J.A. said that no other factor had been identified as rendering the second application an abuse of process.

“It was not simply a repetition of the previously failed application. It was, quite clearly, a genuine endeavour to repair the deficiencies in the first application. It was not a case of ‘hawking’ the application from judge to judge in a search for a successful outcome. It may be noted, of course, that it was only a second application. A third application following upon two previous failures might well enter the area of abuse of process.”[35]

[35]at 167-8 [124].

One reason for the refusal of the majority in Manning[36] to adopt any general rule was that, as Heydon, J.A. said –

“... there are considerable differences between the particular goals of each type of [interlocutory] order, and the categories of circumstances in which each type of order is made. These differences make it difficult to propound a general rule suitable for all cases when the controversy in one specific case for decision does not have characteristics which are common to all categories. Not only are the categories different, but the circumstances of particular cases falling within each category are almost infinitely various. It is unlikely that a single set of rigid and exhaustive criteria could justly settle all issues.”

[36](supra).

In National Parks and Wildlife Service v Pierson,[37] a differently-constituted New South Wales Court of Appeal (Mason, P., Santow, J.A. and Palmer, A.J.A.) endorsed the statement by McLelland, C.J. in Equity, in Brimaud v Honeysett Instant Print Pty Ltd[38] that –

“the overriding principle governing the approach of the court to interlocutory applications is that the court should do whatever the interests of justice require in the particular circumstances of the case.”[39]

[37](2002) 55 NSWLR 315.

[38]McLelland, J., 19 September 1988, unreported – cited by Foster, A.J.A. in Manning (supra) at 161.

[39]55 NSWLR at 318 [19].

In my view, the decision in Christie v Baker[40] is distinguishable, on two grounds. First, there is a crucial difference between an application by a vexatious litigant for leave to proceed and an application for extension of time under s.23A – and, for that matter, most other interlocutory applications. It is that a leave application by a vexatious litigant is made ex parte. There being no respondent, the making of successive applications does not – cannot - “vex” or “oppress” any other party. The burden imposed on the Court itself cannot be ignored, but this is a matter over which the Court has a large measure of control.
[40]Supra.

Secondly, the present case does not involve what Hayne, J.A. in Christie described as “hawking” the same application from judge to judge in a search for a successful outcome. Had that been the true nature of Mr Lindsey’s conduct, it would undoubtedly have been an abuse of process. Moreover, I have no doubt that it would have been identified as such by one or other of the Judges in the Practice Court. Given that on each occasion there was full disclosure by Mr Lindsey of what had occurred on the previous unsuccessful applications, each successive judge was well placed to decide whether the application before him/her was an abuse of process as an exercise in “judge shopping”. The larger the number of previous failed applications, the more likely it was that the next judge would have formed that view - had it been open to do so.

No such thing happened. Quite the opposite, in fact. On five of the eight occasions which preceded the ninth – successful - application, the Judge in dismissing the leave application recommended that Mr Lindsey obtain legal assistance. It is particularly significant that the Judge who dismissed the eighth application, and was critical of what he described as the “refashioning” of the claim, nevertheless endorsed the view expressed by his various predecessors, that Mr Lindsey should seek legal advice. On none of these eight occasions did the Judge suggest (for example) that the Court’s patience was running out or that Mr Lindsey would be given “one last chance”.

The consistency of the Court’s response, over the course of such a large number of failed applications, is very striking. The response is, I think, to be explained by two considerations. The first is that, after the failure of the first application, each subsequent judge apparently accepted that Mr Lindsey was making “a genuine endeavour to repair the deficiencies” identified on the previous occasion.[41] In dismissing the fifth application, for example, Smith, J. said:

“Mr Lindsey has made a further major effort to gather material and present it as well... I have no doubt that he has used his best endeavours to produce a satisfactory statement of claim.”[42]

[41]Manning at 167-8 per Foster, A.J.A.

[42]See para [23] above.

Secondly, the successive judges apparently accepted that the allegations which Mr Lindsey was wanting to make might well, with the benefit of competent legal advice, be capable of articulation in a statement of claim in proper form. That being so, each of their Honours was evidently of the view that it was in the interests of justice that Mr Lindsey not be shut out.

It is not without significance that Mr Lindsey was representing himself. He had made unsuccessful attempts to obtain legal representation. In allowing Mr Lindsey to make his successive applications, and in encouraging him to seek legal advice, the Judges of this Court were promoting what they perceived to be the interests of justice in the case. Far from condoning an abuse of process, they were dealing – in exemplary fashion – with an unrepresented litigant who appeared to have – potentially – a sound basis for a claim and who, unlike some unrepresented litigants, was obviously listening carefully to the Court’s criticisms and was making a genuine endeavour to address those criticisms.

The conduct of each of the Judges before whom Mr Lindsey appeared – including the learned Judge whose decision is under appeal – epitomises the approach described by Kirby, J. in Re Attorney-General for the Commonwealth; ex parte Skyring,[43]as follows:

“First, it is always important for every Judge to keep an open mind in case a person who has been rejected by courts in the past may have, hidden amongst the verbiage of his or her arguments, a point which has not been previously seen and which may have merit. Vigilance, and not impatience, are specially required where that person is not legally represented;
...”

[43](1996) 70 ALJR 321 at 323.

Phillip Morris also placed reliance on the second aspect of abuse of process described by Mason, C.J. in Rogers v The Queen,[44] namely -

“...that the matter complained of will bring the administration of justice into disrepute.”[45]

[44](1994) 181 CLR 251.

[45]at 256.

The submission relies principally on the fact that Mr Lindsey has not paid the costs ordered by the Federal Court, which I deal with below. But it was also suggested that for the Court thus to permit the making of successive applications would bring the administration of justice into disrepute. It follows from what I have said that I reject this submission. In my view, the conduct of the Judges of this Court in relation to Mr Lindsey’s successive applications should enhance rather than lower the community’s opinion of the administration of justice in Victoria.

Was there new material?

In further support of the argument that the leave application was itself an abuse of process, Phillip Morris submitted –

“Consistency in judicial decision-making suggested that the ninth application should have been dismissed unless some markedly different aspect could be identified or markedly new material was relied upon. No new medical material was relied upon and the essential substance of the factual allegations sought to be made by Mr Lindsey remained the same.
... Mr Lindsey did not identify in the ninth application any change of circumstances which might have justified revisiting the matter but simply relied upon material which had been considered on previous applications.”

It was submitted that the learned Judge hearing the ninth application should have asked the question:

“Is there any material difference between what is before the Court on this application and that which was before the Court on the previous, unsuccessful, application?”

If that question was answered in the negative, then - so it was submitted - the ninth application should have been dismissed as an abuse of process.

In the course of the hearing in this Court, counsel for Phillip Morris presented a document entitled “Equivalent Paragraphs in Proposed Statements of Claim”. This document sought to compare – paragraph by paragraph – the draft statement of claim considered by Hansen, J. in December 2004 with the draft statement of claim which was before the learned Judge on the ninth (successful) application. The purpose of this document was evidently to demonstrate that there was no material difference between the pleading in respect of which leave had been refused on the eighth application and the pleading in respect of which leave had been granted on the ninth.

A careful comparison of the respective drafts of the statement of claim – from December 2004 and January 2005 – does reveal substantial similarity, but it also reveals material differences. For example, the January 2005 version introduces, for the first time, substantive allegations in the following terms:

“9.By 01^st January 1973 despite the introduction of government health warnings on the outer packets of cigarettes alerting the user to the potential health hazard of cigarette smoking, the Plaintiff did continue to smoke the Defendants tobacco product ‘Marlboro’, involuntarily.
10.Further and in the alternative it is alleged by the Plaintiff that by the 01^st January 1973, even though being alerted to the potential health hazard’s associated with cigarette smoking, he could not stop smoking ‘Marlboro’ as he had already developed a degree of addiction to ‘Nicotine’, unknown at the time by him.”

These were new allegations of material fact. They had not been pleaded in the December 2004 version. They went to the critical issue of causation, to which repeated reference had been made by judges on the earlier unsuccessful applications.

Likewise, the January 2005 statement of claim alleged, for the first time, that Phillip Morris not only knew that its cigarettes contained nicotine, and that this was an addictive substance, but that it had kept this information secret (para 8). The December 2004 draft of the statement of claim alleged knowledge but not concealment. It contained an allegation (in the particulars) of a failure by Phillip Morris to “make known that it had introduced nicotine”. But an allegation of failure to disclose is, obviously, different from an allegation that information was deliberately withheld.

In short, the content of the document of central importance to the application – the draft statement of claim – had changed materially between the eighth application and the ninth.

Prospects of success

As noted earlier, Phillip Morris submitted that –

“The material before the Court... did not provide a sufficient basis for the Court to conclude that Mr Lindsey’s proposed proceeding had ‘realistic prospects of success’ and would be a ‘case of substance’.”

Phillip Morris relied – in this Court, as at first instance – on the English Court of Appeal decision in Becker v Teale.[46] In that case, the plaintiff/appellant had been given leave to appeal. She had previously been declared a vexatious litigant and the grant of leave was (at that time) governed by s.51(1) of the Supreme Court of Judicature (Consolidation) Act 1925, the relevant part of which provided that –

“... leave shall not be given unless the court or judge is satisfied that the proceedings are not an abuse of the process of the court and that there is prima facie ground for the proceedings.” (emphasis added)

[46][1971] 3 All E.R. 715.

It can be seen immediately that, while the then-applicable English provision[47] was comparable to s.21(4), it contained a second requirement which has no equivalent in s.21(4), namely that there be “prima facie ground for the proceedings”. That significant difference must be borne in mind in considering the applicability in Victoria of what the Court of Appeal said in that case.
[47]The new English provision is s.42 of the Supreme Court Act 1981: see paragraph 69 below.

It was the unanimous view of the Court of Appeal in Becker that the appeal (in respect of which leave had been granted) was hopeless. Davies, L.J. (with whom Stephenson, L.J. agreed) described the grant of leave as “unfortunate” and went on to make the following general remarks about the approach to be adopted on an application by a vexatious litigant for leave to proceed:

“In my view the jurisdiction which is given by that section to a judge in chambers to give leave for the institution or continuance of proceedings by a vexatious litigant is a jurisdiction that should be very carefully exercised. Ex hypothesi the person has already ‘habitually and persistently and without any reasonable ground instituted vexatious proceedings’; and there is a high onus cast on such a person when he or she applies to the judge for the leave mentioned in the section.
We all, unfortunately, know what ingenuity vexatious litigants can from time to time display in, if I may use the expression, cooking up imaginary claims and pursuing futile appeals, and it is to be remembered that the application, in the first instance at any rate, is ex parte, though the judge may cause notice of the application to be given to the Attorney-General so that he may be represented. As I say, we do not know what was before Cooke, J. when he made the order that he did; but I repeat that in my view the jurisdiction is one which should be very carefully and indeed almost sparingly exercised, and the court should be satisfied, before giving leave, that there is really a case of some substance, ...”.[48]

[48]at 716 (emphasis added).

In the present case, the learned trial Judge was referred to Becker v Teale. His Honour was content to adopt the approach set out in the above extract. He noted that the now-current English provision – s.42 of the Supreme Court Act 1981 - required the vexatious litigant to establish “that there are reasonable grounds for the proceedings”. His Honour went on:

“The latter requirement is absent in the Victorian legislation. However, in my opinion, a vexatious litigant in this State would have to establish, in proving that the proceeding was not an abuse of the process of the Court, that there were reasonable grounds for the proceeding.
...
Because Mr Lindsey has been declared a vexatious litigant, a court must proceed cautiously and with extreme care before granting him leave to bring a proceeding. The Court must carefully consider any application. The jurisdiction should be sparingly exercised and only where there is a case of substance. His track record of bringing vexatious proceedings without any reasonable ground supports the application of a strict test.”[49]

[49]at [8], [11].

In the event, his Honour was satisfied that the statement of claim disclosed a cause of action and that Mr Lindsey’s claim “had substance”. I am of the same view.

With respect to his Honour, however, I see no justification for reading into s.21(4) a second pre-condition to the grant of leave, of the kind which appears in the English legislation but not in the Victorian equivalent. The only pre-condition in s.21(4) is that the Court be satisfied that the proposed proceedings “are not or will not be an abuse of the process”. As noted earlier, the principles developed with respect to abuse of process require the Court to consider, so far as it is possible on such an application, the prospects of success of the proposed proceeding. But this examination is not for the purpose of deciding whether there are “reasonable grounds” for the proceeding, or whether the case “has substance”, but in order to decide whether the proceedings are “foredoomed to fail”. Once the Court has concluded that the proposed proceedings are not foredoomed to fail, s.21(4) in my view neither requires nor authorises the Court to go further. Had Parliament intended there to be a separate investigation of the merits of the proposed proceeding, by reference to “reasonable grounds”, “prima facie case” or some such test, it could have said so.

The conclusion that the proposed proceeding has substance precludes a finding that it is foredoomed to fail. Indeed, as noted earlier, Phillip Morris made no such submission. It follows, in my view, that the Phillip Morris submission – that the proposed proceeding is an abuse of process because it has insufficient prospects of success – must be rejected.

I should add for completeness that the learned trial Judge paid proper regard to the characterisation of Mr Lindsey’s past conduct before the courts as “habitual and persistent” and so on. Plainly, this is a factor relevant to the determination of the question of abuse of process in relation to the proposed proceedings. But it will hardly ever be determinative. After all, it is in consequence of that prior conduct that the litigant is already in the – quite exceptional – position of having to seek leave before being free to litigate.[50] What really matters on an application under s.21(4) is the Court’s assessment of the form, content and likely conduct of the proposed proceeding, having regard to the relevant indicia of abuse of process.
[50]See Skyring (supra) at 323C.

“The outstanding costs principle”

Counsel for Phillip Morris argued that there was a legal principle, identified as “the outstanding costs principle”, to the following effect:

“There should be a stay of a second proceeding between the same parties in respect of the same or substantially similar subject-matter until outstanding costs orders are paid.”

This principle was said to be founded upon that aspect of the law of abuse of process which seeks to prevent a use of court procedures which may bring the administration of justice into disrepute.

Various authorities were relied on as showing the existence of this principle. In Boase v Jones,[51] the plaintiff had begun an action in the County Court for the recovery of certain expenses. Part of the claim was struck out on the ground of want of jurisdiction, and costs were awarded against the plaintiff. Without having paid those costs, the plaintiff then brought an action in the Supreme Court raising the same issues as had formed that part of the proceeding struck out in the County Court. The defendant sought a stay of the Supreme Court proceeding until the County Court costs were paid. Cussen, J. granted the stay pending payment of the County Court costs.
[51][1925] VLR 465.

Hutchinson v Nominal Defendant[52] was another example of a second action being commenced, between the same parties and in respect of the same subject-matter, by a plaintiff who had not yet paid the costs of the failed first action. A stay was granted on the defendant’s application pending the payment of those costs. The plaintiff applied successfully to Isaacs, J. for a lifting of the stay order. His Honour said:

“It is undoubtedly established law that a second action brought in respect of the same subject matter in respect of which the plaintiff has already brought an action and failed will be stayed until the costs of the first action have been paid. This is not an absolute right, but is in reality an exercise of the discretion of the court to stay proceedings which are either vexatious, unjust, oppressive, malicious or frivolous in the particular circumstances, and the courts have taken the view that it is certainly unjust and oppressive for a defendant who has already faced an action by the plaintiff and succeeded and has not been paid his costs to run the risk of having to face a second action on the same subject matter with probably the same result and risk that if the plaintiff fails in that second action the defendant will be unable to recover his costs or may be left lamenting in respect of them.”[53]

[52][1972] 1 NSWLR 443.

[53]at 448-9 (emphasis added).

In exercising his discretion to lift the stay, Isaacs, J. considered the merits of the second action and concluded that the second action was not “vexatious, unjust, oppressive, malicious or frivolous”. The second relevant factor favouring a lifting of the stay was that, because of the grant of a certificate under the Legal Assistance Act, the defendant was no longer at risk as to costs in the second action if the plaintiff was unsuccessful.

In Thames Investment and Securities plc v. Benjamin,[54] the defendants made a second application for security for costs, having failed on a similar previous application and not having paid the costs ordered against them in respect of that application. The plaintiff argued that the second application should not be heard until those costs had been paid or provided for. Goulding, J. said:

“... there is no rigid and inflexible rule that dictates what the court must do. I think the matter is one for the court’s discretion to be judicially exercised on the facts of the particular case, though authority does give some indication of the way in which the discretion should generally be exercised.
Quite apart from authority, two propositions would seem to me plain as a general rule. The first is that where an application has been made for a particular relief and has been dismissed with costs because of some fault or lack of success on the part of the applicant, then, generally speaking, the applicant ought not to be allowed to apply again for identical or equivalent relief if he is guilty of failure to pay the costs of the previous application. [The second proposition is not presently relevant]”.[55]

[54][1984] 3 All E.R. 393.

[55]at 394 (emphasis added).

In Sinclair v. British Telecommunications plc,[56] the factual situation was again similar. After the failure of the plaintiff’s first proceeding, and the making of an order for costs, the plaintiff without paying those costs commenced a second proceeding based on various contracts, including the contract the subject of the first proceeding. On the defendant’s application, the second proceeding was stayed until the original costs order was satisfied. The Court of Appeal dismissed the plaintiff’s appeal, holding that the Court had –

“… an inherent jurisdiction which, in essence, enables the court to prevent a plaintiff subjecting a defendant to a second, substantially similar, action without satisfying his obligations in respect of the first action.”[57]

[56][2000] 2 All E.R. 461.

[57]at 469 per Ferris, J., with whom Peter Gibson, L.J. agreed.

In the view of Judge, L.J.,[58] the second proceedings –

“involved a clear misuse of process. Part of the court’s inherent jurisdiction is to ensure that its process is not so misused...”[59]

[58]With whom Peter Gibson, L.J. also agreed.

[59]at 472.

The Court treated as relevant to the exercise of the discretion the possibility that a stay pending payment of the original costs might stifle the later proceeding, because of the impecuniosity of the plaintiff. In the event, the Court held that the plaintiff had not sufficiently established his lack of financial capacity.

What emerges from these authorities can, I think, be summarised as follows:

1. Where -

(a) a second proceeding is commenced by a party, in respect of subject-matter which is the same as, or similar to, that of an earlier, unsuccessful, proceeding brought by the same party;

(b) that party was ordered to pay the costs of the first proceeding; and

(c) those costs remain unpaid,

the court has a discretion to stay the second proceeding until the costs have been paid.

2. The power to grant a stay is exercisable by the Court in order to ensure that there is no abuse of process, constituted by exposure of the defendant to the cost of defending the second proceeding while its costs of the first proceeding remain unpaid.

3. In the exercise of the discretion, it is relevant to consider the financial position of the unsuccessful plaintiff and the possibility that the grant of a stay may stifle the second proceeding.

Applying these principles to the present case, I respectfully agree with the learned trial Judge that it was relevant to the question of leave under s.21(4) that Mr Lindsey owes Phillip Morris a substantial sum for costs (in excess of $90,000) and is unlikely to pay the costs before the finalisation of the County Court proceeding, if at all. The learned Judge considered the matter carefully, saying:

“Vexation to the other litigant often happens. Time spent and the incurring of legal costs which are often not paid, cause much harm, annoyance and distress to the other party. Sometimes the other party is entitled to protection. Sometimes the vexation can cause real and irremediable financial hardship. Whether or not the procedure is an abuse of the court’s process will depend on the circumstances. The court must strike a balance between a claim of substance going forward and avoiding vexation to the litigant brought about by financial burdens... The balancing exercise involves the court in considering the substance of the claim. It would be a serious step for the court to deny a litigant, indeed a vexatious litigant, his day in court if the claim has substance for substantial damages, because costs were owed in respect of previous proceedings involving the same parties.”[60]

[60]at [29].

His Honour noted that the proceeding in the Federal Court, which gave rise to the costs order, concerned causes of action under the Trade Practices Act and did not include a common law claim in negligence of the kind sought to be advanced in the proposed County Court proceeding. His Honour concluded by saying:

“I do not think [Mr Lindsey’s] present proceeding is oppressive in the context of the previous litigation in the Federal Court and the institution of the proceeding in the County Court. The mere fact that he owes money to Phillip Morris for costs does not convert his common law negligence claim in the County Court to an abuse of process of that court.”[61]

[61]at [30].

I respectfully agree. That conclusion is, I think, reinforced by the fact that Phillip Morris is a well-resourced litigant, for whom the non-payment of the Federal Court costs creates no financial difficulty at all. On the other hand, Phillip Morris does not dispute that Mr Lindsey is financially incapable of meeting the costs order. He says that he will be able to - and will - pay those costs if he succeeds in his County Court proceeding. In those circumstances, to treat the non-payment of the Federal Court costs as a bar to the County Court proceeding would, in effect, prevent the County Court proceeding from ever going ahead.

As noted earlier, Phillip Morris submitted that to permit Mr Lindsey to continue to pursue litigation against it while the Federal Court costs remained unpaid risked bringing the administration of justice into disrepute. I am not persuaded by that submission. As Mr Sackar QC properly conceded, there are many factors which bear upon the repute (or otherwise) which attaches to the administration of justice. One such factor - as he also conceded – is that public confidence in the administration of justice may be adversely affected by the high cost of legal proceedings and by the perception that well-resourced litigants have better opportunities to assert and defend their rights than others do. On that view, permitting Mr Lindsey to proceed notwithstanding his inability to meet the earlier costs order might be thought to enhance the community’s opinion of the justice system.

Resource implications; procedural and evidentiary difficulties

According to the Phillip Morris submission:

“It is inevitable that Mr Lindsey’s proceeding in the County Court will give rise to procedural and evidential difficulties as well as the expenditure of significant effort and resources on the part of the County Court and [Phillip Morris], given the nature of the proceeding and the manner in which Mr Lindsey has conducted litigation in the past. In his writ filed in the County Court proceeding, Mr Lindsey seeks a trial before judge and jury.”

In this Court, counsel for Phillip Morris argued that we should –

· note the “scandalous” allegations in Mr Lindsey’s written submissions, including alleged “dark conspiracies about lawyers”;

· note that the submission contained a lot of irrelevant material and this in turn would create “blatant difficulties of case management”;

· accept that the change in the alleged date of commencement of smoking would create “a layer of complication which will elongate the proceeding, and increase cost”;

· recognise that a disproportionately large amount of court resources would be used in the process of hearing a relatively small claim (Mr Lindsey makes no claim for past economic loss).

In my view, the last of these arguments can be dismissed immediately. It seems to me to be wholly irrelevant to the question of abuse of process whether the proposed proceeding will have small, medium or large resource implications, either for the court in question or for the proposed defendant. It is the antithesis of basic principles of access to justice that a litigant who has a claim of substance should face a greater obstacle to the commencement of that proceeding simply because the case is complicated and will take longer to try than some other, simpler, proceeding.

As to the other issues about case management, it seems to me that, as Ormiston, J.A. said during argument, we are in the realm of speculation. It is not possible with any degree of confidence to forecast how the trial of the proceeding will run. In part this is because one cannot predict what pre-trial steps might be taken, either at the court’s direction or at the instigation of plaintiff or defendant. Again as Ormiston, J.A. said in argument, the complaints which Phillip Morris makes about Mr Lindsey’s tendency to stray into irrelevancy, and conspiracy theories, are precisely the kinds of matters which a trial judge is able to deal with if and when they arise.

Insofar as it is relevant, I formed the view on the basis of his appearance in this Court that Mr Lindsey is perfectly capable of presenting his case clearly and coherently and in a proper manner. The content and manner of his presentation in this Court was unexceptionable.

Ambiguity in the pleading

In this Court, Phillip Morris argued that one of the factors tending to show that the proposed proceeding was an abuse of process was that –

“Mr Lindsey’s proposed pleading was deficient as it was ambiguous in several respects.”

The written submission did not amplify this contention, nor was it much elaborated in argument.

This was a somewhat surprising submission to make on the appeal given that, as I pointed out in argument, the transcript of argument before the learned trial Judge records what seems to be a concession by counsel for Phillip Morris – made more than once – that the pleading was adequate. For example, senior counsel said to his Honour:

“Justice Hansen had a [draft statement of claim] which was, I don’t say completely identical, but substantially the same as the one your Honour looked at. But the point I’m conceding against myself for the moment is he’s got to get a tick in that box, and we accept that.”[62]

[62]Transcript 4 March 2005 p.15; see also T14, 16, 26 and 28.

In any case, a complaint that a pleading was “ambiguous in several respects” would be unlikely, by itself, to add much to a submission directed at showing abuse of process. Ambiguity in pleadings is a common enough complaint, but it is remediable in the conventional way, by a request for further and better particulars or, ultimately, by an application to strike out the pleading as embarrassing.

Moreover, in my view, the draft statement of claim which was before his Honour was satisfactory in both form and content, and the concession apparently made below by counsel for Phillip Morris was properly made. The claim which Phillip Morris has to meet is clear on the face of the pleading, namely that Phillip Morris manufactured and sold a product which, to its knowledge, contained “a poisonous and dangerous drug of addiction”.

Conclusion: no error

As noted earlier, the learned Judge treated the application by Phillip Morris as a rehearing of Mr Lindsey’s application for leave to proceed. His conclusion was as follows:

“After considering the additional material and the submissions of Phillip Morris, I am satisfied in all the circumstances that the proceeding instituted by Mr Lindsey in the County Court is not an abuse of process of the Court. It follows that I am not persuaded to vacate the order that I made on 12 January 2004.”

In my view, there was no error in this conclusion. For the reasons I have given in relation to the various grounds relied on by Phillip Morris, I am satisfied

that the proposed proceeding is not, and will not be, an abuse of process of the Court.

As I pointed out at the beginning of these reasons, the discretion to grant leave is not enlivened unless the Judge reaches that state of satisfaction. It is not surprising, however, that his Honour did not treat the exercise of discretion as a separate and subsequent step. Implicitly, Phillip Morris relied before his Honour, as in this Court, on the same matters in relation to the exercise of discretion as bore upon the state of satisfaction as to abuse of process. For the same reasons, I see no appellable error in his Honour’s exercise of discretion to grant Mr Lindsey leave to proceed. It follows that the appeal must be dismissed.

ORMISTON, J.A.:

On this appeal I have reached the same conclusion, as has the learned President, that the appeal should be dismissed, substantially for the reasons he has stated but subject to the matters which appear below.

As to abuse of process I agree that it has not been demonstrated that the learned judge erred in reaching the conclusion that he was satisfied “that the proceedings are not or will not be” an abuse of process, as is required under sub-s.(4) of s.21 of the Supreme Court Act 1986 (“the Act”). The expression “abuse of process” has been the subject of much authority but I agree generally with what the President has said on this subject, save to emphasise, as has been stated on many occasions,[63] that the concept cannot be confined to fixed categories. Clearly the onus rested on the respondent Mr Lindsey, as the person declared a vexatious litigant, to establish that the condition as to its absence had been satisfied. Nevertheless, although the decision on this issue may be said to be one which does not involve the exercise of a discretion and therefore one in which an appellate court is said to be in as good a position to reach conclusions as the trial judge, I am impressed by the fact that the learned judge of the Trial Division, who has had great experience in conducting and

hearing common law claims, reached the conclusion that the proceeding as presently constituted was not an abuse of process. Although in strictness such a decision does not involve the exercise of a discretion, it nevertheless requires the making of a value judgment or a series of value judgments of a kind frequently employed in the exercise of a discretion. Here the judge looked at the totality of the material, especially that which had led to the rejection of the earlier eight applications, but was prepared to conclude that the proceeding was not an abuse of process. It has not been demonstrated to me, on the argument put to the Court, that he was wrong in that conclusion.

[63]See, e.g., per Mason, C.J. in Rogers v. The Queen (1994) 181 C.L.R. 251 at 255.

Two principal aspects were relied upon by the appellant, the first being that the proceeding would be an abuse of process “for pleading, evidentiary, factual procedural and other reasons”, which are set out in para.[23] of the President’s judgment. Particular reliance was placed on the series of earlier applications for leave to bring proceedings of an almost identical kind, which had all failed, but I agree entirely with what the President has said on that subject. I also agree with what the President has said as to the appellant’s contention that the claim had been refashioned deliberately to overcome a previously perceived deficiency.

However, on one small issue, referred to in paragraph [42] of the President’s judgment, I would place a caveat. I agree that on applications of an interlocutory kind such as those brought under s.21(3) of the Act, it is ordinarily not practicable to decide questions of substantive fact raised on the application. In broad terms that is a general rule for all interlocutory applications but it is a rule which is subject to exceptions in appropriate circumstances. There may be questions of fact, especially of a straightforward kind, where a proposed plaintiff seeks to bring proceedings based on an allegation which can be demonstrated incontrovertibly to be wrong. In my experience that has occurred from time to time. The Court should be free to halt in limine a claim dependent on a patently false fact, notwithstanding that it will be necessary to reach that factual conclusion before characterising the claim as an abuse of process. Such an answer may not be put forward on many occasions but the Court should not be restricted in its capacity to shut out a vexatious or oppressive proceeding which will have no real chance of success.

As to the contention that the respondent Lindsey had hawked the application from judge to judge and had merely sought to relitigate an application which had already been determined, I agree with the President’s conclusions and reasoning as to why these matters have not been made out. In essence, there had been changes in the case made by Mr Lindsey of a kind recognised by the judges to whom the earlier applications had been made and in particular by the learned judge who granted the application.

On the other hand I am not so convinced that the appellant was not now entitled to raise matters of that kind by reason of the fact that they went to the issue whether the application itself was vexatious or an abuse of process, as opposed to the issue whether the proposed proceeding could be so characterised. The truth of the matter is that it would be highly unlikely that a proposed defendant would participate on the primary hearing on an application pursuant to s.21(3) of the Act, for a vexatious litigant requires leave even to file a proceeding. The defendant’s right can only be to seek to set aside the order after the event, so that there can and will normally be no separate preliminary application by a defendant to prevent the application pursuant to s.21(3) being heard. The judge will have to resolve the setting-aside application having regard to all matters which might otherwise have been taken into account to reject it. I believe it would ordinarily be unrealistic to divide that application into two parts and to confine a defendant accordingly. It is, however, a quite separate issue whether an appellant will be allowed to raise issues which were not raised before the judge in the Trial Division and that must depend upon ordinary principles relating to the right of appellants to raise unpleaded issues or issues that were not relied upon below. Moreover I would prefer to express no opinion as to the extent to which Christie v. Baker[64] should be applied in relation to applications such as the present. I would say only that it must be remembered that the rules relating to res judicata and issue estoppel frequently are inapplicable to matters decided on interlocutory applications such that, if there be no firm rules relating to the relitigation of matters on interlocutory applications, there might well be a rush of applications from unsuccessful applicants mending their hand in the light of unfavourable interlocutory decisions.
[64][1996] 2 V.R. 482.

As to the test under s.21(4), I agree with what the President has said as to the application in this State of Becker v. Teale[65]. The relevant English legislation at the time required that an applicant show also that there be “prima facie ground for the proceedings”. The section here requires only that it be shown that the proposed proceedings “are not or will not be” an abuse of process. I was at first concerned because the words “or will not be” were first inserted in the 1986 Act and clearly were intended to add something to the provision. On the other hand, the test is now expressed in the alternative so that there is on the face of it no additional bar to satisfy. I am inclined to the view that it is intended to overcome a lack of particularity in what an applicant puts forward, such that one can only test the claim by what one can forecast “will be” the nature of the case in the future. It is of course not irrelevant to showing that a case is an abuse of process to show that from the outset it “can be clearly seen to be foredoomed to fail”.[66] That characterisation of an abuse of process, however, would suggest that the decision should be made by reference to what is known or stated, whereas the English legislation necessarily required the factual basis to be made out so that the Court could be satisfied that the proceeding had a prima facie basis. That is not what the present Victorian section requires so that I agree with the conclusion of the President as to the applicability of cases resting on the English legislation. Nevertheless, I would suggest that some such requirement might well be added to the Victorian section so as to make it clear that an applicant must put forward some basic factual material to demonstrate a prima facie case. In essence that is what has been done in the present case and, I believe, in most cases in the past, for doubtless the need for a vexatious litigant to prove a negative with respect to an abuse of process has prompted them to provide factual support for their allegations in order to get leave. The clear rejection of the Becker v. Teale test may change that perception and in my opinion the legislature should clearly consider whether it is necessary to protect the courts from applications of a less meritorious kind by a vexatious litigant by inserting some such requirement as to proof of a prima facie case into s.21. It should be noted that, at least in my experience now over many years, orders under s.21 are comparatively rare and the Supreme Court has been very cautious in declaring persons vexatious litigants.
[65][1971] 3 All E.R. 715.
[66]See Walton v. Gardiner (1993) 177 C.L.R. 378 at 393.

Before dealing with the later cases in England, in particular with the decision in Hines v. Birkbeck College in which the distinction was emphasised, it is necessary to see how the rule was transplanted into Australian practice. Boase v. Jones is the only reported Victorian case to my knowledge and depends entirely on M’Cabe. In New South Wales, however, there have been a number of decisions both at first instance and on appeal which appear also to have adopted the English practice, but to have applied the relevant authorities with respect to the non-payment of costs of previous actions in a way which has resulted in a restatement of the rule in somewhat less emphatic terms, in essence reflecting that the power is discretionary and that the object is to avoid vexation.

For practical purposes one may start with a decision of the New South Wales Full Court in 1874 in Contest v. Croxton[117]. Perhaps because of the newspaper source of the report, no authorities appear to have been cited directly to or by the Court, though one may argue that it was consistent with Cobbett v. Warner. Whatever be the reason, the Court, consisting of Sir James Martin, C.J. and Hargrave and Faucett, JJ., expressed the rule in broad discretionary terms as follows[118]:

“Generally speaking the court had no power to stay proceedings in an action, unless it was vexatiously brought. But where, after a first action has been determined, a second was brought for the same cause, then the Court might interfere if it appeared that the second action was vexatious.” (Emphasis added.)

In agreeing that in fact it had shown clearly that the later action had been both vexatious and malicious, so that the order should not be set aside, the Court concluded[119]: “No doubt this was a power which the Court would exercise very sparingly, because it might be that a poor man would be prevented from obtaining redress, but under the facts here the order was justified.” The approach there stated was applied 22 years later by Cohen, J. in Timoney v. Scott, after citation to him of decisions such as Martin and M’Cabe, in a manner whereby his Honour made an order for a stay upon being satisfied “that the bringing of this second action was vexatious”[120].

[117]Taken from a report in the Sydney Morning Herald on 4 July 1874 it was cited by Cohen, J. and printed as an annexure to his decision in Timoney v. Scott (1896) 12 W.N. (N.S.W.) 127 at 128.

[118]At 128.

[119]Ibid.

[120]At 128.

Subsequently in a judgment which has been cited several times in New South Wales, Rice v. Henley[121], Harvey, J. analysed a large number of English and New South Wales authorities cited to him, including Timoney v. Scott. In a common law action, in which the same facts and evidence were relied upon as in an earlier action but the case was shaped somewhat differently, his Honour upheld an order of the Deputy Prothonotary ordering a stay until the costs of the former action had been paid. He did not, however, apply the rule in precisely the same terms as were expressed in either Timoney or M’Cabe. Although he said that in those circumstances the unsuccessful plaintiff “shall not bring another action for the same cause and against the same defendant” until costs were paid, he emphasised[122] that: “Prima facie under these circumstances the second action is in the eyes of the Court vexatious.” After stating that the same law applied in New South Wales and in England and that no change had been effected by the Judicature Act, he expressed[123] the principles in these terms:

“I start with a general rule that provided the second cause of action is for the same cause and between the same parties, the Court should stay proceedings in the second action till the costs of the first action are paid. This is an invariable rule in actions of ejectment. In other cases it is not invariable and the force of the rule varies with different forms of action, e.g., being almost invariably applied in actions of libel and slander. But there is no absolute rule under which the Court exercises its discretion, and I do not wish to lay down any rule which may fetter the Court in the exercise of such discretion.”

A little later he said[124], “the second action is vexatious and oppressive and the plaintiff must show some special circumstances which will justify the second action being allowed to proceed before the costs of the first are paid.” (Emphasis added.)

[121](1915) 32 W.N. (N.S.W.) 54.

[122]At 54.

[123]At 55.

[124]At 55.

Some years later that statement of principle was adopted by the Full Court in Bowen v. Hickey[125]. Again the costs of an earlier action which had failed had not been paid and the Prothonotary had stayed the proceedings until their payment. It is not entirely clear what authorities were cited to the Full Court on this occasion but there is no doubt that the Full Court accepted[126] the analysis of the early authorities by Harvey, J. in Rice v. Henley, including Martin and M’Cabe. Indeed their Honours said[127]: “In our opinion the judgment of Harvey, J. in Rice v. Henley correctly states the law”. They accepted that prima facie, unless the costs are paid, a second action “is in the eyes of the court vexatious”. Moreover they agreed[128] with his proposition that the second action is vexatious unless the plaintiff shows “some special circumstances which will justify the second action being allowed to proceed”. The Court also considered what might be special circumstances, in particular those upon which counsel relied. As to an argument that such circumstances were made out because the plaintiff was impoverished, such that the payment of costs would be impossible, they thought[129], perhaps strangely, that this was a circumstance which would have the greatest weight in relation to a claim by the defendant for security. They continued[130]:

“It has long been established that the mere fact that a plaintiff is insolvent or a bankrupt or a pauper will not of itself entitle the defendant to security for his costs. But this is not an application of that type at all. The plaintiff has already had one opportunity to litigate his claim and the proceedings entered in favour of the defendant. An action which is instituted with a view to litigating the same complaint a second time against the same defendant without paying the costs of the first action is one which is, prima facie, regarded as vexatious, and it is to prevent a litigant enjoying the privilege of a multiplicity of actions at the expense of the defendant that the rule is aimed”.

In the result they held[131] that the respondent had been “entitled to the relief sought unless the plaintiff appellant [could] show that there [were] some special circumstances which would justify relaxation of the normal rule,” but no such circumstances were shown in the particular case.

[125](1958) 78 W.N. (N.S.W.) 820 (the volume being published in 1961). The Court consisted of Street, C.J., Owen and Manning, JJ.

[126]At 822.

[127]Ibid.

[128]Ibid.

[129]At 822-823.

[130]At 823.

[131]Ibid.

It is unfortunate that neither of these last two cases were cited to or referred by Isaacs, J. in Hutchinson v. Nominal Defendant when he considered the practice in 1972. So his Honour expressed the rule[132] in terms set out in paragraph [91] of the judgment of the learned President herein, but the difficulty is that they express the relevant principles in different terms from those which had recently been stated by the Full Court in that State. Thus, although accepting M’Cabe as giving what might appear to be a prima facie right to an order for a stay, Isaacs, J.[133] said that it was “not an absolute right, but is in reality an exercise of the discretion of the Court to stay proceedings which are either vexatious, unjust, oppressive, malicious or frivolous in the particular circumstances”. Another aspect, he said,[134] which is a relevant consideration for a judge, in exercising the discretion, is that it should be seen “whether the plaintiff in any event has any merits and whether the action may be said to be vexatious [etc.] because of the lack of any such merits.” As to the possible impecunious condition of a plaintiff his Honour appeared to take a more benevolent approach, accepting the passage previously cited from the newspaper report of Contest v. Croxton but, most unfortunately if I may say so with respect, not examining what the Full Court had said on the subject in Bowen v. Hickey.
[132]At 448-449.
[133]At 448.
[134]At 449.

Until the recent series of cases involving, and “reported”[135] under the name Idoport Pty. Ltd. v. National Australia Bank Ltd., there has been no subsequent consideration in Australia of the rule, to the best of my knowledge. The issue was looked at a number of times by judges at first instance and on one brief occasion by the Court of Appeal, but because reference was at this later stage made to more recent English decisions, it is preferable to leave any analysis of this group of cases until the recent English decisions have been examined.
[135]In fact all remain unreported, except on the Internet.

This matter of payment of the costs of a previous unsuccessful action has arisen several times in the last 20 years or so in England but again, if I may say so with respect, there has been a similar tendency for decisions to be made as if they were ships passing in the night, with a failure to refer to one group or another of some of the earlier decisions. This cannot be said in strictness of the first of those decisions, Thames Investment and Securities Plc v. Benjamin[136], for it was a case in which Goulding, J. was considering the relevant remedy to give to defendants who had successfully resisted some two notices of motion in the same action and sought to have their costs paid before the action proceeded further. His Lordship granted the relief sought but expressed[137] the rule in terms that there was “no rigid and inflexible rule that dictates what the Court must do” and that the matter was “one for the Court’s discretion to be judicially exercised on the facts of the particular case”. The full passage, and a further proposition as to what prima facie ought to occur, appear in the judgment of the President at para.[93]. In my opinion, however, what his Lordship said was essentially confined to cases where the costs were outstanding by reason of the failure of the plaintiff to succeed on some interlocutory motion or application[138].
[136][1984] 1 W.L.R. 1381; [1984] 3 All E.R. 393.
[137]At 1384.
[138]See especially the discussion and the authorities cited at 1385.

The next decision, Hines v. Birkbeck College (No. 2) is of some considerable importance, albeit that it has not been frequently cited except on questions of issue estoppel. There was extensive citation of authority to the Court, albeit that many relevant authorities were cited by the appellant in person, being a former professor of economics. Although the defendant’s claims of res judicata and issue estoppel were rejected with respect to the outcome of an earlier proceeding, an application had been successfully brought to stay the new proceeding until the costs of the first had been paid. Nourse, L.J., with whom Balcombe, L.J. and McCowan, L.J. concurred, sought to analyse at least the principal earlier authorities being Morton, Martin, Wickham and M’Cabe. His Lordship observed[139] that the second and fourth of those authorities, namely Martin and M’Cabe, were cases where the plaintiff, having failed in one action, brought a second action for the same matter. As to these authorities the trial judge (Mervyn Davies, J.) had said that a stay for non-payment of costs would be “ordered as of course; unless no doubt there are some wholly exceptional circumstances”.[140] Nourse, L.J. said that the plaintiff had sought to argue for a “less stringent rule” relying primarily on Morton and Wickham but as to these cases he said[141]:

“However, each of those cases were concerned with the question whether a stay should be granted until the payment of costs which had been ordered to be paid in the same action. I can well see that a different rule may apply where there has been no final disposal of the action. That is not a state of affairs with which we are here concerned.”

But he did continue by stating that the trial judge had “correctly extracted the principle” of M’Cabe and he had not erred in applying it, from which I would infer that he accepted, although there was no direct statement to that effect appearing in M’Cabe, that the rule would not be applied if there were “wholly exceptional circumstances”. One may observe that that statement of the principle, slightly qualified as it is in comparison with the bold words used in M’Cabe, has considerable similarity to the “special circumstances” exception referred to by the Full Court in Bowen v. Hickey. I suggest, with respect, that each court was aware that rules of that kind import an element of discretion, albeit that in the statement of principle the strong predilection of the court was that the making an order in the ordinary case and “as of course” should mean that the plaintiff who has refused to pay the costs of a former action must show special circumstances in order to avoid the making of a stay order.

[139][1992] Ch. at 45.

[140]Cited at 45.

[141]At 45-46.

There is one subsequent properly reported decision of the Court of Appeal which has sought to lay down principles relating to the stay of proceedings for failure to pay costs of an earlier action, namely Sinclair v. British Telecommunications Plc[142]. Regrettably the only cases cited to that Court on the issue were cases relating to stays sought with respect to interlocutory motions and applications, namely Morton v. Palmer and Thames Investment and Securities. With the greatest of respect, therefore, I find the analysis therein contained unsatisfactory because it proceeds upon the basis that the various dicta relating to the latter kind of application, many of which have been set out earlier, were used as the basis for qualified statements of principle which are not consistent with the earlier decision of the Court of Appeal in Hines v. Birkbeck College (which was neither cited nor discussed), nor are they consistent with the line of authority in New South Wales represented by Bowen v. Hickey. For example, Ferris, J., who seems to have given the principal judgment, took as his starting point[143] the principles stated by Goulding, J. in Thames Investment and Securities, which in turn were reliant on the statements in Morton v. Palmer. So he merely considered that “generally speaking, the plaintiff ought not to be allowed to apply for further identical or equivalent relief”, although it might seem that his primary concern was as to jurisdiction at that stage.[144] But it is clear that he thought that the jurisdiction is merely “discretionary”[145], albeit that he considered that the stay order was correctly made. More doubtfully, as the case dealt with non-payment of costs of an earlier action, Judge, L.J., in whose judgment also Peter Gibson, L.J. agreed, took as the appropriate standard for exercising the discretion the statement in Morton v. Palmer to the effect that the problem should be approached “with an appropriate degree of caution”.[146] Moreover his Lordship appeared also to accept[147] that the discretion involved a consideration as to whether “the proceedings would be stifled”. Nevertheless he concluded that there was no sufficient evidence to support that contention, so that he likewise agreed that the stay order had been properly made. It may be observed that it is perhaps fortunate, having regard to the paucity of authority cited to the Court, that more was not said as to the Court’s power in such circumstances, but it cannot be denied from a general reading of the judgments that they saw the power as essentially discretionary in the widest sense and with no predilection towards the making of such orders of the kind described in judgments such as Hines v. Birkbeck College.
[142][2001] 1 W.L.R. 38; [2000] 2 All E.R. 461.
[143]At 45.
[144]See also at 47.
[145]See at 48.
[146]See at 40.
[147]At 51.

The first of only two subsequent English appellate decisions of which I am aware is Societe Eram Shipping Co. Ltd. v. Compagnie Internationale De Navigation[148] in which Rix, L.J., exercising the jurisdiction of the Court of Appeal, dealt with an application to stay an appeal on the ground of non-payment of the original judgment costs. Clearly it was an unusual application and one which his Lordship identified as one involving the costs of part of the continuing proceeding. Finally there is the judgment last month of the Court of Appeal in Investment Invoice Financing v. Limehouse Board Mills Ltd. This case was, of course, not cited to us in argument but it is sufficient to say that it does not appear to differ from the recent English cases cited to the Court, including Hines v. Birkbeck College, as well as the earlier judgments in Martin and M’Cabe. An attempt was valiantly made by Moore-Bick, L.J. to apply also the observations in Sinclair v. British Telecommunication, but it seems, with respect, that in this most recent appeal the distinction carefully drawn in Hines v. Birkbeck College was again overlooked, although I do not think anything was said by the Court which was contrary to the propositions earlier stated. Brief reference was in fact made to Hines v. Birkbeck College[149] but, for reasons which are not apparent, the conflict between that case and Sinclair v. British Telecommunication were not addressed. In the result his Lordship, with whom Tuckey, L.J. agreed, stated the relevant rule in terms of the Court having “a discretion to stay the second proceedings until the cost of the first proceedings have been paid and will normally do so.”[150] It was further said[151] that the principle is concerned with preventing abuse of the Court’s process so that the purpose of making an order is “to do substantial justice between the parties”. Finally it was said by his Lordship[152] that the ground for making the order in that case was that it was “unfair to put the defendant to the expense of fresh proceedings while his costs of the previous proceedings remain unpaid”.
[148][2001] EWCA Civ. 568.
[149]At para.[28] and [34].
[150]At para.[24].
[151]At para.[34].
[152]At para.[47].

As I said earlier, it is necessary briefly to refer to some more recent unreported cases in New South Wales, although it will be seen that they add little to the general picture. In the one decision which went to the Court of Appeal, Idoport Pty. Ltd. v. National Australia Bank Ltd.[153], Mason, P., in whose judgment for this purpose Stein and Giles, JJ.A. concurred, a brief mention was made of the effect of an order for costs as a result of the dismissal of an appeal in that very long drawn out litigation. In dealing with the issue of costs generally the learned President observed[154] that, if and when the appellant commenced fresh proceedings, “it will, in the normal course, have to pay or secure the respondent’s costs of the dismissed proceedings before being allowed to prosecute those proceedings”, for which Bowen v. Hickey and Sinclair v. British Telecommunications were cited, although the page reference and the discussion in the latter case would not seem to support the proposition. In general terms that appears to be an endorsement of the Bowen v. Hickey test. The matter was referred to again in the same litigation at different stages thereafter. In one judgment under the same name but reported in [2005] NSWSC 752 Bergin, J. referred[155] to both Martin and M’Cabe, without dealing with subsequent authorities. Earlier Burchett, A.J. in another stage of the proceeding reported in [2004] NSWSC 212, had made general reference to cases such as Morton, Thames Investment, Bowen v. Hickey and Sinclair v. British Telecommunication, before citing in extenso a number of paragraphs from the judgment of Mason, P. including para.[83]. I would infer from the references to both Thames Investment and Sinclair that Burchett, A.J. took a broader view of the discretion than that accepted in cases such as Hines v. Birkbeck College.
[153][2002] NSWCA 271.
[154]At para.[83].
[155]At paras [13] and [14].

Conclusion

It is by no means easy to draw conclusions as to the correct principles applicable on an application for a stay of proceedings based on failure to pay the costs of an earlier, concluded court proceeding. The answer is relevant in the present case inasmuch as it would be foolish to grant leave to the respondent in circumstances where the defendant, the present appellant, could seek such a stay on the basis of the relevant principle relying on admitted failures to pay costs in certain other proceedings.

It must be accepted that there are several decisions, including those of appellate courts, in which the relevant test is expressed in terms of a lesser or greater discretion and with that approach I have some sympathy, as may be seen from my discussion of the principles relevant in a cognate area, which has also been discussed here, where a stay is sought by reason of non-payment of costs in interlocutory stages of the subject proceeding: see Gao v. Zhang. Nevertheless it is obvious, at least from the authorities I have cited, that the courts have tended to take a more stringent view of the conduct of a plaintiff who has failed in an earlier proceeding relating to the same or substantially similar subject matter and has failed to pay the consequential costs ordered against that party. In substance it would appear that many courts have taken the view than an order for a stay would be granted “as of course”. That may have been the product of a more rigorous approach to the conduct of parties in the nineteenth century and into the twentieth century, especially in courts of Chancery, but I have not traced why that should have been the case. Nor can I be satisfied that the consistent dicta I have quoted flowed from a misunderstanding of existing authority. On the other hand, although the principle is stated frequently in unqualified terms, it seems to have become accepted that a court may refuse to make such an order in cases where it can be shown that there are “some special circumstances which would justify relaxation of the normal rule”, as the Full Court stated in Bowen v. Hickey[156]. A similar qualification would appear to have been accepted by Nourse, L.J. in Hines v. Birkbeck College although it can be argued that he expressed it more stringently.
[156]At 823.

There is no binding authority in this State but the solution, I suggest, lies in two directions. Undoubtedly the power should be seen to be a discretionary power but one ordinarily exercised if the relevant conditional facts are made out. No court power can be considered to be immutable, let alone one which brings to an end the right of a plaintiff to seek redress in the courts. What I believe has occurred is that there has been a confusion in earlier years between the circumstances in which a party could rely on res judicata or issue estoppel and those in which an unsuccessful party in respect of a similar claim had refused to pay costs. Unless the proceeding was terminated in exceptional circumstances, if the new one related to a claim in which the parties were identical and the issue was truly the same, then there can be little doubt that, if the relevant order were final, the party would be barred a second time by reason of the doctrines of res judicata or issue estoppel. The rule must therefore be directed to circumstances in which the order was not “final” or in which the proceedings are not identical or the parties are not identical, whatever the language used in the past. The Court therefore must look very carefully at what has been claimed and what has not been claimed and furthermore as to who makes the claim and who is subject to the claim. The closer the subject and the parties are to those of the original proceeding, the more reasonable it will be to treat the proceeding as a vexatious means of litigating the same question twice. The more closely the later proceeding resembles the first, the more obvious will be its vexatious character, but that factor will not be so clear if the first proceeding was defeated by reason of jurisdictional or other technical objections not going to the heart of the issues raised. But in a number of cases the elements of resemblance will be clear and the rule ought therefore to apply. The question remains as to how the rule should now be expressed.

If it were not for the long line of reported cases on this issue, it might be easier to assimilate the so-called rule into the general test applied by courts in their inherent jurisdiction to prevent abuse of process, for that certainly is the source of the rule, at least on the Common Law side. On the other hand, those statements which would seek to place the rule on such a basis might be said to run counter to the more emphatic expression of the rule in appellate courts. Nor is it possible to say that the rule is merely a product of pre-Judicature Act practice; indeed on the Chancery side it was an unusually rigid practice based on long replaced rules relating to the recovery of costs by attachment. But the strict rule survived the Judicature Acts; indeed it has been re-stated in emphatic terms by the House of Lords and the English and New South Wales Courts of Appeal. The only Victorian case, Boase v. Jones, seems to have depended entirely on what was said by the House of Lords in M’Cabe, but the practice in New South Wales was not merely clearly laid down by the Full Court in Bowen v. Hickey, but the Court of Appeal less than four years ago in Idoport explicitly described the practice in Bowen v. Hickey as the “normal course”. Thus, therefore, authority would support a strict view of the practice, subject only to the right of the plaintiff to establish special circumstances. I find the analysis of the cases, at least those of which I am aware, contained in cases such as Bowen v. Hickey and Hines v. Birkbeck more satisfactory as a matter of logic, for, unfortunately, those in recent years who have taken a broader view and have expressed the rule in essentially discretionary terms could not have considered appropriately, if I may say so with respect, the leading authorities on stays for non-payment of costs of past actions, as opposed to stays based on non-payment of costs in interlocutory proceedings.

In the end, I would prefer to view the authorities as permitting an understanding of the rule as requiring only the exercise of a discretion, being a discretion to prevent vexatious proceedings or otherwise to control abuse of process. Likewise I would view the more stringent authorities as depending too greatly on the Chancery practice, which had its own peculiar rationale which has become of no relevance at least since the passing of the Judicature Act. If one were to prefer the practice on the common law side, then it would be possible to turn to the last reported decision on this subject, to my knowledge, of a common law court sitting in banc, namely, Cobbett v. Warner, in particular the judgment of Mellor, J. Although, as I have said, it has only been followed once explicitly to my knowledge, in Morton v. Palmer in the Queen’s Bench Division, but in respect to non-payment of costs of interlocutory motions, what his Lordship said has never been disapproved and in my opinion can lie consistently with the later authorities, if one assumes, as I think one fairly may, that they each implicitly recognise that such orders involve the

exercise of a discretion, however firmly that exercise is suggested in those later appellate authorities. Cave, J. in Morton v. Palmer recognised that the general common law rule had been laid down in cases such as Hoare and Cobbett v. Warner, but he perceived the power in the case with which he was dealing to be discretionary in the widest sense.

If, however, one might return to that last appellate decision of a common law court where the costs in question were those incurred by an unsuccessful plaintiff in an earlier action, i.e. Cobbett v. Warner, then, as Mellor, J. stated, that jurisdiction to order a stay is to be invoked in order to prevent one party harassing another. He would have denied that it was a course “to be adopted whenever costs of a former litigation are unpaid” and he properly emphasised[157] that: “This summary jurisdiction should be sparingly exercised, as it deprives the party whose action is stopped of the right to try his cause and if necessary to carry it to the highest tribunal.” With this approach I agree.
[157]At 110.

Nevertheless, whatever view one should take of the authorities, I am in agreement that the matter should be resolved in this case in the way proposed by the learned President in his judgment. I would in any event not be satisfied that the present cause of action is the same as, or substantially similar to, those in the previous actions relied upon, but I would likewise conclude that no error has been demonstrated in the exercise of the relevant discretionary power.

EAMES, J.A.:

I have had the considerable advantage of reading in draft the judgments of the President and Ormiston, J.A. and I agree with their Honours that the appeal should be dismissed. Subject to those matters arising out of the judgment of

Ormiston, J.A. which I discuss below, I agree with the reasons stated by the President in concluding that the appeal should be dismissed.

To the extent, if at all, the reasons of the President are inconsistent with those of Ormiston, J.A. on this question, I respectfully agree with the qualification made by Ormiston, J.A. to the statement of the President, at [33], as to the extent to which the Court is precluded from deciding factual disputes upon hearing an interlocutory application. Clearly there may be cases where it is not only possible for the Court to confidently decide questions of fact on such an application but where justice would dictate that a court should do so, if to refrain to so act would permit a plainly unmeritorious case to vex the proposed defendant and to abuse the processes of the court.

I agree with Ormiston, J.A. that, for the practical reasons his Honour has stated, the appeal by the appellant should not be treated as confined only to a complaint that the application for leave to bring proceedings was itself an abuse of process rather than as also embracing complaint that the proposed action would itself constitute an abuse of process. In any event, both arguments have been addressed by the President and I agree with his reasons for their rejection. I do not consider that his Honour’s reasons cast doubt on the statements of principle made by the members of the Court in Christie v Baker[158]. Both the President and Ormiston, J.A. acknowledge that that decision cannot be applied without allowance being made for the important differences between an application under s.23A of the Limitations of Actions Act and an application by a vexatious litigant under s.21(3), in particular the fact that applications under s.21(3) will usually be heard ex-parte.
[158][1996] 2 V.R. 482.

With his renowned thoroughness, Ormiston, J.A. has fully canvassed the authorities concerning the powers of the Court to stay proceedings for non-payment of costs of past actions. In light of his Honour’s analysis of the authorities, I have no difficulty endorsing the suggested guiding principles which his Honour articulates in his judgment, at [149]-[150].

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[2006] VSCA 21

21 February 2006