Williams v State of Victoria
[2012] VSC 585
•3 December 2012
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2012 05437
| GEORGE LESLIE WILLIAMS AND OTHERS | Plaintiffs |
| v | |
| STATE OF VICTORIA | First Defendant |
| COMMISSIONER FOR TAXATION | Second Defendant |
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JUDGE: | ZAMMIT AsJ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 26 November 2012 | |
DATE OF JUDGMENT: | 3 December 2012 | |
CASE MAY BE CITED AS: | Williams and ors v State of Victoria and anor | |
MEDIUM NEUTRAL CITATION: | [2012] VSC 585 | |
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PRACTICE AND PROCEDURE – Stay of proceedings – Abuse of process – Similar proceeding in the same Court.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr A.G. Uren QC | Spicer Lawyers |
| For the Second Defendant | Mr S. Donaghue SC with Mr S. Sharpley | Clayton Utz |
HER HONOUR:
An application for summary judgment or stay has been made by the Commissioner for Taxation (the Commissioner) as second defendant in the current proceeding under Rule 23.01 or alternatively the inherent jurisdiction of the Court.
In the course of the hearing of this application, counsel for the second defendant submitted that the appropriate order was that the proceeding be stayed.
The Commissioner makes this application on the basis that the claims against him are an abuse of process as they are already the subject of an existing proceeding in the Court, namely the proceeding in which the Commissioner is seeking to recover an alleged tax debt owed by the first plaintiff George Leslie Williams (the recovery proceeding).
The current proceeding
The plaintiffs, George Leslie Williams, Roberta Williams and Dhakota Lee Williams, allege that the State of Victoria (the State) was negligent in that it failed to ensure the safe custody and welfare of Carl Williams and that as a result of the State’s negligence, Carl Williams was killed.
Paragraphs 1 to 39 of the statement of claim set out the claim in negligence against the State. At paragraph 14 the plaintiffs allege that in or around October 2008, Carl Williams commenced cooperating with the Victoria Police in relation to a murder investigation and charges.
The claims made against the State include that the State and/or Victoria Police agreed to provide certain financial benefits to Carl Williams and his family members.[1] Specifically, a payment of George Williams’ tax liability to the Australian Tax Office.[2]
[1]Paragraph 14, particular (c) of the statement of claim.
[2]Paragraph 14, particular (f)(i) of the statement of claim.
Paragraphs 40 to 46 set out the case against the Commissioner. The plaintiffs allege:
40.Further, pursuant to the agreement, the servants or agents of the first defendant, including the Victoria Police, agreed to pay and paid the tax liability of the first plaintiff to the second plaintiff (“the payment”) and the payment was accordingly in discharge of the said tax liability.
PARTICULARS OF PAYMENT AND DISCHARGE
(a)on 15 June 2009, the second defendant received $576,000 from Victoria Police;
(b)on 19 June 2009, the solicitors for the second defendant, Australian Government Solicitor, consented to orders dismissing the recovery proceedings that have been issued against the first plaintiff by the second defendant in respect of his tax liability;
(c)on 17 July 2009, a servant or agent of the second defendant wrote to the first plaintiff stating, inter alia:
“Payment of $576,000 was received in this office on 15 June 2009. The amount of $138,752.05 was allocated to the Integrated Client Account and $437,247.95 to the Income Tax Account. An amount of $251,042.28 general interest charged (GIC) was remitted from the income tax account on 3 July 2009. Note the account balances are nil.” (“the payment letter”).
41.On 28 July 2009, a servant or agent of the second defendant, wrote to the first plaintiff stating, inter alia, that the payment letter was “issued in error and that an amount of $574,296.90 remains outstanding.”
42.Subsequent to receipt of the payment letter by the first plaintiff, a servant or agent of the second defendant, returned the payment to Victoria Police (“the repayment”).
43.The said payment letter was not issued in error nor was the payment made by a servant or agent of Victoria Police to the second defendant made in error.
44.The repayment was unauthorised and without power.
45.As a result of the matters aforesaid, the first plaintiff has suffered further loss and damage …
AND THE FIRST PLAINTIFF CLAIMS PURSUANT TO PARAGRAPHS (40)-(44):
(a)A declaration that the repayment was unauthorised and without power;
(b)Alternatively, an order that the first defendant pay to the second defendant all amounts claimed against the first plaintiff by the second defendant and a declaration that the first plaintiff’s tax liability is discharged;
(c)An order that the second defendant pay all of the legal costs incurred by the first plaintiff as a result of the purported re-imposition of his tax liability;
(d)Any further or other order that this Honourable court deems fit.
The issues which arise out of plaintiffs’ pleaded case against the Commissioner are:
1.What agreement, if any, was in place between the State of Victoria and Carl Williams for his police cooperation and what benefits were agreed upon between Carl Williams and the State of Victoria;
2.whether as a consequence of Carl Williams’ death, the first plaintiff was deprived of this benefit, in that he lost the financial benefit of having his tax liability paid; and
3.whether the Commissioner should have made the repayment to the State of Victoria.
The recovery proceeding
On 18 October 2011, the Deputy Commissioner of Taxation issued a proceeding against George Williams seeking recovery of tax related liabilities totalling $743,052.10.
On 15 November 2011, George Williams filed his defence in the recovery proceeding. George Williams contends that the tax debt claimed by the Commissioner has been paid. George Williams pleads in his defence:
6.Your office wrote to me on 17 July 2009. The letter noted that, Payment of $576,000 was received at the ATO office on 18 June 2009, the amount of $138,752.05 was allocated to the integrated account and $437,247.95 to the income tax account.
7.An amount of $251,042.28 general interest charged (GIC) was remitted from the income tax account. Accordingly the debt claimed by the Australian Tax Office (ATO) is paid in full and I am no longer liable in any manner of extent.
8.Further your acceptance of the discharge of the debt is evidenced by the fact that the Supreme Court proceedings issued by the DCT were discontinued inter alia by consent orders made by her Honour Justice Williams on 19 June 2009.
9.I reject the letter sent by your office on 17 July 2009 saying the letter sent on 19 June 2009 was “issued in error”.
On 15 December 2011, the Commissioner filed his reply in the recovery proceeding. In paragraph 1 of the reply the Commissioner pleads:
1.As to paragraph 6:
(a)on or about 15 June 2009 Victoria Police made a payment of $576,000 by cheque addressed to the Australian Taxation Office (“ATO”) which payment was made on the express condition that the amount be held in a holding account and not applied against the defendant’s accounts with the plaintiff pending further instructions from Victoria Police.
Particulars
Telephone discussions between Inspector Peter Wilkins on behalf of Victoria Police and Mr Robin Best on behalf of the ATO during the period March to May 2009 to the effect stated.
An advice to Payee note dated 15 June 2009 issued by Victoria Police to the ATO accompanying the cheque for $576,000 noting the payment was made to “ATO Payment Holding Account”. …
(b)at all material times the payment of $576,000 was held in an ATO suspense account and no part of the payment of $576,000 was allocated to the defendant’s account with the plaintiff;
(c)the ATO letter dated 17 July 2009 referred to by the defendant was issued in error and the statements in the letter that the $576,000 had been allocated to the defendant’s accounts were factually wrong;
(d)the erroneous statements were corrected by an ATO letter dated 28 July 2009 addressed to the defendant which noted that the defendant remained indebted in the then amount of $574,296.90;
(e)on or about 12 July 2010 the payment of $576,000 was repaid to Victoria Police upon receipt of written instructions from Victoria Police.
Particulars
Letters dated 22 February 2010 and 27 May 2010 (wrongly dated 27 May 2009) from the Victoria Police to the ATO and letter dated 12 July 2010 from the ATO enclosing a cheque in the amount of $576,000. …
2.As to paragraph 7, the plaintiff admits that an amount of $251,042.28 in the general interest charge that was remitted as contended by the defendant but says that the defendant has been given credit for this remission. The credit is accounted for in the particulars to paragraphs 9 and 14 of the statement of claim …
On 29 August 2012, the Commissioner filed an application for summary judgment in the recovery proceeding. The application is listed for hearing on 10 December 2012.
The issues raised in the recovery proceeding are:
(a)Was George Williams’ tax debt discharged by the payment from Victoria Police of $576,000;
(b)does the letter of 17 July 2009 prevent the Commissioner from recovering the outstanding tax debt?
Applicable principles
The Court has power under the Rules and an inherent power to prevent misuse of its procedures. As the Court of Appeal stated in Australian Securities and Investments Commission v Lindberg (No. 2)[3] it is a drastic step for a court to prevent a litigant from prosecuting a particular claim and the grant of a permanent stay is therefore a most exceptional course.[4] Davies J, in the decision of The Commissioner of State Revenue v Aidlaw (No. 2)[5] said:
9.Recently in Jeffery and Katauskas Pty Ltd v SST Consulting Pty Ltd the High Court in the plurality judgment, said that it was clear that … abuse of process extends to proceedings that are “seriously and unfairly burdensome, prejudicial or damage” or “productive of serious and unjustifiable trouble and harassment”.
However, the plurality reaffirmed that abuse of process is not made out merely by showing that the conduct of a party in a proceeding is in some way or sense unfair to another party. Thus generally something more than unfairness to a litigant must be shown in order for the Court to be satisfied that a proceeding should be stayed permanently.
10.The authorities demonstrate that it can be appropriate for the Court to exercise this power to stay a proceeding permanently where the plaintiff has brought two separate proceedings against the same defendant, whether in the same or a different court, in which the relief claimed is the same, where there is no reasonable justification for the two proceedings. (footnotes omitted)
[3][2010] 265 ALR 517.
[4]Ibid at [89].
[5][2010] VSC 405 at [9] and [10].
The Commissioner submits that the principle as stated in Henry v Henry[6] is applicable to the circumstances of this case. Henry’s case is primarily concerned with the forum of non-convenience question in a matrimonial dispute. It is a case therefore which involves discussion of a range of matters beyond abuse of process. It is frequently cited, however, in abuse of process cases for the following passage (at 591):
It is prima facie vexatious and oppressive, in the strict sense of those terms, to commence a second or subsequent action in the court’s of this country if an action is already pending with respect to the matter in issue.[7]
[6][1996] 185 CLR 571.
[7]Henry v Henry [1996] 185 CLR 571 at 591.
The decision goes on to discuss the bringing of proceedings in a different country as not necessarily vexatious but involving much the same difficulty and consideration. Ultimately the Australian proceeding was stayed on forum grounds.
The Commissioner relied on the decision of Batistatos v Roads and Traffic Authority of New South Wales.[8] This decision concerned an application to stay an action brought 29 years after the occurrence of a car accident on the basis it was an abuse of process. It does not concern multiple actions, but is cited only for its approval at 281 of a proposition expressed in an earlier case by Dean J that there is no “requirement that the continuance of an action would involve moral delinquency on the part of the plaintiff” in order for abuse of process to be demonstrated.
[8][2006] CLR 256.
Reliance was also placed by the Commissioner on the decision of Sterling Pharmaceuticals Pty Ltd v The Boots Company.[9] This decision concerned an application for a temporary stay of an action brought in Australia that was substantially similar to an action brought in New Zealand concerning statements made on product packaging said to be misleading and deceptive. While the issues in the two proceedings were found not to be precisely the same, the basic issue was the same. Lockhart J made orders standing the Australian proceeding out of the List with the intention of allowing the New Zealand proceeding to run first. A number of considerations were listed to be taken into account in making this decision, including which proceeding was commenced first, how far advanced each case was, and the principle that the law should strive against permitting multiplicity of proceedings in relation to similar issues. This is not an abuse of process case and therefore the emphasis is on “case management” type considerations. The result being simply a delay in the Australian proceeding.
[9][1992] 34 FCR 287.
In response, Mr Uren on behalf of George Williams, relied on a number of decisions including CFMEU v The Commonwealth.[10] This decision concerned an application by the Commonwealth for a stay of proceedings brought against it by the CFMEU on the basis that it was an abuse of process. The abuse was said to lie in the fact that the CFMEU had on foot proceedings against another that involved very similar questions.
[10][1999] FCA 1571.
North J dismissed the stay application on a number of bases:
(a)The claims were not identical;
(b)the proceedings involved different parties (the Commonwealth not being a defendant in the other proceeding); and
(c)that an abuse finding would be rare in such circumstances.
In terms of general principle, North J made the following observation at [30] to [31]:
The power to stay proceedings as an abuse of process is characteristically exercised where the same proceedings are brought against the same parties in two different courts. [citations omitted] … In this case the abuse is said to lie in the pursuit of two proceedings in the same court. There is less force in such an application because the same court has control over both proceedings and can make orders for consolidation, or join two consecutive trials of the two proceedings, and thereby mitigate the main detriment said to constitute the abuse of process. In my view, even if the subject matter of the two proceedings was the same, a matter to which I will return, it will not be appropriate to stay this proceeding unless the question had been argued and determined that any detriment to the respondents from the continuation of both proceedings could not be addressed by some less drastic orders such as consolidation or joint or consecutive hearing.
Mr Uren referred to the decision of Commonwealth of Australia v Cockatoo Docklands Pty Ltd.[11] This was an appeal from a decision of a single judge refusing an application for a stay of proceedings in the Supreme Court of New South Wales on the basis that the proceeding was an abuse of process. The proceeding brought against the Commonwealth was in contract and concerned the recovery of costs incurred in relation to asbestos related personal injury claim. The plaintiff in the proceeding had, in personal injury claims brought against it in the Dust Diseases Tribunal, issued claims for indemnity or contribution against the Commonwealth. There was also a separate proceeding brought by the plaintiff against the insurers in the Supreme Court of New South Wales seeking an indemnity in respect of certain personal injury claims.
[11][2003] NSW CA 192.
The Court found while there was substantial overlap between the proceedings, the contractual claim against the Commonwealth was different to the contribution claim between tortfeasors.
Ultimately the Court held that the question not to grant a stay was a discretionary one that was open to the primary judge to make and no error had been shown. Contributing factors in the determination were that the contractual claims were more suited to determination in the Supreme Court rather than the Dust Diseases Tribunal, it was also more efficient to deal with aspects of the claim within one proceeding rather than 37 separate claims in the Tribunal. The claim against the Commonwealth had also effectively been left alive so that the Commonwealth was not having to deal with multiple proceedings.
This case is distinguishable from the present in that there was a significant dissimilarity of claim. The factors that influenced the decision are also not present in this case.
Mr Uren also relied upon the decision of Davies J in The Commissioner of State Revenue v Aidlaw (No. 2)[12] This decision concerns an application by the defendants for a permanent stay of certain claims made in a single proceeding. The proceeding initiated as a show cause matter under the Stamps Act 1958. The State Revenue Office (“SRO”) obtained leave to file a statement of claim within the same proceeding containing debt claims, breach of contract and breach of costs claims, however orders were made by consent that those claims were effectively stayed pending the outcome of an appeal as to whether the show cause of the aspect of the claim could proceed.
[12][2010] VSC 405.
Following the determination of the Court of Appeal that the show cause procedure could proceed, a stay of the claims and the statement of claim was sought on the basis it was an abuse of process to pursue those matters in addition to the show cause proceeding.
Davies J dismissed the application holding that it was not unreasonable for the SRO to reserve its right to pursue the claim. Her Honour noted that the claims were presently stayed and “it may become unnecessary for the SRO to pursue the additional claims or it may be that the SRO might be met with a claim based on estoppel if the SRO pursues them after the Court’s determination under s 40(2)”.
The case can be distinguished from the present on a number of bases. The claims were within a single proceeding. The subsequent claims are subject to a temporary stay pending the outcome of the primary claim. The show cause procedure under s 40 was a distinct procedure rather than simply another cause of action and it was therefore reasonable to adopt the course of action of pursuing it first while reserving the right to pursue the other claim.
Davies J in this case confirmed that the general principles extend to proceedings in the same court citing Branir Pty Ltd v Wallco Pastoral Company Pty Ltd.[13] The authorities demonstrate that it can be appropriate for the Court to exercise its power to stay a proceeding permanently where the plaintiff has brought two separate proceedings against the same defendant, whether in the same or a different court, in which the relief claimed is the same, where there is no reasonable justification for the two proceedings.[14]
[13][2006] NTSC 70.
[14]The Commissioner of State Revenue v Aidlaw Pty Ltd (No. 2) [2010] VSC 405 at [10].
However, Davies J found that the case before her was not such a case both because it was not a case of multiple proceedings and that the Commissioner had acted reasonably in reserving the right to rely on the claims brought later in time.
For completeness, I refer to four cases that were not relied upon by either party: Lidden and anor v Composite Buyers Pty Ltd and Ors;[15] Branir Pty Ltd v Wallco Pastoral Company Pty Lt;,[16] Kermini v Westpac Banking Corporation;[17] and Thirteenth Corp Pty Ltd v State and Ors.[18]
[15][1996] 139 ALR 549.
[16][2006] NTSC 70.
[17][2012] VSCA 42.
[18][2006] 232 ALR 491.
Lidden’s case involved two proceedings brought in the same court three years apart. The second proceeding was brought to cover the eventuality that the first proceeding did not encompass loss suffered after the institution of the earlier proceeding to satisfy insurance requirements. Finn J confirmed that the principles of abuse of process extend equally to proceedings in the same court at 559:
It is the case that, where proceedings have been started in one court, it is an abuse of process to duplicate proceedings in another court when a complete remedy is available in the first court. It likewise seems the case that where proceedings are pending in a court, a separate action in the same court should at least be stayed where both actions involve the same parties and the same subject matter and where the hearing of the first will effectively dispose of the need for the hearing of the second.
However, Finn J refused the application to strike out the later proceedings as an abuse of process on case management principles and determined that the proceeding be heard together with an explicit acknowledgement that there may however be cost consequences for the plaintiff.
Branir’s case concerned an agreement to sell a pastoral lease. Wallco lodged a caveat over the land and then sought specific performance against Branir of the agreement. Branir then brought separate proceedings for removal of the caveat lodged by Wallco. Application was made by Wallco to stay the caveat removal proceeding as an abuse of process.
Mildren J cites the above passage from Lidden and concluded that:
I therefore consider that the prima facie rule which applies to actions in different courts also applies where the proceedings are brought in the same court.[19]
[19]Branir Pty Ltd v Wallco Pastoral Company Pty Ltd [2006] NTSC 70 at [20].
Nevertheless, Mildren J held in that case that the prima facie rule had been rebutted. The caveat removal application required a particular procedure and it was questionable whether it could be properly brought in the action initiated by Wallco. There was nothing prejudicial or unfair to Wallco in Branir taking the course it had as a caveat issue would have to be determined first and could resolve both actions.
The decision is significant in another respect in that it confirms the application of the principle where a subsequent proceeding is brought by a defendant in the earlier proceeding concerning the same subject matter.
The case of Kermini v Westpac Banking Corporation,[20] was an appeal against an order staying proceedings as an abuse of process. The decision contains a very helpful summary of the principles and authorities of abuse of process by Robson AJA at [97] including that: “A prima facie rule applies whether or not the two proceeding are in separate courts or one.”
[20][2012] VSCA 42.
The case is also significant in that the issue litigated in the earlier proceeding was raised by the parties in that matter as a defence. The Court upheld the stay on the basis that in the latter proceeding the plaintiff sought by her claim to re‑litigate the issues raised by the parties in the earlier proceeding as a defence to the action by the bank to recover costs against them as guarantors. It is distinguishable, however, from the current case on the basis that the earlier proceedings had been determined before the proceeding in question was brought.
Finally, the decision of Thirteenth Corp Pty Ltd v State and Others,[21] concerns a proceeding brought in the Federal Court following the stay of proceedings in the Supreme Court for failure to pay security for costs. It is often cited for the following commentary at 505 on a decision of Mason J in the High Court dismissing a proceeding as an abuse of process even though it involved different parties and different relief was sought:
The important, perhaps critical, point was that the Court in which the earlier proceeding was commenced had jurisdiction to deal with everything raised in the later proceeding and there was no reasonable justification, based on legitimate considerations of convenience, cost or the like, for commencing the second proceeding rather than seeking to amend the earlier. One sees the same underlying values as to the requirements of a fair and efficient system for the administration of justice here as are seen, in a different but analogous context, in Anshun.
[21][2006] 232 ALR 491.
In this case, Jessup J held that he would have considered the proceeding an abuse but for the fact the Victorian proceeding was no longer on foot.
The Commissioners’ submissions
The Commissioner submits that it is an abuse of process to allow George Williams to maintain both proceedings in this Court which deal with the same subject matter. The second defendant submits that this is prima facie vexatious and an abuse of process.
The Commissioner submits that the aim of the claim made against the Commissioner in the current proceeding is to simply confirm or effect the discharge of the same tax liability which the Commissioner is seeking to have paid in the recovery proceeding.
The Commissioner relies upon the decision of Henry v Henry.[22]
[22][1996] 185 CLR 571.
Mr Donaghue, who appeared with Mr Sharpley of counsel for the Commissioner, submitted that the two proceedings dealt in substance with the same matter and that it was an abuse of process to allow both to continue separately. It was contended that George Williams’ claim against the State is premised on his tax debt not having been paid by Victoria Police and therefore remains outstanding and that that claim is consistent with the position maintained by the Commissioner in the recovery proceeding. It is submitted by the Commissioner that the claims against the Commissioner at paragraphs 40 to 46 of the statement of claim largely repeat the matters referred to by George Williams in his defence in the recovery proceeding in support of the contention in the current proceeding that the tax debt was paid.
In summary, the Commissioner submits that by including paragraphs 40 to 46, George Williams seeks to litigate in this proceeding the very same issues as those which arise in the recovery proceeding, that is, whether the tax debt has been paid and the effect of the letter dated 17 July 2009.[23]
[23]Written outline of second defendant’s submissions at [9] and [10], dated 23 November 2012.
Mr Donaghue drew attention to some of the consequences of the continuance of the two proceedings. He argued that the Court would need to deal twice with essentially the same facts and that in doing so there would be a danger of inconsistent findings of fact and decisions of law. It was contended that this would also involve a waste of resources by the Court and the parties.
The following factors were put forward by the Commissioner as to why the claim against the Commissioner in the current proceeding should be stayed on the basis of an abuse of process:
(a)That the recovery proceeding was commenced first in time;
(b)determination of the recovery proceeding would remove any uncertainty in relation to the current proceeding. That is, if the Commissioner is successful in the recovery proceeding then it follows that George Williams has an outstanding tax liability to the Commissioner. On the other hand, if the Commissioner is unsuccessful and George Williams successfully defends the claim on the basis of his defence, it will be determined that the payment made by the State of Victoria and/or the Victoria Police to the Commissioner has extinguished the tax liability alleged to be owed by George Williams to the Commissioner. A decision in the recovery proceeding would provide certainty on this issue;
(c)by allowing both proceedings to go ahead, there would be a substantial waste of time and effort by virtue of having to consolidate the two proceedings in this Court involving substantially the same issue. The Commissioner submits that the undesirability of wasting time and costs is confirmed in the Civil Procedure Act (2010) (Vic);[24]
(d)the recovery proceeding is sufficiently advanced to allow a summary judgment to proceed and the summary judgment application is listed for hearing on 10 December 2012. In contrast, in the current proceeding the State of Victoria has not filed its defence and a first directions hearing is now listed on 12 December 2012;
(e)there is no disadvantage that George Williams has discerned as identified by reason of a stay of the claim against the Commissioner in the current proceeding. If George Williams succeeds in the recovery proceeding, then that is a loss he is not required to pursue in the current proceeding. This is a disadvantage to the Commissioner in that if the current proceeding is litigated, the Commissioner in the parallel recovery proceeding will be dragged into a jury trial which is substantially a negligence claim against the State and it is unlikely that a trial date will be given in the current proceeding before the latter part of 2013 if not later.
[24]Sections 7 and 9.
In addition to the argument that the claim against the Commissioner in the current proceeding is an abuse of process and should be stayed, it was submitted that the stay of the current proceeding against the Commissioner is necessary to give effect to ss 7 and 8 of the Civil Procedure Act 2010 (Vic).
Mr George Williams’ submissions
Mr Uren submitted that the principles espoused in Henry v Henry[25] and the line of authorities referred to by the Commissioner did not apply to this case. That is on the basis that those cases dealt with parallel proceedings in different countries or within the same jurisdiction but different courts.
[25][1996] 185 CLR 571.
Mr Uren submits that it was too early to determine if there was a commonality of facts and that a more appropriate step was to dismiss the current application on the basis that it cannot be determined now that there will be a vexatious duplication of issues.
Relying upon the decision of North J in CFMEU v Commonwealth of Australia,[26] Mr Uren submitted that it would not be appropriate to stay the current proceeding as there were less drastic options open to the Court, such as consolidation or joint consecutive hearing.
[26][1999] FCA 1571 at 31.
Mr Uren submitted that in the current proceeding communications between the State and/or Victoria Police and the tax office will be examined in order to determine the nature of the agreement and that these may not be matters canvassed in the recovery proceeding. Further, that the State will be bound by any decision in the current proceeding but not in the recovery proceeding.
Mr Uren considered that it was premature to bring the application given the State had not filed a defence and that it may be that once that defence is filed, the issues as between the Commissioner and George Williams could be hived off and determined separately, for example, as a preliminary issue. This would address any issue in relation to costs, delay and doubling up of resources.
Consideration
I do not accept Mr Uren’s submissions that the principles concerning abuse of process set down in Henry v Henry[27] do not apply to the current case. The analysis of cases at paragraphs 14 to 20 of this judgment confirm that the principle set out in Henry’s case concerning abuse of process is applicable where the proceedings are in the same court.
[27][1996] 185 CLR 571 at 591 per Dawson, Gaudron, McHugh and Gummow JJ.
Turning firstly to the pleadings in the current proceeding and the recovery proceeding. One component of the defence on the recovery proceeding is that the liability has been discharged by the payment by Victoria Police. The claim in the current proceeding against the State (following the negligence claim) relating to the payment to the Tax Office is not readily apparent. It appears in some respects to be a breach of contract claim but if so, it is poorly pleaded and the entitlement of George Williams to sue in this regard is unclear as nothing is pleaded about him representing Carl Williams’ estate or being a party to the agreement rather than a mere beneficiary of it.
The basis of the claim against the Commissioner is even less clear. All that is pleaded is effectively that the plaintiff has suffered loss and damage that will be particularised at a later stage. A declaration is sought that the repayment was unauthorised and without power together with an order that the Commissioner pay the plaintiff’s legal costs. There is potentially a further claim that somehow the “unauthorised” repayments of the amount by the Commissioner has caused further loss and damage.
As it stands, the claim against the Commissioner appears to raise identical issues to those raised by the defence in the recovery proceeding. Applying the established principle set out in Henry’s case, this is prima facie an abuse of process.
The declaratory relief and costs sought against the Commissioner are clearly directed at the recovery proceeding. If there is a genuine claim for further loss and damage arising out of the “unauthorised refund”, George Williams could have filed a counterclaim in the recovery proceeding. Any claim against the State in relation to the refund issue (as opposed to the negligence claim where the tax liability is merely a particular of the damages claim) may also have been able to be joined in the recovery action.
The simple point is save for the matters pleaded at paragraphs 40 to 46, there is no allegation that engages the Commissioner. The liability sought in the recovery procedure is one created by statute and whether the State is bound or not bound by that decision is arguably irrelevant.
Mr Uren argued that by having the two proceedings dealt with together, there would be a saving of time and cost. Yet it was accepted that a possible mechanism available to the Court was perhaps to hear the claims concerning the Commissioner in both proceedings determined as a preliminary issue.
Mr Uren was unable to point to any real disadvantage to George Williams by staying the claim against the Commissioner in the current proceeding. In contrast, the Commissioner would be a party in a complex negligence claim which will undoubtedly take some time for all interlocutory steps to be finalised and if it does not settle, will be involved in a lengthy jury trial. As noted in the current proceeding, the State and the Commissioner have not filed defences. In contrast, in the recovery proceeding, the Commissioner’s summary judgment application is listed for hearing on 10 December 2012.
Importantly, the determination of the recovery proceeding will bring certainty which can only assist the parties in the current proceeding to clarify the issues and claims. This will lead to a reduction in time and cost and use of resources, including court resources.
However, I have real concerns about staying the current proceeding. As noted, the statement of claim is poorly pleaded. This is a matter alluded to in the written submissions filed on behalf of the Commissioner. Secondly, the defence in the recovery proceeding appears to have been prepared by George Williams and is poorly drafted. From the evidence before the Court there is no solicitor on the record for George Williams in the recovery proceeding. I flagged that if there is a genuine claim for further loss and damage arising out of the “unauthorised refund”, George Williams could have filed a counterclaim in the recovery proceeding and equally that any claim against the State in relation to the refund issue may be joined in the recovery action. It is unlikely if George Williams is self-represented in the recovery proceeding that these matters will have been considered.
At this stage, it is not clear if the recovery proceeding will traverse factual issues raised in the claim against the State. For example, George Williams’ defence in the recovery proceeding may give rise to an examination of factual matters concerning the alleged agreement between the State and Carl Williams.
Regrettably, the poor state of the pleadings leads me to conclude that it is premature to make an order staying the claim against the Commissioner in the current proceeding. I consider that the appropriate course is that this claim be managed in the Major Torts List and that both proceedings be listed for directions before Justice Beach on 14 December 2012. Careful case management will ensure that the difficulties alluded to by the Commissioner can be avoided. It is not appropriate that the summary judgment application proceed on 10 December 2012. I note that if by virtue of case management it is considered appropriate in due course for the claim against the Commissioner and the issues in the recovery proceeding to be determined as a preliminary point there may be cost consequences for the plaintiffs.
While the Commissioner has not been successful in this application, the evidence before the Court strongly supports the contention that the two proceedings raise very similar, if not identical issues of law and fact. However, primarily due to the poor state of the plaintiffs’ pleadings in the current proceeding and the defence in the recovery proceeding I am not prepared to order the stay. Accordingly, subject to hearing from the parties I consider an appropriate order for costs is that the cost of this application be reserved. Save for any costs order, I make the following orders:
1. The second defendant’s summons dated 15 November 2012 is dismissed.
2. The directions hearing listed on 12 December 2012 is vacated.
3. The proceeding is entered into the Major Torts List.
4. This proceeding and proceeding S CI 2011 5571 are listed for directions in the Major Torts List on 14 December 2012.
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