St(2) Pty Ltd v National Australia Bank Limited

[2000] VSC 88

SUPREME COURT OF VICTORIA
PRACTICE COURT	Not Restricted

No. 5426 of 1999

ST(2) PTY. LTD. (RECEIVER AND MANAGER APPOINTED) AND OTHERS	Plaintiffs
v.
NATIONAL AUSTRALIA BANK LIMITED	Defendant

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JUDGE:	BEACH, J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	16 MARCH 2000
DATE OF JUDGMENT:	23 MARCH 2000
CASE MAY BE CITED AS:	ST(2) PTY. LTD. v. NATIONAL AUSTRALIA BANK LTD.
MEDIUM NEUTRAL CITATION:	[2000] VSC 88

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CATCHWORDS:      Practice and Procedure – Proceeding an abuse of process – Earlier proceeding – Later proceeding raising new causes of action – Reasonableness in instituting separate proceeding.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr. C. Harrison
For the Defendant	Mr. M. Clarke	Russell Kennedy

HIS HONOUR:

1. This is an appeal by the defendant the National Australia Bank Ltd. (NAB) from the order of Master Evans made on 3 March 2000 whereby the Master dismissed NAB's application that the proceeding brought against it by the third and fourth plaintiffs David Edmund Hugh Westbrook and Maria Carmen Westbrook (the Westbrooks) be dismissed on the ground that it does not disclose a cause of action is scandalous frivolous or vexatious and/or is an abuse of the process of the Court but ordered that the Westbrooks' statement of claim be struck out.

1. Having made those orders the Master then gave the Westbrooks leave to file and serve a further amended statement of claim within 21 days of his order.

1. In making the orders he did in the matter the Master delivered quite lengthy written reasons for his decision.  In those reasons the Master set out in some detail the factual background to the proceeding, and to an earlier proceeding instituted in this Court by the bank against the Westbrooks, being proceeding No. 5540 of 1998.  The Master then defined the issues that arose for his determination in the proceeding, dealt with the arguments advanced to him in relation to the issues and then stated his reasons for his conclusions concerning NAB's application.

1. I have carefully considered Master Evans' reasons for judgment and in my opinion he made no error in the matter.

1. Although the proceeding before me is a hearing de novo I consider that in the circumstances it is not incumbent upon me to reiterate many of the matters covered by the Master.  It will be sufficient for the parties' purposes if I state the basis upon which I have also concluded that the Westbrooks' action against NAB should not be dismissed.

1. The case for NAB is that the Westbrooks' proceeding against it is an abuse of process in that the matters now relied upon by the Westbrooks should have been raised by them by way of defence and counterclaim to the earlier proceeding brought against them by the bank.

1. The earlier proceeding was a claim by NAB against the Westbrooks in respect of a guarantee they had given to the bank to secure repayment to the bank by Brook Reyes Pty. Ltd., a company of which they were directors, of a sum of $740,000 which NAB had advanced to Brook Reyes.  The guarantee was dated 3 December 1996.

1. On 23 April 1998 NAB filed the writ in that proceeding in the Court whereby it sought to recover from the Westbrooks the sum of $200,642.51 which was then outstanding under the facility.

1. On 4 August 1998 judgment was entered against the Westbrooks in that proceeding in default of appearance.

1. The Westbrooks who were acting on their own behalf, defaulted in filing their appearance in time because on the way to the city from their home at Officer to do so, their car broke down and had to be towed back to Officer.  When they attended at the office of the Prothonotary on 5 August to file their appearance, the judgment had already been entered against them.

1. On 28 September 1998 a Master of the Court set the judgment aside.

1. On 13 October 1998 I heard an appeal by NAB from the order of the Master.

1. On 22 October 1998 I upheld the appeal and quashed the Master's order.  I also dismissed the Westbrooks' application to set aside the default judgment.

1. My orders in that regard were upheld by the Court of Appeal on 15 April 1999.

1. No opportunity was ever given to the Westbrooks in the earlier proceeding therefore to litigate any matters they may have wished to raise against NAB.  See Shanks & Co. Pty. Ltd. v. Hohne[1].

   [1](1963) VR 198

1. The authority relied upon by NAB in the present case is of course the decision of the High Court in Port of Melbourne Authority v. Anshun Pty. Ltd.[2] and in particular the following passage at p.602 et seq.:

"In this situation we would prefer to say that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it.  Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding.  In this respect, we need to recall that there are a variety of circumstances, some referred to in 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 e.g. expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few.  See the illustrations given in Cromwell v. County of Sac. (1876) 94 US [24 Law. Ed., at p.199].)

It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment.  In this respect the discussion in Brewer v. Brewer (1953) 88 CLR 1 is illuminating."

[2](1981) 147 CLR 589

1. There can be no question of any judgment in the Westbrooks' favour in this case conflicting with the judgment of the Court in the earlier case.

1. Nor in my opinion can it be said that it was unreasonable for the Westbrooks not to raise in the earlier proceeding the matters they now seek to rely upon.  They are different causes of action, requiring proof of different elements.  In that regard see the observations of Ormiston, J.A. in Gibbs & Another v. Kinna[3].

   [3](1999) 2 VR 19 at p.21

1. Further the factual matters which will require investigation in this proceeding go far beyond those which required investigation in the earlier proceeding.

1. The appeal will be dismissed with costs to be taxed and paid by the defendant.

1. I order that paragraphs 45 and 46 of the defendant's amended defence be struck out.

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