Stokes (by a tutor) v McCourt
[2013] NSWSC 1014
•31 July 2013
Supreme Court
New South Wales
Medium Neutral Citation: Stokes (by a tutor) v McCourt [2013] NSWSC 1014 Hearing dates: 17 May 2013 Decision date: 31 July 2013 Jurisdiction: Equity Division Before: Lindsay J Decision: (1) The defendant's summary disposal application dismissed.
(2) The defendant refused leave to rely upon an "Amended Defence" filed without leave.
(3) Costs orders made in favour of the plaintiff.
Catchwords: PROCEDURE - Civil - Judgments and orders - Contempt of court - Practice - Whether contemnor can be heard in own cause before purging contempt
PROCEDURE - Civil - Judgments and orders - Effect of judgment - Estoppel by judgment - Res Judicata - Issue estoppel - Anshun estoppel - Abuse of process - Consideration upon application for summary disposal of second proceedings -
Whether entitlement to rely on a res judicata defence can be lost by a failure to plead - Waiver - EstoppelLegislation Cited: Property (Relationships) Act 1984 NSW
Property Law Act 1974 QLD
Contracts Review Act 1980 NSW
Uniform Civil Procedure Rules 2005 NSW
Supreme Court Rules 1970 NSW
Family Provision Act 1982 NSW
Succession Act 2006 NSW
Family Law Act 1975 CTH
Uniform Civil Procedure Rules 1999 QLD
Jurisdiction of Courts (Cross Vesting) Act 1987 NSW, s 4(3)
Jurisdiction of Courts (Cross Vesting) Act 1987 QLD, s 9.Cases Cited: VTMVS v MREM [2009] QSC 393
Blair v Curran (1939) 62 CLR 464, 531-533
Permewan Wright Consolidated Pty Ltd v Attorney General (NSW) (1978) 35 NSWLR 365 at 369 and 374
Young v Jackman (1986) 7 NSWLR 97; 102B; 101D-E
KP Cable Investments Pty Limited v Meltglow Pty Limited (1995) 56 FCR 189 at 206C-G
X Limited v Morgan-Grampian (Publishers) Limited [1991] 1 AC 1 at 46B-H, 50H and 55E-F; 45 E-F
In the marriage of Fahmi (1995) 19 Fam LR 517 at 525;
AN v Zhu [2006] Fam CA 179; (2006) FLC 93-257; 198 FLR 152 at [79] and [120]-[123]
Leaway v Newcastle City Council (No 2) [2005] NSWSC 826; 220 ALR 757; at [52], [59]-[60] and [87]).
Kayserian Nominees (No. 1) Pty Ltd v JR Garner Pty Ltd [2008] NSWSC 1011 at [1]-[3]
Chuck v Cremer (1846) 1 Coop t Cott 205; 47 ER 820 at 820
Hadkinson v Hadkinson [1952] P285 at 288; 289
Permewan Wright Consolidated Pty Limited v Attorney General (1994) 35 NSWLR 365 at 367B, 369C and 374C
Jackson v Goldsmith (1950) 81 CLR at 446- 467
Cordes v Dr Peter Ironside Pty Ltd [2010] Qd R 235 at 247-249 [44]-[46] and [48]
Trawl Industries of Australia Pty Ltd (In Liq) v Effem Foods Pty Ltd (1992) 36 FCR 406 at 412; 418 and 422.
Trawl Industries of Australia Pty Ltd (In Liq) v Effem Foods Pty Ltd (1992) 36 FCR 406 at 412 ; (1993) 43 FCR 510.
Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589 at 598-604
Henderson v Henderson (1843) 3 Hare 100 at 115; 67 ER 313 at 319
Nominal Defendant v Manning (2000) 50 NSWLR 139 at 142 [6]
Kuligowski v Metrobus (2004) 220 CLR 363 at 375; 373 [21] and 379 [40]
Coshott v Woollahra Municipal Council [2002] NSWCA 64 at [19]),
Williams v Spautz (1992) 174 CLR 509 at 518 and 520
Walton v Gardner (1993) 177 CLR 378 at 392-393
Hall v Nominal Defendant (1966) 117 CLR 423 at 439-441
Licul v Carney (1976) 180 CLR 213 at 225
Port of Melbourne Authority v Anshun Pty Limited [No 1] (1980) 147 CLR 35 at 38 and Carr v Finance Corp of Australia Limited [No 1] (1981) 147 CLR 246
Upendr Nath Bose v Lall [1940] AIR (PC) 222 at 225
Hall v Nominal Defendant (1966) 117 CLR 423 at 440-441
Wickstead v Browne (1992) 30 NSWLR 1 at 11
Ramsay v Pigram (1968) 118 CLR 271 at 276;
Reichel v Magrath (1889) 14 App Cas 665) Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404 at 410B Rippon v Chilcotin Pty Limited (2001) 53 NSWLR 198
National Parks and Wildlife Service v Pierson (2002) 55 NSWLR 315 at 318 [16]-[17]
Nominal Defendant v Manning (2000) 50 NSWLR 139 a t 155-156 [71]-[73] and 167 [122]
Fletcher v Besser [2010] NSWCA 30 at [17]
Reichel v Magrath (1889) 14 App Cas 665) Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404 at 410B
Miller v University of New South Wales [2002] FCA 882 at [91]
Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 at 504-505 and 512
Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 at 193-194 [33]; 213 [98] and 217 [111]-[112])
Vakauta v Kelly (1989) 167 CLR 568 at 572
Metwally v University of Wollongong (No 2) [1985] HCA 28; 59 ALJR 481 at 483; 60 ALR 68 at 71 Commonwealth v Verwayen (1990) 170 CLR 394
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 128-130
Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 at 504-505 and 512
Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589 at 598-604, 598, 601-602 and 602-603
Woodhouse v Consignia plc [2002] 1 WLR 2558 at 25575 [56]
Henderson v Henderson (1843) 67 ER 313 at 319,
Anshun (1981) 147 CLR 589 at 598 and 602-603
Macquarie Bank Limited v National Mutual Life Association of Australia Limited (1996) 40 NSWLR 543 at 556E-557G
Republic of India v India Steamship Co Limited [1993] AC 410 at 421H-423D Showlag v Mansour [1995] 1 AC 431 at 440H-441ETexts Cited: Spencer Bower & Handley, Res Judicata (4th ed, LexisNexis, London 2009) at para 2.15; 5.02, 17.16, 18.03, 18.05, 18.09 18.10 Daniell's Chancery Practice (London, 7th ed, 1901) vol 1, pp 724-727
Borrie & Lowe, The Law of Contempt (London, Butterworths, 1996, 3rd ed), pp 651-654Category: Principal judgment Parties: Vanessa Therese Marge Veronica Stokes by her tutor Paul Kenneth Stokes (Plaintiff)
Matthew Robert Ernest McCourt (Defendant)Representation: JR Dupree (Plaintiff)
RM Galloway (Defendant)
Somerville Laundry Lomax (Plaintiff)
Wiltshire Lawyers (Defendant)
File Number(s): 2010/00148874
Judgment
INTRODUCTION
This judgment determines two motions arising out of a de facto relationship which has been the subject of:
(a) a purported "Termination Agreement" made between the parties pursuant to Part 4 of the Property (Relationships) Act 1984 NSW; and
(b) a judgment of the Supreme Court of Queensland, published as VTMVS v MREM [2009] QSC 393, in which an application by the present plaintiff for a property adjustment order under Part 19 Division 4 of the Property Law Act 1974 QLD (the Queensland equivalent of the Property (Relationships) Act 1984 NSW) was dismissed.
By a statement of claim filed in this Court on 15 June 2010 the plaintiff applied for relief to the following effect: (a) an order under s 18 of the NSW Act that she be granted leave to make an application for an order under Part 3 of the Act (for an adjustment of property rights) outside the time limited by that section for the making of such an application; (b) an order under s 20 of the NSW Act adjusting the parties' property rights; and (c) insofar as the purported Termination Agreement may constrain her application for an adjustment order by reason of s 47 of the NSW Act, an order that the Termination Agreement be declared void or set aside.
The grounds upon which the plaintiff challenges the validity of the purported Termination Agreement include a contention that that instrument was an "unjust contract" within the meaning of the Contracts Review Act 1980 NSW.
The potential availability of such a ground is confirmed by s 46 of the NSW Act which provides that, except as otherwise provided by Part 4 of the NSW Act, a termination agreement "shall be subject to and enforceable in accordance with the law of contract, including, without limiting the generality of this section, the Contracts Review Act 1980".
The defendant filed a defence to the plaintiff's statement of claim on 24 September 2010. Although he traversed the plaintiff's allegations in detail, he did not plead the judgment of the Supreme Court of Queensland as an answer, in whole or part, to her claims for relief in these proceedings.
The possibility of such a defence was first raised by the defendant at a directions hearing before Hallen J on 10 December 2012, at which time his Honour (by consent) made orders (which, for convenience, I will here describe generically as "directions") for the future conduct of the proceedings.
Those directions provided, principally, for the appointment of experts for the purpose of valuing land and business entities. They were forensically important as a step towards a final hearing of proceedings in which there had been, and there remained, disputes about the adequacy of the defendant's disclosure of information about his assets and operations.
The directions did not grant leave to the defendant to file an amended defence; but they did provide for the defendant to serve on the plaintiff "a proposed amended defence" on or before 31 January 2013 in anticipation of an application for leave to amend his defence.
Without leave, the defendant purportedly filed an "Amended Defence" on 31 January 2013.
Materially, that document contains the following paragraphs in purported answer to the whole of the plaintiff's statement of claim:
"43. Further, the defendant says that the plaintiff's action is not maintainable as it is a res judicata, or as an estoppels [sic] arises against the plaintiff, in consequence of a determination of the Supreme Court of Queensland.
Particulars
(a) On 4 December 2009 the Supreme Court of Queensland dismissed the plaintiff's claim for a property adjustment Order against the defendant, which claim arose by reason of their de facto relationship;
(b) The Supreme Court of Queensland found that the Termination Agreement entered into between the parties was both valid and enforceable;
(c) The Supreme Court of Queensland found further that the plaintiff would otherwise be stopped [sic] from proceeding with her claim for a property adjustment order;
(d) The plaintiffs [sic] claim was dismissed.
44. Further, or in the alternative, the plaintiff is or should be stopped [sic] from denying the validity or enforceability of the Termination Agreement on the basis that the agreement was pleaded as a bar to the plaintiff's action in the Queensland proceedings and no case was made by [her] there, no argument offered, that the agreement was void or voidable or had been induced by the unconscionable conduct of the defendant."
By a notice of motion filed on 7 February 2013 and amended on 10 April 2013, the defendant seeks orders to the following effect: (a) an order, pursuant to rule 14.28 of the Uniform Civil Procedure Rules 2005 NSW, or the inherent jurisdiction of the Court, that the plaintiff's statement of claim be struck out, or summarily dismissed, per rem judicatam; (b) an order that the orders made by consent on 10 December 2012 be varied or set aside; (c) an order that the defendant be granted leave to rely upon the Amended Defence filed on 31 January 2013; and (d) an order for costs.
Having purportedly filed his "Amended Defence", and having filed his notice of motion seeking summary disposal of the plaintiff's claims for relief on the grounds articulated in paragraphs 43 and 44 of the "Amended Defence", the defendant declined to comply with the directions given on 10 December 2012 pending determination of his motion.
The motion does not, in terms, refer to r 13.4 of the Uniform Civil Procedure Rules, as distinct from UCPR r 14.28, but the inherent jurisdiction of the court (to which the motion does refer) is no less extensive than those two rules. Their respective terms reflect the ambit of debate on the hearing of the parties' motions.
Rules 13.4 and 14.28 are in the following terms:
"13.4 Frivolous and vexatious proceedings
(1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings:
(a) the proceedings are frivolous or vexatious, or
(b) no reasonable cause of action is disclosed, or
(c) the proceedings are an abuse of the process of the court,
the court may order that the proceedings be dismissed generally or in relation to that claim.
(2) The court may receive evidence on the hearing of an application for an order under subrule (1).
14.28 Circumstances in which court may strike out pleadings
(1) The court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading:
(a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or
(b) has a tendency to cause prejudice, embarrassment or delay in the proceedings, or
(c) is otherwise an abuse of the process of the court.
(2) The court may receive evidence on the hearing of an application for an order under subrule (1). "
By a notice of motion filed on 6 May 2013, the plaintiff seeks orders to the following effect: (a) an order that the defendant's Amended Defence be rejected and removed from the Court's file; (b) an order that, by reason of his non-compliance with directions given on 10 December 2012, the defendant not be heard on his Amended Notice of Motion filed 10 April 2013; (c) orders, by reference to Part 55 of the Supreme Court Rules 1970 NSW, for the defendant to be dealt with for contempt of court by reason of his failure to comply with directions given on 10 December 2013; and (d) orders for costs, including orders for the immediate enforcement of earlier, interlocutory costs orders made against the defendant.
The application for an order that the defendant not be heard was a formal expression of what was, in substance, an objection to the defendant being heard on his application for summary relief. Taking the form of a notice of motion, it foreshadowed an objection that could have been communicated to the defendant and the Court by other means.
On the day appointed for the hearing of the parties' respective motions, and with their acquiescence, I ordered that the two motions be heard together.
The plaintiff's objection to the defendant being heard on his motion for summary disposal of her claims for relief is based upon the general principle that, until any contempt is purged, a party guilty of contempt should not be heard on any application for relief beyond an application to set aside or vary an order (or undertaking to the court) in respect of which he, she or it is in contempt or an appeal designed to set aside or vary that order or undertaking: Permewan Wright Consolidated Pty Ltd v Attorney General (NSW) (1978) 35 NSWLR 365 at 369 and 374; Young v Jackman (1986) 7 NSWLR 97; Leaway v Newcastle City Council (No 2) [2005] NSWSC 826; 220 ALR 757; Kayserian Nominees (No. 1) Pty Ltd v JR Garner Pty Ltd [2008] NSWSC 1011 at [1]-[3].
I deliberately describe this proposition as a "principle", rather than as a "rule" (as it is sometimes characterised), because use of the expression "rule" has led to unjustified, or at least unproductive, perceptions of rigidity in its application.
An early modern statement of the principle, but not its genesis, is that of Lord Cottenham in Chuck v Cremer (1846) 1 Coop t Cott 205; 47 ER 820 in a law report introduced with the reporter's headnote summary of the effect of the case: "In general a party in contempt cannot take a proceeding in the cause for his own benefit."
The text of the report of the judgment is limited to the following:
"The Defendant moved before the Vice-Chancellor of England that an injunction granted ex parte might be dissolved. His application being unsuccessful, he gave notice of motion by way of appeal. Previously to the notice of the appeal motion being given, an attachment was issued against the Defendant, who was abroad, for not having put in his answer.
Upon the motion being opened, it was objected that the Defendant was in contempt and could not be heard.
THE LORD CHANCELLOR said, he was of opinion that the appeal motion could not proceed. That a party was entitled to be heard, if his object was to get rid of the order, or other proceeding, which placed him in contempt, and he was also entitled to be heard for the purpose of resisting or setting aside for irregularity, any proceedings subsequent to his contempt; but he was not generally entitled to take a proceeding in the cause for his own benefit. That there were exceptions to the last rule, but they were few in number."
An historical account of enforcement procedures in English ecclesiastical courts, Chancery and courts of common law sufficient to place Lord Cottenham's ruling in context is set out in the judgment of Lord Denning in Hadkinson v Hadkinson [1952] P 285 at 295-298.
Illustrations of the operation of the "rule", going back to the time of Sir Francis Bacon in 1618, are set out in notes compiled by the reporter of
Chuck v Cremer : 47 ER 820-830.
It is not necessary to review them, or subsequent experience of the "rule", because, in modern times, the leading case became that of the English Court of Appeal in Hadkinson v Hadkinson.
All three judges in that case (Somervell, Romer and Denning LJJ) concurred in declining to hear an appeal until the appellant had purged her contempt by compliance with an order under appeal, which she evidently did within a short time. Their decision was unanimous, but their articulation of reasons for the decision differed, at least in form.
Sommervell and Romer AJJ stated the law in terms of a general rule subject to exceptions: [1952] P 288-289. Lord Denning favoured a statement of the law in terms of a discretionary rule: [1952] P 298.
The approach of Romer LJ (in which Somervell LJ concurred) appears in the following extract from his Judgment at [1952] P 288-290:
"It is the plain and unqualified obligation of every person against, or in respect of whom, an order is made by a court of competent jurisdiction, to obey it unless and until that order is discharged. The uncompromising nature of this obligation is shown by the fact that it extends even to cases where the person affected by an order believes it to be irregular or even void. ...
Such being the nature of this obligation, two consequences will, in general, follow from its breach. The first is that anyone who disobeys an order of the court (and I am not now considering disobedience of orders relating merely to matters of procedure) is in contempt and may be punished by committal or attachment or otherwise. The second is that no application to the court by such a person will be entertained until he has purged himself of his contempt. It is the second of these consequences which is of immediate relevance to this appeal. The rule, in its general form, cannot be open to question. There are many reported cases in which the rule has been recognised and applied. ...
No attempt, indeed, was made before us by [counsel for the contemnor] to challenge the rule itself; he sought only to bring the present case within one of the exceptions to which the rule is undoubtedly subject. ...
Is this case, then, an exception from the general rule which would debar [the contemnor] from being heard by the courts whose order she has disobeyed? One of the exceptions is that a person can apply for the purpose of purging his contempt and another is that he can appeal with a view to setting aside the order upon which his alleged contempt is founded; neither of those exceptions is relevant to the present case. A person against whom contempt is alleged will also, of course, be heard in support of a submission that, having regard to the true meaning and intendment of the order which he is said to have disobeyed, his actions did not constitute a breach of it; or that, having regard to all the circumstances, he ought not to be treated as being in contempt. The only other exception which could in any way be regarded as material is the qualified exception which, in some cases, entitles a person who is in contempt to defend himself when some application is made against him. ..."
The Denning approach is encapsulated in the following paragraph extracted from his judgment in Hadkinson v Hadkinson [1952] P 285 at 298:
"It is a strong thing for a court to refuse to hear a party to a cause and it is only to be justified by grave considerations of public policy. It is a step which a court will only take when contempt itself impedes the course of justice and there is no other effective means of securing [a party's] compliance. In this regard I would like to refer to what Sir George Jessel MR said in a similar connection in In re Clements v Erlanger (1877) 46 L.J.Ch. 375 at 383: 'I have myself had on many occasions to consider this jurisdiction, and I have always thought that, necessary though it be, it is necessary only in a sense in which extreme measures are sometimes necessary to preserve men's rights, that is, if no other pertinent remedy can be found. Probably that will be discovered after consideration to be the true measure of the exercise of the jurisdiction.' Applying this principle I am of the opinion that the fact that a party to a cause has disobeyed an order of the court is not of itself a bar to his being heard, but if his disobedience is such that, so long as it continues, it impedes the course of justice in the cause, by making it more difficult for the court to ascertain the truth or to enforce the orders which it may make, then the court may in its discretion refuse to hear him until the impediment is removed or good reason is shown why it should not be removed."
Viewing the law as a general rule subject to exceptions, particular cases might be recognised as falling within an established exception; but the nature and scope of the exceptions generally remains ill-defined. A classic treatment of them can be found in Daniell's Chancery Practice (London, 7th ed, 1901) vol 1, pp 724-727.
Whether the general principle is best stated as "a rule subject to exceptions" or as a "discretionary rule" is the subject of debate in New South Wales (Kayserian Nominees (No 1) Pty Ltd v JR Garner Pty Limited [2008] NSW 1011 at [3]-[4]), a debate which must now be viewed in the context of the case management provisions of ss 56-64 of the Civil Procedure Act 2005 NSW and the Uniform Civil Procedure Rules 2005 NSW.
CPA s 56 mandates that, in civil proceedings, the Court give effect to the "overriding purpose" of facilitating the just, quick and cheap resolution of the real issues in the proceedings. CPA s 57 mandates that the Court strive to ensure the attainment of case management objectives defined in terms of both efficiency and justice in the determination of proceedings. CPA s 58 mandates that, in the management of proceedings, the Court must seek to act in accordance with the dictates of justice. CPA ss 59-64 contain ancillary provisions which, in their legislative context, point in the same direction.
The ambit of "exceptions" to the general rule that a contemnor cannot be heard in his own cause appears often, if not universally, to have been described by reference to felt necessities in the due administration of justice generally and by the dictates of justice in the particular case. The felt necessities appear to have varied over time and to have depended, in part, on each court's practice and procedure, not limited to particular provisions in rules of court.
Nevertheless, in Permewan Wright Consolidated Pty Limited v Attorney General (NSW) (1978) 35 NSLWR 365 at 369, Hutley JA emphatically favoured the approach of Romer LJ, with which Somervell LJ had concurred, over that of Denning LJ. Mahoney JA appears to have acquiesced in that approach: 35 NSWLR 374B-C. Reynolds JA appears to have sidestepped controversy: 35 NSWLR 367B.
In Young v Jackman (1986) 7 NSWLR 97 at 102B, Young J felt constrained to adhere to the view expressed by Hutley JA.
Since that time, the House of Lords has embraced Lord Denning's reasoning (X Limited v Morgan-Grampian (Publishers) Limited [1991] 1 AC 1 at 46B-H, 50H and 55E-F); the Full Court of the Family Court of Australia has done likewise (In the marriage of Fahmi (1995) 19 Fam LR 517 at 525; AN v Zhu [2006] Fam CA 179; (2006) FLC 93-257; 198 FLR 152 at [79] and [120]-[123]); and a senior New South Wales judge, Campbell J, has proceeded on the basis that the question of which approach is correct is open (Leaway v Newcastle City Council (No 2) [2005] NSWSC 826; 22 ALR 757 at [52], [59]-[60] and [87]).
To this mix might be added the injunction of the High Court of Australia in Farah Constructions Pty Limited v Say Dee Pty Limited (2006) 230 CLR 89 at 151-152 [135] to trial judges not to depart from decisions of intermediate appellate courts in another Australian jurisdiction unless they are convinced that the interpretation is plainly wrong.
That, possibly, complicates the picture for a single judge of this Court because the position taken by the Full Court of the Family Court was taken, deliberately, with notice of Permewan Wright Consolidated Pty Limited v Attorney General (NSW) and Young v Jackman.
The judgments of the House of Lords in X Limited v Morgan-Grampian (Publishers) Limited and Campbell J in Leaway v Newcastle City Council (No 2) stand in the way of any expression of an opinion that the Full Court of the Family Court was "plainly wrong" to have preferred the reasoning of Lord Denning in Hadkinson v Hadkinson over that of Hutley JA (and possibly Mahoney JA) in Permewan Wright Consolidated Pty Limited v Attorney General (NSW). So too does treatment of the topic by text writers such as the editors of Borrie & Lowe, The Law of Contempt (London, Butterworths, 1996, 3rd ed), pp 651-654.
Conceptually, Lord Denning's approach appears to have all but captured the field.
Even if that be so, the appropriate course for a single judge of this Court is to apply Romer LJ's approach until such time as the Court of Appeal may reconsider Permewan Wright.
For this, there are several reasons. First, the question under consideration relates to the practice and procedure of the Court rather than a question of substantive law unrelated to adjectival law considerations. Secondly, I take the injunction of the High Court in Say-Dee to have been published with questions of substantive law in mind. Thirdly, there is no incongruity in the law if different courts approach differently questions of practice and procedure, bearing in mind that it is incumbent upon each court to control its own processes. Fourthly, at day's end there are few, if any, cases in which the differences in approach canvassed in this area of legal practice are likely to be decisive. Both approaches attempt a reconciliation between enforcement of court decisions and allowing voices to be heard on the road to decision, or thereafter. Fifthly, in NSW the process of reconciliation of those twin objectives is now governed, and guided, by the case management provisions of the Civil Procedure Act 2005 NSW, not either of the competing approaches per se. Sixthly, the approach favoured in Permewan Wright works in practice, and potentially works more effectively in a broader range of cases than does the alternative, which is ostensibly more accommodating of laxity in compliance with court orders.
In practical reality, as Lord Bridge of Harwich observed in X Limited v Morgan-Grampian (Publishers) Limited [1991] 1 AC 1 at 46G-H, the different approaches of Romer and Denning LJJ presented in Hadkinson v Hadkinson, in many (if not most) cases, are likely to lead to the same conclusion. That is so here, particularly when the case management provisions of the Civil Procedure Act 2005 NSW are taken into account.
In practice, any difference between the respective approaches of those who favour a "rule subject to exceptions" and those who prefer a "discretionary rule" may be illusory. That is because the dynamics of the litigation process channel a dispute about whether a contemnor should be heard into a procedural framework in which the court is able, and required, to exercise a discretion, according to case management principles, even in the context of a statement of the law in terms favoured by Romer LJ.
There are at least four possible explanations for this phenomenon. First, the operation of "the rule", as currently perceived and however formulated, is not conditioned upon formal steps having been taken, or foreshadowed, for prosecution of a contemnor for contempt: Young v Jackman (1986) 7 NSWLR 97 at 101D-E; KP Cable Investments Pty Limited v Meltglow Pty Limited (1995) 56 FCR 189 at 206C-G. It operates within the realm of general case management principles. It is not confined by the comparative rigidity of criminal law practice and procedure or a prosecutorial mindset.
Secondly, where objection is taken to a contemnor being heard, a routine response by the contemnor is to move the court for relief against the order or undertaking sought by the objection to be enforced. This too engages a need in the court to focus attention on questions of case management. Is the contemnor's motion to be heard first? Can it be, should it be, must it be, heard in conjunction with other process before the court?
The practical necessity for a contemnor to apply for relief from the orders or undertakings sought to be enforced provides a vehicle for a focussed review of the cutting edge of enforcement procedures and, at least, an occasion upon which, if appropriate, an order for costs can be made in vindication of the court's authority.
Thirdly, in a case of contempt of an interlocutory order or undertaking, the most effective means for dealing with that contempt may be for the court to take whatever steps may be available to advance the proceedings as quickly as possible to a final determination, by conventional means uncomplicated by a complaint of a denial of procedural fairness arising from a refusal to hear the contemnor. An inflexible refusal to hear a contemnor may unnecessarily arm the contemnor with a ground of appeal that might, perversely, serve the contemnor's strategy of obstructing enforcement of a court order or an undertaking given to the court. With a focus on ultimate outcomes, a court might be constrained to hear a contemnor: embracing the counter-intuitive to avoid the counter-productive.
Fourthly, it is a comparatively rare thing (outside a small range of cases that includes child abduction cases such as Hadkinson v Hadkinson, or cases such as X Limited v Morgan-Grampion (Publishers) Limited [1992] 1 AC 1 at 45 E-F in which disclosure obligations are sought to be enforced against a journalist) for an alleged contemnor to reveal, during the pendency of proceedings in which he, she or it seeks actively to participate as a persuasive force, a settled intention never to comply with an order or undertaking sought to be enforced. Absent an overt challenge to the authority of the court, its ordinary business, which mandates that parties be allowed an opportunity to be heard, generally proceeds, one way or another, in the ordinary course.
Despite appearances, the respective approaches of Romer and Denning LJJ might be thought to complement, rather than to contradict, one another. They approach the same question (namely, whether a contemnor should be heard) from opposite sides. Romer LJ's approach starts with a negative answer then explores competing factors. Denning LJ's approach starts with an affirmative answer, then considers competing factors. Both approaches require the court to examine factors bearing upon the administration of justice generally and the dictates of justice in the particular case. In exploring their middle ground, both are bound to take into account the case management provisions of the Civil Procedure Act 2005 NSW.
Strictly, I do not, ultimately, need in these proceedings to choose between a statement of the law in terms of "a rule subject to exceptions" or in terms of a "discretionary rule". However the question of whether the defendant should be heard notwithstanding his non-compliance with directions of the Court is approached, the outcome is the same. Case management considerations loom large.
It is sufficient for the purposes of the present proceedings to notice that the orders of the Court with which the defendant has not complied are procedural in character, albeit forensically important (Hadkinson v Hadkinson [1952] P285 at 288); the defendant has applied for those orders to be set aside or varied (Hadkinson v Hadkinson at 289); that application is accompanied by a contention, based upon reliance on the Queensland judgment, that the current proceedings, not limited to the orders not complied with, are irregular (Permewan Wright Consolidated Pty Limited v Attorney General (1994) 35 NSWLR 365 at 367B, 369C and 374C); and the dictates of justice, in the particular case, mandate that the defendant be heard on his motion, heard together with that of the plaintiff, so that the respective rights and obligations of the parties can be determined without further undue delay or expense.
For these reasons, I declined to accede to the plaintiff's application that the defendant not be heard on his motion until he had complied with the directions given by the Court on 10 December 2012.
I do not, as matters presently stand, propose to initiate contempt proceedings against the defendant as sought in the plaintiff's notice of motion. The defendant is, in this judgment, the subject of criticism for having consented to the directions given on 10 December 2012 and then, without complying with them, having filed a motion for summary disposal of the principal proceedings. Nevertheless, he did, on 10 December 2012, expressly foreshadow the case subsequently "pleaded" in paragraphs 43 and 44 of the "Amended Defence", and the course he subsequently took can be dealt with more productively by the making of costs orders than by prosecution of a charge for contempt of court.
The parties' motions raise two principal questions:
(a) First, whether the maintenance or conduct of these proceedings is constrained by the judgment of the Supreme Court of Queensland upon a proper application of principles relating to res judicata, estoppel or abuse of process.
(b) Secondly, if so, whether the plaintiff can overcome any such constraint by reliance upon principles of waiver or estoppel by conduct.
FACTUAL CONTEXT
The Parties' De Facto Relationship
The parties lived in a de facto relationship (within the meaning of s 4 of the Property (Relationships) Act 1984 NSW) for some years before it came to an end on or about 12 September 2007. Before that date they lived together as a couple. They have five children, the eldest of whom was born in December 1997, and the youngest of whom was born in March 2007.
Throughout their relationship they lived in the state of New South Wales, including residency on the north coast of New South Wales. Some of the land they acquired during their relationship was located in the state of Queensland.
The Parties' Purported Termination Agreement
On or about 4 February 2009 they executed a deed expressed to have been a "Termination Agreement" made pursuant to Part 4 of the NSW Act.
The deed contains provisions which suggest that the parties have lived lives that have straddled the border between New South Wales and Queensland.
Clause 14 of the deed provides that "this Deed shall be governed by and construed in accordance with the laws of the State of Queensland".
By clause 22 of the deed the parties appear to have agreed that the deed "will only be rescinded or varied by a written Agreement executed by both parties with the same degree of formality as this Deed and pursuant to the provisions of ss 265(1) and (2) and s 266 of the Property Law Act 1974 (Qld) as varied from time to time."
Clause 23 of the deed contains, by reference (and subject) to s 31 of the Family Provision Act 1982 NSW, a mutual release of rights to make "a testator's family maintenance application", a clause that needs to be read with an acknowledgement (in recital P to the deed) that the parties had received advice about the operation of the Succession Act 2006 NSW.
The deed was executed shortly before the date (on 1 March 2009) when applications for family provision relief generally fell to be determined under the Succession Act in lieu of the Family Provision Act.
The intention of the parties, as declared in the deed, was to effect "an end once and for all of the rights and claims of each [party] against the other for a financial adjustment or maintenance pursuant to Part 3 of the Property (Relationships) Act [1984 NSW]": Recital M.
Operative terms of the deed provided for division of the parties' property between them and for a mutual disclaimer of entitlements to maintenance.
By clause 7 of the deed the parties declared that they had entered the deed pursuant to the provisions of Part 4 of the NSW Act and that the deed "relates to all claims and actions in respect of all financial matters arising out of their relationship (other than a breach of this Deed) including but not limited to their rights if any at all: (a) under the [NSW] Act; (b) at common law; (c) in equity; and (d) under any other law (both written and unwritten) of Queensland or any other State and/or Territory of the Commonwealth of Australia, or the Commonwealth of Australia itself including the Family Law Act 1975 as amended".
Proceedings in the Queensland Supreme Court
On 9 September 2009 the plaintiff (as "applicant") filed an Originating Application in the Supreme Court of Queensland in which she applied for the following relief against the defendant (described as "the respondent"):
"1. An adjustment of the property interests of the parties pursuant to Part 19 Division 4 of the Property Law Act (Queensland) 1974 such that an amount equivalent to 70% of the net property pool is paid to the Applicant.
2. Further or in the alternative, an order that the Respondent pay to the Applicant an amount of $2,500,000 by way of property adjustment between the parties pursuant to Part 19 Division 4 of the Property Law Act (Queensland) 1974.
3. An order that the Respondent pay the Applicant's costs of this application."
On 9 October 2009 the defendant countered by filing in the Queensland Supreme Court an Application for relief to the following effect:
"1. [An order] that the originating application [filed] by the respondent de facto spouse on 9 September 2009 be struck out or alternatively dismissed for want of jurisdiction pursuant to rule 16 [of the] Uniform Civil Procedure Rules 1999.
2. In the alternate to order 1 herein [sic], [an order that] the originating application be summarily dismissed pursuant to rule 658 [of the] Uniform Civil Procedure Rules 1999.
3. [An order that] the respondent pay the applicant's costs of and incidental to this application..."
The proceedings came before Justice Martin of the Supreme Court of Queensland on 5 October 2009, the return date of the plaintiff's Originating Application.
The plaintiff was then represented by senior counsel. The defendant was represented by the same counsel who appeared before me in the current proceedings.
The Judgment of the Queensland Supreme Court
On 4 December 2009 Martin J made an order that the plaintiff's Originating Application be dismissed.
That order was supported by the Reasons for Judgment, previously identified, published as VTMVS v MREM [2009] QSC 393.
The order for dismissal was grounded on three findings.
First, the principal ground for dismissal was a finding of a want of jurisdiction in the Supreme Court of Queensland to grant the relief claimed by the plaintiff. The defendant contended, and Martin J accepted, that the Court did not have jurisdiction to determine the plaintiff's Originating Application because Part 19 Division 4 of the Property Law Act 1974 (Qld) had no territorial application to the parties: [2009] QSC 393 at [7]-[14].
The fact that the parties had lived outside Queensland for the whole of their relationship was held to have been decisive against the existence of any jurisdiction in the Supreme Court of Queensland to entertain the plaintiff's application: [2009] QSC 393 at [14]. That barrier was not displaced by either the plaintiff's residency in Queensland at the time the proceedings were heard (as noted in [2009] QSC 393 at [2]) or the parties' co-ownership of land in Queensland (as noted in [2009] QSC 393 at [3] and [14]).
Secondly, as an adjunct to the principal ground for dismissal, and against the possibility that he was in error in finding that he had no jurisdiction to entertain the plaintiff's Originating Application, Martin J briefly considered the effect of the parties' deed on the Queensland Supreme Court's capacity to make an order under Part 19 Division 4 of the Property Law Act 1974 QLD: [2009] QSC 393 at [15]-[26].
Although his Honour did not, in terms, say so, he appears to have approached this topic on the basis of a summary review of the case advanced by the plaintiff in support of her Originating Application.
That appears from the terms of paragraphs [25]-[26] of his Honour's Judgment in which the nature of his second finding is evident:
"[25] The applicant goes into some detail in her affidavit [filed in support of the Originating Application] about her role during the relationship and the assets which were accumulated. But, in order to demonstrate that the agreement does not come within s 266 of the PLA, she needs to demonstrate that it does not contain 'a statement of all significant property, financial resources and liabilities of each de facto partner when the de facto partner sign[ed] the agreement'. I am not satisfied that she has done that. The property referred to in her affidavit is property of which she must have been aware at the time of signing the agreement because it is referred to in the agreement. I was not directed to any piece of property that should have been included in the agreement but which was not.
[26] I do not accept that the adequacy of the assets list has been put in issue such that a trial is necessary to determine the facts."
Thirdly, as an "alternative ground" for regarding the proceedings under Part 19 Division 4 of the Property Law Act 1974 QLD as barred, Martin J found that, if otherwise able to maintain the proceedings, the plaintiff would be estopped from doing so by reason of her entry into the parties' deed: [2009] QSC 393 at [27]-[35], especially at [30]-[32] and [35].
In reaching that conclusion, his Honour referred to ss 271 and 272 of the Property Law Act. The former reads: "A provision in an agreement purporting to exclude the jurisdiction of a court in relation to a cohabitation or separation agreement is invalid, but its invalidity does not affect the validity of the rest of the agreement." The latter reads: "A cohabitation or separation agreement is subject to, and enforceable according to, the law of contract except as otherwise provided by this part."
His Honour's conclusion as to the operation of estoppel by deed appears in paragraphs [32] and [35]:
"[32] From the terms [of the Deed set out in his Honour's Judgment], it is clear that the objective intention of the parties was to finalise property matters relating to their de facto relationship 'once and for all' and that neither party should have recourse to any court of competent jurisdiction to change or challenge their agreement. While s 271 makes it impossible to oust the court's jurisdiction entirely, s 271 and s 272 together allow parties to agree not to challenge an agreement in court, where that agreement is otherwise valid and enforceable under the Queensland Act. The agreement between the parties in this case is both valid and enforceable. ...
[35] The recitals of the termination agreement [ie, the parties' deed] clearly establish the parties' intention to determine their respective rights once and for all and to formulate a legally enforceable agreement, without resort to litigation. In addition, the terms of the deed are precise and unambiguous in stipulating that the agreement should determine each party's rights under any and all Australian legislation, and that neither party may make any further claim. The applicant would, if otherwise able to proceed, be estopped [by operation of principles governing estoppels by deed]."
The Nature of the Order for Dismissal of the Queensland proceedings
Martin J's order for dismissal of the Queensland proceedings appears, on the face of his Reasons for Judgment, to have been responsive to the defendant's Application for summary disposal rather than after a trial of the plaintiff's Originating Application on the merits.
The defendant's Application for summary disposal invoked rules 16 and 658 of the Uniform Civil Procedure Rules 1999 QLD.
Rule 16 is in the following terms:
"16 Setting aside originating process
The court may -
(a) declare that a proceeding for which an originating process has been issued has not, for want of jurisdiction, been properly started; or
(b) declare that an originating process has not been properly served; or
(c) set aside an order for service of an originating process; or
(d) set aside an order extending the period for service of an originating process; or
(e) set aside an originating process; or
(f) set aside service of an originating process; or
(g) stay a proceeding; or
(h) set aside or amend an order made under rule 127; or
(i) make another order the court considers appropriate."
Rule 127 has no present application. It relates to the service of court process outside Australia with the leave of the Court.
Rule 658, relied upon by the defendant as an alternative to rule 16, is in the following terms:
"658 General
(1) The court may, at any stage of a proceeding, on the application of a party, make any order, including a judgment, that the nature of the case requires.
(2) The court may make the order even if there is no claim for relief extending to the order in the originating process, statement of claim, counterclaim or similar document."
As I read Martin J's Reasons for Judgment, his order for dismissal is grounded fundamentally upon a finding of a want of jurisdiction in the Court to entertain the plaintiff's Originating Application. That order might have been made, implicitly, by reference to rules 16(1) and (i) of the Uniform Civil Procedure Rules 1999, with or without assistance from rule 658. It might also have been made by reference to the Court's inherent jurisdiction, but neither the defendant's Application nor his Honour's judgment expressly invoked the inherent jurisdiction.
The course of the New South Wales proceedings
The present proceedings were commenced by a statement of claim filed on 15 June 2010, in answer to which the defendant filed a defence on 24 September 2010.
On 1 November 2010 the defendant filed a notice of motion seeking an order pursuant to rule 28.2 of the Uniform Civil Procedure Rules 2005 NSW for the separate determination of a preliminary question about whether the parties' deed is binding and enforceable.
On 26 November 2010 Associate Justice Macready dismissed that motion with costs and (on a notice of motion filed by the plaintiff) ordered that the defendant give discovery of financial records appertaining to his financial affairs.
On 18 August 2011 Justice Nicholas entertained further notices of motion. On a notice of motion of the plaintiff filed on 6 June 2011, he made further orders for discovery against the defendant and ordered that the defendant pay the plaintiff's costs. He ordered that the parties' bear their own costs of the defendant's notice of motion.
On 2 November 2012 Acting Justice Young (on a notice of motion filed by the plaintiff) made a further order for discovery against the defendant, directed that the proceedings be managed by a judge and adjourned the proceedings to 10 December 2012 for that purpose: [2012] NSWSC 1337.
The judge to whom the proceedings were referred for case management was Hallen J. In the event, the orders made by his Honour on 10 December 2012 were made by consent, albeit after exchanges between bench and bar about the best way forward.
By that time, the defendant had filed a defence traversing the plaintiff's statement of claim in detail without reference to the Queensland judgment; engaged in interlocutory disputes about whether there should be a trial of a separate question and the defendant's discovery obligations; submitted to various directions for the conduct of the proceedings generally; and subjected the plaintiff to an obligation to incur costs, some part of which might be recovered on interlocutory orders for costs.
At no time before 10 December 2012 did the defendant, expressly or by implication, advert to the possibility that the conduct of the present proceedings in the Supreme Court of NSW might be constrained by the Queensland judgment. The defendant accepted, before me, that that possibility had not been raised by any party, or by the Court, before the time when, on 10 December 2012, the defendant foreshadowed an intention to apply for leave to amend his defence.
ANALYSIS
The Defendant's Summary Disposal Application
The defendant's case for summary disposal of the plaintiff's statement of claim is based, in substance, upon the following inter-related contentions:
(a) First, a contention that the Queensland judgment was a final determination of the rights between the parties, giving rise to a cause of action estoppel in accordance with principles governing res judicata (literally the "thing", the cause, having been decided): Blair v Curran (1939) 62 CLR 464 at 532; Jackson v Goldsmith (1950) 81 CLR 446 at 466-467; Trawl Industries of Australia Pty Ltd (In Liq) v Effem Foods Pty Ltd (1992) 36 FCR 406 at 412 (from which an appeal was dismissed, as reported at (1993) 43 FCR 510); Spencer Bower and Handley, Res Judicata (LexisNexis, London, 4th ed, 2009), para. 1.02.
(b) Secondly, a contention that the Queensland judgment was a final determination of disputes between the parties giving rise to an issue estoppel (a form of res judicata estoppel because the issue has been decided) binding the plaintiff on the issue of estoppel by deed: Blair v Curran (1939) 62 CLR 464 at 531-533; Jackson v Goldsmith (1950) 81 CLR 446 at 466-467, Spencer Bower and Handley, Res Judicata, paras. 1.05 and 8.01.
(c) Thirdly, Anshun estoppel: a contention that the Queensland judgment was a contested determination of litigation between the parties in which the plaintiff could reasonably have, but did not, advance her general law challenge to the validity of the parties' deed, with the consequence that she is estopped (by operation of the principle enunciated in Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589 at 598-604, especially at 598, 601-602 and 602-603, by reference to Henderson v Henderson (1843) 3 Hare 100 at 115; 67 ER 313 at 319) from advancing that challenge in these proceedings. Cf, Spencer Bower and Handley, Res Judicata, paras. 5.32, 7.03, and 8.11.
(d) Fourthly, abuse of process: a contention that, having lost her application for a property adjustment order in the Queensland proceedings, it is an abuse of the processes of this Court for the plaintiff to make substantially the same application in the current proceedings.
Each of these contentions appeals to the Court's concern to promote finality in the conduct of litigation: Nominal Defendant v Manning (2000) 50 NSWLR 139 at 142 [6].
It is neither necessary nor appropriate, upon a consideration of Martin J's Judgment in the Queensland proceedings, to consider whether his Honour's reasoning was correct. The field of operation of the contentions relied upon by the defendant does not depend on the correctness or otherwise of an earlier judgment said to constrain the conduct of subsequent proceedings: Spencer Bower and Handley, Res Judicata, paras. 1.03 and 1.14. The present proceedings are not, in law or fact, an appeal from the order for dismissal of the Queensland proceedings.
The first two (and possibly the third) of the defendant's contentions depend upon whether the order for dismissal of the Queensland proceedings is properly characterised as a final decision.
Questions about the existence or otherwise of an Anshun estoppel generally arise in connection with a final decision, not an interlocutory one. That said, in Res Judicata Justice Handley notes (in para 5.32) the observation of the English Court of Appeal in Woodhouse v Consignia plc [2002] 1 WLR 2558 at 2575 [56]: "In our view, although the policy that underpins the rule in Henderson v Henderson [the foundation case applied in Anshun] has relevance as regards successive pre-trial applications for the same relief, it should be applied less strictly than in relation to a final decision of the court, at any rate where the earlier pre-trial application has been dismissed." Significantly, this passage refers to a "policy that underpins" Henderson v Henderson.
In an Australian context, we are more likely to appeal to Adam P Brown Male Fashions Pty Limited v Philip Morris Incorporated (1981) 148 CLR 170 at 177-178, and concepts of abuse of process, than Anshun in the regulation of interlocutory processes. Whether an interlocutory order or undertaking can be displaced by another interlocutory decision is, generally, governed by whether there has been a change in circumstances bearing upon the justice of the case.
A "final" decision, in this context, is one which is not of an interlocutory character: Kuligowski v Metrobus (2004) 220 CLR 363 at 375. Cf, Spencer Bower and Handley, Res Judicata, para 5.02.
The test for determining whether a decision is final, or merely interlocutory, is whether the legal effect of the decision is to effect a final disposal of the rights of the parties: Hall v Nominal Defendant (1966) 117 CLR 423 at 439-441; Licul v Carney (1976) 180 CLR 213 at 225; Port of Melbourne Authority v Anshun Pty Limited [No 1] (1980) 147 CLR 35 at 38; and Carr v Finance Corp of Australia Limited [No 1] (1981) 147 CLR 246 at 248 and 253-254.
According to this test, the order for dismissal of the Queensland proceedings was not "final", save possibly insofar as it determined that the Queensland Supreme Court lacked jurisdiction to entertain the plaintiff's Originating Application.
In Spencer Bower & Handley, Res Judicata, at paragraph 2.15, Justice Handley records that a decision by a tribunal that it has no jurisdiction will not support a plea of res judicata on any other question for reasons expressed by the Privy Council in Upendr Nath Bose v Lall [1940] AIR (PC) 222 at 225. However, he records, a decision by a tribunal denying jurisdiction makes that question res judicata in that tribunal, unless jurisdiction is later conferred by statute.
The reasoning of the Privy Council to which reference is made is set out in the following extract:
"The res judicata here was the lack of jurisdiction ... not the reason for that decision. A Court which declines jurisdiction cannot bind parties by its reasons for declining jurisdiction: such reasons are not decisions, and are certainly not decisions by a court of competent jurisdiction. It would indeed be strange if on a dispute as to the jurisdiction of a Court to try an issue, that Court by its reasons for holding that it had no jurisdiction, could, on the principle of res judicata decide and bind the parties upon the very issue it was incompetent to try."
That reasoning has a logical foundation which applies in this case, with the added factor that the Queensland Supreme Court's denial of jurisdiction was expressed in terms of a denial of "territorial jurisdiction" that, logically, implied that the plaintiff's proceedings should have been commenced in New South Wales rather than Queensland.
In making this observation I am mindful that the Supreme Court of Queensland is, like this Court, a superior court of record (not an inferior tribunal) and, by virtue of the Jurisdiction of Courts (Cross Vesting) Acts enacted in New South Wales and Queensland in 1987, there are circumstances in which the Queensland Supreme Court can exercise the jurisdiction of this Court.
Whether the Supreme Court of Queensland would or should, in other circumstances, deny jurisdiction to entertain claims for relief such as those made by the plaintiff in the Queensland proceedings, or associated claims for relief, is a matter for that court, not this. The purpose of the present discussion is confined to identification of the context in which the defendant contends, in the current proceedings, that the Queensland judgment constrains the plaintiff's entitlement to invoke the processes of this Court.
Martin J's principal finding (that the Supreme Court of Queensland lacked territorial jurisdiction to entertain the plaintiff's Originating Application) was founded, fundamentally, upon an implicit finding that any challenge to be made by the plaintiff to the parties' purported Termination Agreement could, and should, have been made in NSW, the territorial jurisdiction in which the parties' de facto relationship had operated. The fact that his Honour went on to make a finding, in the alternative, about the operation of an estoppel by deed does not detract from the fact that the order for dismissal was grounded upon the principal finding about territorial jurisdiction, which, implicitly, left open the possibility of similar proceedings in this Court.
It might be added, further, that the defendant's Application to the Supreme Court of Queensland was, in substance, an application for summary disposal of the plaintiff's Originating Application. Martin J's grant of that application by way of an order for dismissal of the proceedings, was an interlocutory judgment: Hall v Nominal Defendant (1966) 117 CLR 423 at 440-441; Wickstead v Browne (1992) 30 NSWLR 1 at 11. Dismissal of the proceedings did not follow a hearing of the plaintiff's Originating Application on its merits. That that is so is illustrated, not only by the first of the three grounds upon which Martin J dismissed the proceedings, but also more particularly by the second. His Honour reviewed the plaintiff's affidavit summarily, expressly without any felt need for factual investigation.
In his submissions in the current proceedings the defendant described his Application in the Queensland proceedings as one to have the plaintiff's action in the Queensland Supreme Court struck out, dismissed for want of jurisdiction or, alternatively, summarily dismissed. He did not contend that there had been a trial on the merits in any real sense; but he did contend that, as the Originating Application was before the Court, it was open to the Court to make the finding it made about estoppel by deed.
Although the Originating Application was, in a formal sense, before the Court it was the subject matter of, and necessarily displaced in the Court's attention by, the defendant's Application for its summary disposal. Objectively, the whole of the business transacted by the Court in that context must be characterised as interlocutory.
Characterisation of the order for dismissal of the Queensland proceedings as other than "final" is sufficient to dispose of the first two, and possibly the third, of the contentions upon which the defendant's case depends.
There are, however, other impediments to the success of those contentions.
An impediment to a finding of res judicata, "cause of action estoppel", is that the "cause of action" on which the plaintiff moved in the Supreme Court of Queensland differs from the "cause of action" upon which she moves in this Court: Ramsay v Pigram (1968) 118 CLR 271 at 276; Kuligowski v Metrobus (2004) 220 CLR 363 at 373 [21] and 379 [40]. In Queensland she proceeded under Part 19 Division 4 of the Property Law Act 1974 QLD. In New South Wales she proceeds under different legislation; namely, the Property (Relationships) Act 1984 NSW and the Contracts Review Act 1980 NSW, the latter of which is expressly recognised in s 46 of the former. Queensland has no equivalent of the Contracts Review Act.
Regarding the question as of one of substance rather than one of form (Trawl Industries of Australia Pty Limited (In Liq) v Effem Foods Pty Limited (1992) 36 FCR 406 at 418 and 422, applied in Coshott v Woollahra Municipal Council [2002] NSWCA 64 at [19]), the plaintiff's challenge to the validity of the parties' Termination Agreement based on a claim for relief under the Contracts Review Act distinguishes the two "causes of action".
Although there is a general similarity between the respective provisions of Part 19 Division 4 of the Property Law Act 1974 QLD and the Property (Relationships) Act 1984 NSW, and the object of the plaintiff in seeking a property adjustment order under one or the other of those Acts is a constant, the unique character of the Contracts Review Act bears substantively (not merely procedurally) upon such, if any, entitlements that the plaintiff may have. The Contracts Review Act provides a broad legislative regime entitling the plaintiff to strike at the validity of the Termination Agreement on grounds independent of those specifically provided for in the de facto relationships legislation common to NSW and Queensland. Although its provisions are not uncommonly invoked in conjunction with an invocation of equitable principles governing unconscionable conduct, their distinctive legislative character sets them apart from jurisdiction exercised under the general law, to which the Queensland Act's equivalent of s 46 of the NSW Act is confined.
An impediment to the existence of an issue estoppel based on Martin J's finding of an estoppel by deed is that that finding was not legally indispensable to his Honour's conclusion that the Queensland proceedings should be dismissed. An issue estoppel arises only in respect of those matters which an earlier judgment has necessarily established as the legal foundation or justification of its conclusion: Spencer Bower and Handley, Res Judicata, paras. 8.23-8.24 and 8.26. Findings of law or fact which are subsidiary or collateral give rise to no estoppel: Blair v Curran (1939) 62 CLR 464 at 531-532. Martin J's finding of estoppel by deed falls into that category. The order for dismissal was based upon his Honour's principal finding of no territorial jurisdiction. His finding of estoppel by deed was based upon an assumption that that finding was wrong.
An impediment to the operation of an Anshun estoppel is that it was not unreasonable for the plaintiff not to rely upon a claim under NSW legislation in proceedings in the Supreme Court of Queensland. Moreover, even if it was unreasonable for the plaintiff not to have made such a claim, the failure of the defendant to bring to attention the possibility that she could, or should, do so provides special circumstances (of the type contemplated by Henderson v Henderson (1843) 67 ER 313 at 319, Anshun (1981) 147 CLR 589 at 598 and 602-603 and other cases, such as Macquarie Bank Limited v National Mutual Life Association of Australia Limited (1996) 40 NSWLR 543 at 558C) for relieving her of the consequences of any Anshun estoppel that might otherwise be found.
During the course of the hearing of the defendant's notice of motion in the current proceedings, I inquired of the parties whether, notwithstanding Martin J's finding of no territorial jurisdiction, the plaintiff could have relied upon the Property (Relationships) Act 1984 NSW and the Contracts Review Act 1980 NSW in the Queensland Supreme Court by virtue of the Jurisdiction of Courts (Cross Vesting) Act 1987 NSW, s 4(3) and the Jurisdiction of Courts (Cross Vesting) Act 1987 QLD, s 9. The defendant contended (in my opinion, correctly) that that question should be answered in the affirmative.
He proceeded to contend (but I do not accept) that it had been incumbent upon the plaintiff to invoke the cross vesting jurisdiction in the Queensland Supreme Court, and the fact that she had not done so counted against her upon a consideration of Anshun.
In advancing this submission the defendant contended that the plaintiff, having elected to go to court in Queensland, "elected" at that time not to seek relief under the NSW legislation when she could have done so.
It does not, in fairness, lie in the mouth of the defendant to say that the plaintiff made an "election" not to apply for relief under the NSW legislation in the Supreme Court of Queensland. Certainly, the plaintiff did not file any process in the Queensland proceedings formally, or in compliance with Part 7 of the Uniform Civil Procedure Rules 1999 QLD, invoking the Queensland Supreme Court's cross-vested jurisdiction. However, the possibility that the cross vesting legislation might require consideration was not drawn to the attention of either the plaintiff or Martin J by the defendant in the Queensland proceedings. That being so, it was not unreasonable (but, on the contrary, it was reasonable enough) for the plaintiff to proceed on the basis that, Martin J having implicitly indicated that the Supreme Court of NSW was the proper forum for her application for a financial adjustment order, the proper course was to "go to court" in New South Wales.
If the defendant's notice of motion is to succeed it must be on the basis of a contention that the plaintiff's statement of claim is an abuse of the processes of this Court.
The grounds upon which the Court may find an abuse of its processes are not closed: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at 193-194 [33]. Ultimately, the object of the Court's jurisdiction to deal with abuses of process is to protect the integrity of its processes so that it can effectively discharge its functions: Williams v Spautz (1992) 174 CLR 509 at 518 and 520; Walton v Gardner (1993) 177 CLR 378 at 392-393.
The defendant may be taken to have formulated this aspect of his case in two ways. The first (defined by reference Reichel v Magrath (1889) 14 App Cas 665) relies upon a contention that, having lost her application for a property adjustment order in the Queensland proceedings, it is an abuse of process for the plaintiff to seek to litigate in the current proceedings substantially the same case as that she lost in Queensland: Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404 at 410B; Rippon v Chilcotin Pty Limited (2001) 53 NSWLR 198. The second relies upon a contention that a repetitive interlocutory application, absent a change of circumstances, constitutes an abuse of process: National Parks and Wildlife Service v Pierson (2002) 55 NSWLR 315 at 318 [16]-[17]. Cf, Nominal Defendant v Manning (2000) 50 NSWLR 139 at 155-156 [71]-[73] and 167 [122] and Fletcher v Besser [2010] NSWCA 30 at [17].
Neither of these contentions overcomes the facts that: (a) the principal ground upon which the order for dismissal of the Queensland proceedings was made was implicitly based on a finding that the proceedings should have been brought in New South Wales; (b) Martin J's finding about estoppel by deed was an alternative ground for the order for dismissal based upon an assumption that the Queensland proceedings were otherwise maintainable; (c) the NSW legislation upon which the plaintiff presently proceeds expressly contemplates the availability of the Contracts Review Act 1980 NSW, the provisions of which are not available on an application made under Part 19 Division 4 of the Property Law Act 1974 QLD; (d) the Contracts Review Act provides a legislative foundation for a challenge to the validity and operation of the deed upon which Martin J grounded a finding of estoppel by deed; and (e) as established by Nominal Defendant v Manning, there is no absolute bar on the renewal of an interlocutory application absent a change in circumstances.
Although the Court of Appeal, in Fletcher v Besser, left open the possibility that Nominal Defendant v Manning may require reconsideration in the light of the subsequent enactment of the "case management" provisions of the Civil Procedure Act 2005 NSW, ss 56-60, there is nothing in the current proceedings that requires my exploration of that possibility.
It is sufficient for me to record that, for the five reasons here articulated, I do not regard the plaintiff's institution of the current proceedings (notwithstanding dismissal of the Queensland proceedings) as an abuse of the processes of this Court.
Rejection of each of the contentions relied upon by the defendant in support of his application for summary disposal of these proceedings carries with it an order for dismissal of the substance of his notice of motion.
Waiver and Estoppel by Conduct
In these circumstances, it is not necessary for me to decide whether (if the maintenance or conduct of these proceedings would otherwise be constrained by the Queensland Judgment upon a proper application of principles relating to res judicata or abuse of process) the plaintiff could overcome any such constraint by reliance upon principles of waiver or estoppel by conduct.
Nevertheless, against the possibility that my judgment is the subject of an appeal, it is appropriate that I make some brief observations on this topic.
With support from Miller v University of New South Wales [2002] FCA 882 at [91], the defendant contends that there can be no waiver of reliance on doctrines such as res judicata, issue estoppel and abuse of process because they are calculated primarily to protect the public interest rather than to give rise to private rights.
He relies, further, upon a contention that res judicata applies by operation of law, rather than at the discretion of the Court: Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 at 504-505 and 512.
Where, as here, the judgment alleged to give rise to a res judicata entitlement involved the dismissal of a "cause of action", the cause of action cannot be said to have merged in the judgment: Macquarie Bank Limited v National Mutual Life Association of Australia Limited (1996) 40 NSWLR 543 at 556E-557G; Spencer Bower and Handley, Res Judicata, para 1.04.
In any event, the public interest aspect of such doctrines as those under consideration here does not, of itself, preclude a finding of a loss (or "waiver") of an entitlement to rely upon an earlier judgment by reason of a failure to object to the conduct of subsequent proceedings.
As confirmed in Vakauta v Kelly (1989) 167 CLR 568 at 572, the concept of "waiver" of an objection by a party can be applied, notwithstanding public interest aspects, in the context of maintenance of the integrity of court proceedings. A party who fails to take a timely objection to judicial bias might be taken to have waived any entitlement to do so. Equally, a party who fails to take a timely objection to the maintenance or course of proceedings said to be constrained by an earlier judicial decision might be said to have "waived" any entitlement, subsequently, to take the objection.
In each case, the due administration of justice may be a factor taken into account by the Court in determining whether a belated objection can or should be permitted, as is the particular principle (illustrated by Metwally v University of Wollongong (No 2) [1985] HCA 28; 59 ALJR 481 at 483; 60 ALR 68 at 71 at one end of the litigation process and, at the other, by Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 at 213 [98] and 217 [111]-[112]) that a party is generally bound by the conduct of its case.
A party entitled to rely upon a res judicata type defence to an action cannot participate in the conduct of the action, silent as to the availability of the defence, without exposure to a risk of its loss.
The House of Lords and the Privy Council have accepted that a res judicata estoppel might be waived by, or defeated by an estoppel by conduct arising from, a failure to plead it in subsequent litigation: see, respectively, Republic of India v India Steamship Co Limited [1993] AC 410 at 421H-423D and Showlag v Mansour [1995] 1 AC 431 at 440H-441E, both accepting the analysis now reproduced in Spencer Bower and Handley, Res Judicata, para 17.16. (See also paras 18.03, 18.05, 18.09 and 18.10).
Commonwealth v Verwayen (1990) 170 CLR 394 provides a further illustration that principles governing waiver and estoppel by conduct can operate within the context of pending proceedings.
In principle, waiver and estoppel are capable of application in a factual context such as these proceedings present.
However, the defendant contends that there is no factual foundation for a finding of waiver or estoppel in these proceedings.
I am not persuaded that there is no factual foundation for waiver or estoppel in circumstances in which the defendant has, by filing a defence traversing the plaintiff's statement of claim in detail and by engaging in heated interlocutory litigation without invoking the Queensland judgment, encouraged in the plaintiff an assumption that she is entitled to pursue the current proceedings unconstrained by the Queensland judgment.
If (contrary to my determination in this judgment) the defendant were to be permitted to rely upon a case such as that presently sought to be advanced in paragraphs 43 and 44 of the "Amended Defence" (extracted in paragraph 10 above), any grant of leave entitling him to do so should, in fairness, be conditioned upon, or subject to, a direction permitting the plaintiff to file a reply pleading such case she may seek to make by reference to the concepts of "waiver" and "estoppel by conduct".
My determination in this judgment that the defendant is not entitled to a summary disposal of the proceedings, and that he should not be permitted to rely upon paragraphs 43 and 44 of the "Amended Defence", is based substantially upon documents of record associated with the Queensland proceedings (particularly, the plaintiff's Originating Application, the defendant's Application and Martin J's Reasons for Judgment incorporating his order for dismissal), coupled with uncontroversial, ancillary facts placing them in context.
If the parties were to litigate questions of "waiver" or "estoppel by conduct", a broader investigation of facts than has been conducted on the hearing of their motions might be required. That investigation could not be conducted, efficiently or fairly, in the context of the motions presently before the Court. Prima facie, it would need to be dealt with in the principal proceedings, albeit perhaps on the determination of a separate question governed by the procedure for which rule 28.2 of the Uniform Civil Procedure Rules 2005 NSW provides.
The Plaintiff's Notice of Motion
The directions given by the Court on 10 December 2012 for the service of a form of amended defence were predicated upon a need, in the defendant, to obtain a grant of leave (under s 64 of the Civil Procedure Act 2005 NSW) to permit him to file an amended pleading. No such leave was ever granted.
With justification, the plaintiff opposes the defendant's current application for leave on the basis (reinforced by reference to Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175) that the application is made too late in the day: after substantial costs have been incurred by her on the basis of a defence which did not refer to the Queensland judgment and which, absent any evidence to the contrary, must be taken to have been filed consequentially upon a forensic decision to refrain from reference to the Queensland judgment. A late application to amend a pleading to plead res judicata can, on conventional principles, be refused: Spencer Bower and Handley, Res Judicata, para. 18.09. So, in this case, should it be.
Furthermore, my rejection of the defendant's application for summary disposal of the proceedings carries with it a determination that the Queensland judgment discloses no reasonable defence to the plaintiff's statement of claim. With due regard to the caution against haste in the exercise of summary disposal jurisdiction found in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 128-130, I am satisfied that the defence sought to be advanced in paragraphs 43-44 of the "Amended Defence" (extracted in paragraph 10 above) lacks any reasonable prospects for success.
For these two reasons (delay and want of prospects), I decline to grant to the defendant leave to amend his defence in the terms sought in the "Amended Defence".
Consequentially, I propose to order that the "Amended Defence" be removed from the records of the Court.
It is not necessary or appropriate to order that the "Amended Defence" be struck out in circumstances in which it was never regularly filed. However, if regularly filed, paragraphs 43 and 44 would have been liable to be struck out upon an exercise of the jurisdiction for which rule 14.28 of the Uniform Civil Procedure Rules 2005 NSW provides or upon an exercise of the inherent jurisdiction of the Court to like effect.
DIRECTIONS FOR FURTHER CONDUCT OF THE PROCEEDINGS
Insofar as the defendant has not complied with the directions given by the Court on 10 December 2012 for the further conduct of the principal proceedings, it may be necessary for fresh directions to be given.
However, prima facie, the directions already given are in a form capable of implementation without substantial amendment.
Prima facie, they should be implemented without further delay.
Dismissal of the defendant's motion for summary disposal of the proceedings removes the only suggested impediment to their implementation.
Accordingly, I propose, by orders subject to further order, to confirm the obligation of the parties to carry them into effect.
COSTS
In substance, the plaintiff has succeeded, and the defendant has failed, on each of the motions presently before the Court.
With costs to follow the event, I propose to order that the defendant pay the plaintiff's costs on each motion.
Two factors incline me towards an order that those costs be assessed on the indemnity basis. First, the defendant was guilty of unreasonable delay in raising the possibility that the Queensland judgment might constrain the conduct of the principal proceedings. Secondly, having consented to directions for the further conduct of the principal proceedings on 10 December 2012 without foreshadowing any motion for summary disposal of the plaintiff's proceedings, he filed his motion without compliance with those directions and he might reasonably be thought to have filed it as a means of avoiding, or at least deferring, the burden of the directions of the Court to which he had consented.
In the circumstances of the case as it has unfolded, I also incline to the view that the justice of the case dictates that the plaintiff be permitted to proceed forthwith to enforcement of each of the costs orders thus far made in her favour.
By virtue of rule 42.7 of the Uniform Civil Procedure Rules 2005 NSW, costs payable under an interlocutory order for the payment of costs are not payable until the conclusion of the proceedings unless the Court otherwise orders. I propose to make such an order.
The defendant's delays in the conduct of the principal proceedings, and the possibility that he is conducting a war of attrition in the conduct of interlocutory disputes against the plaintiff, provide a sufficient basis for permitting her to proceed immediately to enforcement of the costs orders made in her favour to date.
However, in making an order for the enforcement of those costs orders forthwith, I am not to be taken to be making any decision about the course of enforcement of such, if any, costs orders as may be made in the future. The defendant's belated reliance upon the Queensland proceedings, possibly as a means of defeating or delaying disclosure obligations increasingly pressing upon him, provides a particular foundation for the current order made under UCPR rule 42.7.
ORDERS
I make the following orders:
(1) Order that the notice of motion filed by the defendant on 7 February 2013 and amended on 10 April 2013 be dismissed.
(2) On the plaintiff's notice of motion filed on 6 May 2013:
(a) Order that the document styled "Amended Defence" purportedly filed by the defendant on 31 January 2013 be removed from the records of the Court; and
(b) Order that the notice of motion otherwise be dismissed.
(3) Order that the defendant pay the costs of both notices of motion on the indemnity basis.
(4) Order that the plaintiff be granted leave to enforce that costs order, and the costs orders made in her favour on 26 November 2010 and 18 August 2011, forthwith.
(5) Order, subject to further order, that the terms of the orders and notation made by Hallen J on 10 December 2012 by reference to paragraphs 1-6 of a draft Minute of Order bearing that date be confirmed, subject to amendment of the date specified in paragraph 3(d) - namely, 31 January 2013 - to read 20 September 2013.
(6) Order, subject to further order, that the proceedings be listed before Hallen J for mention at 9.30am on 15 October 2013 on the basis that, if a form of consent order dealing with a date for a mediation and also the date to which the proceedings are to be adjourned after mediation is delivered to his Honour's Associate no later than 10 October 2013, his Honour may deal with the matter in chambers.
(7) Reserve liberty to apply to Hallen J for fresh directions on 7 days notice.
(8) Order that exhibits and subpoenaed material may be returned forthwith; any exhibits returned must be retained intact by the party or person that produced the material until the expiry of the time to file an appeal, or until any appeal has been determined.
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Decision last updated: 31 July 2013
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