UBS AG v Scott Francis Tyne as Trustee of the Argot Trust

[2018] HCATrans 67

[2018] HCATrans 067

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B54 of 2017

B e t w e e n -

UBS AG

Appellant

and

SCOTT FRANCIS TYNE AS TRUSTEE OF THE ARGOT TRUST

Respondent

KIEFEL CJ
BELL J
GAGELER J
KEANE J
NETTLE J
GORDON J
EDELMAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 18 APRIL 2018, AT 10.19 AM

Copyright in the High Court of Australia

MR J. STOLJAR, SC:   May it please the Court, I appear with my learned friend, MR L.T. LIVINGSTON, for the appellant.  (instructed by King & Wood Mallesons)

MR G.O’L REYNOLDS, SC:   May it please the Court, I appear for the respondent with my learned friend, MR D.P HUME.  (instructed by Russells)

KIEFEL CJ:   Yes, Mr Stoljar.

MR STOLJAR:   Your Honours, the question in this appeal is whether the majority of the Full Court below erred in concluding that there was a proper basis to disturb the primary judge’s evaluative decision.  As appears from our outline of oral submissions which we have provided to your Honours this morning, we advance three main propositions in support of the contention that the majority so erred.  Before I come to those three propositions, we will recount very briefly the salient facts.

In about 2007 the appellant, UBS, through its Singapore branch, provided credit facilities to a Jersey company called Telesto Investments Limited.  Those facilities included an overdraft facility with a limit of $US60 million.  A gentleman called Mr Scott Tyne was the guiding mind of Telesto at all material times and he was also the guiding mind of an entity called the Trustee of the Argot Trust which it is alleged supplied some securities to Telesto and which is now the respondent.  In addition, Mr Tyne gave a personal guarantee of Telesto’s liabilities to UBS in relation to the UBS facilities.

Telesto utilised the funds made available to it under those credit facilities to make various investments, including bonds – well, I am sorry, in bonds issued by two Kazakhi banks.  At the heart of the complaint raised by what might be described as the Tyne‑related entities in various proceedings is the proposition or allegation that UBS gave negligent advice or engaged in misleading and deceptive conduct in relation to Telesto’s investments in those Kazakhi bonds. 

In particular, the Tyne‑related entities alleged that they invested in the bonds or allowed the investments to remain in place in reliance on various advice given or alleged misrepresentations made by UBS from time to time from about 2007 onwards. 

In 2008, the bonds deteriorated in value and – well, the Kazakhi banks defaulted.  In December 2009, the parties entered into a standstill agreement, and without delving into the detail, the general idea of the standstill was that UBS would hold off taking any further enforcement action and Telesto would provide more security and would also procure that the trustee of the Argot Trust also supplied more security. 

Then in 2010, UBS took the position that the Telesto or other entities had defaulted under that standstill agreement and the first significant step was that on 15 October 2010 UBS terminated the standstill agreement and on the same day commenced proceedings in Singapore, where the account was, against Telesto as a principal debtor and against Mr Tyne who had given the person guarantee.  Now, the Argot Trust was not a party to those proceedings. 

About 17 days later, on 2 November 2010, Mr Tyne, in his personal capacity – the then trustee of the Argot Trust and Telesto – commenced proceedings in the Supreme Court of New South Wales in the commercial list alleging that UBS had engaged in misleading, deceptive conduct and had given negligent advice in and from about 2007 or 2008 in relation to the investments made by Telesto. 

Then, in 2011, the following year, UBS commenced anti‑suit proceedings against those three plaintiffs in the New South Wales proceedings, namely, Mr Tyne, Telesto and the trustee of the Argot Trust.  Those anti‑suit proceedings proceeded and were successful in obtaining anti‑suit injunctions against those three entities.

The next salient point – I am just endeavouring to give your Honours an overview and the detail is set out in the decisions below – but in 2012, significantly, the Supreme Court of New South Wales granted leave to the plaintiffs to amend their claim in the New South Wales proceedings and the effect of that was that, without objection from UBS, Mr Tyne and the Argot Trust ceased to be plaintiff and, in effect, discontinued their claims leaving Telesto as the sole plaintiff in the Supreme Court. 

That was at a time when the Supreme Court, through Justice Ward, temporarily stayed the New South Wales proceedings pending the outcome of the Singapore proceedings.  Although no formal orders were made in relation to the two plaintiffs I have adverted to, Mr Tyne and the trustee of the Argot Trust discontinuing, that was, in substance, the effect of what occurred pursuant to the amendment.

At that point, the New South Wales proceedings were temporarily stayed, the Singapore proceedings were ongoing and they proceeded to a final hearing in 2012, although Telesto and Mr Tyne, who were the defendants to those proceedings, elected not to appear.  They have participated to some extent in relation to those proceedings and in relation to the anti‑suit injunction, but without going into detail, they chose to take no further part in the Singapore proceedings.

A hearing proceeded in their absence at which Justice Lai heard evidence and made some findings.  By that stage, 2012, UBS had realised securities provided to it by or on behalf of Telesto in relation to the facility and so the net position by the time of the hearing in Singapore was that there was no longer any money outstanding under the facilities but UBS was successful in obtaining declaratory relief and orders for costs.

The Singapore proceedings were thereby concluded and a stay of the New South Wales proceedings had only been ordered pending the outcome of the Singapore proceedings.  So in 2012 the question became what would be the fate of the New South Wales proceedings now being carried on only by Telesto.  At that point, UBS applied for those proceedings to be permanently stayed on the basis, among other things, of a res judicata or issue estoppel arising out of the Singapore proceedings which had by that stage been concluded.  On 9 May 2013, Justice Sackar in the Supreme Court ordered that Telesto’s proceedings be permanently stayed on the basis of res judicata and issue estoppel.

Now, the circumstances of that decision have some significance for the majority of the Full Court below in that the Full Court attached considerable significance to the fact that the hearing before Justice Sackar was not a hearing on the merits.  And it is certainly true that, of course, that the hearing before Justice Sackar was not one that ventilated all of the factual issues that could have been in contest as between UBS and Telesto in that it did not go into the facts about what advice was given reliance and the like.

Nevertheless, although it was a hearing confined to certain issues, namely, threshold issues, if I can call them that, such as res judicata and issue estoppel, it was a significant piece of litigation.  For example, UBS called – well, both sides in fact called expert evidence.  The expert for UBS was required for cross‑examination and travelled from Singapore for that purpose.  There was a hearing before Justice Sackar, at which that expert was cross‑examined about the effect of Singapore law.  The res judicata and issue estoppel and other issues were fully argued.

The proceedings culminated in the judgment by Justice Sackar of nearly 100 pages.  I will just give your Honours the references:  appeal book 1, page 145 through to 240.  Now, Telesto did not appeal from Justice Sackar’s decision, which was to permanently stay the New South Wales proceedings as an abuse of process.  So, as at 9 May 2013, there the matter appeared to have rested.

Then on 9 January 2014 Mr Tyne was appointed the trustee of the Argot Trust and four days later on 13 January 2014 Mr Tyne, now the trustee of the Argot Trust, and Ms Marks commenced the proceedings below in the Federal Court, raising in substance the same factual matters as those which had been ventilated in the New South Wales proceedings and, for that matter, the Singapore proceedings.  It is those Federal Court proceedings which were permanently stayed as an abuse of process by the primary judge.  I will take your Honours to the primary judge’s decision in a moment, but I will first deal briefly with the position of Ms Marks.

After the judgment of the Full Court below and, indeed, after the special leave application was filed, UBS became aware for the first time that Ms Marks had been declared bankrupt on 11 June 2014, so she became a bankrupt some months – three or four months after the proceedings were commenced by her in the Federal Court below.  They were commenced in January and she became bankrupt in June.  Her trustee in bankruptcy it appears was not aware of the proceedings and certainly UBS was not and nor was the court – I am sorry, the trustee was not aware of the proceedings and UBS and the court was not aware of the bankruptcy.

But to cut a long story short, once it had become clear that she was a bankrupt, UBS brought the proceedings to her trustee’s attention and the trustee elected to take no part in the proceedings and they were thereby deemed to have been abandoned, and as a consequence of orders made by this Court on 15 December 2018, Ms Marks is no longer a party to the appeal.  So, we are proceeding with a case that really involves only the respondent, namely, the trust.

Now, could I take your Honours to the primary judgment and just identify the main basis on which Justice Greenwood resolved the application?  I suppose I should say that after the Federal Court proceedings had been begun, UBS then brought an application asserting that the proceedings were an abuse of process.  Justice Greenwood first dealt with issues of res judicata, issue estoppel and Anshun estoppel.  I do not need to detain your Honours with those because no appeal is brought in respect of his decision adverse to UBS on those points.

But picking up his Honour’s decision at appeal book 2, page 792, paragraph 413 – it is at about line 48 – the primary judge observed that:

The position . . . is entirely different –

that is to say, different from res judicata or issue estoppel and the like in respect of the doctrine of abuse of process.  In paragraph 414, the primary judge observed that:

Mr Tyne was the controlling mind of –

the then:

trustee of the Argot Trust –

and that a few lines further down:

Mr Tyne . . . made the decision to cause the trustee to discontinue its participation as a plaintiff in the SCNSW proceedings and not agitate, by the proposed amended proceeding as put to Sackar J, the causes of action asserted by the trustee for and on behalf of the trust in the Federal Court ‑

Then further down on page 793 at 416 the primary judge observes that:

The trustee chose not to bring, agitate or maintain those claims when it could have done so and should have done so.

At 417 the primary judge observes that:

Mr Tyne submits that because UBS had no money claims against the trustee of the trust or him, he caused those parties to discontinue their participation in the SCNSW proceedings.

And that was an explanation propounded on behalf of the time‑related entities for the discontinuance of the Supreme Court proceedings.  I will come back to that in a moment.

Just continuing through this recital of the key points, his Honour observes in paragraph 417, towards the end of that paragraph, that the claims arose out of a common substratum of fact and the formulation of the proceedings is very substantially in the same terms as those asserted in the Supreme Court of New South Wales.  His Honour observes in 418, in about the third line, line 45 on page 793:

the trustee –

That is, the trustee of the Argot Trust:

would not have been met with res judicata, an issue estoppel or an Anshun estoppel having regard to the state of the law as it was and as it has been affirmed by the High Court in Tomlinson -

that is to say, if the trustee had remained in the Supreme Court of New South Wales proceedings.  On the next page, 794, at 421, the primary judge observed that there was no proper explanation – I am looking at the third line of 421 – as to why the trustee chose not to bring its claims in the Supreme Court of New South Wales.  Then an important finding in 422, in the second half of that paragraph, at about line 30:

The conduct of the SCNSW proceedings seems to suggest that a claim which the trustee could and should have brought was held back on the footing that such a claim might be brought in another court if the outcome of the SCNSW proceedings, having regard to the Singapore 801 proceedings, resulted in a stay of a claim by Telesto.

Pausing there for a moment, if I remind your Honours that the submission had been that the claims were discontinued because UBS no longer was pursuing a money claim against the trustee of the Argot Trust, that is certainly the case, that that money claim was no longer being pursued, but it does not, in our respectful submission, explain in any meaningful way the discontinuance. 

In the New South Wales proceedings the trustee of the Argot Trust was seeking to vindicate the claim which it alleged to have against UBS and obtain for itself monetary compensation.  Whether or not the trustee of the Argot Trust was liable to UBS under the arrangements that had been entered into – namely, a mortgage or a letter of undertaking – is a completely separate question and we would say is irrelevant to whether the trust had its own claim against UBS ‑ indeed a claim against UBS which it had already prosecuted in the Supreme Court of New South Wales for approaching two years when it discontinued.

If I come back to his Honour’s observation in paragraph 422 in about the middle of page 794, when his Honour says that it seems to suggest the trustee’s claim was held back on the footing that such a claim might be brought in another court if the outcome of the Supreme Court of New South Wales proceedings resulted in a stay of a claim by Telesto, we make two observations:  firstly, there is no other explanation proffered and there is no other obvious explanation that one can think of as to why that occurred and, secondly, of course, that finding or observation by his Honour has not been the subject of any challenge either in the Full Court or in this Court.  Then, just completing the recital of ‑ ‑ ‑

NETTLE J:   Can I just ask you, why is that thought to be appropriate? 

MR STOLJAR:   That finding?

NETTLE J:   Yes – as against the trustee.

MR STOLJAR:   I am sorry, is your Honour asking me why is that finding appropriate?

NETTLE J:   Appropriate – as against the trustee.  Why do you mention it as indicating that the trustee has done something impermissible?

MR STOLJAR:   Because it forms the foundation of a proposition to this effect, that a circumstance in which one party, or one plaintiff where there are a number of plaintiffs, discontinues then steps back and allows other plaintiffs, all controlled by the same person, to continue the proceedings, await the outcome of those proceedings and then reagitate the claim in a different court, we would say that that conduct is not one that fits within the overarching purpose of the contemplated ‑ ‑ ‑

EDELMAN J:   This is the inference that Justice Dowsett drew at paragraph 23, is it?

MR STOLJAR:   It is a very similar inference, yes – if not the same inference, yes.

NETTLE J:   But the trustee presumably anticipated that the New South Wales proceeding would be stayed because of the Singapore – the Hong Kong proceeding.

MR STOLJAR:   Telesto was opposing that outcome, of course.  So, it may not have anticipated that but it may have ‑ ‑ ‑

NETTLE J:   Feared it.

MR STOLJAR:   ‑ ‑ ‑ it may have feared it and it may have – for forensic reasons of its own – decided to step back, allow those proceedings to move to their conclusion and then ‑ ‑ ‑

NETTLE J:   But presumably the proceeding would not have been stayed as against the trustee had it stayed in.

MR STOLJAR:   That was certainly the view arrived at by the primary judge because the trustee was not a party to the Singapore proceedings so it is not very unclear that there could be any res judicata, issue estoppel or Anshun estoppel as against the trustee.

NETTLE J:   So the abuse of process which is alleged consists in discontinuing a proceeding and choosing to wait and go again in another proceeding?

MR STOLJAR:   Yes.  But we would submit that the abuse arises in all the circumstances including, importantly, the circumstances that your Honour has just put to me.  But, in addition, the fact that if a party engages in that conduct, that is to say discontinues its claim and steps back and waits several years and then resumes the claim in another court, there will inevitably be delay and increased costs and vexation.  So we would say all those factors give rise to the abuse. 

NETTLE J:   Is that the totality of it?  It has nothing to do with the foreign proceedings?  It is just, as it were, discontinuing from a New South Wales proceeding and then waiting a couple of years before kicking off again.

MR STOLJAR:   We say that the discontinuance and the resurrection of the proceedings in another court is at the heart of it but the Singapore proceedings are an important part of the factual matrix which needs to be taken into account.

NETTLE J:   Even though the trust, as such, or trustee, was not party to that proceeding.

MR STOLJAR:   Yes, yes.

NETTLE J:   Why is that so?

MR STOLJAR:   Because those proceedings were ones which – well, first of all, they were a hearing on the merits relating to these issues.  Secondly, they were ones which the trustee could have chosen had the controlling mind of the trustee sought to participate in those proceedings.  They are a proceeding in which a court has – although involved in different but closely related parties – examined these actual circumstances.

NETTLE J:   Does that mean to say you choose not to join a party to a proceeding and yet you seek later to say that he should be affected by the outcome of it?

MR STOLJAR:   Well, they were not – the only person with whom UBS was in a contractual relationship was the account holder, namely Telesto, and the guarantor, namely Mr Tyne.  The arrangements as between Mr – I am sorry, I suppose there was the standstill agreement.  I think the trustee had by now become a party to that, but the underlying liabilities arose out of the facilities and the terms and conditions of those facilities. 

However – so that is the first proposition.  The second proposition is of course the Singapore proceedings are also related to the anti‑suit injunction which I have not adverted to when discussing this particular point with your Honours.  So the anti‑suit injunction is also part of the factual matrix and that is – those injunctions of course affected the trustee of the Argot Trust directly. 

But at the end of the day we put the abuse really as arising out of the fact that the proceedings were discontinued, and then at a time and for forensic reasons, or tactical reasons, suitable to the trustee so it perceived the same substratum of facts was ventilated in later proceedings. 

NETTLE J:   Thank you.

EDELMAN J:   Does the failure to take part in the Singapore proceedings add anything or do anything more than support the inference that the primary judge made about holding back all that Justice Dowsett made about forensic purpose?

MR STOLJAR:   Had the trust engaged in the Singapore proceedings?

EDELMAN J:   Yes.  Its failure to become involved or to seek to be joined as a party, does it do anything more than somehow assist in that inference?

MR STOLJAR:   It probably does not take it much further than that proposition, no, your Honour.

NETTLE J:   I mean, you could well understand why it would prefer to sue in this country than in another. 

MR STOLJAR:   The trustee?

NETTLE J:   Yes.

MR STOLJAR:   Well, the reason it would advance is that it perceived a juridical advantage arising out of the Trade Practices Act and the Rules ‑ ‑ ‑

NETTLE J:   Which seems to be accepted.

MR STOLJAR:   Yes.  Yes.

NETTLE J:   So its failure or choice not to join in the foreign proceeding can hardly be something to be held against it, can it?

MR STOLJAR:   Only to a limited extent and that is it underscores the fact that it had opportunities before to involve itself in these proceedings.  I think the real opportunity that Justice Greenwood talked about was its opportunity to continue the New South Wales proceedings to fruition, but there had been an earlier opportunity, namely, in Singapore. 

NETTLE J:   Well, that is what I am driving at.  At the end of the day it comes down to an allegation that it is an abuse of process to discontinue a New South Welsh proceeding and wait a couple of years before starting again.

MR STOLJAR:   Yes, in the circumstances of this case, yes. 

NETTLE J:   Thank you.

GAGELER J:   Do you rely in part on the costs incurred by UBS in agitating claims on the same factual matrix in Singapore?

MR STOLJAR:   Only as part, as I say, of the background.  We did not put a case that said the abuse arises because of those specific costs but we certainly said that the conduct of the trust in discontinuing here and then starting new proceedings in the Brisbane registry of the Federal Court was productive of further costs on the part of UBS, yes.  Just completing the primary judge’s analysis briefly, at 423 and, in a sense, picking up the points that Justice Nettle was just debating with me, the primary judge observed that:

the Argot Trust does not have an unqualified and absolute right to a trial –

but it had:

a right to an opportunity to have a hearing on the merits –

At 424, first line:

The trustee had that opportunity and it chose not to exercise that opportunity –

Then his Honour concluded:

Bringing the proceedings now, raising as they do, substantial complex questions of fact and law with which UBS has been vexed before, is an abuse of the processes of the Federal Court of Australia.

NETTLE J:   Why have they been vexed before?

MR STOLJAR:   Because they considered these issues in the context of Telesto’s claim and then UBS brought its stay application as against Telesto, was successful after a significant hearing in having the New South Wales proceedings permanently stayed, and does not have the benefit that it should have from having done that because it has – well, its benefit is confined to, as it were, as a matter of legal theory it has the benefit of a stay as against Telesto ‑ ‑ ‑

NETTLE J:   You chose not to join the trustee to the foreign proceeding and have it bound by it.  You were prepared to let that go and yet now you say it should be treated as if it had been joined and were bound by it.

MR STOLJAR:   Well, no, the foreign proceeding is a different issue, with respect, your Honour.  The proceeding in – if your Honour is asking me why UBS has been vexed before ‑ ‑ ‑

NETTLE J:   Yes.

MR STOLJAR:   ‑ ‑ ‑ the answer or at least one answer is that UBS brought a stay application against Telesto, being the only plaintiff who was ventilating any claim against it.  The benefit, which would have derived to UBS, one would have thought from bringing that stay application, was to obviate the need for a factual contest, raising issues of fact going back to 2007.  It was successful ultimately in obtaining a permanent stay of the New South Wales proceedings as against Telesto, but it did not get the benefit that it would have expected in that another plaintiff who had previously discontinued is now seeking to ventilate those factual issues.

NETTLE J:   Do you mean you did not get the benefit of the stay as against the trustee?

MR STOLJAR:   Well, it did not get the benefit of obviating the need for a fully contested factual contest.  Perhaps I can come at it this way, your Honour.  The reason a party in UBS’s position is going to seek a permanent stay as against Telesto is to obviate the need for a factual contest.  You would not do it if you were, in any event, going to have the factual contest.  There would not be any practical benefit to you for doing that. 

So UBS brought the application for a permanent stay, argued the point out before Justice Sackar in the circumstances that I have described and then, at the end of the day, was successful – no appeal from that decision – but now finds itself having to deal, in any event, with the underlying factual materials, that is to say, or the factual contest, that is to say, if its application for a stay of the Federal Court proceedings is unsuccessful.

NETTLE J:   I am sorry to go on - it is because I am completely confused.  If the trustee had been in the New South Wales proceeding at the time at which the stay application was made, presumably the stay would not have gone as against the trustee and the trustee could have continued to litigate its trade practices claims against you?

MR STOLJAR:   Yes, and this was a point – well, that is so, but then the question is whether UBS would have in fact proceeded with the stay application at all had those two parties been – I say two, Ms Marks and the trust being parties ‑ ‑ ‑

NETTLE J:   Well, you might or you might not have, but at least you got the benefit of it as against Telesto.

MR STOLJAR:   Yes.

NETTLE J:   You were always at risk of being prosecuted by the trustee for the trade practices claims.

MR STOLJAR:   Well, we would say that the trustee had that opportunity and elected not to pursue it.

NETTLE J:   Opportunity where – after the stay?

MR STOLJAR:   Well, no, when it was a party for the two years or so it prosecuted those claims as against UBS in the Supreme Court of New South Wales and then it chose ‑ ‑ ‑

NETTLE J:   But you have not yet been vexed with them, have you?

MR STOLJAR:   Not with the underlying factual contest, no.  UBS has not had to deal with the underlying factual contest.

NETTLE J:   So you would face it, if you do face it, for the first time in the new proceeding in the Federal Court?

MR STOLJAR:   That is so.

NETTLE J:   Thank you.

MR STOLJAR:   I am going to come back to these points in the context of the majority of the Full Court’s decision.  Perhaps I will take your Honours to that now.  So if I could pick up the count in the Full Court at page 849 in volume 2 of the appeal book, the majority.

GORDON J:   Sorry, what page number is that, Mr Stoljar?

MR STOLJAR:   Page 849.

GORDON J:   Thank you.

MR STOLJAR:   The majority in the Full Court observed at 56 that the primary judge’s conclusions depended on, as their Honours say, six key matters.  I have already taken your Honours to many of those matters, but your Honours will note that at paragraph 60 one of those matters is that:

the claims now sought to be advanced by the trust and Ms Marks arise from the same facts –

Then at 62:

the trust and Ms Marks could have made the claims they now seek to advance . . . without being at risk of those proceedings being stayed (in contract to the position of Telesto –

Then, coming over to the next page, we had put to the Full Court, as your Honours will observe from 67, that the primary judge had applied Tomlinson.  Their Honours did not accept that proposition, as your Honours will see from the bottom of page 850.  At 851, their Honours conveniently extract Tomlinson, and I will just remind your Honours of those paragraphs since they are in front of your Honours, but your Honours will recollect that in Tomlinson at paragraph [25], as appears from about 12, this Court articulated the following proposition:

abuse of process is capable of application in any circumstances in which the use of a court’s procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute.

So there are two possible paths to an abuse.  Then at [26] this Court articulated the proposition that:

making a claim or raising an issue which was made . . . or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process –

Then the second proposition in the concluding sentence of paragraph [26] in Tomlinson that:

it has been recognised that making such a claim or raising such an issue can constitute an abuse of process where the party seeking to make the claim or to raise the issue . . . was neither a party to that earlier proceeding, nor the privy of a party to that earlier proceeding, and therefore could not be precluded by an estoppel.

Now, I will not take your Honours through the detail of the majority’s decision following the articulation of those propositions, but their Honours look at a number of older cases and arrive at two conclusions said to emanate from those cases.  The first is on page 857, paragraph 80.  The majority say the first matter that should be noted is that:

the cases discussed above do not involve a finding of an abuse of process against a person who was not a party to an earlier proceeding.

Now, pausing there, that of course is more relevant to Ms Marks perhaps than the trust, because the trust was a party to the New South Wales proceeding.

Then if your Honours come through to page 862, the second proposition which the majority draw from those cases is described in the opening line of paragraph 90:

Second, the parties have not identified any case involving a finding of an abuse of process where the issue sought to be raised in the subsequent proceeding was not decided on its merits in the earlier proceeding.

There are such cases ‑ for example, one of the cases on our list, Walton v Gardiner (1993) 177 CLR 378, was a case in which the earlier proceedings were stayed permanently as an abuse of process and then the fresh proceedings were also stayed permanently as an abuse of process. So there had been no hearing on the merits in that case. Batistatos v RTA (2006) 226 CLR 256 is also a case in which there had been no earlier hearing on the merits.

In Batistatos there had been no hearing at all, let alone one on the merits.  It was a case in which, as your Honours will recollect, proceedings were commenced some 29 years after the motor vehicle accident in question and the proceedings were permanently stayed on the basis that the delay was so great that a fair trial could not proceed.

KEANE J:   It also takes a pretty narrow view of the notion of a trial on the merits.

MR STOLJAR:   Yes.

KEANE J:    If res judicata is a good defence, it is a good defence, as a matter of merit.

MR STOLJAR:   That is so, and we endeavour to make that point.  We would say it was a hearing on the merits but a hearing confined to certain issues that did not extend to the factual issues.  It is comparable to a situation in which, for example, there might be a limitations point decided in advance of the hearing, despite the statements in Wardley against that course.  But, anyway, if that happened, then you would have a situation in which that issue, the limitations issue, had been fully argued and determined on the merits even if the underlying factual questions had not been determined.

KIEFEL CJ:   Is the point that you are making in relation to your point 1 in this context, that it is important that UBS as a party was seeking to achieve finality?

MR STOLJAR:   Yes.

KIEFEL CJ:   And that one looks at their overarching purpose through that lens?

MR STOLJAR:   Yes, and indeed was endeavouring to do so in a way that was consonant with that overarching purpose because it was seeking to do so in an efficient manner, namely, to deal with the res judicata issue, which, on its face, should have resolved these issues in their totality if favourably decided from the point of view of UBS.

Then briefly continuing with the examination of the majorities decision, at 865, after dealing with the position of Ms Marks, their Honours at 99 turn to the issue in respect of the Argot Trust and their Honours observed that that is of a different kind.  Unless your Honours have questions, I will not travel through the minutiae of the reasoning process but I will perhaps pick it up at 107 on page 868, which seems to us to be at the heart of their Honours’ reasoning.  At line 30, their Honours pointed out:

Importantly, and as discussed, the primary judge found that had the trust or Ms Marks made their claims in the Supreme Court proceedings, UBS could not have obtained a permanent stay . . . based on res judicata, issue estoppel or . . . abuse of process.  In other words, if the trust or Ms Marks had made their claims in the Supreme Court proceedings, UBS would have been required to admit or defend those claims.  That is the same position as UBS would now be in but for the grant of the permanent stay by the primary judge. 

Then their Honours go on and ask what might have happened differently.  So, their Honours say:

The only possible different position that UBS identified is that it might not have sought a permanent stay of Telesto’s proceedings in the Supreme Court if the claims of the trust and Ms Marks had also been made in those proceedings.  Unlikely as this seems, we accept it for the purposes of this discussion.

So, their Honours have accepted it.  But, picking up the word “unlikely”, perhaps this harks back to some of the discussion I was having with your Honour Justice Nettle, the point we were really endeavouring to articulate is that there is only a point – you only would try and stay Telesto’s proceedings and have this res judicata and issue estoppel point if you thought it could get rid of the whole claim.  I am putting it rather loosely - if you thought that, in any event, you would have go on and deal with all the underlying factual matters you would not do it.  So that is why we do not see that that is an unlikely proposition.  But, in any event, their Honours accepted it for the purposes of discussion and they say:

What then is the position?  It is that UBS has sought and obtained a permanent stay against Telesto which it might not otherwise have done and would have had to defend the claims of the trust and Ms Marks in 2013 rather than now.

A small point, it is probably 2012 rather than now because the permanent stay was handed down at the beginning of 2013 but the discontinuance was in 2012 and the application for a permanent stay was ventilated in 2012 after the Singapore judgment.  But, in any event, they then go on:

As to the former, UBS has the benefit of the permanent stay of Telesto’s claims against it based on a res judicata.  As to the latter, UBS must do now what it otherwise would have had to do in 2013.

As a matter of legal theory, of course we do – UBS does have the benefit of the permanent stay of Telesto’s claim but it really is a theoretical benefit rather than a practical one if the underlying factual matters are, nevertheless, going to have to be ventilated and fought out in a fresh hearing.

EDELMAN J:   Can I just ask you about your submission about the likelihood of the stay being sought if all parties were not present?  Whose loss was it?  Whose loss do you say was actually alleged to have occurred?  Was it the trustees, or was it Telesto’s? 

MR STOLJAR:   Of course our first proposition is there was no loss.  But, if your Honour is asking me about the form of the pleading ‑ ‑ ‑

EDELMAN J:   Yes.

MR STOLJAR:   ‑ ‑ ‑ it seemed to be pleaded in slightly different ways.  One would need to do a close analysis of the New South Wales pleading and compare it to the Federal Court pleading.  But Telesto was the entity which invested in the Kazakhi bonds and incurred liabilities under the facility arrangements between it and UBS.  The trustee’s argument is that had an arrangement pursuant to which it lent certain securities to Telesto which Telesto could then pledge or otherwise deploy as securities on the facility.

So, the trust’s argument, as we apprehend it from the various pleadings, is that its loss was the loss of those securities which it made available to Telesto.  Telesto’s loss is the incurring of liabilities.  But one thing would appear to be certain and that is that there could not be two, as it were – there could not be a double‑dipping.  Either Telesto would recover its loss and would then be in a position to make good any losses the trust had or the trust would recover its loss.

EDELMAN J:   I appreciate that.  I am just wondering if there could be some real merit, for example, in proceeding only against Telesto for a permanent stay even knowing that there might be a claim looming by the trustee.  The trustee’s loss might be characterised, for example, as reflective loss and irrecoverable. 

MR STOLJAR:   Well, that might be a potential argument that one might have but the only way one would get to the outcome of that argument would be by having the very complex and factual contest that one is seeking to avoid by raising the res judicata.  Then I think I come to about line 55 in paragraph 108 where it is said:

As to the latter, UBS must do now what it otherwise would have had to do -

We see that proposition really as at the heart of the majority’s reasoning, that UBS only has to do, on their Honours’ view, what it would otherwise have had to do in – perhaps it should be 2012.  Their Honours say:

We are unable to accept these circumstances as involving any material unfairness to, or oppression of, UBS.  The fact that the primary judge must be inferred to have reached a contrary view indicates error.  Again, if it is necessary to identify the error with precision it is either that the primary judge did not consider the unfairness to or oppression of UBS that was involved in the particular circumstances of this case, or that it was not open on the facts as found to characterise the circumstances as involving an abuse of process -

Now, our friends seek to characterise that as two discrete errors expressed disjunctively.  We would say that really what the majority is doing there is saying the factual matter – the important factual component is that UBS majority says it must do now what it otherwise what it would have had to do in 2013.  Their Honours are then saying one way to look at it is that the primary judge did not consider the unfairness to or oppression of UBS or that it was not open on the facts as found. 

In either event, they seem to be saying that because there was no determination of those factual matters there could be no unfairness or it was simply not open on the facts to characterise the circumstances as involving an abuse of process.

Then we will come to why we say that conclusion was erroneous in a moment, but if I can just complete this survey by taking your Honours to 109.  Your Honours will observe that the majority described that error by the primary judge as an error of principle and say that the orders of the primary judge had to be set aside.  Then their Honours say in the third sentence of 109 at about line 17:

In lieu thereof, UBS’s interlocutory application, at least insofar as it sought summary dismissal on the grounds of res judicata, issue estoppel, Anshun estoppel and/or abuse of process must be dismissed.

So that was the – having set aside the primary judge’s orders the majority of course then – well that leaves the application, so the majority either remits it to the primary judge or resolves it itself. 

Now, because as we read it there was this error or principle, namely, that it is simply not open because there had been no hearing on the merits, their Honours were able to in effect resolve the underlying application in a single sentence by saying that the application must be dismissed.  If there is a principle of the kind that I have just described then the operation of that principle must mean that the application is dismissed.  That seems to be the reasoning process in the third sentence of paragraph 109.

Could I then come to the propositions which we have endeavoured to articulate in our outline and we say the brief oppositions to some extent overlap.  Our first proposition is that that approach is inconsistent with the overarching purpose of the relevant practice and procedure provisions, more particularly section 37M.  Could I just remind your Honours that that provision is to be found conveniently behind our written outline – if that is to hand it is in annexure A.  I know your Honours are well familiar with it but, as your Honours recollect the overarching purpose is to facilitate disputes:

(a)according to law; and

(b)as quickly, inexpensively and efficiently as possible.

If I could remind your Honours of (2)(b), the overarching purpose includes:

(b)the efficient use of the judicial and administration resources . . . 

(c)the efficient disposal of the Court’s overall caseload;

(d)the disposal of all proceedings in a timely manner -

Subsection (3) is also significant:

The civil practice and procedure provisions must be interpreted and applied . . . in the way that best promotes the overarching purpose.

Really, our simple proposition is the one we have endeavoured to articulate at paragraph 5 of our outline, that the overarching purpose cannot be achieved by allowing a circumstance in which one or more of a number of plaintiffs, all controlled by the same individual, is permitted to discontinue proceedings, then to stand back and allow those proceedings to continue to a final judicial determination and then, depending on the outcome of those first proceedings and without any explanation, commence fresh proceedings raising the same facts.

NETTLE J:   You mean continue to a final determination of the stay application?

MR STOLJAR:   Yes.

NETTLE J:   Not the merits?

MR STOLJAR:   I mean a continuation – those proceedings were permanently stayed and were thereby concluded.

NETTLE J:   So they were permanently stayed as against the other parties because of the res judicata, the consequence of the Hong Kong proceeding – the Singapore proceeding.

MR STOLJAR:   Yes.  But if your Honour is putting to me that there was no hearing of the underlying factual issues, that is absolutely correct.

NETTLE J:   There has been no dealing yet with the trustee’s claim.  It has just not been litigated.

MR STOLJAR:   But just as in Batistatos and in Walton v Gardiner, those underlying claims have not been litigated either.

NETTLE J:   But were they not the subject of stays as against the very parties seeking to relitigate?

MR STOLJAR:   Well, Walter v Gardiner was.  Batistatos, there had been no earlier proceedings so there was no ‑ ‑ ‑

NETTLE J:   There was just delay.

MR STOLJAR:   Yes, just delay.  That is so.  There is no case that we are aware of that is on all fours with the precise factual circumstances arising in this case, but we would say that the categories are not closed and that the search for a case that is precisely on all fours may not be a productive one.  We would respectfully submit the issue is has the overarching purpose been achieved by the conduct of the parties to the Federal Court proceedings below?

Our second proposition is that the majority of the Full Court did not pay regard to whether the Argot Trust bringing and maintaining the proceedings below would, in all circumstances, bring the administration of justice into disrepute.  Their Honours did not appear to give consideration to that issue.  It certainly loomed large, as your Honours will recollect, in the decision of Justice Dowsett.

GORDON J:   Does that add anything to 37M considerations?

MR STOLJAR:   No, it is really picking up the observation in Tomlinson about when abuse will arise.  It is a slightly different point from the 37M point.  And, really, we make a very similar proposition that, again – and I am starting to repeat myself – but if one of a number of plaintiffs is permitted to resume or recommence proceedings in another court in another State, then we would say that there is a risk – well, picking up the words of Justice Dowsett, below, the administration of justice could be perceived as:

inefficient, careless about the incurrence of cost by the parties, and profligate in the application of public moneys.

Justice Dowsett, as your Honours recall, made that observation at paragraph 17, ab 2, page 835, point 20.

Our third point is that the approach taken by the majority depends upon the identification and application of a rigid principle of law, namely, if one of the original plaintiffs brings fresh proceedings against the same defendant and raising the same facts, it is not open to a court to find the proceedings were an abuse.

We say that proposition not only works an injustice in the present case but it is inconsistent with the teaching in Tomlinson to the effect that abuse is flexible and capable of being moulded to the facts of the case.  There is no reason, in our respectful submission, to read Tomlinson in a confined way.  Abuse is, as is clear from Tomlinson:

capable of application in any circumstances in which the use of a court’s procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute.

KEANE J:   And their Honours do not refer as being relevant to the circumstance that the various parties that are being moved around the chessboard are controlled by the one mind and that their benefits of any litigation to one or other of those parties are extricably intertwined.

MR STOLJAR:   That is so.  And that adds – well, that is both relevant to the rigid principle and also to the question of whether the administration of justice has been brought into disrepute.  That is so.

EDELMAN J:   Is the principle necessarily a binary one?  In other words, is it really a question, if one is looking at 37M as a paramount consideration for abuse of process, as to whether a court would – in this case, the Federal Court, was required to say, well, it would be an abuse of process to bring this litigation or, alternatively, you have got an absolute right to bring it?  Or is there some position in the middle, such as whether or not security of the costs might be more likely to be awarded or other conditions might be put upon the ability to litigate?

MR STOLJAR:   Well, the court’s ability to regulate the processes before it is infinitely various and factors of the kind that your Honour has just put to me are no doubt capable of being considered.  But, at the end of the day, in the present case one has a circumstance in which – well, we would just say a party discontinuing and then stepping back and allowing other related parties to continue with the claim and then bringing the claim in a different court is not a matter for security per se.  It is a matter in which it just, inevitably, is prosecuting a claim in a way which is productive of delay and inefficiency, contrary to 37M.  But those circumstances are so unusual and so exceptional that we would submit that, while as a matter of theory safeguards of the kind that your Honour has put to me may be available, they would not be appropriate in the present case.

EDELMAN J:   But, you do not say it is just the mere fact of discontinuance and recommencing that would be an abuse of process.

MR STOLJAR:   No.  If one could imagine a circumstance – well, one could imagine at least two things – one is where the detailed affidavit was brought forward explaining what had happened.  That might rebut the finding of abuse of process.  That is one possibility.  Or, secondly, the temporal lapse could be in short compass.  So, for example, if you – to take a facetious example – discontinued on the Monday and started again on the Wednesday, it may be that there would be no abuse.  It is not the discontinuance of itself and without more.  It is the discontinuance in all of the contexts here and, more particularly, discontinuance followed by resuming the litigation some years later elsewhere.

KIEFEL CJ:   Is this what Justice Dowsett was referring to when you said that abuse is to be found in the effect of the conduct rather than in the conduct itself?

MR STOLJAR:   Yes, that certainly seems to be making a very similar point, your Honour, if not the same point.  Then, the only last point I wish to make is really one that your Honour Justice Keane has already put to me and I will make it very briefly.  But, fixing upon the label of hearing on the merits is not, we would respectfully submit, help for one in this circumstance.  There had been a hearing on the merits in the sense that one issue had been determined on the merits but, of course, as your Honour Justice Nettle has put to me, there had not been a hearing of the underlying factual matters.

What occurred at the hearing of the first proceedings is simply one matter to take into account.  Attaching the label “hearing on the merits” to it, or otherwise, is not determinative.  It is not always easy to attach that label.  There had, of course, just by way of factual background, been a hearing on the merits in Singapore, admittedly with different parties, but we would respectfully say that placing undue attention on the question of whether the label “hearing on the merits” could be attached led the majority into posing the wrong question – the true question being the one emerging from Tomlinson – namely, whether there were circumstances, or any circumstances, which would render the continuation of the proceeding unjustifiably oppressive or which would bring the administration of justice into disrepute.  Unless there are any further matters, those are my submissions, may it please the Court.

KIEFEL CJ:   Yes, thank you.  Yes, Mr Reynolds.

MR REYNOLDS:   If the Court pleases.  I assume your Honours have my synopsis before you.  In general terms, the primary jurisprudential issue raised by this case is where there is a situation where there is no res judicata, issue estoppel or Anshun and a party asserts an abuse of process because it is duplicative of earlier litigation, what are the principles that apply in that particular situation.  The more specific issue, however, is when, if ever, will it be an abuse of process for a plaintiff to recommence proceedings, having previously been granted unconditional leave to discontinue by a court with the defendant’s consent.

Now, the way this appeal has been structured, your Honours will see it particularly from the grounds which are the subject of leave at pages 877 to 878 of the appeal book, is that what UBS does, what the appellant does, in ground number 2 on page 877 is effectively to wrap themselves in the mantle of six points raised by the dissenting judge in the Full Court and in ground 3 they add a couple of matters which were rejected by all of the four judges below.

We submit that there are two main problems with the appeal.  The first is that when one examines each of those eight matters said to ground an abuse of process, that they are all highly problematical, and your Honours will see paragraphs 5 through to 12 detail the specific difficulties ‑ and I will be coming to those in a moment – with each of those points.

The second difficulty I submit is an even more fundamental one, and it is this, that it will be extremely rare, and it may be it would never be the case, for a defendant successfully to assert an abuse of process where that defendant has consented to unconditional leave to discontinue being granted to the plaintiff and where the court has granted leave to discontinue unconditionally we submit that it will be very, very difficult for a defendant to assert that simply by recommencing the proceedings the plaintiff is engaging in an abuse of process.

Now, it is that second point that I want to focus on to begin with and in order to make good that point can I take your Honours ‑ your Honours should have a small hand‑up we have provided, the front page of which refers to the Uniform Civil Procedure Rules.  These are the ones applicable in the New South Wales Supreme Court and were applicable in the discontinuance application before Justice Ward.  Your Honours will be familiar with the basic format of this because the superior courts all over this country pretty well have rules in these terms.

The effect of rule 1 is that – or the substance of it – is that a plaintiff can discontinue, with the consent of the defendant, or with the leave of the court.  Sub‑rule (3) – this is in rule 12.1 – talks about terms.  There is also reference in rule 12.3(2) to the terms of consent.  And, it is also important to stress that there are two terms that are very commonly utilised where there is leave to discontinue.  The first is – and I will come back to this – that the discontinuing plaintiff is ordered to pay the costs of the proceedings.

The second thing is that the other very common condition that would be sought by a defendant is a condition that the plaintiff not be able to bring any further proceedings.  There is a common understanding that – and I will come to this in a moment – that if there is a discontinuance, no further proceedings are possible.  And, the judge who is dealing with the application to discontinue has a broad discretion as to the terms of the discontinuance.

BELL J:   Justice Ward, here, was not dealing with an application to discontinue by way of a notice of discontinuance under rule 12, was she?  Was this not an application to amend the pleading and her Honour granted leave and the amended pleading ‑ ‑ ‑

MR REYNOLDS:   Your Honour, it was both. 

BELL J:   Yes.

MR REYNOLDS:   And it was treated – this is appeal book page 446 – there is repeated reference to discontinuance on that page.

BELL J:   Right.

MR REYNOLDS:   It did two things.  It dropped out plaintiffs 2 and 3.  Plaintiff 1 remained and wanted to amend its case.  So, it is ‑ as noted on page 446 which is where there is a discussion about the appropriate conditions – it is, certainly in substance, a discontinuance.  It had to be because you have got two plaintiffs dropping out.

BELL J:   I understand what you say when you say it was in substance but you have been directing our attention to rule 12 governing a discontinuance by way of a notice and that is the only matter I am raising with you, Mr Reynolds.  I think it ‑ ‑ ‑

MR REYNOLDS:   Yes, your Honour.  There was not a notice.  But, these things ‑ ‑ ‑

GORDON J:   Do you regard this as discontinuance by leave, then?

MR REYNOLDS:   I am sorry, your Honour?

GORDON J:   Are you treating it as discontinuance by leave?

MR REYNOLDS:   Yes.

GORDON J:   Under rule 12?

MR REYNOLDS:   Not necessarily pursuant to rule 12.  But, actually, it would be – with the leave of the Court, under 12.1(1)(b) – but, in this case, there was no notice so that is a matter of form which does not alter the substance of the application which was one to discontinue the proceedings.  It had to be, in substance, a discontinuance.

It was understood, if your Honours go back to the transcript at page 446, that it was a discontinuance, that there needed to be leave.  There is reference to the cost consequences and my learned friend deals, and we will come to this in a moment, with the cost consequences of the discontinuance.  So it would be to ignore the whole of the substance of what is happening to treat this as being anything other than a discontinuance.

KIEFEL CJ:   So the result of that would be, you would accept, that neither Mr Tyne nor the trustee, at least putting Ms Marks to one side, could try to run the claims that were later brought in the Federal Court.  They could not pursue those in the New South Wales Supreme Court.  Is that the effect?

MR REYNOLDS:   Quite the opposite, your Honour, because if you go to rule 12.3 - this is the point that I am making - it states in very clear terms, in subrule 1, that a discontinuance:

does not prevent the plaintiff from claiming the same relief in fresh proceedings - 

unless, of course, the terms of the discontinuance were that, for example, an undertaking was extracted which meant that the plaintiff could not bring those further proceedings.  These provisions and the notion of discontinuance is one that is, we submit, very well understood in the profession.

There is a case – probably the only case that I will be taking your Honours to, which your Honours have a copy of - called Kronprinz (1887) 12 App Cas 256 and this case is referred to repeatedly in this context. If I can take your Honours to pages 259 to 260 at about point 6 on 259 - this is in the context of the discontinuance - Lord Halsbury says that the two solicitors who are entering into this arrangement:

must be taken to be familiar with the effect and meaning of the forms which they were using. 

At the bottom of the page, that:

they deliberately . . . adopted language which can only be used if it is the intention of the parties to leave themselves at large so as to reassert their rights if they please.

Further down the page, at about point 4, it refers to the form adopted, that there is an:

inference that so far as the instrument itself is concerned it was intended to leave the parties free to bring a fresh action or to do that which is equivalent to bringing a fresh action, namely, to make this claim . . . obvious inference which is to be drawn from . . . the plain construction of the language which they have used -

Over to 262, Lord Herschell makes – this is at about point 3 - the obvious point:

that an order for discontinuance does not of itself operate as a release or an extinguishment of the claims, or in any other way bar further proceedings. 

Further down the page at about point 7 he refers to:

that there shall not be a bar ; because not merely does the fact of the plaintiff discontinuing not operate in any way as a bar, but the judge’s order to discontinue – unless it were made a condition of the discontinuance that no other action should be brought – would not operate as a bar.

KIEFEL CJ:   Accepting, Mr Reynolds, that whilst Mr Tyne and the trustee may not have sought to continue the proceedings that they said were discontinued but that, as you point out, they could bring fresh proceedings because their claim was not extinguished, if they brought fresh proceedings in the Supreme Court of New South Wales is not the question whether that would have been viewed as an abuse of process?  It is a quite different question from extinguishment of the claim.

MR REYNOLDS:   Yes.  I am saying that it would be extremely difficult, after they had been granted leave, to discontinue, the whole purpose of which, everyone knows, is ‑ ‑ ‑

KIEFEL CJ:   But Mr Reynolds, you are viewing, are you not, the question of whether there is an abuse of process as a question which is to be determined simply as between what the parties thought, what messages were given, whether it was reasonable, whether it was fair?  Abuse of process involves much wider considerations about the conduct of litigation objectively viewed, does it not?

MR REYNOLDS:   Certainly, but we start with – and this is, I submit, an important matter – not only with what the rules say on this point but you here have rules – and this is critical – which are themselves drafted so that the judge presiding over the application is to deal with the future consequences of any further proceedings and needs to deal with that at the point of discontinuance and where a party who wishes to be protected as a defendant from further proceedings needs to put their hand up at the point where the plaintiff is seeking to discontinue and say, for example, I oppose it unless there is an undertaking not to bring further proceedings or unless there is an undertaking to provide a covenant not to sue the defendant.

If that does not happen, the effect of this and the common understanding within the profession is that the plaintiff will be free to bring further proceedings and that merely to commence further proceedings would not of itself amount to an abuse of process because the court has granted leave to discontinue with the inevitable consequences and the defendant has consented to these things happening.

That is not to say – to pick up what your Honour the Chief Justice is saying – that if a party were, as in Batistatos, to delay the recommencement of proceedings for 29 years – now, this Court split four/three on whether that amounted to an abuse of process on delay grounds alone - of course there might be other factors which might create an abuse of process, the point I am making and perhaps struggling to make is that simply ‑ and this is my learned friend’s basis, I understand – his primary point is okay, in those circumstances, if leave to discontinue has been granted, by consent, unconditionally, he says to recommence those proceedings is an abuse of process and we submit that that is going to be a very, very difficult proposition to sustain given ‑ ‑ ‑

KIEFEL CJ:   Forgive me, but in the process that occurred, where was the point of conditioning?  When does this arise because there is no order made - in the process which actually occurred?

MR REYNOLDS:   That is my point, is that there is not any condition extracted from ‑ ‑ ‑

KIEFEL CJ:    But where was the point where UBS were to say, “At this point we ask your Honour to make an order conditioning”?

MR REYNOLDS:   At page 446 of the appeal book.  There my learned friend deals with the question of what the appropriate conditions are for the discontinuance.  What does he do?  Well, we will come to this a bit later, but very properly he says, well, look, there is a costs issue and he refers to the presumptive operation of a rule which is at page 4 of our hand‑up.  Actually he does not nominate it, but he is talking about Part 42, rule 19, which talks about if no order is made then if there is a discontinuance then the plaintiff will have to pay the costs of the proceedings unless an order is otherwise made by the judge.

But this framework is a regulatory framework which I submit impacts very closely on any consideration of whether or not there is an abuse of process, principally because the way these rules are structured is to make it incumbent upon the judge that is considering leave to discontinue to deal with the question of future proceedings.  That has been said in some cases.

It is also incumbent on a defendant who wishes in the future to object to any fresh proceedings to have that matter addressed at this point, that is, at the point where the plaintiff is seeking to discontinue the action.  Effectively, the judge by either making an order or imposing a condition will determine first of all whether there is any form of res judicata, et cetera, and second of all, the extent of it.

The cases all say – well, not all say, but many of them say that the judge has a broad discretion to deal with the question of whether further proceedings will be permitted.  If the judge does impose such a condition, then that condition will govern the taking of further proceedings.  If, on the other hand, the judge does not impose such a condition then, at least prima facie, that is going to mean that the plaintiff will be able to commence fresh proceedings or, put another way, it will not ipso facto be an abuse of process to recommence those proceedings.

Now, in this case here – and I will come back to this in a moment – it is a fortiori of that position because not only did the judge grant unconditional leave in substance, but the defendant, as it says in submissions, consented to that.  Now, it is not just ‑ ‑ ‑

KEANE J:   Mr Reynolds, can I just ask where does the judge grant unconditional leave, in substance?

MR REYNOLDS:   In substance, at page 237 – sorry, 447, my learned friend rightly corrects me – refers to, in order 2, to the filing of an amended summons.  Now, if one goes to that amended summons one sees it in the next appeal book, volume 2, and at page 20, line 23, the number of plaintiffs are reduced from three to one.  At page 454, at line 30, two plaintiffs are crossed out and, as it were, disappear.

EDELMAN J:   You are basically saying that the giving of leave so far as necessary to serve an amended summons is also the giving of leave to discontinue?

MR REYNOLDS:   It has to be.  Also, at 483, in the middle of the page.  And that is how everyone understood it and I ask, rhetorically, how else could it be understood?  You have two plaintiffs disappearing from the proceedings; that has to amount, in substance, to a discontinuance.

KEANE J:   And withdrawing the allegations they had previously made?

MR REYNOLDS:   Your Honour, that is not what a discontinuance is, with respect.

KEANE J:   Well, no.  But this discontinuance is one that, as I understand it, you are saying was effected by the delivery of an amended statement of claim in which allegations were withdrawn?

MR REYNOLDS:   No.  The discontinuance was effected by the grant of leave by the judge, allowing that – well, the orders are at page 447.  And your Honours will also have been given – it was not reproduced in the appeal book – the actual reasons are in this document, two pages, where Justice Ward deals with it.  It is not just, as it were, a jurist’s point about the construction of the rules, the way they work and the common understanding of all litigation lawyers.  It is one of the first things, obviously, anyone engaged in civil litigation has to know about.  And it would be absurd to suggest that my learned friend on my left, being one of the more eminent counsel in the Commonwealth, would not have understood the consequences of it or his equally eminent firm of solicitors instructing him.

But in our submissions your Honours will see that I try to build on this proposition – this is in paragraph 1 ‑ under the heading of whether or not it is fair in these circumstances, that being an important integer, for a defendant in this type of context where leave has been granted by consent to take the point when later proceedings are filed that those later proceedings are an abuse of process.

KIEFEL CJ:   Mr Reynolds, how does that assist this Court determining the question?  The question is:  was there an abuse of process?

MR REYNOLDS:   That is right.

KIEFEL CJ:   Why are we, then, having to determine a question whether it is fair to raise the question whether there was an abuse of process, which is almost to say it is an abuse of process to suggest there is an abuse of process?  I mean, you seem to be getting somewhat away from the central question.

MR REYNOLDS:   No, your Honour.  In my respectful submission, the key integer and the cases of Timbercorp or Tomlinson or both point up the importance of the court focusing on the principle of whether or not there is any unfairness to grant a stay.  If there is unfairness to grant a stay, then that is a critical factor on whether or not your Honours would find that there was an abuse of process or whether ‑ ‑ ‑

KIEFEL CJ:   That is rather different from the question of whether it is fair for a defendant to raise a question.

MR REYNOLDS:   No, your Honour, with respect, it is precisely the same question and that is that we submit that it is always a relevant factor on whether there is an abuse of process.

KIEFEL CJ:   Yes, but fairness in relation to whether a stay should be granted focuses on the effects on the party.  Your submissions deal with that separately.  This just seems to me to be so far away from the issue and we are spending a lot of time on it, it seems to me.

MR REYNOLDS:   Well, I submit that it is critical integer in your Honours’ consideration of whether there is an abuse of process and, with very great respect, I need to press this submission, your Honour, because it will lead in due course to your Honours holding that no abuse of process can be found here because to find an abuse of process would be grossly unfair to Mr Tyne.

BELL J:   Mr Reynolds, you point to your opponent as, as it were, urging a rule respecting the circumstances in which an abuse will be found to have occurred and you now seem to be developing a submission about circumstances in which it will never be right to find an abuse to have occurred.

MR REYNOLDS:   Well, rarely.

BELL J:   Are we more concerned with looking at the analysis made by the Full Court of the reasons of the primary judge in the exercise of the primary judge’s determination of whether, in the events that occurred, there was an abuse and in that regard do you suggest that Justice Greenwood was not mindful of the fact that the proceedings had been discontinued before Justice Ward on the part of the trust?

MR REYNOLDS:   Your Honour, the way I am dealing with the appeal is, as I said at the outset, to focus on the grant of leave and the grounds which are the subject of leave, which your Honour will recall granting leave to.  They, as I said, really amount to eight points, six of which are to pick up the approach of the dissenting judge and then to pick up two extra points, seven and eight, which were not embraced by any of the four judges.

As part of responding to that – and as your Honour can see from the document, I am going to respond to each of those points extensively – I am taking the more global point in opposition to those eight points, which is that notwithstanding the strength of any of those eight points, your Honours would not hold that there was an abuse of process here because it would be contrary to the regulatory regime and the Supreme Court Rules about discontinuance and it would also be grossly unfair to my client and the cases all focus on that point.

So what I am doing is – and the reason I have put it up front is that I will be coming back to this point again and again under each of those eight points, so it reappears ‑ ‑ ‑

KIEFEL CJ:   I hope you will not be repeating it at each point, Mr Reynolds.

MR REYNOLDS:   Well, your Honour, touching on it very briefly under each of those ‑ ‑ ‑

KIEFEL CJ:   I think we can see the argument that you have raised in relation to the first point.  Is there anything that you need to add further to it that would not be repetitive?

MR REYNOLDS:   Your Honour, I have not – I do need, at least, to go through that for a minute and ‑ ‑ ‑

KIEFEL CJ:   I am sorry – go through?

MR REYNOLDS:   This paragraph 1, briefly.

KIEFEL CJ:   Have we got past the first two lines?

MR REYNOLDS:   Your Honour, I hope so.  But, your Honours will see there the gist of the submission which is made in general terms.  The first, (i), can I dwell on just for a moment and that is that Justice Ward must be taken, even though the leave was not opposed – your Honours know there are cases that say even if a party does not oppose an application, the judge is still duty bound to consider the issue.  Justice Ward must be treated as having considered whether or not, inter alia, it was just cheap and quick to grant unconditional leave, that is, without any of the usual conditions about further proceedings.  Everyone there – this is (ii) – must have known this.  The defendant, that is UBS, consented and acquiesced in those further proceedings ‑ ‑ ‑

KIEFEL CJ:   I think you have made that point. 

MR REYNOLDS:   ‑ ‑ ‑ and there would be possible substantial injustice that you end up having another hearing – this is (v) – whereas you could have had just a short hearing before Justice Ward on discretion.  The later hearing on abuse of process will delay things.  It will generate extra costs and we submit that, rather ironically, it is UBS that could and should have raised this point at the point of discontinuance and that it is not open to them to assert that, not having done that previously, if there is a…..it means – and this the point that has been raised earlier – there is no determination on the merits of the plaintiff’s case.

We go so far as to say that if one were to hold that the further proceedings could not be brought despite the earlier consent, despite the earlier leave, despite the earlier unconditional leave, I put it as high as this, your Honours, that that would bring the administration of justice into disrepute if that is what has happened.  Your Honours can see what I am doing.  I am turning my learned friend’s principles that he adopts back against him and I am saying ‑ ‑ ‑

KIEFEL CJ:   I think we could deduce that for ourselves, thank you, Mr Reynolds.  

MR REYNOLDS:   Thank you, your Honour.  On this question that your Honour Justice Nettle dealt with about an adjudication on the merits, there is an article – can I give your Honours just the reference – by Justice Handley – I have not got the title – it is the current editor of Spencer Bower in volume 118 of the Law Quarterly Review 397.  At pages 403, point 6, 404, point 2 and 405, point 3, he stresses the importance of that in the context of whether or not the court holds that there is an abuse of process.

GAGELER J:   What is the significance of the determination on the merits?  What is the significance?

MR REYNOLDS:   That it is a critical integer.

GAGELER J:   Why?

MR REYNOLDS:   Well, because otherwise it means that what is assumed to be ex hypothesi an arguable claim never gets to be determined at all, as happened here, and a lot of these principles depend, as your Honour appreciates, on broader questions of justice and the view has been taken that that is very important as to whether or not it would be just to find an abuse of process in these circumstances, and that is one of the reasons that Justice Handley underlies it – former Justice Handley – in the context of – at that point I think it was 2002 - recent developments in the English case law.  He applauds them and says we are getting back here now to this important factor of whether or not there has been an adjudication on the merits and he welcomes that particular development.

GAGELER J:   Do you dispute the Tomlinson formulation?  What you are looking for is oppression to the defendant or the bringing of the system of justice into disrepute.  Neither of those in their terms would necessitate some prior determination on the merits.

MR REYNOLDS:   Your Honour, there is more than one factor.  If one goes to the Timbercorp Case – I will just give your Honours the reference - the notion of injustice is mentioned at paragraph [73] in the plurality.  Any talk about oppression – and this is paragraph [69] talks about unjustifiable oppression and, as your Honour appreciates, there is a degree of play in that concept, and paragraph 24 of Tomlinson talks about the importance of abuse of process being informed by notions of fairness.

Now, I submit that Tomlinson of course is technically obiter because I think the finding was as to there being an issue estoppel.  But in jurisprudential terms – and I will come to this briefly a little later – there has not, I submit, yet been a full articulation – that is not a criticism – by this Court of exactly how abuse of process works in the precise context of duplicative litigation, and I am going to submit in due course ‑ ‑ ‑

GORDON J:   That is because, Mr Reynolds, there is no hard and fast rule.  One has to look at the particular facts, which is what I think we should focus on, if I may be so bold as to suggest.  As I understand your case, it is this:  under the rules, my client was entitled to discontinue the proceedings and it did so.  It was entitled to recommence those proceedings under the rules.  The question is whether that act which was permitted under the rules and ultimately led to the proceedings being issued in the Federal Court is because of its peculiar circumstances and abuse.

The things that are put against you are, in addition to those matters which you have sought to answer by reference the rules, the two‑year delay, the lack of explanation, what occurred in Singapore – I mean, there is a whole range of matters.  I, for my part, would be gratefully assisted by you addressing those issues.

MR REYNOLDS:   Can I trouble your Honours for one further minute before I deal in detail with all of those matters and that is in relation to (iv) in paragraph 1, and that is that by not raising the question of opposition to further proceedings before Justice Ward UBS has effectively denied my client an opportunity to withdraw its request for discontinuance. 

Your Honour Justice Nettle has already pointed this up but we know that if there had not have been a discontinuance that my client would have been able to press on with the Supreme Court proceedings – there is no doubt about that.  Where the evidence, I confess, is slightly imperfect is that my client, being a litigant in person ‑ although a solicitor, not a litigation lawyer – does not have very clear evidence in an affidavit as to what he would have done if UBS had opposed the discontinuance at that point. 

But I do submit that it is clear that he has lost the opportunity, first of all, to have withdrawn the application or I should say the trustee has, but perhaps more importantly later events, I submit, make it reasonably clear that if that matter had been raised as the price of discontinuance before Justice Ward that the trustee, controlled as it is said by Mr Tyne, would not have given that undertaking.  Why?  Because we know that in due course, seven months – not years – after Justice Sackar’s determination the proceedings in the name of the trustee were recommenced at the beginning of 2014.

So it is important.  I am sorry if it is troubling your Honours, that my insistence on dealing with this is causing angst, but I submit that it is a very important point, both in terms of the general issue that your Honours are looking at and also that each of these points I have made in paragraph 1 are important in the present case.

The only other thing I would say before addressing each of the matters your Honour Justice Gordon raised with me is my learned friend talked about authorities.  We submit that so far as there is any authority – and I agree some of these are dicta and subject to qualification and not, as he says, directly on point – but such law as there is is all one way.

My learned friend refers to Walton v Gardiner and Batistatos.  He started this appeal in my submissions by saying the question we are dealing with is abuse of process by duplication.  They are abuse of process cases – those two - which are simply abuse of process by delay and they raise altogether different issues from the precise issue which your Honours are dealing with.  Again, I apologise and I am sorry to be so insistent but I feel that it is my duty to do so. 

KIEFEL CJ:   You do not have to keep saying that, Mr Reynolds. 

MR REYNOLDS:   All right, your Honour.

KIEFEL CJ:   We are perfectly happy to hear your argument.

MR REYNOLDS:   Your Honour, whilst we are ‑ ‑ ‑

KIEFEL CJ:   As long as you do not repeat yourself too much. 

MR REYNOLDS:   ‑ ‑ ‑ all still friends I will move on to the next point which is this issue of costs.   Now, the precise argument, and I mentioned at the outset that my learned friend wraps himself in the mantle, in effect, of the dissenting judge, but in paragraph 23 of his judgment, the dissenting judge makes the point that the effect of the trustee discontinuing the New South Wales Supreme Court proceedings was to increase the costs incurred by UBS in resolving the differences arising out of the relevant transactions, that is, that it is that discontinuance which causes the extra costs to be incurred. 

Now, if your Honours go to our synopsis, we take a number of points your Honours will see are listed there, that first of all we are not told exactly by either the dissenting judge or by UBS how it is that there are extra costs as a result of that discontinuance, and there was not any evidence before the primary judge of what those costs were or how they were made up. 

The third point we raise, your Honours have heard before, is that the time to raise the issue of costs in relation to either the original proceedings in the Supreme Court or, can I add, any further proceedings was before Justice Ward.  Justice Ward, as we have said, had a broad discretion to deal with the question of the costs of further proceedings or any costs occasioned or thrown away by the further proceedings and that was the time to raise it.

There was mention - this is at page 446 of the appeal book, of there being a presumptive costs order.  Now, one can argue, and I am not going to do it now, that Part 42, rule 19, which I have taken your Honours to, may or may not have operated here but the point is whether or not there was a presumptive costs order the time to argue about it was before Justice Ward and UBS has had its opportunity.

Fifthly, so far as lost costs are concerned, I do not understand my learned friend to have suggested in either his written or oral submissions that there were any costs that have been occasioned or lost other than the cost of the initial proceedings in the New South Wales Supreme Court and your Honours will remember that they were discontinued without even a defence being filed very early on in the proceedings. 

Sixthly, UBS sought no further condition in relation to costs before Justice Ward if we are talking here about any other costs other than the cost of the New South Wales Supreme Court case.  Seventhly, having consented to leave and having sought no further costs order, it is very difficult for UBS to complain about prejudice from additional costs now.

Eighthly, it is inconsistent with Justice Ward’s judgment because her Honour may be taken, I submit, in dealing with the grant of leave to have considered all relevant matters in relation to that, including the issue of costs and including matter such as the just, cheap and quick provisions in the New South Wales Supreme Court and (ix) is the point that I have already made.  So that is the first point.

I am sorry, over the page, at (x), the Federal Court proceedings will be dealt with by costs orders in that court and there is a presumption, we submit, that the costs of running a case in the Supreme Court, which is what would have happened if there had been no discontinuance, as your Honour Justice Nettle has noted, and the Federal Court are substantially the same.  Your Honours would not embark upon a process of suggesting otherwise.  So this point, we submit, comes to very little or nothing.

So far as the delay is concerned, again the ground is specified in volume 2 of the appeal book at the bottom of page 877 where there are references to particular paragraphs from the dissenting judge’s reasons.  Paragraph 23 of the dissenting judge’s reasons takes the point that the effect of the discontinuance was to delay the resolution of the dispute between UBS on the one hand and the trust on the other.

At paragraph 32 he makes the point that the delay, he says, is three or more years and that the case would otherwise have been resolved in 2013.  We submit that there are very grave difficulties with paragraphs 23 and 32 in that regard.  The point that seems to be made there is that the comparisons are to be made between two things.  The first is when the proceedings between UBS and the trustee would have been finalised if there was no discontinuance and it is apparently said that they would have come to an end in 2013.

The second integer or the second comparison is when the proceedings will now be resolved, given that there has been a discontinuance and recommencement and the point that is made is well, it is still not resolved in 2016.  Therefore, there is a delay of three or more years in the resolution of the proceedings.

Now, we submit that that has the difficulties we have summarised at paragraph 6, and that is that proposition has not been demonstrated, that is, as to why the proceedings originally would have ended in 2013 and why there is this difference of three or more years.  The second point is that we submit that that is just wrong.  If one looks at the original proceedings before the Supreme Court, at the stage they were discontinued no defence had been filed and no interlocutory steps had occurred. 

Now, to suggest that the proceedings would have finished in 2013 when Justice Sackar, presumably when he delivered his judgment in May of 2013, does not allow for first of all the fact, as your Honour Justice Nettle has said, that it is clear that there would have been no res judicata or issue estoppel or abuse of process that would have caught the trustee if Justice Sackar had determined it.

So, Justice Sackar, we can proceed on the basis - my learned friend does not dispute it – or the Supreme Court, some other judge, would then have had to deal with the hearing of the proceedings.  So that would have meant that all interlocutory steps would have had to take place, there would have had to have been a hearing and there would have been a wait, and we do not know how long any of these things would have been before a judgment was delivered.

GAGELER J:   Mr Reynolds, can we assume that a case of the same nature would be run as expeditiously in the Supreme Court of New South Wales as in the Federal Court?  I mean, you want us to presume something about costs.  What about time?

MR REYNOLDS:   Well, your Honour, I would leave it to your Honours’ judgment on that.

GAGELER J:   My simple point is if you start three years later you are going to finish three years later.  Is that not the only point here?

MR REYNOLDS:   Except that there are so many variables in this, your Honour.  You are talking about ‑ ‑ ‑

GAGELER J:   But it is not a huge point.  It is one of eight.  All I am suggesting is that it is quite an obvious point and it really cannot be taken very far.

MR REYNOLDS:   Taken very far against me?

GAGELER J:   Either way.

MR REYNOLDS:   Well, your Honour, I am glad to hear your Honour say that, if I may respectfully say so.  But unfortunately, as I have learnt to my cost, I cannot assume that there may not be a different view, but I hear what your Honour says and I will take that as an encouragement to ‑ ‑ ‑

KIEFEL CJ:   Mr Reynolds, could you please direct me to where the appellant relies upon delay as a major premise?

MR REYNOLDS:   Well, it is in the ground of appeal at the bottom of page 877 where there is an itemisation of each of these six points and it picks up what is said at paragraphs 23 and 32 of Justice Dowsett.

KIEFEL CJ:   I see.

MR REYNOLDS:   I have repeated to your Honours the effect I started off in paragraphs 23 and 32.

KIEFEL CJ:   I was looking for it in the submissions.  They do not seem to have picked up on it in their written submissions so much.

MR REYNOLDS:   No, but, your Honour, for the reason Justice Gageler said ‑ ‑ ‑

KIEFEL CJ:   Yes, yes, I understand.

MR REYNOLDS:   ‑ ‑ ‑ it is not difficult to see why.  If we go to point (iii), and I will take that as an encouragement to move more quickly, if I have not already been given that indication, if there is any delay the only delay, we submit, that one could point to would be the seven months between Justice Sackar’s judgment in May 2013 and the recommencement of the proceedings in January 2014, which we submit is neither here nor there.  I think, so far as points (iv), (v) and (vi), your Honours have indicated you are fully apprised of those matters.

So far as this notion of unduly vexing is concerned, again, to go to the relevant paragraphs my learned friend relies on, the dissenting judge at paragraph 23 uses the rather general expression “otherwise to vex UBS”.  At paragraph 17 he says that he can infer vexation where discontinued proceedings are recommenced. 

Now, your Honours see our points in paragraph 7, this is not specified; (ii) there is no finding of vexation other than by inference; (iii) there is no basis for inferring vexation merely from discontinuance, with consent and leave, and subsequent recommencement.  The inference has problems – can I make a couple of points there.  One is that UBS consented to unconditional discontinuance.  The other is that UBS sought no restriction on any further proceedings before Justice Ward.

At (iv) the majority found that UBS’ position was substantially the same as if there had been no discontinuance.  There has not been a challenge to that.  In relation to point (vi) Justice Greenwood does mention vexation at appeal book 794, point 57 - that is line 57 - but does not take it very far.  Seventhly, that Mr Tyne’s conduct, we submit, in discontinuing and recommencing cannot be “unjustifiably oppressive” – that is the point I think I raised with your Honour Justice Gageler earlier.  If there is a consent and no condition in relation to further proceedings were sought - and your Honours can see the next few points.

So far as manifest unfairness is concerned, again, paragraphs 23 and 32 of the dissenting judge’s judgment are mentioned in the ground of appeal.  At paragraph 30, at 23 the point that is made is that to allow current proceedings to remain on foot is to inflict manifest unfairness on UBS.  Now, particulars are given of that – threefold particulars in paragraph 32 of the dissenting judge’s judgment and he says three things.

First of all, he points to delay in the final resolution of the matter for three or more years; secondly, to inevitable additional costs; thirdly, to the inconvenience of having to deal with the matter again after lengthy litigation.  If your Honours go to our synopsis at (i), we have dealt with delay and costs previously so that really is doubling up. 

As to the inconvenience of dealing with the case again, your Honours see our various points there, all of which, your Honour the Chief Justice has noted, I have already covered to some degree previously and I will therefore not repeat those points again.  So far as ‑ ‑ ‑

NETTLE J:   Mr Reynolds, in the whole of that New South Wales proceeding, no defence was ever filed.  It never got further than that.

MR REYNOLDS:   It really was stopped in limine.  Now, dealing with the first point – I am sorry, the fifth point, which is this notion of waste of public resources, that picks up paragraph 23 of the dissenting judge’s judgment which talks about the waste of public resources inevitably associated with the duplication of proceedings and neither – the first point we make is that neither the dissenting judge nor UBS flesh that out at all and indicate why there has been a duplication. 

At (ii) as the majority pointed out the fact that you have – going to have a hearing now in due course – assuming we win this case, in the Federal Court rather than the Supreme Court does not create itself any duplication.  Your Honours know that (iii) the procedure discontinued very early.  If there is any duplication it is the result of UBS consenting to unconditional leave to discontinue.  In (v) Justice Ward granted leave - your Honours know that point - and (vi). 

The sixth point is bringing the administration of justice into disrepute and the key paragraphs here are – that assertion is made by the sitting judge in paragraph 23 at appeal book 837, line 19 but it is adumbrated at paragraph 32, appeal book page 840 where there is reference to the five things your Honours have already heard from up to now, namely, unfairness, delay, extra cost, inconvenience and waste of public resources. 

This is referred to at pages 851 to 853 and at 865, line 12 by the majority.  Your Honours will know the point that I am going to make and that is that this point by the dissenting judge is itself duplicative because it simply repeats the previous five points under this heading.  Your Honours know that we are submitting it to enable – I withdraw that – to allow UBS to assert an abuse in this case by reason of the further proceedings.  Your Honours say to hold would itself bring the administration of justice into disrepute.

Before I deal with points 7 and 8, it is convenient to deal with what I will call the “no explanation” point which your Honours will probably be pleased to hear is not dealt with in our synopsis.  Can I make, nonetheless, a few points?  The main point is – I withdraw that.  This is a point made, for example, in paragraph 9 of my friend’s reply, that we have not given any explanation for the discontinuance. 

That, with respect, is not quite right.  Your Honours are dealing here, of course, with a litigant in person.  No one suggests that he is a litigation lawyer.  There was an explanation given at page 617, at around line 50 – from lines 49 through to about 55 – where your Honours will see that the reason he gives for not having a concurrent case between Telesto and the trustee was really three things.  There are straightened financial circumstances.  Second of all, the extra expense of running an additional case on behalf of the trustee and also, thirdly, it was going to be more time consuming and remember here we are talking about a litigant in person trying to run his own case.

There was not any cross‑examination – and I make no criticism of that – I just note it – by UBS about that.  In particular there was not any suggestion made by Mr Tyne that that was not an adequate explanation or that in that respect and otherwise he did not have a good reason to discontinue.  So we submit that the point really has difficulties ab initio, as it were – that is, this notion of jumping up and down saying in general terms there is no explanation for the discontinuance. 

But can I make a series of other points very briefly?  The first is that when Mr Tyne, the trustee, did seek discontinuance, UBS consented and they took no point about a lack of explanation at that point of discontinuance.  We submit that that was the time – that is the usual time for explaining why you are discontinuing is at the point of explanation.  They did not seek any explanation at that point, and we submit it does not lie in their mouth to say that no explanation was given on a later application before Justice Greenwood.

Secondly, there was no need for Mr Tyne to explain his reasons for discontinuance when there had been a consent to that event by UBS and where the judge had granted unconditional leave.  UBS had not suggested previously that there was any insufficiency of explanation at the point of discontinuance.

Thirdly, every lawyer knows, particularly a litigation lawyer, that the usual reason for a discontinuance is to leave open the possibility of fresh proceedings.  That is what the Kronprinz Case says.  UBS should have known that, or at least its lawyers should be taken to have known that.

Fourthly, a failure to explain by evidence, as your Honours appreciate, is not itself a freestanding point in this context.  It is only a principle of evidence akin to Jones v Dunkel.  The actual leading authority on this point of not adducing evidence from a witness who has given evidence, as opposed to not calling someone in your camp, is Commercial Union Assurance Company of Australia v Ferrcom (1991) 22 NSWLR 389, at pages 418 to 419.

Fifthly, even where that principle would be applicable, the principle is that the court “may” draw the inference that such evidence on that point may not have assisted the party that called the witness.  Given the circumstances I have referred to in the last three minutes, we submit that the court would not draw any such inference.

Sixthly, UBS does not indicate what the inference is that should be drawn either in its favour or should not be drawn in my client’s favour.  Seventhly ‑ there are cases on this; if your Honours want a list, we can provide them – as your Honours would know, inferences of this kind, such as Jones v Dunkel, are rarely drawn against a litigant in person, particularly if it is an issue which had not been raised by the primary judge with him directly as to the need for evidence on a particular point.

Eighthly, my client is under no onus to explain any of this.  It is UBS that bears the onus of proof.  Ninthly, Jones v Dunkel and the Ferrcom equivalent cannot be used to overcome a gap in evidence and tenthly, and finally, this problem is likely to be a much greater problem for UBS than for my client and that is, if your Honours go to appeal book page 48 at paragraph 43, your Honours will see that UBS there talks about, or the solicitor, the deponent talks about UBS believing that as a result of the discontinuance there would be no further claims.

Well, one was going to say that and put that in issue, that understanding one would expect that there would be some evidence as to what UBS and/or its lawyers understood as to the consequences of a discontinuance.  We submit that if there are any inferences of the kind we are talking about, that an inference should be drawn against UBS because ‑ principally because as we have discussed, it is almost unthinkable to think that UBS, if they had sought advice, would have been told anything other than that if there is a discontinuance, then that there is a real possibility of future proceedings.

Can I deal with the final two points as quickly as I can, only because I am almost losing my voice.  The anti‑suit put in the grounds at page 878 quite generally, the orders that are referred to are found at appeal book 751, paragraph 198 at order 2 and I refer your Honours also to appeal book pages 421 to 426.

As your Honours already appreciate, even though this anti‑suit injunction covers the trustee, the trustee was not a party to the main Singapore proceedings ‑ those are the ones discussed that are determined by Justice Chong – and nor was Mr Tyne enjoined in his capacity as a trustee.

Justice Greenwood deals with this issue in appeal book 791, paragraphs 404 and 409.  He deals with abuse of process more specifically at paragraphs 413 to 424.  Without going to the detail of the reasoning of Justice Greenwood in the interests of time, he has not said that this is a matter of any real significance.

The majority make that point at paragraph 53 of their judgment, towards the end, paragraph 848 in the appeal book, where they say it is clear that the primary judge did not think that the Singapore proceedings could found any claim that there was an abuse of process.  If we go to my synopsis at (i), none of the judges below regarded this as significant and we submit they were correct.  Justice Dowsett did not adopt it, for example.

There is a discussion of these points – and I will mention it briefly – by other judges and these are in the appeal books, particularly Justice Ward at appeal book pages 93 to 103.  She refers to authorities on this point, including decisions of Justice Warren, and I would refer your Honours in particular to paragraph 109 where authorities that are against my friend, or at least do not assist him, are referred to.  At paragraph 111 there is mention of comity and at paragraph 113 she says that an anti‑suit will not warrant of itself a stay because it would be tantamount to “enforcement in this jurisdiction of a foreign injunction”.

Justice Sackar at appeal book pages 226 to 229 found there was no abuse of process, contrary to what my learned friend said earlier, by Telesto which one would have thought would have been an easier case for an abuse of process than the present one.  But he does not mention the anti‑suit at all in that context.  What he does mention is at page 228, line 53, the juridical advantage available in New South Wales.  He is talking about the Trade Practices Act claims.  Of course, Justice Greenwood refers to that also at page 793 at line 50.

There has not been – if we go back to (iii) - any error shown in this reasoning by these various judges, and we touch in (iv) on abuse of process by reference to Justice Sackar’s finding and we say that the court below was correct to have required a notice of contention but no error has been shown in that regard.  So this point, which appealed to none of the judges below, we submit, amounts to either nothing or a very, very small point indeed.

Similarly, your Honours see what we say about the Singapore 801 judgment, as it has been called.  Your Honours realise that the trustee was not even a party to those proceedings.  At that point, Mr Tyne was not a trustee.  There was not any contradictor.  There was not any claim by the trustee determined.  Contrary to what has been suggested in some places, it would not have been possible for the trustee to have brought a cross‑claim in those proceedings simply because the trustee was not a defendant.

The majority did not as it – the submission in paragraph 57 of the appellant’s submissions is that the majority overlooked this.  But we submit that they did take account of it, particularly at the end of paragraph 53, and in the other references which are in our note – that the primary judge did not regard that as a factor. There is – it must be a misprint – (iii) should read “particularly at [53]” not “[57]”.  I think I have covered ‑ ‑ ‑

GORDON J:   Can I ask one factual question, please, Mr Reynolds?

MR REYNOLDS:   Certainly. 

GORDON J:   In Justice Ward’s - or in the transcript we have which you took us to at appeal book 1 at page 441, Mr Stitt appearing for both clients says that they, in effect, seek leave to amend:

indicated the basis upon which we want to amend and we’ve followed the terms of your Honour’s judgment in that regard.

That is the judgment of Justice Ward.  Do you know what that is referring to?

MR REYNOLDS:   I think it is very oblique, your Honour, and very opaque.  I have thought about an answer to your question – your Honour’s question previously but I cannot take it any further than that.  It is to put it in a very general way but the important thing is everyone knows – knew and this is clear from page 446 that we were talking here about a discontinuance.  If the Court pleases, those are my submissions.

KIEFEL CJ:   Yes, Mr Stoljar, do you have anything in reply?

MR STOLJAR:   Yes.  Can I deal first with the question of terms attaching to the discontinuance?  My first point is that my friend relies on rule 12.3 of the Civil Procedure Rules.  The effect of that rule is that a discontinuance of itself and without more does not bar a plaintiff from commencing fresh proceedings.  In other words, the discontinuance does not operate to extinguish the plaintiff’s cause of action but nor does the rule, in our respectful submission, bestow some licence upon the discontinuing plaintiff to commence in perpetuity fresh proceedings in either that court or another court.  The rule operates within the broader parameter of the rules regulating abuses of process and, even if there had been literal compliance with the rules, abuse of process may still of course operate.

My second point is a closely related one.  It is not so much the discontinuance of itself and without more that gives rise to the abuse of process in the current circumstances, as I endeavoured to say I think in response to something Justice Edelman raised with me.  If, to take a hypothetical example, the discontinuance had been on a Monday and it had sought to be revoked or fresh proceedings issued or the discontinuing plaintiffs had sought to rejoin the proceedings on the Wednesday, one would not be asserting that there would be an abuse of process.  The abuse of process arises because of all the circumstances in the case that we have endeavoured to articulate in our opening.

My third point relates to Kronprinz on which my friend attaches some significance.  That relates or arises in different…..  It certainly does not arise in a circumstance of the kind with which we are presently dealing, namely, a circumstance in which two of a number of plaintiffs discontinue, leaving one plaintiff to run the proceedings and then allowing those two plaintiffs to sit back and await the outcome and then, depending on that outcome, resurrect the proceedings.  It is a much more conventional situation in which one party discontinues and then later on seeks to agitate factual matters.

Kronprinz does not establish some proposition that it is always open to a plaintiff who has discontinued to bring fresh proceedings agitating the same issues and even if it did, with the greatest respect to the teaching of the House of Lords, it is a decision from 1887 – that is over a century before the cultural change that was brought in with section 37.  I deploy the expression “cultural change”, drawing, of course, from the explanatory memorandum for section 37M, which your Honours will find in our list of authorities.

Very briefly, looking at page 446 that my friend went to on a number of occasions, I really just wish to draw your Honours’ attention to the observation of Justice Ward at line 15 on that page where, after I raised an issue about lodging a notice of discontinuance, which dealt automatically with the cost question, and said they may have to make an application, that is an application to discontinue rather than an application to amend and her Honour said to me:

Yes.  It seems to me it is not in your client’s interests to discourage them from discontinuing the proceedings.

I said, “No your Honour”, agreeing with the proposition that had been put to me.  One would reasonably infer to the extent it relevant or assist your Honours that Justice Ward was contemplating that that would be the end of any claims brought by either the trustee or Mr Tyne individually as against UBS by reason of the discontinuance.  It was certainly never suggested that something further would happen two years later.

KEANE J:   Mr Stoljar, can you help us with what is said at 441 by Mr Stitt at line 48, where he says - this is in conclusion, his support for the orders he was seeking:

there will be no overlapping.  The proceedings could then proceed just, quick and efficiently which is what we were actually working towards.

Are you able to help us with what that means?

MR STOLJAR:   I will endeavour to, your Honour, but with some reservation that one is peering back to 2012 and it is not always easy to discern precisely what might have been meant.  But as I read it, the overlapping is overlapping between the New South Wales proceedings and the Singapore proceedings and what was being contemplated was some fashioning of the New South Wales proceedings which might inhibit the overlapping and the proposition which was then being advanced was that the proceedings, i.e. the New South Wales proceedings, could then proceed just, quickly and efficiently. 

KEANE J:   I mean, one could be forgiven for thinking that what was being proposed were measures directed to the quick and efficient conclusion of both sets of proceedings without overlapping, that is to say without duplication. 

MR STOLJAR:   Yes, well that does appear to me the thrust of what was being put, as I read it, your Honour.  I am just reminded if it does assist your Honour - I am not sure it takes the matter much further, but just to give your Honours the reference - Justice Ward in her decision at page 141, line 50, that is paragraph 219 in volume 1 of the appeal book does make reference to the controversy – the degree to which if at all the controversy to be litigated in Singapore overlaps with the proceedings then before Justice Ward. 

GORDON J:   I asked Mr Reynolds is that what is – I know you are not Mr Stitt, but earlier on in page 441 where it talks about amendment in light of your Honour’s judgment?

MR STOLJAR:   Your Honour, I believe that to be the case but I would need to go back and refresh my memory about the amendment and Justice Ward’s judgment before I could answer that with any certainty but I suspect that may be what is being indicated.  The question of costs which was being debated at page 446 is the costs occasioned by and arising from the discontinuance.  Costs of that kind, contrary to my friend’s outline, costs – historical costs, I mean that is to say costs that have been incurred because proceedings were being carried on which have now been discontinued.  An order for costs in those circumstances would not normally regulate costs occurring later by reason of events, indeed, some years’ later as is the case here.

NETTLE J:   They were costs thrown away by reason of them bringing that proceeding against you.

MR STOLJAR:   Yes, and frankly there may not have been significant such costs here because the proceedings are being carried on by Telesto.

NETTLE J:   Then there was the amendment of the pleading.

MR STOLJAR:   Then there was the amendment.

NETTLE J:   Then there was the application permanently to stay the proceeding.  They were the costs incurred.  Your application permanently to stay the proceeding plus what you had incurred which had been thrown away and recouped plus such other costs as you incurred as against the party against whom you…..the stay.

MR STOLJAR:   Yes, your Honour said “and recouped”.

NETTLE J:   Well, not necessarily recouped, an order for recoupment.

MR STOLJAR:   Yes, there may have been some orders.  So there is the discontinuance – well, there is an amendment which had that effect – then there was the application which went before Justice Sackar which occupied quite a considerable amount of judicial resources and parties’ resources, as I

have indicated earlier, and then the proceedings culminated and then the new proceedings were started.

So there are costs associated with the proceedings being carried on for a year or so in the Supreme Court of New South Wales up to – between February 2012 and Justice Sackar’s decision in May 2013, and then we would say further costs associated with the new proceedings being commenced in Brisbane.

Sixthly, very shortly re the question of whether there was a three‑year delay or otherwise, the fact of the matter is the discontinuance was in early 2012, the new proceedings were commenced in 2014.  Whether one can precisely ascribe a particular period of time referable to the delay is perhaps of little moment.  The fact is that the party who conducts proceedings in that way is, inevitably and obviously, we would say, going to cause significant delay.

Re the question of – this is the seventh point – any explanation, the finding of Justice Greenwood in – from memory, it was about paragraph 420, I will just ask Mr Livingston to track it down – was that there had been no proper explanation for the – 421 – proffered by the discontinuing parties.  The word “proper” indicates that Justice Greenwood had regard to whatever explanation had been propounded and did not regard it as satisfactory.

The passages that my friend took your Honours to of Mr Tyne’s affidavit were of a high level of generality and one can well understand why Justice Greenwood arrived at the finding he did, but, in any event, there has been no challenge to Justice Greenwood’s finding, whether in the Full Court or here, until this morning.  Unless there are any further questions, those are my submissions in reply.  May it please the Court.

KIEFEL CJ:   Yes, thank you.  The Court reserves its decision in this matter and adjourns to 9.45 am tomorrow for pronouncement of orders and otherwise to 10.00 am.

AT 12.48 PM THE MATTER WAS ADJOURNED