Rayhill v Mouawad

[2001] NSWSC 676

CITATION:	Rayhill v Mouawad [2001] NSWSC 676
CURRENT JURISDICTION:	Common Law Division
FILE NUMBER(S):	SC 11074/01
HEARING DATE(S):	08/08/01
JUDGMENT DATE:	8 August 2001
PARTIES :	Michael Norman Rayhill (Pl) Roderick Mouawad (Def)
JUDGMENT OF:	Kirby J

LOWER COURT JURISDICTION :	Local Court
LOWER COURT FILE NUMBER(S) :
LOWER COURT JUDICIAL OFFICER :	Barnett LCM

COUNSEL :	In Person (Pl) M Doueihi (Def)
SOLICITORS:	M N Rayhill & Co (Pl) Doueihi Lawyers (Def)
CATCHWORDS:	Anshun principle - Res judicata - Issue estoppel - Privies - Right appeal Small Claims Court against interlocutory judgment - Unsuccessful action against one party for a joint debt - Can the otehr be sued?
LEGISLATION CITED:	Local Courts (Civil Claims) Act, 1970 Justices Act, 1902 Suitors' Fund Act, 1951 Justices Legislation (Amendment) Appeals Act, 1998 Criminal Appeal Act, 1912
CASES CITED:	Kojima v Australian Chinese Newspapers [2000] NSWSC 1153 Bozatsis & Spanakakis (1997) 97 A Crim R 296 Ryan v Hansen (2000) 49 NSWLR 184 Cachia v Isaacs (1985) 3 NSWLR 366 Gleeson v J Wippell & Co Ltd (1977) 3 All ER 54 Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853 Effem Foods Pty Ltd v Trawl Industries of Australia P/L & Ors 115 ALR 377 Ramsay v Pigram (1968) 118 CLR 271 Phillips v Ward & Ors (1863) 2 H&C 717 [159 ER 297] Henderson v Henderson (1843) 67 ER 313 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
DECISION:	Ref para 67

Extempore - Revised

OF NEW SOUTH WALES
COMMON LAW DIVISION

KIRBY J

Wednesday 8 August 2001

11074/01 - Michael Norman RAYHILL v Roderick MOUAWAD

JUDGMENT

1   HIS HONOUR: This is a matter with a long and sorry history. It is a claim which involves the sum of less than $3,000 which has been the subject of extensive litigation, as I will describe.

The Action by Mr Mouawad

2   Mr Mouawad is a house painter. He apparently performed work at premises at 42A Bay Street, Mosman. Those premises are owned by a Mrs Colleen Rayhill.

3   Mr Mouawad claims that he was not paid for that work. He commenced proceedings in the Parramatta Local Court by Statement of Liquidated Claim on 3 August 1998. The claim was described as being for $2,920, being moneys due to the plaintiff for work and materials provided.

4   The defence was filed by Mrs Rayhill. The defence included, amongst other things, the following statement:

“The plaintiff was not employed by me but by Paul Peterkin of 5a Ventura Close, Hornsby Heights, 2077 (hereinafter called the builder).”

5   Mrs Rayhill also complained that the work had been performed badly. She said that she subsequently required another painter to rectify that work and complete the job.

The Cross Claim by Mrs Rayhill

6   A cross-claim was commenced in which the following was asserted:

“The plaintiff, in pretended performance of the subject work, carried out work in so negligent and careless a manner that the defendant had to have the faulty workmanship rectified at a cost to the defendant of $320.”

7   That appears to be a claim in negligence against the painter, namely, Mr Mouawad.

8   A defence was filed on behalf of the plaintiff/cross-defendant denying these allegations.

The Hearing before the Small Claims Court

9 The matter proceeded before the Local Court in the Small Claims Division. Procedures have been introduced designed to deal with small claims (less than $3000) (s12(3) Local Courts (Civil Claims) Act, 1970) in a simple and expeditious way. The procedures were described by O’Keefe J in Kojima v Australian Chinese Newspapers [2000] NSWSC 1153. There are the following alternatives for a small claim: (para 20)

“(a) informal hearing, that is a procedure in which written statements and relevant documentation is presented without the necessity or expense of witnesses attending. No oral evidence is given and there is no cross-examination;
(b) semi-formal hearing, that is a procedure adopted in a case in which it is considered necessary that a witness or witnesses should be questioned by the parties after their written statements have been tendered;
(c) formal hearing, that is a procedure in which evidence is taken on oath and there is cross-examination and addresses in the same way as in an ordinary adversarial proceeding in a superior court.”

10   The parties apparently opted for an informal hearing. They were invited to place material before the Court, and did so.

11   Mrs Rayhill filed statements which elaborated upon the matters raised by her defence. She said that in January 1996 she appointed Mr Paul Peterkin as the builder to complete the refurbishment of her house. Apparently he retained the plaintiff to carry out the painting which formed part of that refurbishment. She inspected the job and found that it was only part complete and was unsatisfactory in various ways which she described. She spoke to Mr Mouawad. He could not complete the job because he was about to leave for overseas.

12   According to her statement he said, “I will be happy if you just pay me for the four drums of paint which have been used on the job”. She said that she agreed. It is not disclosed whether she thereafter provided that paint in accordance with that agreement.

13   However that may be, a statement was also furnished to the Court by a Mr Fenner who was a painter retained by Mrs Rayhill to complete the job and to correct, according to her evidence and that of Mr Fenner, the defective nature of the work performed by Mr Mouawad.

14   Mr Mouawad, likewise, furnished a statement. He stated that he had approached Mr Peterkin to do a job and indeed furnished invoices to him. Mr Peterkin told him that he was managing the job for the owner. Mr Peterkin, according to Mr Mouawad and contrary to Mrs Rayhill’s evidence, is not a licensed builder.

15   This material having been placed before the Court, the Magistrate or Assessor, announced his decision. He found for Mrs Rayhill in the claim by Mr Mouawad against her, and he found for Mrs Rayhill in her cross-claim against Mr Mouawad. There is some controversy as to the basis upon which these findings were made.

16   Mr Michael Rayhill, who is a solicitor, appeared for his wife, Mrs Colleen Rayhill, in those proceedings. He asserted that the Referee made certain comments which adopted the assertions by the painter, Mr Fenner, as to the inadequacy of the work performed by the plaintiff.

17   The agent for the plaintiff’s solicitors, however, made a note. I was told from the Bar table that that note contains no such reference. Rather, the Referee appeared to have taken the view, understandably upon the evidence, that Mr Mouawad had sued the wrong party, and that his claim ought to have been directed against Mr Peterkin.

18 When the matter proceeded before me, the judgment of the Lower Court was not available. Indeed, I was led to believe that it was not recorded, and that this was one aspect of the informality which attends proceedings in the Small Claims Division of the Court. I have since noticed s23B(4) of the Local Courts (Civil Claims) Act, 1970, which suggests that a record may exist of that judgment. That section is in these terms:

“23(B)
(4) Proceedings in the Small Claims Division of a court (other than any judgment given or order made in respect of the proceedings) are not required to be recorded.”

19   The decision having been given by the Referee, the plaintiff apparently sought a stay of proceedings, announcing an intention to appeal. However, I am told that no appeal was lodged. I approach this matter upon the basis that the proceedings taken by Mr Mouawad against Mrs Rayhill were, therefore, brought to an end in the manner I have described.

Further Proceedings by Mr Mouawad

20   Thereafter, fresh proceedings were commenced in the Parramatta Local Court by Mr Mouawad against Mr Peterkin. Subsequently, the proceedings were amended, adding Colleen and Michael Rayhill as second defendants.

Notice of Motion by Mr Rayhill

21   A Notice of Motion was then filed by Mr Rayhill, drawing attention to the earlier proceedings, and annexing certain material. The additional material was said to have included a quotation furnished by the plaintiff, which identified Mr Michael Rayhill, as well as his wife, as the persons to whom a quote was sent by Mr Mouawad.

22   I am told by the solicitors for the plaintiff that the Amended Statement of Claim has been served upon Mr Michael Rayhill but not upon Mrs Colleen Rayhill. The solicitors apparently seek to keep Mrs Colleen Rayhill as a potential defendant, although they recognise the difficulties that may be occasioned by the earlier proceedings.

23   That seems to me unsatisfactory. I will deal with the matter upon an assumption that the claim is directed at Mr Michael Rayhill and Mr Peterkin; that is, I will assume that Mrs Colleen Rayhill, having successfully obtained judgment in earlier proceedings, is not available to be sued in respect of the same cause of action in later proceedings.

24   The Notice of Motion gave rise to an issue of law, as I will shortly describe. It was, therefore, thought unsuitable for the Small Claims Division of the Court. It was transferred to the General Division (cf s6 of the Act). It was then argued before Mr Barnett, Local Court Magistrate. Mr Rayhill, as I understand his argument on the Notice of Motion, advanced three claims which have been repeated in the proceedings before me.

25   The first is that Mr Mouawad was barred by the principle of res judicata from suing either his wife or himself by reason of the judgment given in the first proceedings.

26   Secondly, and in the alternative, there was an issue estoppel which prevented the exploration by the plaintiff in the second set of proceedings of issues dealt with in the first, such as the alleged faulty nature of the work.

27   Thirdly, and again in the alternative, it was suggested that the Anshun principle had application and prevented Mr Mouawad from successfully pursuing his claim, such that it should be terminated at once.

28   Mr Barnett, Local Court Magistrate, disagreed. He did not believe that there was any bar to the plaintiff maintaining his claim against Mr Michael Rayhill and against Mr Peterkin. He, therefore, proposed to continue with the action.

Action in the Supreme Court

29   However, Mr Rayhill in these circumstances approached this Court seeking orders set out in a Summons filed on 30 April 2001. The orders sought are as follows:

“1. An order pursuant to s107(5) of the Justices Act, 1902 staying the matter until further order.
2. An order pursuant to s104(4) of the Justices Act, 1902 granting the plaintiff leave to appeal the decision.
3. An order pursuant to s104(5) of the Justices Act, 1092 setting aside the decision.
4. (a) A declaration that the Magistrate erred in law in failing to apply the principles of res judicata in arriving at the decision.
(b) Further and in the alternative, a declaration that the Magistrate erred in law in failing to apply the principle of issue estoppel in arriving at the decision.
(c) Further and in the alternative, a declaration that the Magistrate erred in law in failing to apply the ‘Anshun’ principle in arriving at the decision.
5. An order that the matter be remitted to the Magistrate to be dealt with according to law.
6. An order that the Court extend the provisions of the Suitors’ Fund Act, 1951 to the plaintiff.
7. Costs.”

The Right of Appeal

30 There was no argument before me directed to Mr Rayhill’s right to appeal against the ruling of Mr Barnett on the Notice of Motion. Nonetheless, I should say something about that issue. Mr Rayhill, it will be noticed, seeks orders under various sections of the Justices Act. 1902. Part 5 of the Justices Act was introduced by the Justices Legislation (Amendment) Appeals Act, 1998. It deals with appeals to the Supreme Court, which are by way of Summons, rather than Stated Case, as in the past (cf Supreme Court Rules, Pt 51B). Section 102(3) of the Justices Act includes the following provision:

“s102(3) This Part, to the extent to which it is not inconsistent with any other Act, applies to any order of a Magistrate made under another Act against which:
(a) an appeal is provided for under the other Act to the Supreme Court, or …”

31 See also s69(3) of the Local Courts (Civil Claims) Act, 1970.

32 The appellant’s Summons recognised that the “decision” of Mr Barnett, against which he seeks to appeal, was in the nature of an interlocutory judgment. Accordingly, Mr Rayhill sought leave to appeal under s104(4) of the Justices Act, which is in these terms:

“s104(4) Appeals in relation to interlocutory orders
A defendant or an informant may appeal under this Division to the Supreme Court against any interlocutory order that is made by a Magistrate in summary proceedings, on a ground that involves a question of law alone, but only with the leave of the Supreme Court.”

33 However, the terms of that section, and the structure of s104 make it plain, in my view, that the term “defendant” in s104(4) is a person facing criminal or quasi criminal proceedings (cf s104(1)). Appeals in respect of civil proceedings are dealt with in s104(5), which is as follows:

“s104(5) Appeals by parties to civil proceedings
A party to any proceedings under the Local Courts (Civil Claims) Act 1970 may appeal under this Division to the Supreme Court as provided for by section 69 of that Act.”

34 Likewise, it seems to me that s107 (dealing with a stay) is concerned with criminal proceedings. The power to stay civil proceedings is to be found in s32 of the Local Courts (Civil Claims) Act, 1970.

35 Section 104(5) directs one to s69 of the Local Courts (Civil Claims) Act, 1970 which, relevantly, is in the following terms:

“s69 Appeal
(1) Subject to subsection (2), all judgments and orders of a court exercising jurisdiction under this Act shall be final and conclusive.
(2) A party to proceedings under this Act who is dissatisfied with the judgment or order of the court as being erroneous in point of law, may appeal to the Supreme Court therefrom.
(2A) …
(3) The provisions of Part 5 of the Justices Act 1902, apply, to the extent to which they are applicable, to appeals under subsection (2) in the same way as they apply to appeals to the Supreme court under those provisions.”

36   It follows that, in order to appeal to this Court, two conditions must be satisfied by Mr Rayhill:

· First, there must be a “judgment or order” of the Local Court, General Division.

· Secondly, there must be an error of law.

37   Was the ruling given by Mr Barnett on Mr Rayhill’s Notice of Motion a “judgment or order” of the Local Court? Was it, on the other hand, simply a “ruling”? In Bozatsis & Spanakakis (1997) 97 A Crim R 296, the Court of Criminal Appeal (in the context of s5F of the Criminal Appeal Act, 1912) held that whether a particular ruling can be regarded correctly as a “judgment or order”, or merely a “ruling”, is a question of substance and not of mere form. Gleeson CJ (with whom Meagher JA and Bruce J agreed), said this: (at 303)

“In Lethlean (1995) 83 A Crim R 197 Sheller JA observed that the authorities have established no bright line test for discriminating between judgments or orders, on the one hand, and rulings which do not constitute judgments or orders, on the other. King CJ, in Legal Practitioners’ Complaint Committee v A Practitioner (1987) 46 SASR 126 drew a distinction between judgments or orders and what he called ‘incidental rulings’. A judgment or order, he said, is a ‘judicial act which decides the question or one of the questions which is raised for decision in the particular proceedings’. However, rulings also decide questions. It is the character of the question, and the effect of the decision that makes the difference.”

38   I believe that the determination by the learned Magistrate was a ruling and not a judgment or order. It was open to Mr Rayhill, once the evidence was in, to renew his application. He could seek, by reference to the terms of the judgment in his wife’s favour, and by reference to the evidence, to demonstrate that he was able to claim immunity from suit under that judgment (cf Ryan v Hansen (2000) 49 NSWLR 184, especially 201-202). I do not believe that Mr Rayhill had, at this early stage, a right of appeal under s69(2) of the Local Courts (Civil Claims) Act, 1970.

Argument on the Merits

39   However, since the matter was argued on the merits (that is, whether the Magistrate’s ruling was erroneous in point of law), I should say something about these issues.

40   The appellant, Mr Rayhill, asserted that, by reason of the judgment or order of the Local Court, Small Claims Division, in his wife’s favour, Mr Mouawad could not bring an action against him. As mentioned, the appellant identified three bases for that assertion:

· Res judicata.

· Issue estoppel.

· The Anshun principle.

Res Judicata and Issue Estoppel

41   It is convenient to turn to Halsbury’s “Laws of Australia” for a statement of the rule in respect of res judicata: (Vol 12, para 190-45)

“The rule as to res judicata (sometimes called ‘cause of action estoppel’) is that, where an action has been brought and judgment has been entered in that action, no other proceedings may be maintained on the same cause of action. If the cause of action was held to exist, so that judgment was given upon it, it is said to be merged in the judgment and no longer has an independent existence. If it was held not to exist, the unsuccessful plaintiff may no longer assert that it does. Res judicata is a defence to a claim in a legal proceeding which, if made out, is a complete bar to the claim.”

42   There are a number of prerequisites. There must be a hearing on the merits. The judgment, or order, must be that of a competent tribunal. McHugh JA in Cachia v Isaacs (1985) 3 NSWLR 366 made the following comment in the context of the Consumer Claims Tribunal: (at 388)

“I think that a serious question arises as to whether proceedings in the Consumer Claims Tribunal are capable of giving rise to an issue estoppel or a res judicata. Res judicata and issue estoppel are concerned with decisions on the ultimate issues in causes of action or defences to them. The jurisdiction conferred on the Tribunal is to make orders to pay money, perform work, or to relieve of obligations in claims arising out of contracts. In that sense the Act confers rights on consumers. But a right to obtain an order is not a cause of action.”

43 Here, the Local Court (whether in the Small Claims Division or the General Division) is constituted as a “Court of record”. A judgment of that Court may be set up as a defence in any action brought in another Court (s7 Local Courts (Civil Claims) Act, 1970).

44   Mrs Rayhill obtained a judgment in the action by Mr Mouawad against her. That judgment has not been set aside. She is entitled to rely upon that judgment as a defence to any further action by Mr Mouawad. But is her husband, the appellant, also entitled? Mr Rayhill was not a party to the original action. Res Judicata, however, extends not only to parties, but their privies. The issue is whether Mr Rayhill is a privy to his wife. I will return to that issue in a moment.

45   Issue estoppel was defined by McHugh JA in Cachia v Isaacs (supra) in these words: (at 386)

“The policy of the law is to prevent any issue of fact or law in dispute between parties from being determined in judicial proceedings more than once. A final decision on an issue, once given by a competent tribunal, forever binds the parties to the determination and all those who claim through them. They are estopped in future litigation from denying the correctness of the decision on that issue. But the decision is only binding in respect of an issue which was directly, and not collaterally or incidentally, involved in the proceedings. A decision on an ultimate issue binds the parties; a decision concerning an evidentiary fact does not: Blair v Curran (1939) 62 CLR 464 at 532; Brewer v Brewer (1953) 88 CLR 1 at 15-16. An ultimate issue is one the proof of which was legally necessary to establish a cause of action, defence or reply in proceedings between the parties: Blair v Curran (at 532).”

46   The rule in respect of issue estoppel likewise extends to privies.

Who is a Privy?

47   So the issue is whether Mr Rayhill can be regarded as a privy with his wife. In his affidavit in support of the Summons, and in written submissions, Mr Rayhill has included an elaboration upon his assertion that he is to be regarded as a privy with his wife. He says this:

“1. The North Sydney proceedings (referring to the original claim which was transferred from Parramatta) involved the same claim as the Parramatta proceedings (the second set of proceedings).
2. The wife (referring to Mrs Colleen Rayhill) is a party to both proceedings and I submit that I am in privity with her in relation to the North Sydney proceedings, inter alia, because I have an interest in those proceedings as her husband, and as I was her solicitor in those proceedings.” (parenthesis added)

48   The same elaboration appears in respect of the assertion made in relation to the Anshun principle, and in relation to issue estoppel. Mr Rayhill suggested that simply because he was the husband of Colleen Rayhill, the defendant in the first proceedings, he was to be regarded as a privy or, alternatively, because he appeared for her and, therefore, in his words, ‘actively participated in the previous proceedings’, he is to be regarded as a privy.

49   A privy is one who claims title or right by virtue of the title or right of another. There are three classes of privy: blood, title or interest. Here, Mr Rayhill is not a privy, for the purposes of the rule, by blood or title. If he is a privy, it is under the broad heading of interest. In Gleeson v J Wippell & Co Limited (1977) 3 All ER 54, Sir Robert Megarry VC said this:

“Having due regard to the subject matter of the dispute, there must be a sufficient degree of identification between the two to make it just to hold that the decision to which one was party should be binding in proceedings to which the other is party. It is in that sense that I would regard the phrase ‘privity of interest’.”

50   In Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853, Lord Upjohn said this: (at 945)

“I can see nothing in the solicitors’ relationship with his client which renders them privy to one another in the ordinary sense in which privy or privity is used for the purposes of the doctrine.”

51   In Effem Foods Pty Limited v Trawl Industries of Australia Pty Limited & Ors 115 ALR 377, the Federal Court considered the nature of a privity of interest. The facts were complicated. Trawl Industries of Australia Pty Limited (in liquidation) (“Trawl Industries”) brought proceedings in the Supreme Court of New South Wales. A number of parties assisted Trawl Industries in those proceedings, and stood to gain had the plaintiff been successful. However, the action failed. Trawl Industries, and the parties behind that company, then took action in the Federal Court against the same defendant, “Effem Foods”. That company issued a Motion seeking to have the proceedings stayed on the grounds of res judicata arising from the Supreme Court judgment. Gummow J stayed the action of Trawl Industries, but dismissed the balance of the Motion. The issue was whether the other parties were, for the purposes of the res judicata rule, privies of Trawl Industries. Northrop and Lee JJ said this: (at 395)

“As in Ramsay v Pigram , the causes of action determined by the judgment in the first action were separate and distinct from the causes of action in the second action, so also in the present case, the causes of action relied upon by the applicants, other than Trawl, in the Federal Court proceeding are separate and distinct from the causes of action in the earlier Supreme Court action. The only way Effem could plead successfully the defence of res judicata would be to show that those applicants were privies in interest with Trawl in the earlier action. In our opinion, the law relating to privity of interest in this respect in Australia is so settled that this court is bound by the earlier authorities.”

52   There was no privity of interest between the respondents to the Motion, notwithstanding their economic or financial interest in the earlier proceedings.

53   Mr Rayhill, in argument, drew attention to Ramsay v Pigram (1968) 118 CLR 271 where, in the judgment of Taylor J, there was reference to a treatise on the Law of Evidence by Judge Pitt Taylor, which was in these terms:

“In all the instances of privity above given, the privy has claimed, or been liable, under or through the original party, but the same rules of law apply where two or more persons are subject to a joint or concurrent liability.”

54   Thereafter, the author said this:

“If one be sued alone upon a joint note, debt, or tort, the judgment against him, even without satisfaction, may be pleaded and proved in bar of a second suit for the same cause of action, whether it be brought against the other debtor or wrongdoer, or against the joint debtors or wrongdoers. The reason is that, in these cases, the original cause of action has been changed into matter of record, which is of a higher nature, and the inferior remedy is thus merged in the higher.”

55   Taylor J, immediately before these passages, drew attention to the case of Phillips v Ward & Ors (1863) 2 H&C 717 [159 ER 297]. That case was concerned with an action by a solicitor against two defendants said to be jointly responsible for his fees. A demurrer was entered by the defendants. The demurrer asserted that the retainer of the defendants was a joint retainer with another individual, John Bazalgette. The solicitor had previously, and unsuccessfully, brought an action against Mr Bazalgette in the Court of Common Pleas. The defendants sought to obtain the benefit of that judgment.

56   In opposition to that argument Hayes, Serjt, said this: (at 297)

“A plaintiff who has failed in an action against one of several joint contractors is not thereby estopped from suing the others. An estoppel would arise in another action between the same parties for the same cause, but it is a novel plea that, because the plaintiff has sued the wrong party, he is estopped from suing the right one.”

57   Pollock CB gave the following judgment: (at 298)

“We are all of opinion that the plea cannot be sustained. This is an action against persons who are joint debtors with another person not now sued and because he was fortunate enough to succeed by some plea or other in an action brought by the plaintiff against him for the same cause, the defendants seek to avail themselves of his immunity. Now, for anything which appears on the face of the plea, he may have succeeded on matter of defence, which, though good with respect to him, is not open to his co-debtors. The consequence is that the plea is bad, and the plaintiff entitled to judgment.”

58   Bramwell B agreed, adding the following: (at 298)

“No doubt, if a person jointly liable with others succeeds in an action against him alone by pleading a release or payment, that would afford a good defence to an action against the other joint debtors - whether pleaded in bar or by way of estoppel seems unimportant - for a release to one is a release to all, and payment by one is a discharge of all. Therefore, in some cases, a judgment recovered by one of several joint debtors may be pleaded in an action against the others. But this plea does not show that the former action was successfully resisted on some ground common to all the joint debtors; but only that the Court gave judgment for the defendant which may have been on some ground purely personal, as infancy, bankruptcy, or insolvency.”

59   In “The Doctrine of Res Judicata” by Spencer Bower, Turner and Handley (3rd Ed), the principle was expressed as follows: (para 220)

“220 … Where A is jointly liable with B to X, and X unsuccessfully sued A alone, the judgment operates for the benefit of B if it proceeded on a ground common to A and B, and not some ground personal to A such as infancy, bankruptcy or the like.”

60   See also Halsbury’s “Laws of Australia” (Vol 6, para 110-2965), where the principle is expressed in these words:

“Where a co-promisor successfully defends an action on the promise, whether the co-promisors, if sued, can successfully defend on the ground that the issue has already been decided in their favour depends on the nature of the successful defence to the earlier proceedings.
(1) If the defence was personal to the other promisor it will not aid them.
(2) If the defence went to the enforceability of the promise on general principles it will be a good defence.”

61   The problem here is that there has been no exploration of the case which the plaintiff seeks to make against Mr Rayhill under the Amended Statement of Liquidated claim. One simply does not know what evidence will be relied upon by him in order to establish that Mr Rayhill was a contracting party in respect of the paintwork which was performed. Likewise, one does not know the evidence which will be relied upon in respect of Mr Peterkin, although the material to which I have referred perhaps provides some greater insight.

62   I am not in a position to say, and I do not believe Mr Rayhill is in a position to assert, that the plaintiff necessarily will assert a joint responsibility for the work between himself and his wife. Even were there joint responsibility, it is not entirely clear that the judgment would operate to prevent a claim by Mr Mouawad against Mr Rayhill. It will depend upon the terms of the judgment, and the basis upon which Mrs Rayhill succeeded.

The Anshun Principle

63   I then turn to the third basis upon which Mr Rayhill relied, that of the Anshun principle. That principle has its origin in the statement by Sr James Wigram VC in Henderson v Henderson (1843) 67 ER 313 where he said this:

“Where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, which was not brought forward, only because they have, from negligence, inadvertence, or even accident, permitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.”

64   It is instructive to turn to the judgment in Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589, where Gibbs CJ, Mason and Aickin JJ said the following: (at 602-603)

“… there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff’s claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceedings. In this respect, we need to recall that there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings, eg expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few.”

65   Their Honours added: (at 603)

“It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment.”

66   Here, plainly it would have been sensible and desirable for Mr Mouawad to commence proceedings against all parties who may have had a contractual responsibility for his wages. That is, it would have been much safer from Mr Mouawad’s viewpoint to have sued Mr Peterkin, Mr Rayhill and Mrs Rayhill, in that he would thereby have avoided the risk of falling between two stools. However, for whatever reason, he did not do that. He sued Mrs Rayhill alone. The Anshun principle does not, in my view, prevent his now suing Mr Rayhill and Mr Peterkin, and attempting to establish their individual liability. Whether that attempt is successful will depend upon the evidence, and the principles to which I have referred.

67   It seems to me, therefore, that the following orders are appropriate:

1. The Summons appealing against the determination by the Magistrate on 19 March 2001 is dismissed.

2. The matter is remitted to the Local Court to be completed and determined according to law.

3. The plaintiff to the Summons, Mr Rayhill, should pay the defendant’s costs.

4. The exhibits may be returned.

*****

Last Modified: 08/17/2001