Winky Pop Pty Ltd v The State of Victoria and Mobil
[2019] VSCA 9
•6 February 2019
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2018 0042
| WINKY POP PTY LTD (ACN 082 744 769) | First Applicant |
| and | |
| OR AUSTRALIA PTY LTD (ACN 073 102 520) | Second Applicant |
| v | |
| THE STATE OF VICTORIA | First Respondent |
| and | |
| MOBIL REFINING AUSTRALIA PTY LTD (ACN 004 300 163) | Second Respondent |
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| JUDGES: | MAXWELL P, ASHLEY JA and ALMOND AJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 8 November 2018 |
| DATE OF JUDGMENT: | 6 February 2019 |
| MEDIUM NEUTRAL CITATION: | [2019] VSCA 9 |
| JUDGMENT APPEALED FROM: | [2018] VSC 82 (Digby J) |
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ESTOPPEL – Issue estoppel – Negligence, nuisance – Damages – Contamination of land – Applicants sought identical relief against both respondents – Second respondent admitted liability – Trial proceeded against second respondent only – Pre-trial order that first respondent be bound by trial findings – First respondent participated in trial – Applicant’s claims dismissed as against second respondent – Whether applicant estopped from proceeding against first respondent on identical claims – Whether abuse of process – Leave to appeal refused – Blair v Curran (1939) 62 CLR 464, Port of Melbourne Authority v Anshun (1981) 147 CLR 589, Tomlinson v Ramsay Food Processing (2015) 256 CLR 507 applied.
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| APPEARANCES: | Counsel | Solicitors |
For the First and Second Applicant | Mr P W Collinson QC | King & Wood Mallesons |
| For the First Respondent | Mr S R Horgan QC | Clayton Utz |
| For the Second Respondent | Mr C M Caleo QC with Ms F J Hudgson | Ashurst Australia |
MAXWELL P
ASHLEY JA
ALMOND AJA:
Summary
The applicants (‘Winky Pop’)[1] own land in Williamstown North (the ‘land’). At some time before December 2006, a large volume of petroleum hydrocarbon leaked from a pipeline (the ‘pipeline’) owned and operated by the second respondent (‘Mobil’). The leak polluted the groundwater under the land.
[1]Since nothing turns on the separate identity of the applicant companies, we will refer to them throughout as ‘Winky Pop’ or ‘the plaintiff’.
In 2009, Winky Pop sued Mobil, alleging negligence, nuisance and a failure to manage the operation of the pipeline in accordance with the requirements of the Pipelines Act 2005 (the ‘Act’). The claim sought damages and a mandatory injunction to require remediation of the land.
In November 2012, the first respondent (the ‘State’) was joined as a defendant on Winky Pop’s application. The claim was brought in negligence, relying on the State’s regulatory responsibilities under the Act with respect to the pipeline. As in the Mobil claim, Winky Pop sought damages and a mandatory injunction.
Because of the late joinder of the State, orders were made for a trial of Winky Pop’s claims as against Mobil alone. Beyond the filing of a defence, the State was relieved of the obligation to take any procedural steps until the conclusion of the Mobil trial. At Winky Pop’s insistence, however, it was ordered that the State ‘be bound by any findings made in the trial against [Mobil].’ It was contemplated by all parties that the State would participate in the Mobil trial. As already mentioned, identical relief was sought against both defendants.
Mobil having admitted liability in negligence, the only issues for determination at trial’s end were causation and quantum (as will appear, the remediation claims were abandoned). The State participated in the trial, including by cross-examining witnesses and making submissions.
In his 2015 judgment,[2] the judge dismissed all of Winky Pop’s claims against Mobil, other than a claim for the cost of investigating the leak. Mobil duly paid the judgment sum. Winky Pop’s appeal to this Court was dismissed[3] and its application for special leave to appeal to the High Court was refused.
[2]Winky Pop Pty Ltd v Mobil Refining Australia Pty Ltd [2015] VSC 348 (‘2015 judgment’).
[3]Winky Pop Pty Ltd v Mobil Refining Australia Pty Ltd [2016] VSCA 187.
The State subsequently applied for summary judgment, on the ground that Winky Pop’s failure to establish any other compensable loss as against Mobil meant that the negligence claim against the State had no prospect of success. Winky Pop opposed that application and applied to amend its pleading against the State to add a cause of action in nuisance. In his 2018 judgment (‘2018 judgment’), the judge granted summary judgment and refused the application to amend.[4] It is from those orders that Winky Pop now seeks leave to appeal.
[4]Winky Pop Pty Ltd v Mobil Refining Australia Pty Ltd [2018] VSC 82 (‘2018 judgment’).
For reasons which follow, we would refuse leave to appeal. The key considerations may be shortly stated:
(a) the Mobil trial was conducted on the express basis ― proposed by the State and formalised at the insistence of Winky Pop ― that the State would be bound by any findings on the issues litigated in that trial, as if it were a party to any orders made against Mobil;
(b) because the State was thus at risk on quantum, it participated in the Mobil trial as if it were a party, in order to protect its interests, and did so with Winky Pop’s concurrence;
(c) the issue of compensable damage for negligence and nuisance was finally determined in that trial;
(d) in those circumstances, issue estoppel is available to the State in respect of that issue, just as if it had been subject to the orders made in the Mobil trial; and
(e) alternatively, but for similar reasons, Anshun[5] estoppel is available to the State so as to preclude Winky Pop raising the claim which it now seeks to pursue, and it would be an abuse of process if Winky Pop were permitted to proceed further against the State.
[5]Port of Melbourne Authority v Anshun (1981) 147 CLR 589 (‘Anshun’).
Procedural history
In its claim against Mobil, Winky Pop sought damages for negligence; damages or a mandatory injunction in respect of nuisance; and compensation for the alleged breach of the Act. Mobil admitted negligence in the management and operation of the pipeline and, further, that the leak had caused at least some of the contamination of the land.
In its claim against the State, Winky Pop sought damages for negligence. In addition, although no claim in nuisance was pleaded, Winky Pop sought mandatory injunctions requiring the State to ‘abate the nuisance’, specifically, to remove the petroleum hydrocarbons. The State denied that it owed Winky Pop a duty of care, in the alternative denying any breach of duty and any liability to pay damages.
Identical damages were claimed against both defendants, in the case of Mobil both in respect of the claims in negligence and nuisance, and in the case of the State in respect of the claim laid in negligence. A single set of particulars of loss and damage was relied on. Indeed, the identity of the damages claims was at the forefront of Winky Pop’s successful application to have the State joined as a defendant. So much is clear from the following unchallenged summary of Winky Pop’s arguments on that application:
(i)the loss and damage alleged by [Winky Pop] is the same as against the State and Mobil;
(ii)the extent of [Winky Pop’s] claimed loss and damage is likely to be in issue for the State as it is for Mobil;
(iii)questions relating to the State are matters which are also referred to, and arise from the claims made by [Winky Pop] against Mobil, including the question of what loss and damage has been suffered by [Winky Pop];
(iv)it would be just and convenient to have [Winky Pop’s] claims against the State determined in the same proceeding in which [Winky Pop’s] claims against Mobil were determined, including because the [Civil Procedure Act 2010] directs that in exercising its powers under the Rules, the court shall ensure the effective, complete, prompt and economical determination of questions in proceedings;
(v)refusing [Winky Pop] leave to join the State to this proceeding would result in the certainty of a further proceeding being filed by [Winky Pop] against the State. Such an outcome would be inconsistent with the effective, economical and efficient conduct of the business of the Court and the resolution of issues in this proceeding because, for example, in any subsequent proceeding the State is likely to adopt a similar defence to Mobil in relation to the question of the loss and damage suffered by the plaintiffs and allege that [Winky Pop’s] loss and damage should not be assessed by reference to any loss of opportunity to develop [Winky Pop’s] land for residential purposes;
(vi)the avoidance of a multiplicity of proceedings would therefore be consistent with the effective, economical and efficient conduct of the business of the Court and the resolution of all issues in this proceeding and in any subsequent proceeding that would be required to be brought against the State.[6]
[6]2015 judgment [9] (emphasis added).
We draw attention in particular to the highlighted passage. As there noted, the particulars of loss and damage then included a claim for loss of profit, that is, loss of the profits which Winky Pop expected to realise from the development of the land in its uncontaminated state.[7] The full particulars were as follows:
[7]At trial, this claim mutated into a claim with respect to an allegedly lost opportunity to make profits. See later in these reasons.
1. Costs of investigating the contamination of the Plaintiffs’ land.
2. Costs of remediating the Plaintiffs’ land.
3. The diminution in the value of the Plaintiffs’ land.
4.Loss of profits that the Plaintiffs would have realised from the development of the Plaintiffs’ land but for the contamination. Full particulars of the Plaintiffs’ lost profits will be provided before trial, calculated as follows:
A – B – C = loss of profits where:
‘A’ is the gross sum the Plaintiffs would have realised by the development of the uncontaminated land. By way of example, subdivision of the land into 121 residential lots (as depicted in the plan dated 25 May 2006 Ref 7996/T13 locality presented to the C33 Panel by the Plaintiffs), and construction of appropriate dwellings on those lots (‘the 121 Residence Development’), is expected to have yielded a gross return of not less than $120 million.
‘B’ is the cost to the Plaintiffs of the completed development. By way of example, the cost (excluding land) of the 121 Residence Development was expected to have been approximately $35 million.
‘C’ is value of the Plaintiffs’ land taking into account the fact that it cannot now be developed for residential purposes because of the contamination with petroleum hydrocarbons from Mobil Pipeline No 1 including by reason of the stigma attaching to the land as a result of the contamination.
Subsequently, in response to a request from Mobil, Winky Pop provided the following further and better particulars:
The diminution in the value of the Plaintiffs’ land is equal to the loss of profits particularised in paragraph 19 of the statement of claim.
…
The Plaintiffs have lost the opportunity to realise the profits from the development of their land and therefore have lost the value of their land because the extent of the contamination of the Plaintiffs’ land has resulted in the land being unable to be sold for its true value.
Following its joinder, the State sought orders that the issue of damages be heard and determined before any trial on the question of the State’s liability, which should be stayed until the damages issue was determined. On the hearing of that application, senior counsel for the State stated its position as follows:
our position would be that the case should run against [Mobil] on quantum and liability, that we would be engaged in the quantum issues, that we would be bound by res judicata on both issues. But we would not be able to put on a substantive defence to the liability issues against the State for at least [a] six month period …[8]
And further:
Really the issues between [Winky Pop] and Mobil on liability are: what was the extent of the pollution caused by the leak in the part which is admitted and what is the quantum or other relief required? We will be bound by those determinations. We reserve our right to make submissions in relation to all of the issues, but in particular quantum and will be prepared to do that in accordance with the timetable …[9]
[8]Emphasis added.
[9]Emphasis added.
Senior counsel for Mobil supported the course proposed by the State. He confirmed that Mobil accepted liability and had the capacity to pay any judgment made against it. Counsel said:
What is being offered to [Winky Pop] is an assessment of damages, effectively, and an early opportunity on the basis that Mobil has … made it plain that liability for the damage that arose from the contamination which is admitted would be paid on assessment.
Both counsel pointed out that the decision on causation and quantum would be likely to obviate any need for Winky Pop to proceed against the State and, in turn, any need for the State to conduct a long and expensive discovery process. Senior counsel for Mobil submitted that it was
an unusual case where almost with certainty one can say that the determination of this issue, whichever way it goes, will bring it to an end … In this case because of the admission [of the] liability, providing some damage can be shown by [Winky Pop], that damage will be assessed and paid and that will resolve all questions.
Winky Pop disagreed. Its preference, senior counsel told the Associate Justice, was to have a single trial against both defendants. If that meant a postponement of the trial date, so that the State could give discovery and then file a full defence on liability, then that was what should occur. Senior counsel accepted, however, that the real question was: ‘What is the best way to proceed with this case?’
The Associate Justice upheld the submissions advanced by the State and Mobil, and on 14 December 2012 ordered that:
The proceeding, insofar as it concerns the dispute between the plaintiffs and the first defendant, be fixed for hearing …
She further ordered that:
Save for the filing of a defence … the second defendant be relieved of the obligations to take any further steps in the proceeding until the hearing and determination of the proceeding against the first defendant, or further order, save that the second defendant will be bound by any findings made in the trial against the first defendant.[10]
[10]Order of Daly AsJ in Winky Pop Pty Ltd v Mobil Refining Australia Pty Ltd (Supreme Court of Victoria S CI 2009 6345, 14 December 2012).
The highlighted words were added at the request of the solicitors for Winky Pop. When the addition of the words was first proposed, the solicitors for the State responded that, since it was a party, the State would be bound ‘without the need for an order to that effect’. As already mentioned, counsel for the State had stated in open court that it would be bound by any findings made in the Mobil trial. The solicitors for Winky Pop nevertheless insisted on the words being included, saying that ‘for certainty it should be made express’. (We will refer to the added words as ‘the 2012 proviso’.)
In the result, the making of those orders expressed the common understanding of all three parties that there should be one trial, and one trial only, on the questions of causation and damage. There was every likelihood, as senior counsel for Mobil had correctly pointed out, that the determination of those issues would bring the entire proceeding to an end, given Mobil’s stated readiness to pay any damages for which it was found to be liable. If we may say so with respect, the approach adopted by the Associate Justice was exemplary.
The State’s position was reinforced on two subsequent occasions, as the judge recorded in the 2015 judgment:
At the directions hearing on 23 May 2013, the State said that the orders of 14 December 2012 meant that the trial would proceed against Mobil. The State accepted that it would suffer issue estoppel in respect of the issues in this proceeding that affect the State in its case. Those issues would be predominantly the quantum issues, because the same damages were sought from Mobil and the State. The State said it was prepared to take part in the trial in relation to those issues and other factual issues relevant to relief.
In its opening submissions, the State submitted that in this trial of Mobil’s liability, the State is concerned principally with the defence in relation to quantum, and in those circumstances, in any subsequent action or in the liability case against the State, there will be issue estoppel in relation to the necessary findings made in this proceeding. The State said that the issue estoppel was the reason for the State’s presence in this trial.[11]
[11]2015 judgment [59]–[60] (citations omitted).
In substance, therefore, what occurred was a trial as against both defendants as to the relief to which Winky Pop was entitled. (We say ‘relief’ rather than ‘quantum’ only because, when the trial began ― though not at its end ― Winky Pop’s claims to mandatory injunctions were still alive.) It was understood on all sides that the State was as much at risk of an adverse finding on damages as was Mobil itself, and the trial proceeded on that basis. Of necessity, the State participated in the trial as if it were a party to the trial and liable to have orders made against it at the conclusion of the trial. Conversely, for perfectly understandable forensic reasons, Winky Pop wanted the State bound by the outcome on those questions as if it were a party to the trial.
In this Court, senior counsel for Winky Pop properly conceded that this was so, that is, his client wanted the quantum issues resolved once and for all and the very purpose of the 2012 proviso was to bind the State on quantum as if it were a party to the Mobil trial. Counsel also conceded that, on ordinary principles, Winky Pop was obliged to advance in its case against Mobil all of the arguments on quantum on which it wished to rely.
The proceeding at first instance
As noted earlier, the principal ground of the State’s application for summary judgment was that the negligence claim against it had no prospect of success. This was said to be so because the proposed claim for damages was identical to the claim pleaded against Mobil, which had been dismissed (save for the investigation costs). In the alternative, the State submitted that ‘the factual and procedural context’ meant that the principles of issue estoppel and/or Anshun estoppel and/or abuse of process would preclude Winky Pop from maintaining any claim for damages against it in the proceeding.
The contention for Winky Pop was that, in the 2015 judgment, there had been no ‘finding’ ― within the meaning of the 2012 proviso ― with respect to a claim for damages based on diminution in the value of the land. Winky Pop further submitted that nothing said by the judge about diminution in value as a head of damage was ‘legally indispensable’ to the conclusions in the 2015 judgment and, as a result, no issue estoppel could arise.
The judge rejected Winky Pop’s contentions. For reasons examined in more detail below, he held that the 2015 judgment had decided all issues as to Winky Pop’s damages claim, including damages in respect of diminution in value of the land.[12] He had decided, the judge said, that Winky Pop ‘had not established any entitlement to damages (save in respect of the costs of on-site investigation …) on the case which they pleaded’.[13]
[12]2018 judgment [102]–[105].
[13]Ibid [104].
In this Court, Winky Pop’s principal submission was that the judge had made no ‘finding’ on diminution in value, within the meaning of the 2012 proviso. According to the written case:
The real question below was whether a claim against the State for diminution in the value of WP’s land was barred by any ‘findings’ in the 2015 judgment, a question which invited reference to the terms of the 14 December orders not a consideration of the doctrine of issue estoppel, at least directly. Indisputably, the answer to that question was no ...
Accordingly, before addressing the principles of issue estoppel, it is necessary to consider what was actually decided in the 2015 judgment.
What was decided at the trial?
In its outline of opening submissions at trial, Winky Pop relevantly said:
The primary relief that the plaintiffs seek is a mandatory injunction that the defendants remove the contamination for which they are responsible. Liability for the contamination having been admitted by Mobil, the principal issue in this case is whether it would be just for the plaintiffs to be limited to an award of damages.
The plaintiffs’ claims against Mobil are in nuisance, negligence and for compensation under the Pipelines Act2005. The plaintiffs seek an injunction requiring the defendants to remove the petroleum hydrocarbon contamination from the plaintiffs’ land so as to restore it the condition it was in before the leak occurred with the full range of commercial opportunities that attached to the land pre-leak.
…
The claims against the State are in negligence and allege that the State breached a duty of care to the plaintiffs when it failed to properly supervise the regulatory regime and licence conditions relating to the operation and maintenance of the pipeline … The plaintiffs seek the same relief from the State as from Mobil. Unusually, this trial will address the question of the assessment of the appropriate relief before the liability of the State has been determined.[14]
Consistently with its statement of claim, Winky Pop was at this stage seeking a mandatory injunction against both Mobil and the State.
[14]Emphasis added.
The State’s outline of opening submissions relevantly said:
This is the trial of the proceeding brought against the first defendant [Mobil], though the second defendant [the State] will be bound by necessary and indispensable findings of fact relevant to the proceeding against it and, in particular, as to loss and damage [citing Blair v Curran] … Relevant to this proceeding the second defendant’s case on damages is that the constraints on the Winky Pop land are such that the court cannot be satisfied that the Winky Pop land would have been developed for residential purposes in the way alleged by the plaintiffs. The circumstances do not favour the grant of an injunction and the true measure of the plaintiffs’ loss is any diminution in the value of the Winky Pop land.
The issues for determination in this trial are:
(a)the appropriate measure of damages in negligence and nuisance and under the Pipelines Act;
(b)the quantum of the plaintiffs’ loss;
(c) whether the plaintiffs are entitled to a mandatory injunction.[15]
[15]Emphasis added.
The relief sought by Winky Pop changed during the course of the trial. In closing submissions, Winky Pop stated that it was abandoning its development aspirations for the subject land, due to the levels of contamination and to factual and legal uncertainties. Accordingly,
an injunction for full clean-up of the plaintiffs’ land (which is, in any event on the evidence, impractical if not impossible) is no longer pursued and the plaintiffs seek damages on the basis that the development opportunities are lost.
In his reasons for giving the State summary judgment (the 2018 judgment), the judge stated that his 2015 judgment had decided all matters relating to Winky Pop’s damages, particularly with respect to diminution in value of the land.[16] In this Court, Winky Pop submitted that this conclusion was ‘irreconcilable’ with key paragraphs of the 2015 judgment. For the reasons which follow, we reject that submission. In any event, the true question is not what the judge in 2018 concluded he had decided in 2015. It is what he in fact decided in 2015, and that involves the fair reading of his 2015 judgment. So read, the judge’s conclusion is faithful to the fact of the matter.
[16]2018 judgment [102]–[105].
It is convenient first to set out the principal paragraphs in each set of reasons. In the 2015 judgment, his Honour said:
733The plaintiffs would be more appropriately entitled to damages for diminution in value of the land. So much was conceded by both Mobil and the State. However, the plaintiffs have not pleaded or submitted nor adduced evidence to support their entitlements to damages for diminution of their land. The plaintiffs’ initial reference in their pleadings to a diminution in value claim was ultimately clarified by particularisation, to be a claim for the loss of profits caused by their loss of opportunity to develop the plaintiffs’ land residentially. Further, the plaintiffs did not adduce any evidence as to the pre-leak or post-leak value of the land. The plaintiffs did however rely on evidence given by Mr Brown, a Mobil expert witness, to identify the residual value of the land. The plaintiffs in their case have deducted from their value of the lost opportunity the Brown Report residual value of the plaintiffs’ land at $9.9m.
734The plaintiffs submit that valuing the plaintiffs’ loss by reference to the market value of the land alone and ignoring the plaintiffs’ opportunity to develop the land for profit would significantly under-compensate the plaintiffs for the wrong that they have suffered from the conduct of the defendants.
735By their Further Amended Statement of Claim dated 18 December 2012, the plaintiffs seek damages in negligence. Those damages have been particularised under four heads:
1.1.1Costs of investigating the contamination of the plaintiffs’ land.
1.1.2 Costs of remediating the plaintiffs’ land.
1.1.3 The diminution in the value of the plaintiffs’ land.
1.1.4Loss of profits that the plaintiffs would have realised from the development of the plaintiffs’ land but for the contamination.
736Heads of damages (ii)-(iv) have not been pleaded in the alternative, although to award the plaintiffs damages under each of those three heads would probably result in the plaintiffs being overcompensated. Further particulars of these damages were to be provided prior to trial.
737The plaintiffs’ Response to Request for Further and Better Particulars dated 19 October 2011 provided that the diminution in the value of the plaintiffs’ land is equal to the loss of profits particularised in the plaintiffs’ Statement of Claim. In summary, loss of profits, as pleaded and submitted by the plaintiffs, is to be calculated as the gross revenue of the residential development, minus the costs associated with the residential development, minus residual value of the land.
738The plaintiffs chose not to lead evidence as to the residual value of the land, despite the fact that it was an element of their loss of profits analysis.
739Although it is somewhat unclear, it appears that the plaintiffs rely upon the evidence of Mr Brown, Mobil’s expert valuation witness, as establishing the residual value of the land to be incorporated in the loss of profits analysis. It is now necessary to turn to the expert valuation evidence of Mr Brown.
740As part of his first report, Mr Brown valued the plaintiffs’ land in around April or May 2007 and as at September 2011. These valuations assumed that there was no contamination from the leak and that the land was zoned Industrial 3, and disregarded the plaintiffs’ rezoning application and the allegedly proposed residential developments. Mr Brown was also required to consider and state whether the assessment of the condition of the plaintiffs’ land as set out in the AECOM Report dated 10 April 2010 was relevant to his opinion.
741Having considered the AECOM Report, Mr Brown was of the opinion that it was not relevant to his valuation because it addressed environmental issues not relevant to an industrial zone and development. Taking into account his instructions, Mr Brown’s valuation assumed that the highest and best use for the site was an industrial development.
742Mr Brown employed a direct comparison approach, whereby he used comparable site sales in 2007 and 2011 to determine the price paid per square metre of land area in those respective years. From this sales evidence, for the valuation as at April/May 2007, he adopted a rate of $150 per square metre of land for Lots A and B and a higher rate of $400 per square metre for Lots 35 and 36, leading to a rounded estimated value of $13,000,000. For September 2011, the respective figures adopted were $130 and $350 per square metre, leading to a rounded estimated value of $11,300,000.
743As part of his second report, Mr Brown gave valuations of the land if the leak had not occurred, as of April/May 2007 and April 2013. Mr Brown adopted the same figures he had used in his first report for the September 2011 valuation for the April 2013 valuation, resulting in the same rounded estimated value of $11,300,000.
744In cross examination, the plaintiffs handed an information memorandum for 240 Kororoit Creek Road (also known as the Arundel Stud Farm) to Mr Brown, which included evidence of two transfers of the property in 2012. Mr Brown was not aware of any sales for 240 Kororoit Creek Road since the 2011 valuation date of 28 September 2011. Mr Brown acknowledged that he would have regard to the 240 Kororoit Creek Road transactions if he were now to do a valuation of the plaintiffs’ land.
745On the one hand, the plaintiffs seek to adopt Mr Brown’s valuation of the plaintiffs’ land post-leak of $9,938,500 as the residual value of the land for the loss of profits analysis. On the other, they dispute Mr Brown’s valuation method for not having taken into account comparable sales and as overvaluing the land when taking into account Mr Williams’ evidence that he would not touch the land. The plaintiffs submit that $9,938,500 overvalues the true market value of Lots A and B post-leak, but no other figure was put to the Court by the plaintiffs even though it is an essential element of their loss of profits analysis.
746Both Mobil and the State submit that the plaintiffs’ damages should be measured on the basis of diminution in value, in accordance with accepted principles.
747Mobil submits that Mr Brown’s valuation evidence establishes that the diminution in value of the plaintiffs’ land, taking into account all potentialities for the land, is no more than $1,000,000.
748Mobil points out that the plaintiffs have not filed any valuation evidence prepared in accordance with these accepted principles as to diminution in value. Rather, they claimed:
1.2Mobil should be enjoined to remove from the land all its contamination. This claim was abandoned by the plaintiffs late in the proceeding; and alternatively
1.3the diminution in value by reference to the lost opportunity to make a profit from development of the land for residential purposes.
749The State accepts that there has been some diminution of market value as a result of the leak. The State’s position is that the loss is capable of quantification and that the Arundel Estate sales information provides evidence for a rough estimation of value, as it is proximate industrial three zoned land with a similar future potential use for residential. Mr Brown, who was provided with the Arundel Estate sales data in cross examination, accepted that it would be comparable sales evidence if the plaintiffs land’s highest and best use is residential.
750The State concedes that the plaintiffs are entitled to:
1.4damages assessed using the diminution in market value measure; and
1.5the sum of $104,273.95 to compensate the plaintiffs for the reasonable costs of investigating the leak.
751The plaintiffs did not accept that the land could be developed as industrial land, and said that Mr Brown’s ‘as is’ valuation of the land was not accurate because he assumed that the land could be developed industrially.
752I do not consider however that it is appropriate to endeavour to decide what, if any, sum the plaintiffs would be entitled to, assessed as I have found damages should be in the circumstances of this case. That is because the plaintiffs do not plead (as explained above), or submit, nor have they adduced any evidence in support of, an entitlement to damages based on diminution of the value of their land. Furthermore, the evidence referred to above, to which Mobil refers in its Closing Submissions concerning diminution damages, has not been put forward by any expert witness who has explained the basis for and comprehensiveness and accuracy of his or her calculation of such damages. In the result the scant evidence to which Mobil refers, does not provide a sound and safe basis for the Court to be satisfied as to the proper quantum of the plaintiffs’ damages and the plaintiffs do not seek to be compensated on a diminution of value basis.
Summary of Findings
753For the above reasons I find that:
1The proper basis for the measurement of damages in relation to the plaintiffs’ causes of action is diminution in the value of the plaintiffs’ land.
2In this matter the assessment of damages on a loss of opportunity basis would be unacceptably uncertain and is more likely to lead to an unjust result than diminution of value damages and is also otherwise inappropriate.
3Prior to the Mobil leak it was most unlikely that the plaintiffs’ land would be rezoned by the relevant planning authority so as to be able to be developed for residential use.
4Prior to the Mobil leak it was most unlikely that the relevant planning authority would grant development permits for the plaintiffs to develop their land for residential purposes.
5At the time of the Mobil leak and thereafter the plaintiffs have not established that they had, or but for the Mobil Leak would have had, the opportunity to develop the plaintiffs’ land residentially.
6The plaintiffs have not lost the opportunity to develop the plaintiffs’ land because of the Mobil leak.
7The opportunity to develop the plaintiffs’ land residentially, as identified by the plaintiffs, has no real prospect of being successfully pursued and is therefore of negligible or no value.
8The Mobil leak, in itself, will not prevent or impair the plaintiffs’ ability to develop their land for residential purposes.
9In case I am incorrect in relation to my above findings, I have also determined that in the event that the plaintiffs were entitled to damages on the bases which they assert (which I have rejected) the sum of those damages would be $66,829,900, subject to interest entitlements.
10The plaintiffs are entitled to be paid the sum of $104,273.93 by Mobil in relation to the plaintiffs’ costs incurred in investigating the Mobil leak.
11The plaintiffs are also entitled to interest, in relation to the sum of $104,273.93.[17]
[17]Citations omitted.
In the 2018 judgment, his Honour relevantly said:
102The core findings, decision and orders at the earlier trial decided all issues as to the plaintiffs’ damages. This included damages in respect of diminution of value of the relevant land.
103The damages issues raised two inextricably intertwined questions. The first was whether the plaintiffs had suffered and were entitled to recover loss of profit damages in respect of a lost opportunity. The second was whether the plaintiffs had suffered and were entitled to recover damages in respect of the diminution of the value of their land alleged to be caused by the contamination of that land.
104These questions were answered at trial. I decided that the plaintiffs had not established any entitlement to damages (save in respect of the costs of on-site investigation referred to above) on the case which they pleaded because:
(a)in relation to the plaintiffs’ damages claim based on loss of opportunity and consequential loss of profits, that measure of damages was not apposite and therefore not recoverable;
(b)in relation to the plaintiffs’ claim for damages in respect of ‘diminution in value of the plaintiffs’ land’, the plaintiffs had not proved any such loss and damage. Instead, the plaintiffs had inappropriately and unsuccessfully sought to establish causation, and the monetary quantification of such loss and damage, as loss of profits caused by the plaintiffs’ loss of opportunity to develop the plaintiffs’ land residentially.
105I consider that the determination of the abovementioned intertwined issues was legally indispensable to the conclusion in relation to the plaintiffs’ title to damages and as a corollary of the plaintiffs’ claimed causes of action. Both issues were decided as part of both the ultimate decision in respect of the damages claims which were the gist of all the plaintiffs’ claims in the proceedings. The findings and determinations in the 2015 Judgment in relation to damages, finally and forever concluded the intertwined issues to which I have referred.
Reviving the Claim for Diminution in Value Damages
106The plaintiffs now propose to amend to plead a further case against the State for damages to their land caused by contamination, and in that manner, continue the proceeding. This necessarily involves an attempt to revisit these foreclosed damages issues.[18]
[18]Citations omitted.
Winky Pop submitted in this Court that the parties had proceeded at trial on the correct understanding that it was advancing a lost opportunity case, which was conceptually distinct from a diminution in value case. Counsel argued that submissions made at trial would show that this was so. In the event, counsel submitted, the judge was wrong to say that a lost opportunity case and a diminution in value case were ‘inextricably intertwined questions’, such that a dismissal of a lost opportunity case imported a dismissal of a diminution of value case.
We gave leave to the parties to provide excerpts from trial submissions pertaining to this matter. Excerpts were provided. In our opinion, read in context, they do not support the submissions advanced by Winky Pop. Certainly, counsel for Winky Pop made much reference to the allegedly lost opportunity. But such reference was made in the context of submissions that a conventional market value approach to diminution in value would provide inadequate compensation.
It was said that the loss of the opportunity to develop the land, which existed before but not subsequent to the leak, provided the basis for assessment of damages. Two routes led to the same result: application of a discrete loss of opportunity analysis; or application of an unconventional diminution in value analysis. By that approach, Winky Pop was evidently seeking, one way or another, to capture the value of the alleged loss of opportunity.
For their part, both Mobil and the State submitted that there was no occasion to depart from an assessment of damages on a conventional diminution in value basis. In all, the excerpts to which we were referred confirm that the proper basis for the assessment of damages was a key issue in the trial.
As we have already noted, Winky Pop submitted that the judge erred by saying in his 2018 judgment that a lost opportunity case and a diminution in value case were ‘inextricably intertwined’. As is apparent from the extract set out above, however, his Honour said that ‘[t]he damages issues raised two inextricably intertwined questions’.[19] His Honour was quite correct to say so, for two distinct reasons.
[19]See 2018 judgment [102]–[105] (emphasis added).
First, as noted earlier, Winky Pop had particularised its damages claims against Mobil in negligence and nuisance, and against the State in negligence, in the same way. Relevantly, it alleged diminution in value of the land and loss of profits (the latter of which mutated at trial into loss of an opportunity to earn profits). In the 2015 judgment, the judge pointed out that Winky Pop had particularised its claim for diminution in value by saying that it was equal to the alleged loss of profits.[20]
[20]2015 judgment [737].
The particulars to which the judge referred said this:
The diminution in the value of the plaintiffs’ land is equal to the loss of profits particularised in paragraph 19 of the statement of claim.
And further, after setting out three potential development scenarios:
The plaintiffs have lost the opportunity to realise the profits from the development of their land and therefore have lost the value of their land because the extent of the contamination of the plaintiffs’ land has resulted in the land being unable to be sold for its true value.
Thus it was Winky Pop which had intertwined the damages issues, and the judge was correct, on this basis alone, to speak of them being intertwined.
Second, the way in which evidence was adduced and submissions were advanced at trial underlined the interrelationship, as Winky Pop put its case, between the claim founded solely upon the allegedly lost opportunity, and that founded on diminution in value of the land.
According to Winky Pop’s submissions, various passages in the 2015 judgment show that the judge did not decide ― that is, made no ‘finding’ on ― a diminution in value claim. We reject that submission for a number of reasons.
First, such a claim was distinctly pleaded and never abandoned.
Second, there is a distinction between the raising of a claim and the way in which it is sought to be established. On analysis, and consistently with its claim as particularised, Winky Pop contended that if damages were to be assessed on a diminution in value basis, they were to be measured by the value of the alleged lost opportunity.
Third, the way in which Winky Pop advanced its claim at trial, as noted by the judge, could not of itself show that the judge had not considered and passed upon a diminution in value claim of a conventional kind.
Fourth, the defendants unequivocally contended that the proper basis of claim was for diminution in value, assessed on a conventional basis, and that the alleged loss of opportunity was irrelevant and in any event unproven. The proper basis for measuring loss and damage was squarely in issue throughout the trial.
Fifth, the judge decided that damages for loss of opportunity, considered discretely, were inapposite; and that, in any event, no lost opportunity had been established. It necessarily followed that Winky Pop’s diminution in value damages claim, as particularised, must fail.
Finally, the judge did in fact decide that the proper basis for assessing damages was for diminution in value measured in a conventional way. But his Honour also found that Winky Pop had failed to establish such a diminution in value because there was a paucity of evidence.
In all, it is clear that Winky Pop’s claim founded on diminution in value of the land, one of the heads of damage pleaded, remained on foot throughout the trial. The extracts upon which Winky Pop relied, and the particularised damages which it claimed, demonstrate that it sought to have damages under that head assessed by reference to the value of the lost opportunity, rather than by the conventional measure of diminution in market value. Far from demonstrating that a diminution in value claim was not pursued, or was not determined, these circumstances show only that Winky Pop elected not to lead any evidence to support a conventional diminution in market value measure. This was a forensic decision, as counsel for Winky Pop accepted in this Court.
Contending for one method of calculating a head of damage rather than another is not the same as abandoning that head of damage. It is clear that Winky Pop never abandoned the diminution in value head of damage — by contrast with the relief sought by way of a mandatory injunction and the costs of remediation. Thus, and also because the defendants pressed the argument that the proper basis for assessment of damages was diminution in market value calculated in the orthodox way, it was necessary for the trial judge to deal with the issue of the claim for diminution in the value of land as one of the matters in issue. And deal with it he did.[21]
[21]See 2015 judgment [733]–[738], [745]–[753] (as set out above).
Once the judge decided that loss of opportunity to earn profits was not the proper basis upon which to assess damages and that, in any event, Winky Pop had not established that it had lost the opportunity to develop the land residentially by reason of the leak, it followed that both the lost opportunity claim and the diminution in value claim as Winky Pop had particularised it must fail. Winky Pop had not advanced the latter basis of claim in a conventional way, and the skerrick of evidence that there was in that connection was insufficient to permit a finding favourable to Winky Pop to be made. So it was that the entirety of Winky Pop’s claim for damages arising from the contamination of the land due to the leak from the pipeline was heard and determined at the trial.
To be clear, it necessarily followed from the way in which Winky Pop particularised its diminution in value claim that, once the judge concluded that it had not established any lost opportunity, the diminution in value claim as Winky Pop had articulated it was doomed. The judge’s conclusion that Winky Pop had failed to prove a lost opportunity was indispensable to his Honour’s resolution of the claim against Mobil. Whichever way Winky Pop had articulated its claim, the result must have been the same.
Further, as we have said, the judge did address and pass upon the question of assessment of damages on a conventional diminution in value basis. Very understandably, he did so in circumstances where both of the defendants contended that it was the proper basis for assessment of damages and where it was contemplated by all parties that this trial should once and for all decide every damages issue between them.
Ground 1: issue estoppel
As explained earlier, the Mobil trial was conducted on the basis that both defendants would participate on the issue of quantum and any issues relevant to relief, even though the trial was nominally against Mobil only. This hybrid approach was eminently sensible in the circumstances from the perspective of orderly and effective case management and it was beneficial to the parties.
The approach overcame the problem caused by late joinder of the State, by avoiding any delay in the hearing and determination of the case against Mobil, and had the effect of accelerating the hearing and determination of the case against the State (except with respect to its possible liability). It avoided duplication and the risk of inconsistent findings and, as already noted, presented a real opportunity for the final resolution of all matters.
For these perfectly sound reasons, the parties decided to have the Court determine all issues of quantum[22] with both defendants present and participating in the Mobil trial. And that is what happened. All of the parties to the litigation embraced the hybrid arrangement. All of the parties participated in the trial in a complete sense — that is to say, they made opening and closing submissions and exercised the right to lead or not lead evidence and to cross-examine. When Winky Pop exercised its right to alter the focus of its claim to relief, the State, as well as Mobil, met the changing complexion of the claims for relief.
[22]And, at the outset of the trial, such other relief as was sought.
Moreover, as we have already noted, Winky Pop opened its case against both defendants, noting the unusual circumstance that the question of appropriate relief would be determined before the liability of the State had been determined, and that the same relief was sought from the State as from Mobil. As was the case for Mobil, the arrangement meant that the State had one opportunity, and only one, to contest the question of quantum and relief, with such carve-out as was necessary to deal with the fact that the State’s liability was not to be determined at the trial.
In those circumstances, in our view, the doctrine of issue estoppel is applicable. The question of damages was finally determined, adversely to Winky Pop, by the 2015 judgment. Winky Pop had insisted, for sound reasons, on the State being bound by that determination. As the State accepted from the outset, this meant that if the case against it should ever proceed separately, it would be estopped from contending for any different result on the question of damages for negligence. For its part, Winky Pop would likewise be bound as against the State, as its senior counsel properly conceded in this Court.
Moreover, since the damages claimed against Mobil on the nuisance cause of action were exactly the same as the damages claimed against both defendants on the negligence causes of action, it could hardly be said that Winky Pop now should be free to raise a claim in nuisance against the State.
It follows, in our view, that the principles which underpin the doctrine of issue estoppel are fully engaged for the benefit of the State. It would be a grave injustice if ― merely because no order was to be, or was in fact, made against the State in the Mobil trial ― it could not avail itself of those protections. Had that possibility been suggested in the December 2012 hearing before the Associate Justice, we have no doubt that it would have been promptly and explicitly ruled out.
The case falls, in our view, squarely within what Dixon J said in Blair v Curran.[23] That is, the issue estoppel relevantly attaches to the issue of damages, that being one of the ‘ultimate facts which form the ingredients in the cause of action’. That issue was finally and conclusively determined by the 2015 judgment, as all parties intended and desired should occur.
[23](1939) 62 CLR 464, 532 (‘Blair’).
This conclusion also accords with the policy of the Civil Procedure Act 2010. That is, there was a common understanding between the parties on a course of action to be adopted, for the best of case management reasons ― the saving of time and expense to the parties and to the Court. Each party should be held to the spirit of that understanding and not permitted (opportunistically) to switch the focus to the form of the particular orders made. All parties knew what was proposed, and why it was proposed. And a party which took advantage of that arrangement ― judging it to be in its own interest ― should not now be allowed to depart from the understanding to which it gave effect.
For completeness, we note that our conclusion is consistent with what was said recently by this Court in Archibald v Powlett,[24] to which counsel for Mobil drew our attention. A plaintiff sued two defendants for breach of contract in a single proceeding. Because of the poor health of one defendant (A), the proceeding against him was stayed, whilst the proceeding against the other defendant (B) was heard and determined.
[24](2017) 53 VR 645.
When the case against A was subsequently litigated, he relied upon issue estoppel with respect to a matter decided in the trial of the claim against B. The trial judge held that issue estoppel could not apply, A being neither a party against whom judgment was entered in the first trial nor a privy of the defendant in the first trial. The Court (McLeish JA with whom Redlich and Osborn JJA agreed) held that issue estoppel was, in principle, available in the circumstances:
The parties directed some argument to the question whether [A] and [B] were privies. The arguments masked a mistaken premise in the issue estoppel argument, which was that there were here two proceedings. In fact there was a single proceeding which was, in effect, conducted by separate trials. [A] and [B] were parties at all times in the County Court. No question of one being the privy of the other arises.
Although there was a single proceeding, the first trial resulted in a judicial determination, binding on the parties, as to the liability of [B] to the [plaintiff] for breach of contract. That matter having been fully heard and determined, there is no reason in principle why an issue estoppel could not arise, albeit later in the same proceeding, if a party were to seek to have the court make findings of fact or law contrary to a finding that was necessary to the earlier judicial determination.[25]
A’s appeal failed; but that was on the facts, not in point of principle.
[25]Ibid 656 [42]–[43].
In our respectful view, there was no error in the reasoning of the primary judge, whether examined using estoppel doctrine as enunciated in Blair[26] and later cases such as Tomlinson v Ramsay Food Processing Pty Limited[27] or through the prism of ‘findings’ as expressed in the 2012 proviso. In our view, the entirety of the plaintiffs’ claim for damages arising from the contamination of the plaintiffs’ land due to the leak from the pipeline was heard and determined at the trial.
[26](1939) 62 CLR 464.
[27](2015) 256 CLR 507 (‘Tomlinson’).
As counsel for the State submitted, the existence or otherwise of damage was an ultimate fact which formed an ingredient in the causes of action in negligence and nuisance, and was ‘the actual ground upon which the existence of the right [in those causes of action] was negatived’.[28] Further, there is no doubt in this case that the issues in respect of which the estoppel arises are identical, as Winky Pop claimed precisely the same damage from each defendant and the particulars of loss and damage in negligence and nuisance were identical. As a result of the 2015 judgment, there was a determination of the damages issues binding against all three parties.
[28]Blair (1939) 62 CLR 464, 532.
In the circumstances, the primary judge was correct to find that determination of the intertwined damages issues was legally indispensable to the conclusion he reached at trial, and that both issues were decided as part of the ultimate decision in respect of the damages claims, and that the determinations in the 2015 judgment in relation to damages finally and forever concluded those issues.[29] Ground 1 therefore fails.
[29]2018 judgment [105].
Ground 2: prejudice
Under ground 2, Winky Pop submits that the issue estoppel doctrine does not permit of discretionary considerations such as prejudice and that the primary judge erred by taking such matters into account. The respondents accept that such discretionary considerations are irrelevant but submit that the references to prejudice in the 2018 judgment did not affect his Honour’s reasoning about issue estoppel.
The State further submits that, to the extent that the trial judge had regard to the issues broadly described as prejudice, his Honour did so in the context of a submission made by Winky Pop below, relying upon the exception to the issue estoppel principles set out in Arnold v National Westminster Bank PLC.[30] In short, his Honour was merely responding to a matter put in issue in argument and made no error in so doing.
[30][1991] 2 AC 93.
Given our conclusion on the substantive question of issue estoppel, we need say nothing further on this ground. If there was an error, it was immaterial to the outcome. Ground 2 also fails.
Ground 3: Anshun estoppel and abuse of process
In his 2018 judgment, the judge concluded that Winky Pop was ‘Anshun estopped’ from seeking to prosecute its proposed damages claim against the State; and that it ‘should be prevented from perpetrating an abuse of process by advancing this proceeding and [its] proposed damages claim as [it] propose[d] to do’.[31]
[31]2018 judgment [145].
Relevant to his Honour’s conclusions ― not assigning a particular circumstance to a particular conclusion ― were these paragraphs of his reasons:
119Mobil and the State participated in a long, complicated and expensive proceeding. If the plaintiffs’ application to amend succeeded and a further trial occurred, considerable time, effort and expense incurred in relation to the proceeding to date will be rendered fruitless, and the proceeding would have been ineffective in dealing with all damages issues. Furthermore, the continuation of these proceedings will inevitably increase the costs of entertaining claims that should have been dealt with at the first trial. I also consider that the Court’s resources will be inappropriately taxed by ultimately having to conduct two trials of the plaintiffs’ damages case. Accordingly, failing to present and enable the Court to adjudicate all the plaintiffs’ claims together will also exacerbate attendant inefficiencies in the management and disposal of this proceeding and will waste court resources.
120Mobil has successfully contested the totality of the plaintiffs’ damages claims. If the plaintiffs were now permitted to proceed, Mobil will likely be embroiled in a further trial by reason of a State contribution claim against Mobil.
…
126The plaintiffs’ comprehensive failure at trial in relation to their damages claims was determined finally in the 2015 Judgment.
127I do not consider that the plaintiffs’ can avoid the effect of the extant 2015 Judgment and Orders. In particular, the plaintiffs cannot move to revitalise their claim for damages against the State by arguing that the damages now sought are in respect of a different cause of action against the State or that the damages now sought are different because they are to be assessed up to a later date as a result of the nuisance complained of being a continuing nuisance.
128I consider that in substance the plaintiffs are seeking to again raise the issues foreclosed in the 2015 Judgment flowing from the contamination of their land.
…
130In the context of this application, and in particular the plaintiffs’ response to the State’s Summons of 16 March 2017, for the reasons outlined above, the plaintiffs have in my view acted unreasonably in these proceedings to date by not put putting forward the whole of their damages case at trial. They should not be permitted to do so now.
131As stated, an Anshun estoppel may arise where a cause of action, defence, claim or issue relied upon in a subsequent action was so relevant to the subject matter of the first action that it was unreasonable of a party not to rely on such cause of action, defence, claim or issue in the first action.
132In my view, the plaintiffs acted unreasonably in deferring the claim for damages they now seek to prosecute against the State in this proceeding.
133The facts referred to above establish that the parties, and the Court, sought to have the whole of the plaintiffs’ damages case dealt with and adjudicated at trial.
134The plaintiffs also sought to effectuate orders to ensure any findings against Mobil were binding on the State to achieve that purpose.
…
136At trial, the plaintiffs could have presented a case which sought to prove its entitlement to damages for nuisance against the State for diminution of value of the land which had been contaminated. Such a claim was an obvious component of the arguable damages case available to a litigant in the plaintiffs’ position in these proceedings, before and at the time of trial. Indeed, the plaintiffs themselves particularised a claim for ‘diminution in value of the plaintiffs’ land’, but at trial elected not to advance evidence in support of that claim.
137The plaintiffs were at all relevant times mindful of the need, on a number of bases asserted by the plaintiffs themselves, to address their case in a way which would avoid an inefficient, costly and potentially inconsistent determination of their claims. This is clear from the plaintiffs’ own submission, referred to above in support of their application to join the State in November 2012.
138In my view, it is very likely that Mobil would, were I to permit these proceeding to go further as the plaintiffs propose, be brought into the proceedings in the near future pursuant to a contribution claim notified by the State.
139By the 14 December 2012 Orders, the State was bound unequivocally by all findings made at trial in relation to damages. The State bore the potential burden of such findings and the plaintiffs obtained the potential benefit of such findings. In particular, the State accepted it would be subject to issue estoppel in respect of any finding made in relation to Mobil at the trial pursuant to the principles elucidated by the High Court in Blair v Curran.
140There is little doubt that if the plaintiffs had been successful as to damages at trial, the plaintiffs would be relying on the 2015 Judgment and Orders against the State.
141However the plaintiffs’ damages case at trial failed and the plaintiffs now seek to run another damages case against the State in relation to the same land and the same contamination.
142Whereas the plaintiffs sought to amend the Orders of 14 December 2012 to ensure the benefit of any damages findings against the State, in effect the plaintiffs now seek to avoid the burden of those Orders. I consider this to be impermissible in the circumstances.
…
144The plaintiffs’ proposed conduct in this proceeding, including the application to amend, would provide an opportunity to further pursue a damages case against the State. The plaintiffs are estopped on the bases elucidated in Anshun. If permitted to proceed, the plaintiffs’ proposed case against the State’s claim would be tantamount to permitting the plaintiffs to advance a case against the State which the plaintiffs unreasonably failed to advance at trial. It would also be a clear abuse of process if the proposed conduct were permitted in the circumstances of this proceeding to date.[32]
[32]Ibid. It is beside the point that [119]–[120] were dealt with under the heading ‘Prejudice’.
Ground 3 contends that the judge erred by finding that Winky Pop was ‘Anshun estopped’ from further proceeding against the State, and in concluding that it would be an abuse of process if Winky Pop was permitted to further proceed against the State. In light of our conclusion with respect to issue estoppel, it is not strictly necessary to determine this ground. But we will do so in case that conclusion is in error.
The applicable principles are uncontroversial. In Tomlinson,[33] the High Court observed that three forms of estoppel have been recognised by the common law of Australia, namely ‘cause of action’ estoppel, issue estoppel and Anshun estoppel.[34] In relation to Anshun estoppel, the Court said:
[Anshun estoppel] operates to preclude the assertion of a claim, or the raising of an issue of fact or law, if that claim or issue was so connected with the subject matter of the first proceeding as to have made it unreasonable in the context of that first proceeding for the claim not to have been made or the issue not to have been raised in that proceeding.[35]
[33](2015) 256 CLR 507.
[34]Ibid 517–18 [22].
[35]Ibid, citing Anshun (1981) 147 CLR 589, 598, 602–3; Hoysted v Federal Commissioner of Taxation (1925) 37 CLR 290; Rogers v The Queen (1994) 181 CLR 251, 275.
The Court also noted that the doctrine of abuse of process overlaps with the doctrine of estoppel:
The doctrine of abuse of process is informed in part by similar considerations of finality and fairness. Applied to the assertion of rights or obligations, or to the raising of issues in successive proceedings, it overlaps with the doctrine of estoppel. Thus, the assertion of a right or obligation, or the raising of an issue of fact or law, in a subsequent proceeding can be simultaneously: (1) the subject of an estoppel which has resulted from a final judgment in an earlier proceeding; and (2) conduct which constitutes an abuse of process in the subsequent proceeding.
Abuse of process, which may be invoked in areas in which estoppels also apply, is inherently broader and more flexible than estoppel. Although insusceptible of a formulation which comprises closed categories, 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 …
Accordingly, it has been recognised that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel. Similarly, 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 in the later proceeding 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.[36]
[36]Tomlinson (2015) 256 CLR 507, 518–19 [24]–[26] (citations omitted).
Winky Pop submitted that Anshun estoppel could not preclude it raising a claim in nuisance against the State. First, it was said, the regime established for future claims against the State was to be found entirely in the 14 December 2012 orders; and, second, the claim which Winky Pop sought to pursue would not be a proceeding between the parties to the 2015 judgment. Only Mobil had the benefit of an Anshun estoppel in respect of that judgment.
Winky Pop submitted that only in extreme cases would a proceeding be permanently stayed for abuse of process. It submitted that this was not a case where the proposed use of the court’s procedures was unjustifiably oppressive to the State, or where the proposed use of the court’s procedures would bring the administration of justice into disrepute.
The State, supported by Mobil, submitted that, for the purposes of Anshun estoppel, it was a party at the time when Winky Pop was required ― and understood that it was required ― to place its whole claim before the Court; and when, in the Mobil trial, the entire question of relief was intended to be agitated. The 14 December 2012 orders did not oust the operation of the general law.
As to abuse of process, the State submitted that, when it was joined, nuisance was a live cause of action, likewise the proper measure of damage. Yet Winky Pop chose to hold back on its purported case in nuisance against the State, and hold back from pursuing a diminution in value claim on conventional proofs.
In our opinion, the judge was correct to hold that an Anshun estoppel operated to the State’s advantage. Even if that were not so, we consider that his Honour’s conclusion on abuse of process was fully justified.
As to the first of those conclusions, we reject Winky Pop’s contention that a regime for future claims against the State was exclusively contained within the 14 December 2012 orders. Likewise, we reject the notion that Mobil alone would enjoy the protection of any Anshun estoppel. Both the State and Mobil were parties to the proceeding and, by reason of the hybrid arrangement, the State fully participated in the Mobil trial, albeit that findings of fact referable to relief, and resulting orders, were made against Mobil alone. As we have said more than once, the whole point of the arrangement was to enable all issues of quantum and other relief to be heard and determined at the one time.
Assuming, however, that an Anshun estoppel was not available to the State, we are of the firm opinion that to have permitted Winky Pop to raise a claim for damages for nuisance against the State would have given rise to an abuse of process. That is so having regard to:
(f) the course of events which led up to the trial;
(g) the way in which Winky Pop chose to formulate and pursue its case at trial;
(h) the duration of the trial, and thus the demand upon the Court’s resources;
(i) the cost and expense of that trial for the parties;
(j) the further demand upon the Court’s resources of a second trial on the issue of quantum, which should have been unnecessary; and
(k) the certainty that not only Winky Pop but at least the State ― and, it might well be, Mobil ― would be exposed to the cost and expense of a further trial on the issue of quantum.
In all the circumstances, the appellation ‘extreme case’ is apt. We think that there was no merit to Winky Pop’s repeated assertion in this Court that, in effect, all it wanted to do was agitate a claim against the State which it had not previously litigated.
Ground 4: the application to amend the statement of claim
For the reasons already given, the judge was entirely correct to refuse Winky Pop’s application to amend its statement of claim to add a claim for continuing nuisance against the State. Ground 4 therefore fails.
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