Prodata Solutions Pty Ltd v Zacest

Case [2025] SASC 138

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

PRODATA SOLUTIONS PTY LTD v ZACEST & ORS

[2025] SASC 138

Judgment of the Honourable Associate Justice Dart  

ESTOPPEL - ESTOPPEL BY JUDGMENT - RES JUDICATA OR CAUSE OF ACTION ESTOPPEL

ESTOPPEL - ESTOPPEL BY JUDGMENT - ISSUE ESTOPPEL

ESTOPPEL - ESTOPPEL BY JUDGMENT - ANSHUN ESTOPPEL

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY - DEFAULT JUDGMENT - OTHER PARTICULAR JUDGMENTS - ON CLAIM FOR DEBT OR LIQUIDATED DEMAND

PROCEDURE - STATE AND TERRITORY COURTS: JURISDICTION, POWERS AND GENERALLY - INHERENT AND GENERAL STATUTORY POWERS - TO PREVENT ABUSE OF PROCESS - ATTEMPTS TO RELITIGATE

The applicant commenced proceedings against the eighth respondent in the Federal Court - those proceedings were dismissed in 2020 due to the failure of the applicant to comply with orders of the Court - these proceedings were commenced in 2023 - for all relevant purposes this proceeding is the same as the proceeding dismissed in the Federal Court - the eighth respondent says that the Federal Court judgment creates res judicata - it also says that relitigating the claim is an abuse of process - the eighth respondent has applied for dismissal of the proceedings - it is appropriate to dismiss the proceedings.

Prodata Solutions Pty Ltd v South Australian Fire and Emergency Services Commission (No 3) [2020] FCA 1210; Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; Rogers v Legal Services Commission of South Australia (1995) 64 SASR 572; Mandeville v Better Lending Pty Ltd & Anor [2021] SASCA 28; Zetta Jet Pte Ltd v The Ship “Dragon Pearl” (No 2) [2018] FCAFC 132; McDonald v State of South Australia [2011] FCA 297; McDonald v State of South Australia [2008] SASC 134; State of South Australia v McDonald [2009] SASC 219, considered.

PRODATA SOLUTIONS PTY LTD v ZACEST & ORS
[2025] SASC 138

  1. These reasons deal with an interlocutory application, filed by the eighth respondent, by which it seeks to have the action dismissed as an abuse of process. It is appropriate to dismiss the action against the eighth respondent.

    Background

  2. The applicant is a software development company. Commencing in 2001, it developed and maintained an Emergency Services Organisation Training and Administration System (“ESOTAS”) for use by the South Australian Fire and Emergency Services Commission (“SAFECOM”). There were various arrangements in place over a lengthy period of time. In 2014 an agreement was signed by SAFECOM acknowledging the applicant’s ownership of intellectual property rights in the source code used in the system. In 2018 SAFECOM terminated the 2014 agreement.

  3. This claim deals with the assertion that SAFECOM, the eighth respondent, is inappropriately continuing to utilise intellectual property owned by the applicant. It seeks a declaration that the source code used in ESOTAS vests in it. It also seeks an injunction restraining it from using the source code without the applicant’s written consent. It is a complex dispute. These proceedings…

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Prodata Solutions Pty Ltd v Zacest [2025] SASC 138
Case
[2025] SASC 138
Decision Date

CaseChat Overview and Summary

The eighth respondent, South Australian Fire and Emergency Services Commission ("SAFECOM"), has brought an interlocutory application seeking the dismissal of the applicant's action against it as an abuse of process. The applicant, Prodata Solutions Pty Ltd, is a software development company that developed and maintained an Emergency Services Organisation Training and Administration System ("ESOTAS") for SAFECOM. The proceedings concern SAFECOM's alleged continued use of the applicant's intellectual property without its consent.

The court had to determine whether the dismissal of the applicant's Federal Court proceedings created res judicata or constituted an abuse of process, warranting the summary dismissal of the current proceedings. The eighth respondent argued that the dismissal in the Federal Court created res judicata, precluding the applicant from pursuing the same cause of action. Alternatively, the eighth respondent contended that the applicant's attempt to relitigate the same claim amounted to an abuse of process.

The court found that the dismissal of the Federal Court proceedings constituted a final judgment on the merits, as it was based on the applicant's deliberate non-compliance with court orders. The court concluded that the cause of action in the Federal Court proceeding merged into the judgment, and the applicant's claim in the current proceedings was precluded. Therefore, the eighth respondent was entitled to summary dismissal of the claim against it. The court also found that the applicant's attempt to relitigate the same claim amounted to an abuse of process, as it would be unjustifiably vexatious and oppressive for the eighth respondent.

The court granted the eighth respondent's application for summary dismissal of the claim against it. The proceedings against the eighth respondent were dismissed with costs.

Orders

Orders of the court

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Background

Background to the litigation

These reasons deal with an interlocutory application, filed by the eighth respondent, by which it seeks to have the action dismissed as an abuse of process. It is appropriate to dismiss the action against the eighth respondent.Background The applicant is a software development company. Commencing in 2001, it developed and maintained an Emergency Services Organisation Training and Administration System (“ESOTAS”) for use by the South Australian Fire and Emergency Services Commission (“SAFECOM”). There were various arrangements in place over a lengthy period of time. In 2014 an agreement was signed by SAFECOM acknowledging the applicant’s ownership of intellectual property rights in the source code used in the system. In 2018 SAFECOM terminated the 2014 agreement. This claim deals with the assertion that SAFECOM, the eighth respondent, is inappropriately continuing to utilise intellectual property owned by the applicant. It seeks a declaration that the source code used in ESOTAS vests in it. It also seeks an injunction restraining it from using the source code without the applicant’s written consent. It is a complex dispute. These proceedings are the second by which the applicant has sought to vindicate its rights. The applicant first commenced proceedings in the Federal Court in 2017. Those proceedings started with it seeking an interlocutory injunction. On the injunction argument, the eighth respondent conceded a serious question existed, but the injunction was declined on discretionary grounds. The Federal Court proceedings progressed through various interlocutory steps for about two years. On 26 September 2019 the Court set the matter down for a four week trial to commence on 31 August 2020. At the same time, orders were made in relation to the preparation of the matter for trial. Among the orders was a requirement of the parties to produce evidence in chief in affidavit form. The parties were advised to commence preparation of their affidavits. At a case management conference on 1 May 2020, formal orders were made requiring the applicant to file its expert evidence by 22 May 2020 and its lay evidence by 19 June 2020. The orders were made after the parties had been unable to agree a timetable to prepare the matter for trial. During the course of proceedings in the Federal Court it appears the applicant had four separate firms of solicitors acting for it. After the May orders were made, there was another change in solicitors and counsel and then the applicant ceased to be represented at all.Dismissal in the Federal Court In the result, the applicant did not comply with the orders to file its lay evidence, nor did it seek an extension of time within which to do so or provide the Court with details as to when its affidavits would be filed. The failure led to the vacation of the trial date fixed by the Court. After the vacation of the trial date, two of the respondents made applications to have the action dismissed. The applications were made pursuant to both r 5.23(1)(b) of the Federal Court Rules 2011 and s 37P of the Federal Court of Australia Act 1976 (Cth) which relevantly provide as follows:5.23 Orders on default (1) If an applicant is in default, a respondent may apply to the Court for an order that: …(b) the proceeding be stayed or dismissed for the whole or any part of the relief claimed by the applicant: (i) immediately; or (ii) on conditions specified in the order.…37P Power of the Court to give directions about practice and procedure in a civil proceeding…(5) If a party fails to comply with a direction given by the Court or a Judge under subsection (2), the Court or Judge may make such order or direction as the Court or Judge thinks appropriate. (6) In particular, the Court or Judge may do any of the following: (a) dismiss the proceeding in whole or in part; (b) strike out, amend or limit any part of a party’s claim or defence; (c) disallow or reject any evidence; (d) award costs against a party; (e) order that costs awarded against a party are to be assessed on an indemnity basis or otherwise.…

Evidence

Evidence Before The Court

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Decision

Reasons for decision

The eighth respondent seeks summary judgment. It relies on UCR 143.1(1):143.1—Judgment for failure to disclose basis (1) The Court may grant judgment dismissing an action on the ground that no reasonable cause of action in the case of a claim, or basis for the application in the case of an originating application, is capable of being disclosed. The decision of the Federal Court creates res judicata. The cause of action in that proceeding merged into the judgment. It no longer has an independent existence. The applicant accepts that the statement of claim in this action is effectively the same as the final statement of claim in the Federal Court.[13] It follows that no reasonable cause of action is disclosed in these proceedings. The cause of action which the applicant wishes to pursue is precluded and does not arise. The eighth respondent is therefore entitled to summary dismissal of the claim against it. [13] Transcript of 25 March 2025, page 5, line 36.Abuse of process It is not strictly necessary to consider the alternate basis put forward by the eighth respondent. I will, however, do so briefly. The eighth respondent submits that the attempt by the applicant to relitigate this claim is an abuse of process. It relies, in part, for that submission on what was said by Besanko J in McDonald v State of South Australia.[14] His Honour, after considering the issues of res judicata, issue estoppel and Anshun estoppel said:[15][14] [2011] FCA 297.[15] [2011] FCA 297 at [41]-[43].The doctrines set out above have a number of technical requirements. The Court’s jurisdiction to protect a party from an abuse of process constituted by an attempt to relitigate a case already disposed of is not limited to cases where those technical requirements can be made out: Walton v Gardiner (1993) 177 CLR 378 at 393 per Mason CJ, Deane and Dawson JJ (‘Walton’); Rana v University of South Australia [2008] FCA 1903 at [43]. The operation of the doctrines of res judicata, issue estoppel and Anshun estoppel is subsumed into the - 13 - Federal Court’s implied incidental power to prevent abuse of its processes: Spalla at [59]. Justice French said in Spalla (at [66]) that: the doctrines of res judicata, issue estoppel, and Anshun do not exhaust the circumstances in which a proceeding may be regarded as amounting to an abuse of process by way of attempted relitigation of a dispute already judicially determined. In Walton Mason CJ, Deane and Dawson JJ said (at 393) that: … proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance 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. The power to strike out a claim is to be exercised sparingly and ‘upon an examination of the relevant circumstances of the particular case before the Court: Spalla at [70]. In State Bank of New South Wales Ltd v Stenhouse Ltd (1997) Aust Torts Reports 81- 423 (at 64,089) (‘Stenhouse’), Giles CJ set out a list of relevant matters in determining whether it would be an abuse of process if a party were allowed to litigate an issue already raised in previous proceedings: (a) the importance of the issue in and to the earlier proceedings, including whether it is an evidentiary 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. In Spalla, French J described this list as a non-exhaustive one (at [70]).

Ratio Decidendi

Legal Principle Established

A summary of the above authorities is that a full trial of a matter is not required to establish res judicata. While an administrative or procedural judgment without a hearing will not usually suffice to create res judicata, anything more formal than that may do so. Consideration The applicant says that all that occurred in the Federal Court was a dismissal for want of prosecution. It says that that being the case, no question of res judicata can arise. That may well be correct, but I am not convinced that the Federal Court decision can be characterised in that way. There is a difference between dismissing an action that has been meandering along at a sluggish pace and dismissing an action for failing to comply with court orders. It is the latter that occurred here. Justice Charlesworth found that the non‑compliance with orders to prepare for trial was deliberate. The action was dismissed because of the applicant’s failure to comply with orders of the Court. The Federal Court has no express rule dealing with the consequences of a want of prosecution. The dismissal occurred after argument on two interlocutory applications brought by the respondents in the Federal Court proceedings. The respondents sought orders for dismissal of the action. There was a contest and the Court made a decision to dismiss the action. The dismissal order cannot be regarded as simply administrative or procedural. It was an order of substance based on the applicant’s failure to avail itself of the opportunity to have the matter proceed to trial. It is appropriate to treat the judgment as a final judgment on the merits of the action, even though the substantive merits were not considered by the Federal Court. The eighth respondent seeks summary judgment. It relies on UCR 143.1(1):143.1—Judgment for failure to disclose basis (1) The Court may grant judgment dismissing an action on the ground that no reasonable cause of action in the case of a claim, or basis for the application in the case of an originating application, is capable of being disclosed. The decision of the Federal Court creates res judicata. The cause of action in that proceeding merged into the judgment. It no longer has an independent existence. The applicant accepts that the statement of claim in this action is effectively the same as the final statement of claim in the Federal Court.[13] It follows that no reasonable cause of action is disclosed in these proceedings. The cause of action which the applicant wishes to pursue is precluded and does not arise. The eighth respondent is therefore entitled to summary dismissal of the claim against it. [13] Transcript of 25 March 2025, page 5, line 36.Abuse of process It is not strictly necessary to consider the alternate basis put forward by the eighth respondent. I will, however, do so briefly. The eighth respondent submits that the attempt by the applicant to relitigate this claim is an abuse of process. It relies, in part, for that submission on what was said by Besanko J in McDonald v State of South Australia.[14] His Honour, after considering the issues of res judicata, issue estoppel and Anshun estoppel said:[15][14] [2011] FCA 297.[15] [2011] FCA 297 at [41]-[43].The doctrines set out above have a number of technical requirements. The Court’s jurisdiction to protect a party from an abuse of process constituted by an attempt to relitigate a case already disposed of is not limited to cases where those technical requirements can be made out: Walton v Gardiner (1993) 177 CLR 378 at 393 per Mason CJ, Deane and Dawson JJ (‘Walton’); Rana v University of South Australia [2008] FCA 1903 at [43]. The operation of the doctrines of res judicata, issue estoppel and Anshun estoppel is subsumed into the - 13 - Federal Court’s implied incidental power to prevent abuse of its processes: Spalla at [59]. Justice French said in Spalla (at [66]) that: the doctrines of res judicata, issue estoppel, and Anshun do not exhaust the circumstances in which a proceeding may be regarded as amounting to an abuse of process by way of attempted relitigation of a dispute already judicially determined. In Walton Mason CJ, Deane and Dawson JJ said (at 393) that: … proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance 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. The power to strike out a claim is to be exercised sparingly and ‘upon an examination of the relevant circumstances of the particular case before the Court: Spalla at [70]. In State Bank of New South Wales Ltd v Stenhouse Ltd (1997) Aust Torts Reports 81- 423 (at 64,089) (‘Stenhouse’), Giles CJ set out a list of relevant matters in determining whether it would be an abuse of process if a party were allowed to litigate an issue already raised in previous proceedings: (a) the importance of the issue in and to the earlier proceedings, including whether it is an evidentiary 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. In Spalla, French J described this list as a non-exhaustive one (at [70]).