Port City Pty Ltd v Fiocco - [2022] WASC 226

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   PORT CITY PTY LTD -v- FIOCCO [2022] WASC 226
CORAM:   TOTTLE J
HEARD:   16 MAY 2022
DELIVERED          :   13 JULY 2022
PUBLISHED           :   13 JULY 2022
FILE NO/S:   CIV 1716 of 2020
BETWEEN:   PORT CITY PTY LTD
First Plaintiff
GLENDA RAE OMACINI
Second Plaintiff
AND
JOHN GAETANO MARIO FIOCCO
First Defendant
KATJA JANE LEVY
Second Defendant
DERMOT KEVIN JOHN DANAGHER
Third Defendant
SLATER & GORDON LTD
Fourth Defendant

Catchwords:

Practice and procedure – Pleadings – Application to strike out paragraphs in amended statement of claim – Abuse of process – Re-litigation abuse of process – Where impugned paragraphs involve collateral challenge to earlier judicial determination – No abuse of process – Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA), O 20 r 19

Result:

Application dismissed

Category: B

Representation:

Counsel:

First Plaintiff	:	A Metaxas
Second Plaintiff	:	A Metaxas
First Defendant	:	SF Popperwell
Second Defendant	:	SF Popperwell
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance

Solicitors:

First Plaintiff	:	Metaxas Legal
Second Plaintiff	:	Metaxas Legal
First Defendant	:	Popperwell & Co
Second Defendant	:	DLA Piper Australia - Perth
Third Defendant	:	Gilchrist Connell
Fourth Defendant	:	MDS Legal

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

Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615
Cleary v Jeans [2006] NSWCA 9; (2006) 65 NSWLR 355
Connelly v Director of Public Prosecutions (UK) [1964] AC 1254
Corp v Robinson [2012] WASC 490
D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1
Goddard Elliott (a firm) v Fritsch [2012] VSC 87
Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231
Hana v Shad Legal Services Pty Ltd [2021] NSWCA 258
Hunter v Chief Constable of the West Midlands Police [1982] AC 529
Morgan v Workcover Corporation [2013] SASCFC 139
O'Shane v Harbour Radio Pty Ltd [2013] NSWCA 315; (2013) 85 NSWLR 698
Port City Pty Ltd v De Freitas & Ryan Property Consultants Pty Ltd [No 2] [2015] WASC 265
Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589
Reichel v Magrath (1889) 14 App Cas 665
Rippon v Chilcotin Pty Ltd [2001] NSWCA 142; (2001) 53 NSWLR 198
Robertson v Vlahos [2011] QCA 243
Rogers v Roche (No 1) [2016] QCA 340; [2017] 2 Qd R 306
Secretary of State for Trade and Industry v Bairstow [2004] Ch 1
South Australian Housing Trust v State Government Insurance Commission (1989) 51 SASR 1
Spalla v St George Motor Finance Ltd (No 6) [2004] FCA 1699
State Bank of New South Wales Ltd v Stenhouse Ltd (1997) Aust Torts Reports 81-423
Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; (2015) 256 CLR 507
Walpole v Partridge & Wilson (a firm) [1994] QB 106
Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378

TOTTLE J:

Overview

In this action for damages for professional negligence the first and second defendants have applied to strike out paragraphs in the plaintiffs' amended statement of claim on the grounds the impugned paragraphs constitute an abuse of process,[1] because they are an impermissible collateral attack on an existing judgment of this court, the judgment being Port City Pty Ltd v De Freitas & Ryan Property Consultants Pty Ltd [No 2].[2]
[1] Rules of the Supreme Court 1971 (WA) O 20 r 19; chambers summonses filed 25 February 2022.
[2] Port City Pty Ltd v De Freitas & Ryan Property Consultants Pty Ltd [No 2] [2015] WASC 265.
The first and second defendants are legal practitioners who acted for the plaintiffs in the proceedings that culminated in the earlier judgment. They do not invoke the doctrine of advocate's immunity in support of the strike out application but rely on the principles governing what has been termed 're-litigation abuse of process'.[3]
[3] Rogers v Roche (No 1) [2016] QCA 340; [2017] 2 Qd R 306[29] (Fraser JA), [70] (Gotterson JA), [71] (Burns J).
The earlier proceedings involved consolidated actions and concerned a contest about entitlements to commissions derived from real estate transactions between the first plaintiff on the one hand and De Freitas & Ryan Property Consultants Pty Ltd on the other. There was a trial of preliminary issues and in substance though not in form, the effect of the judgment was that the first plaintiff's entitlement to a share in the commissions was limited to 25%. The trial judge, K Martin J, reached this result by a process of construing an agreement governing the separation of the ownership of two real estate businesses trading as Port City Real Estate and Port City Southern Suburbs respectively.
Relevantly, as pleaded in the amended statement of claim in the present action, there are two limbs to the plaintiffs' claim against the first and second defendants.
First, the plaintiffs plead that a lawyer acting with reasonable skill and diligence would have advised the plaintiffs that their claim in the earlier proceedings was doomed to fail (a plea that conforms to the conclusion reached by K Martin J). That plea is not challenged.
Secondly, the plaintiffs plead a lawyer acting with reasonable skill and diligence would have advised:
(a)the claim should be amended to include three other matters:
(i)a claim for rectification;[4]
(ii)a claim that the defendants in the action had engaged in misleading or deceptive conduct;[5] and
(iii)a claim that the proper construction of the agreement between the parties was informed by three matters not raised in the proceedings before K Martin J;[6]
(b) that another party be joined to the proceedings as a defendant;[7]
(c) the order for the trial of the preliminary issues should be set aside and there be a trial of all issues;[8] and
(d) the plaintiffs to take independent advice in respect of their rights against the first and second defendants.[9]
[4] Amended statement of claim filed 28 January 2022 [74.2], [79(2)].
[5] Amended statement of claim filed 28 January 2022 [74.3], [79(3)].
[6] Amended statement of claim filed 28 January 2022 [74.4], [79(4)].
[7] Amended statement of claim filed 28 January 2022 [74.5], [79(5)].
[8] Amended statement of claim filed 28 January 2022 [74.6], [79(6)].
[9] Amended statement of claim filed 28 January 2022 [74.7], [79(7)].
It is these additional pleas that are the subject of the first and second defendants' application.
The first and second defendants' central submission was to the following effect: by making a claim that they would have achieved a better outcome had different causes of action been prosecuted, the plaintiffs necessarily challenge the outcome in the earlier proceedings. This is impermissible because the determination made by K Martin J must be treated as incontrovertibly correct by the plaintiffs and to allow a challenge to that outcome would bring the administration of justice into disrepute. The first and second defendants contend this submission is supported by the reasoning of Bell J in Goddard Elliott (a firm) v Fritsch,[10] and further contend Bell J's reasoning was approved by K Martin J in Corp v Robinson.[11]
[10] Goddard Elliott (a firm) v Fritsch [2012] VSC 87.
[11] Corp v Robinson [2012] WASC 490.
As explained in the review of the authorities below, the High Court, the Courts of Appeal in New South Wales and Queensland and the Full Court of the Supreme Court of South Australia have made it clear that not every attempt to re‑litigate issues, the subject of an earlier judicial determination, constitutes an abuse of process. The principles require a value judgment following an examination of the circumstances of each case to determine whether or not the litigation of the second claim would be oppressive to a party or would bring the administration of justice into disrepute.
I accept that, if upheld at trial, at least some of the matters pleaded in the impugned paragraphs would result in a determination about the first plaintiff's entitlement to commissions which would conflict with the determination made by K Martin J and, in that sense, the pleas constitute a collateral attack on the earlier determination. As I will explain, I do not accept, however, that they constitute an abuse of process.

The authorities

The doctrine of abuse of process may be invoked in any circumstances in which the use of a court's procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute. The categories of abuse of process are not closed.[12]
[12] Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; (2015) 256 CLR 507 [25] (French CJ, Bell, Gageler & Keane JJ).
The protection of the public interest in the certainty and finality of the quelling of controversies by judicial determination informs both the abuse of process doctrine and the doctrine of advocate's immunity.[13]
[13] D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1 [65] (Gleeson CJ, Gummow, Hayne & Heydon JJ).
There is no absolute rule that a party is precluded from re-litigating an issue determined in an earlier proceeding. In the High Court decision of Tomlinson v Ramsey Food Processing Pty Ltd,[14] the plurality referred to the possibility that re-litigating an issue already determined might constitute an abuse of process in terms that accepted that it will not always do so. Their Honours said:[15]
[I]t has been recognised that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel. Similarly, it has been recognised that making such a claim or raising such an issue can constitute an abuse of process where the party seeking to make the claim or to raise the issue in the later proceeding was neither a party to that earlier proceeding, nor the privy of a party to that earlier proceeding, and therefore could not be precluded by an estoppel. (emphasis added and footnotes omitted)
[14] Tomlinson v Ramsey Food Processing Pty Ltd.
[15] Tomlinson v Ramsey Food Processing Pty Ltd [26] (French CJ, Bell, Gageler & Keane JJ).
In Rogers v Roche (No 1),[16] Fraser JA referred to the observations of the plurality in Tomlinson v Ramsey Food Processing Pty Ltd cited above as reflecting the 'non-prescriptive character of the re‑litigation abuse of process test'.[17] His Honour having observed in an earlier passage that:[18]
Unlike the test for advocate's immunity, the test for re-litigation abuse of process incorporates generally expressed value judgments.
[16] Rogers v Roche (No 1) [2016] QCA 340; [2017] 2 Qd R 306.
[17] Rogers v Roche (No 1) [30] (Fraser JA).
[18] Rogers v Roche (No 1) [29] (Fraser JA).
In State Bank of New South Wales Ltd v Stenhouse Ltd,[19] Giles CJ in Comm Div identified a number of considerations relevant to the determination of whether the re‑litigation of an issue might constitute an abuse of process:[20]
[19] State Bank of New South Wales Ltd v Stenhouse Ltd (1997) Aust Torts Reports 81-423.
[20] State Bank of New South Wales Ltd v Stenhouse Ltd (64,089) (Giles CJ in Comm Div).
The guiding considerations are oppression and unfairness to the other party to the litigation and concern for the integrity of the system of administration of justice, and amongst the matters to which regard may be had are –
(a)the importance of the issue in and to the earlier proceedings, including whether it is an evidentiary issue or an ultimate issue;
(b)the opportunity available and taken to fully litigate the issue;
(c)the terms and finality of the finding as to the issue;
(d)the identity between the relevant issues in the two proceedings;
(e)any plea of fresh evidence, including the nature and significance of the evidence and the reason why it was not part of the earlier proceedings; all part of –
(f)the extent of the oppression and unfairness to the other party if the issue is relitigated and the impact of the relitigation upon the principle of finality of judicial determination and public confidence in the administration of justice; and
(g)an overall balancing of justice to the alleged abuser against the matters supportive of abuse of process.
That the doctrine of abuse of process does not include a general prohibition on collateral challenges to judicial determinations is apparent from the observations of Handley JA (with whom Young CJ in Equity agreed) in Cleary v Jeans.[21] Handley JA said:[22]
Proceedings to recover a loss incurred as a result of a judgment in earlier proceedings are competent where the plaintiff alleges that the adverse judgment was the result of the defendant's breach of duty.
The point is illustrated by cases dealing with the liability of solicitors for negligence in the management of court proceedings. This was well established before the third edition of Bullen & Leake in 1868 (E Bullen and S Leake, Precedents of Pleading, 3rd ed (1868) London, Steven and Sons); (see at 83-84, 275); and Godefroy v Dalton (1830) 6 Bing 460 at 467; 130 ER 1357 at 1360-1361. It has not been affected by the decision in D'Orta-Ekenaike v Victoria Legal Aid (2005) 79 ALJR 755; 214 ALR 92, which confirmed the immunity of barrister and solicitor advocates.
An action against a solicitor for negligence in which damages are claimed for the loss of an earlier case is not a collateral challenge to the earlier decision where the plaintiff claims that but for the negligence there would have been a more favourable result. In Walpole v Partridge and Wilson [1994] QB 106 at 124–125, Ralph Gibson LJ said:
"If there is a sufficiently arguable case to show that the defendant solicitors, by their breach of duty, put the plaintiffs in the position of being unable properly to contest the first decision, so that the plaintiffs were reasonably compelled to submit to judgment on the issue, then, in my judgment, the plaintiffs' claim is not shown to be an abuse of the process of the court merely because it will, if it succeeds, require the court to assess damages on the basis that the prior decision of the court would not have been made if the solicitors had not been in breach of duty."
The same point was made by Sir Thomas Bingham MR in Smith v Linskills [1996] 1 WLR 763 at 769–770; [1996] 2 All ER 353 at 358:
"It is evident in civil cases particularly that a party may lack any opportunity to resist a hostile claim, as for example where judgment is entered against him on the ground of procedural default, or may lack a full opportunity, as when summary judgment is given against him. We understand Lord Diplock [Hunter v Chief Constable of the West Midlands Police [1982] AC 529 at 536, 541] to have been intending to preserve a party's right to make a collateral attack on a decision made against him in such circumstances."
[21] Cleary v Jeans [2006] NSWCA 9; (2006) 65 NSWLR 355 [25] - [28] (Handley JA), [76] (Young CJ in Equity).
[22] Cleary v Jeans [25] - [28] (Handley JA).
Bryson JA, although in dissent in the result in Cleary v Jeans, made observations to a similar effect:[23]
A collateral attack on an earlier decision of a court is not necessarily an abuse of process. It may be quite legitimate to make such an attack, and to show that an earlier judgment was based on a wrong view of fact or of law, or that a chance was lost of persuading the earlier court that some other view should have been adopted in a finding of fact, in the application of a legal standard or in some other matter. Claims against legal advisers relating to the manner in which earlier litigation was conducted provide ready examples where collateral attacks on earlier decisions have been made. This is illustrated by Walpole v Partridge and Wilson [1994] QB 106, where the plaintiff sued solicitors who had conducted earlier proceedings in which he had failed. There have been varying outcomes, according to circumstances, where there have been claims of abuse of process, and there must have been many such cases where there was no such claim, reasonably enough.
[23] Cleary v Jeans [43] (Bryson JA).
In Robertson v Vlahos[24] Boddice J (with whom McMurdo P agreed) said:[25]
To allow a party to relitigate an issue decided between the party and a third party may constitute an abuse of process where it would be oppressive and unfair to the other party to the litigation and would put in question the integrity of the system of administration of justice. Such an abuse can arise in the case of subsequent proceedings where they are initiated to mount a collateral attack on a final decision against the party made by another court of competent jurisdiction in which the party had a full opportunity of contesting the decision. Whether there is an abuse of process depends on the circumstances.
[24] Robertson v Vlahos [2011] QCA 243.
[25] Robertson v Vlahos [19] (Boddice J), [1] (McMurdo P).
As to 'the circumstances', his Honour quoted the passage from State Bank of New South Wales Ltd v Stenhouse Ltd which has been set out at [15].
In Goddard Elliott (a firm) v Fritsch, the plaintiff client established that his solicitors (the first defendant) were negligent in their conduct of proceedings in the Family Court. The solicitors argued that the plaintiff's claim was an abuse of process and, separately, that they were immune from suit by reason of advocate's immunity. Bell J undertook a comparative analysis of the English and Australian authorities dealing with re‑litigation abuse of process and concluded:[26]
I do not think Hunter and Arthur JS Hall do represent the law in Australia on collateral attack. As I read Rogers, Giannarelli and D'Orta-Ekenaike, in the application of the abuse of process principle the High Court has placed great emphasis on the finality of court orders, with fatal consequences for the plaintiff's claim in the present case.
And:[27]
What I must note, however, is the emphatic manner in which the court in Giannarelli and D'Orta-Ekenaike treated finality as the critical consideration in determining what was in the public interest. While these decisions concerned advocates' immunity and not the abuse of process principle, I think they must be taken into account in determining the proper scope and application of the latter, for the public interest in the finality of court decisions is the common underpinning of both.
[26] Goddard Elliott (a firm) v Fritsch [780] (Bell J).
[27] Goddard Elliott (a firm) v Fritsch [782] (Bell J).
Bell J's observations on the application of abuse of process principles might be understood as conveying that those principles preclude any re-litigation of issues leaving no scope for an evaluative judgment of the nature referred to by Fraser JA in Rogers v Roche (No 1) at [29]. That, in effect, was the submission advanced on behalf of the first and second defendants. Bell J did not express the principle, however, in such absolute terms. His Honour said:[28]
Having regard to those general statements, I cannot reconcile the approach which was stated and adopted in the United Kingdom in Hunter and Arthur JS Hall on the scope and application of the abuse of process principle with the importance which was afforded by the High Court in Rogers, Giannarelli and D'Orta-Ekenaike to finality. I think the abuse of process principle in Australia permits less reference to broader public interest considerations than the principle in the United Kingdom. Here finality as explained in these cases by the High Court is afforded very substantial weight indeed. (emphasis added)
[28] Goddard Elliott (a firm) v Fritsch [786] (Bell J).
It is significant that Bell J did say that there was no room for broader public interest considerations to operate and, did not say that finality of outcome was to be accorded decisive weight.

In Corp v Robinson the plaintiff was charged with criminal offences and engaged the defendant legal practitioners to represent him. The plaintiff was found guilty and sued the defendants who invoked advocate's immunity and applied to have the claim summarily dismissed. K Martin J dismissed the plaintiff's claims on the basis that the defendants were immune from suit by reason of advocate's immunity. Although the defendants did not rely on the abuse of process principles K Martin J referred to, and adopted, Bell J's observations on the subject of abuse of process in Goddard Elliott (a firm) v Fritsch.[29]
[29] Corp v Robinson [132] (K Martin J).
In Morgan v Workcover Corporation,[30] Blue J (with whom Kourakis CJ and Sulan J agreed) discussed the application of the abuse of process principles in a number of cases and provided the following summary:[31]
[30] Morgan v Workcover Corporation [2013] SASCFC 139.
[31] Morgan v Workcover [145] (Blue J), [1] (Kourakis CJ), [2] (Sulan J).
1.In the cases in which it was concluded that there was an abuse of process:
(a)in Spalla v St George Motor Finance Ltd (No 6),[32] the Spalla group were plaintiffs in both actions and sued the same defendants making essentially the same complaints such that, as a matter of substance but not form, res judicata and issue estoppel principles would have applied;
[32] Spalla v St George Motor Finance Ltd (No 6) [2004] FCA 1699.
(b)in Rippon v Chilcotin Pty Ltd,[33] the Chilcotin group were plaintiffs in both actions and sued different defendants making essentially the same complaints such that, as a matter of substance but not form, Anshun estoppel principles[34] would have applied;
[33] Rippon v Chilcotin Pty Ltd [2001] NSWCA 142; (2001) 53 NSWLR 198.
[34] Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589.
(c)in Reichel v Magrath,[35] Reichel was plaintiff in the first action and defendant in the second and, as a matter of substance but not form, the second opponent was successor in title to the first opponent and the subject matter of the action transcended in personam rights;
[35] Reichel v Magrath (1889) 14 App Cas 665.
(d)in Hunter v Chief Constable of the West Midlands Police,[36] Hunter was defendant in the first proceedings and plaintiff in the second and his purpose in bringing the second action was to mount a collateral attack upon the decision in the first proceedings;
[36] Hunter v Chief Constable of the West Midlands Police [1982] AC 529.
(e) in each case, the opponent in the second action made an interlocutory application to stay, strike out or dismiss the claim or defence of the party found to be acting in abuse of process;
(f) in each case, the abuse involved the re-litigation in the second action of the decision in the original proceedings and not merely of one of several issues.
2.Where res judicata and issue estoppel do not apply because of the form of the respective proceedings, an action may nonetheless be an abuse of process because the principles which give rise to them apply as a matter of substance.[37]
[37] Reichel v Magrath; Connelly v Director of Public Prosecutions (UK) [1964] AC 1254.
3. Where the purpose of the second proceedings is to mount a collateral attack on the decision in the first proceedings, there will be a basis for finding abuse of process.[38]
[38] Hunter v Chief Constable of the West Midlands Police.
4. Where it was unreasonable for the plaintiff not to join both claims in the first action, there will be a basis for finding abuse of process.[39]
5. The mere fact that the person against whom the abuse is alleged was a party in both proceedings and seeks to litigate an issue decided in the earlier proceedings is not sufficient to give rise to abuse of process. Something more is required.[40]
6. Normally, in order to establish abuse of process by re-litigation, it is necessary to establish that:
(a)the purpose of the subsequent proceedings is to mount a collateral attack on the decision in the earlier proceedings;
(b) it would be manifestly unfair to the opponent in the later proceedings that the issues decided in the earlier proceedings be re-litigated; or
(c) permitting re-litigation would bring the administration of justice into disrepute.[41]
7.The mere fact that the party against whom the abuse is alleged seeks to re-litigate an issue decided against that party in earlier litigation is not sufficient to bring the administration of justice into dispute.[42]
[39] Rippon v Chilcotin Pty Ltd; Spalla v St George Motor Finance Ltd (No 6).
[40] South Australian Housing Trust v State Government Insurance Commission (1989) 51 SASR 1; State Bank of New South Wales Ltd v Stenhouse Ltd; Walpole v Partridge & Wilson (a firm) [1994] QB 106; Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615; Secretary of State for Trade and Industry v Bairstow [2004] Ch 1; Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231.
[41] Arthur J S Hall & Co (a firm) v Simons; Secretary of State for Trade and Industry v Bairstow.
[42] Arthur J S Hall & Co (a firm) v Simons; Secretary of State for Trade and Industry v Bairstow; Habib v Radio 2UE Sydney Pty Ltd.
Blue J stated there would be 'formidable difficulties in the way of seeking to apply abuse of process by re‑litigation to one issue out of several issues arising in each action',[43] and neither principle nor authority supported the proposition that prima facie it is an abuse of process for a plaintiff against a second opponent to contest a finding of fact made in an earlier matter against a first opponent.[44] In response to the contention that permitting re‑litigation in the context of the case before the court would bring the administration of justice into disrepute, Blue J expressed the view that not permitting the issue to be re-litigated would be to deny a remedy to the plaintiff in circumstances in which, ex hypothesi, she was entitled to recompense.[45]
[43] Morgan v Workcover [149] (Blue J).
[44] Morgan v Workcover [150] (Blue J).
[45] Morgan v Workcover [155] (Blue J).
In Rogers v Roche (No 1) the appellant was awarded damages of $593,708.46 at trial. The appellant sued the solicitors who had acted for him alleging they were negligent by failing to obtain evidence necessary properly to prove his economic loss, thereby losing a chance to receive a higher award of damages. The primary judge upheld an application to strike out parts of the statement of claim as an abuse of process. One of the reasons for the strike out decision was that the impugned plea constituted an attempt to re‑litigate an issue determined by the earlier personal injury judgment. The Queensland Court of Appeal allowed the appeal and Fraser JA gave the lead judgment.
As noted earlier, Fraser JA contrasted the test for advocate's immunity with the test for re‑litigation abuse of process stating that the latter incorporated generally expressed value judgments.[46] Fraser JA held that although the appellant's claims were collateral challenges to the judicial decision in the personal injury litigation as they would conflict with a judicial decision upon the same issues, the claims did not amount to a 're-litigation abuse of process'.[47] His Honour accepted that although the principle favouring finality and certainty underlies re‑litigation abuse of process, it did not follow that it has equal force in all cases as a factor in the decision whether re‑litigation is an abuse of process.[48] To illustrate this point, his Honour said that 'there remains a significant difference between a challenge to a conviction upon a jury verdict and inconsistent judgments about liability and quantum in civil litigation'.[49]
[46] Rogers v Roche (No 1) [29] (Fraser JA).
[47] Rogers v Roche (No 1) [42] (Fraser JA).
[48] Rogers v Roche (No 1) [45] (Fraser JA).
[49] Rogers v Roche (No 1) [45] (Fraser JA).
Fraser JA discussed the authorities of Tomlinson v Ramsey Food Processing Pty Ltd, O'Shane v Harbour Radio Pty Ltd,[50] Walton v Gardiner,[51] Reichel v Magrath,[52] Hunter v Chief Constable of the West Midlands Police[53] and State Bank of New South Wales Ltd v Stenhouse Ltd,[54] and said those decisions made it clear that:[55]
[I]t may but not necessarily will be an abuse of process for a litigant to rely upon a claim which was determined adversely to that litigant in previous litigation; it is necessary to examine the circumstances of each case and to decide whether or not litigation of the second claim would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute.
[50] O'Shane v Harbour Radio Pty Ltd [2013] NSWCA 315; (2013) 85 NSWLR 698.
[51] Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378.
[52] Reichel v Magrath.
[53] Hunter v Chief Constable of the West Midlands Police.
[54] Rogers v Roche (No 1) [29] - [31] (Fraser JA).
[55] Rogers v Roche (No 1) [46] (Fraser JA).
In allowing the appeal Fraser JA concluded:[56]
It is an aspect of all parts of the appellant's claim that he was deprived of a full opportunity of obtaining the entire amount of his economic loss by the wrongful conduct of the first and second respondents. To shut out litigation of this part of the appellant's claim would be more likely to bring the administration of justice into disrepute than would conflicting judicial decisions about the appellant's economic loss reached upon different evidence.
[56] Rogers v Roche (No 1) [50] (Fraser JA).
In Hana v Shad Legal Services Pty Ltd,[57] the applicant had been the unsuccessful respondent in an earlier appeal against a first instance decision in her favour to the effect that a will, naming her as the sole beneficiary, embodied the testamentary intentions of the testatrix. In the earlier appeal decision, the Court of Appeal found that the will did not contain the testatrix's intentions. Subsequently the applicant sued the solicitors who prepared the will alleging that the testatrix's intentions were that the applicant should be the sole beneficiary. The primary judge struck out the applicant's statement of claim on the grounds that it was an abuse of process but gave leave to re‑plead. The primary judge held the premise of the applicant's claim was directly inconsistent with the Court of Appeal's finding on the ultimate issue in the earlier proceedings and because the proceedings challenged precisely the same ultimate finding they were an abuse of process. The applicant applied for leave to appeal.
[57] Hana v Shad Legal Services Pty Ltd [2021] NSWCA 258.
Bathurst CJ agreed generally with the reasons of Payne JA who agreed with the primary judge that the respondent satisfied the onus of proving an abuse of process:[58]
The risk of inconsistent findings about the critical issue raised in each case was a significant one. It is not correct that the proceedings, as pleaded, would entail "an inquiry into a different (hypothetical) set of events and their legal consequences", which is distinguishable from "an inquiry into the same events with additional evidence".
[58] Hana v Shad Legal Services Pty Ltd [48] (Payne JA), [1] (Bathurst CJ).
Payne JA held that the applicant's pleaded cause of action was premised on establishing a fact directly inconsistent with the Court of Appeal's finding on the ultimate issue, namely the extent to which the will contained the real intention, and reflected the true will, of the testatrix.[59] Consequently, the cause of action could only succeed by establishing, contrary to the earlier Court of Appeal finding, that the probate should have been granted in respect of the will.[60] Payne JA referred with approval to Cleary v Jeans and Rogers v Roche (No 1).
[59] Hana v Shad Legal Services Pty Ltd [51] (Payne JA).
[60] Hana v Shad Legal Services Pty Ltd [52] (Payne JA).
Brereton JA held that in principle, no abuse of process was involved in a claim against a solicitor for negligence in which damages are claimed for the loss of an earlier case founded on the proposition that but for the alleged negligence there would have been a different and more favourable result.[61] His Honour cited Cleary v Jeans, Rogers v Roche (No 1) and Walpole v Partridge & Wilson (a firm)[62] as authority for the proposition above.[63]
[61] Hana v Shad Legal Services Pty Ltd [71] (Brereton JA).
[62] Walpole v Partridge & Wilson (a firm) (124 - 125) (Ralph Gibson LJ)
[63] Hana v Shad Legal Services Pty Ltd [71] (Brereton JA).

The Port City Pty Ltd v De Freitas & Ryan Property Consultants Pty Ltd [No 2] proceedings

The facts upon which the judgment in Port City Pty Ltd v De Freitas & Ryan Property Consultants Pty Ltd [No 2] was based may be summarised as follows.
(a)Two real estate businesses were operated from adjoining premises in Fremantle. The first plaintiff in the present action owned and operated Port City Real Estate and De Freitas & Ryan Property Consultants Pty Ltd owned and operated Port City Southern Suburbs.
(b)The second plaintiff in the present action (Mrs Omacini) and Mr Rodney Ryan or interests associated with them each owned one share in the first plaintiff and Mrs Omacini owned 25% of the shares in De Freitas & Ryan Property Consultants Pty Ltd. Mr Ryan and Mr Miguel De Freitas owned the balance of the shares in De Freitas & Ryan Property Consultants Pty Ltd.
(c)In June 2007 an agreement was reached between Mrs Omacini on the one hand and Mr Ryan and Mr De Freitas on the other that they would separate their interests in the two real estate businesses on terms that involved Mrs Omacini purchasing Mr Ryan's share in the first plaintiff and Mr Ryan purchasing Mrs Omacini's shares in De Freitas & Ryan Property Consultants Pty Ltd.
(d)Two written agreements were executed - one dealt with the Port City Real Estate business (the PCRE Agreement) and the other dealt with the Port City Southern Suburbs business (the PCSS Agreement). The agreements were referred to collectively as the SSA.
(e)Each agreement included provisions (cl 17 in the PCRE Agreement and cl 7 in the PCSS Agreement) governing how commissions earned by the respective businesses were to be treated. For this purpose, a list of property transactions was prepared. The list was attached to the agreement relating to the PCRE Agreement and marked annexure F. The same list was annexed to the PCSS Agreement and marked annexure A. The list was reproduced as a schedule to the statement of claim and marked SSA_H(1).
The preliminary issue was expressed as follows:
Issue 1, whether it is the first named plaintiff [PC Corp] or the first named defendant [D & R Corp] that was entitled to receive the commission arising out of the lease or sale of the listings contained in the schedule attached and marked SSA_H(1).
Sub-issues to Issue 1
(a)whether the commission arrangements for the properties identified in Sch SSA_H(1) which are mentioned in the Share Sale Agreement ('the SSA'), are governed by the terms of the SSA.
(b)whether the properties identified in Sch SSA_H(1), which are not mentioned in the SSA, are governed by the terms of the SSA;
(c)whether an oral agreement existed between the parties and if so, what are the relevant terms and ramifications of that oral agreement, particularly as regards commission arrangements for the properties identified in SSA_H(1). (unable to be proceeded with)
(d)on the assumption that an oral agreement did exist between the parties on the basis as contended for in paragraph 22 of the defendants' Defence and did relevantly apply to the commission arrangements for the properties identified in SSA_H(1), whether that oral agreement is nevertheless rendered unenforceable by provisions contained in the Real Estate and Business Agents Act1978 (WA) (REBA Act);
(e)if the SSA did relevantly apply to the commission arrangements for the properties identified in Sch SSA_H(1), whether the SSA is nevertheless rendered unenforceable by provisions contained in the REBA Act.
K Martin J was critical of the way in which the preliminary issue had been formulated and the way in which the plaintiffs' claim had been pleaded and advanced. For the purposes of these reasons, it is sufficient to record that the first plaintiff claimed that it was entitled to all the commission due from the property transactions listed in annexures A and F - those commissions exceeded $1 million.[64] As noted earlier, K Martin J's ultimate finding was to the effect that the first plaintiff was entitled to 25% of the net commissions. In outline, his Honour's reasoning was as follows:
[64] Port City Pty Ltd v De Freitas & Ryan Property Consultants Pty Ltd [No 2] [61] (K Martin J).
(a)The intent of the agreement was to calculate the monetary component of the consideration passing between the parties on the separation of their respective interests in the real estate businesses.
(b)The corporate entities that were entitled to be paid the commissions by the vendors of properties were bound by the agreement.
(c)The agreement comprehensively and explicitly addressed all issues of sales commissions received by the businesses as business income. K Martin J described the effect of cl 17 of the PCRE Agreement in the following terms:[65]
[65] Port City Pty Ltd v De Freitas & Ryan Property Consultants Pty Ltd [No 2] [112] (K Martin J).
The effect of cl 17 is effectively to reduce the amount of the purchase price for Ms Omacini's 50% shareholding otherwise payable to Mr Ryan from a calculated entitlement price due to him of 50% of the funds actually received by the PCRE business and held in trust - by deducting from the payment due to him a calculated 25% entitlement for moneys calculated as likely benefiting Ms Omacini in the future if, or when, property settlements occurred as regards PCSS properties which are the subject of annexure F (residential or commercial).
And his Honour referred to cl 7 of the PCSS Agreement and its relationship with the PCRE Agreement as follows:[66]
It can be seen that annexure A to the second agreement is the same document as the residential/commercial compilation of properties, ultimately generating the 25% payment entitlement to GO (Ms Omacini). In other words, it is the same document as annexure F to the first agreement.
Arrangements under cl 7 with its annexure A, read alongside cl 17 of the first agreement and its Annexure F, show yet again that these parties, objectively assessed, made very comprehensive separation adjustments as regards all perceived future entitlements of the two businesses to commission income. Ms Omacini's payment for her 25% shareholding interest in D & R Corp and its PCSS business was clearly assessed as one element of this process of division, separation, valuation of assets, and an end determination of sale prices for the sold shares of the existing shareholders, calculated as at 23 May 2007.
(d)At least in two instances the first plaintiff had paid the amounts due in respect of disputed commissions from its bank account into the bank account of De Freitas & Ryan Property Consultants Pty Ltd.
(e)Even if the first plaintiff once held an entitlement to the sales commission, the terms of the agreement was such that maintaining a position that the first plaintiff retained an entitlement to sales commission for all time in the face of the agreement reflected an inability to confront reality and a stance of self-delusion.
[66] Port City Pty Ltd v De Freitas & Ryan Property Consultants Pty Ltd [No 2] [134] - [135] (K Martin J).
K Martin J made some concluding observations. Relevantly, his Honour said:[67]
A number of conclusions somewhat painfully emerge from the foregoing analysis. Briefly summarised, they are as follows. First, the plaintiffs' cause of action seeking $1,052,149 in sales commission moneys against D & R Corp (see par 19 of the statement of claim) can only be as an action for damages for breach of the SSA. A claim on that basis is wholly untenable. There is a failure to disclose any reasonably arguable cause of action.
[67] Port City Pty Ltd v De Freitas & Ryan Property Consultants Pty Ltd [No 2] [169] (K Martin J).

On 7 August 2015 K Martin J made orders giving effect to the judgment as follows:
The questions ordered to be determined as a preliminary issue by on 31 January 2013 be answered as follows:
Issue 1: "Whether it is the first named plaintiff or the first named defendant that was entitled to receive the commission. arising out of the lease or sale of the listings contained in the schedule attached and marked SSA_H(l)."
Answer: "Unnecessary to answer beyond the answers to the sub-issues below."
Sub-issues to Issue 1
a)"Whether the commission arrangements for the properties identified in Sch SSA_H(l) which are mentioned in the Share Sale Agreement ('the SSA'), are governed by the terms of the SSA."
Answer: "Yes".
b)"Whether the properties identified in Sch SSA_H(l), which are not mentioned in the SSA, are governed by the terms of the SSA."
Answer: "Yes"
d)"On the assumption that an oral agreement did exist between the parties on the basis as contended for in paragraph 22 of the defendants' Defence and did relevantly apply to the commission arrangements for the properties identified in SSA_H(l), whether that oral agreement is nevertheless rendered unenforceable by provisions contained in the Real Estate and Business Agents Act 1978 (WA) (REBA Act)."
Answer: "Unnecessary to answer".
e)"If the SSA did relevantly apply to the commission arrangements for the properties identified in Sch SSA_H(l), whether the SSA is nevertheless rendered unenforceable by provisions contained in the REBA Act."
Answer: "No"
The plaintiffs' claims in the proceedings were subsequently settled at mediation.

The impugned pleading

Paragraph 74 of the amended statement of claim in the present action pleaded the second limb of the plaintiffs' claim (referred to at [6]) against the first defendant and par 79 repeated the plea in respect of the second defendant. In its amended form par 74 is in the following terms:[68]
[68] In the amended statement of claim: Mrs Omacini is referred to as 'Glenda', Mr Ryan is referred to as 'Rod', Mr De Freitas is referred to as Miguel, the agreement between the parties is referred to by the acronym SSA, and the two real estate businesses are referred to by the acronyms PCRE (Port City Real Estate) and PCSS (Port City Southern Suburbs).
74A lawyer acting for the Plaintiffs with reasonable skill care and diligence between about June 2010 and 13 June 2013 would have further advised and/or warned the Plaintiffs as follows:
74.1Glenda's email sent 9 March 2009 (as pleaded in paragraph 39B above) and Glenda's witness statement dated 19 February 2014 (as pleaded in paragraphs 56.2 to 56.7 above) were consistent with Glenda, Rod and Miguel having executed the PCRE Agreement and the PCSS Agreement under a mutual mistake that Annexure 'F' and Annexure 'A' was a record of properties listed with and sold by PCSS when such was not the case, alternatively, under a mistake by Glenda with Rod and Miguel being aware of her mistake;
74.2the Statement of Claim should plead or be amended to plead:
(a)that the SSA was not the true agreement between the parties and was executed under a mutual mistake by Glenda, Rod and Miguel, alternatively, under a mistake by Glenda with Rod and Miguel being aware of her mistake;
(b)a claim for rectification of the SSA by amendment of Annexure 'F' and Annexure 'A' so that each was a record of properties listed with and sold by PCSS after 4 January 2007 which had not settled by 23 May 2007 and not a list of properties sold by PCRE as the listing agent; and
(c)a prayer for relief by rectification of the SSA to accord with the true agreement between the parties as in (b) above;
74.3the Statement of Claim should plead or be amended to plead misleading or deceptive conduct by PCSS, Rod and Miguel as regards the information they provided to PCRE and Glenda intended to be incorporated as Attachment 'F' of the PCRE Agreement and attachment 'A' of the PCSS Agreement and a prayer for relief to vary, amend or rectify the SSA pursuant to section 87(2) of the Trade Practices Act;
74.4the Statement of Claim should plead or be amended to plead that the proper construction of clause 17 of the PCRE Agreement and clause 7 of the PCSS Agreement was informed by:
(a)each of Annexure 'F' and Annexure 'A' was required to record properties listed with and sold by PCSS so that the sale commissions were payable to PCSS;
(b)the words of the clause did not purport to transfer to PCSS commissions in respect of the sale of properties listed with and sold by PCRE;
(c)as PCSS did not have a trust account until 4 January 2007 the payment of deposits on sales by PCSS into the trust account of PCRE would have been a contravention of s. 68(1) of the [Real Estate and Business Brokers Act 1978 (WA)];
74.5Miguel should be joined as a defendant to the Actions;
74.6the orders made for the determination of a preliminary issue should be set aside and the Actions proceed to a hearing of all issues; and
74.7the Plaintiffs should immediately take independent advice as regards their rights against Fiocco and Levy.
Paragraphs 75 and 80 plead that the conduct in pars 74 and 79 constituted breaches of the contractual and tortious duties of care. Paragraphs 76 and 81 plead the claim for losses. Paragraph 76 pleads the claim against the first defendant (par 81 replicates par 76 but in respect of the second defendant) and is as follows:
76By reason of Fiocco's breaches of the implied term and breaches of the duty of care the plaintiffs suffered loss and damage, including namely, the costs and expenses paid to Fiocco, Levy, Danagher and D&G and the monies which should have been paid to her by PCSS or Rod.
As explained by counsel for the plaintiffs in oral submissions, the case the plaintiffs wish to advance in the present action is straightforward, they contend the first and second defendants should have pleaded that annexure F to the PCRE Agreement and annexure A to the PCSS Agreement listed 'PCRE sales' when the annexures should have listed 'PCSS sales' only.[69] By their amended statement of claim they wish to contend that this error came about either as a result of a mistake entitling the plaintiffs to rectification by the substitution of a list of different transactions for the lists in the two annexures but with no other variation to the text of either agreement, or to damages for misleading or deceptive conduct on the basis that one or both of Mr Ryan and Mr De Freitas misled Mrs Omacini about which business had generated the transactions listed in the annexures.
[69] ts 53.
Counsel for the plaintiff expressly disclaimed any challenge to K Martin J's construction of the agreement and acknowledged that his Honour's construction was correct and that one 'can't put any other interpretation on [the clauses] other than that which the trial judge did'.[70]
[70] ts 54.

Analysis and disposition

As required by the authorities all the circumstances must be taken into account to determine whether the impugned paragraphs constitute an abuse of process but before turning to those circumstances it is important to make it clear that the allegations made by the plaintiffs against the first and second defendants are untested. This application is not concerned with the underlying merits of pleaded allegations nor with the form of the pleading and none of the observations which follow should be understood as reflecting one way or the other on the merits of the allegations.
The following observations may be made about the circumstances.
First, the rectification and misleading or deceptive conduct pleas do not directly challenge K Martin J's reasons, or the orders made by his Honour. Rather, the point underlying those causes of action is that his Honour was asked the wrong preliminary question, or more precisely, the right question but in respect of the wrong list of transactions. From a practical perspective the plaintiffs do not contest the determination made by K Martin J in respect of the transactions in the schedule to the statement of claim in the earlier proceedings, they seek a determination in respect of different transactions. That said, in substance, the essence of the plaintiffs' claim in the present action is that but for the allegedly negligent conduct of the first and second defendants, the plaintiffs would have received a different and better outcome in the earlier proceedings. In the context of that counterfactual, the rectification and misleading or deceptive conduct pleas do involve a collateral challenge to the outcome in the earlier proceedings.
Secondly, although by the rectification and misleading or deceptive conduct pleas in the present action the plaintiffs challenge the outcome in the earlier proceedings, they do not challenge any of the factual findings made by K Martin J nor, on the basis of what was said by their counsel in oral argument, do they contest his Honour's construction of the agreement.
Thirdly, and parenthetically in the light of the disavowal by the plaintiffs' counsel of any challenge to K Martin J's construction of the agreement, it is difficult to understand what purpose is served by the pleas in pars 74.4(a) and (b) and the purpose of the plea in par 74.4(c) is not readily apparent. The first and second defendants do not argue, however, that par 74.4 is embarrassing because it raises a false issue only that, along with the other impugned pleas, it is an abuse of process. The plaintiffs should reconsider the pleading in par 74.4. Much the same point may be made about pars 74.5, 74.6 and 74.7 - no submissions were directed by the parties to those paragraphs. It is not clear how the matters pleaded relate to any challenge to the substantive outcome of the earlier proceedings and, in the absence of submissions directed to them, no further reference need be made to them.
Fourthly, unlike the action taken by the plaintiff in Hunter v Chief Constable of the West Midlands Police, the purpose of the present action is not to mount a collateral attack on the decision in the earlier proceedings but to obtain damages for the loss the plaintiffs claim they have suffered by reason of the alleged breaches of care by the first and second defendants. The challenge to the outcome in the earlier proceedings is a consequence of that claim and not its purpose.
Fifthly, the first and second defendants do not contend that it would be manifestly unfair or oppressive to them for the outcome in the earlier proceedings to be challenged and, indeed, it is difficult to see on what basis that could ever be contended.
Sixthly, on the hypothesis on which the impugned paragraphs are based, that is, the first and second defendants were negligent, the plaintiffs were deprived of the opportunity to raise the matters on which they now wish to rely in the earlier proceedings.
Seventhly, while the importance to be attached to certainty and finality of outcomes must be acknowledged, the substantial weight to be attached to those factors is attenuated in the circumstances of this case by two matters, first, the plaintiffs are not contesting any factual findings or holdings of law made by K Martin J and, relatedly, as has already been observed, the plaintiffs' claim in the present action rests on the proposition that the preliminary issue was posed (in error) in relation to an incorrect list of transactions.
In the circumstances as I have described them, I do not accept that permitting the plaintiffs to maintain the claims in the impugned paragraphs would bring the administration of justice into disrepute. In this respect the observation made by Fraser JA in the context of the claims in Rogers v Roche (No 1) applies with equal force to the plaintiffs' claims in this case, that is, to preclude the plaintiffs from raising the claims in the impugned paragraphs would be more likely to bring the administration of justice into disrepute than would conflicting determinations about the plaintiffs' entitlement to the commissions in respect of different transactions reached on the basis of different causes of action and necessarily different evidence.

Conclusion

The applications made by the first and second defendants will be dismissed and I will hear the parties as to the form of orders and costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
OK
Associate to the Honourable Justice Tottle
13 JULY 2022