Zetta Jet Pte Ltd & Anor v The Ship "Dragon Pearl" & Anor

[2019] HCATrans 14

[2019] HCATrans 014

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M143 of 2018

B e t w e e n -

ZETTA JET PTE LTD (UEN 201529010W)

First Applicant

JONATHAN D KING AS THE CHAPTER 7 TRUSTEE OF ZETTA JET PTE LTD

Second Applicant

and

THE SHIP “DRAGON PEARL”

First Respondent

LINKAGE ACCESS LIMITED

Second Respondent

Application for special leave to appeal

GAGELER J
NETTLE J
EDELMAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 15 FEBRUARY 2019, AT 10.51 AM

Copyright in the High Court of Australia

____________________

MR D.F. JACKSON, QC:   If the Court pleases, I appear with my learned friend, MR O. BIGOS, for the applicants.  (instructed by DLA Piper Australia)

MR A.M. STEWART, SC:   May the Court please, I appear with my learned friend, MR N.J. WALLWORK, for the respondents.  (instructed by Mills Oakley)

GAGELER J:   Mr Jackson.

MR JACKSON:   Your Honours, the issue in the application is whether, in order for a plea of res judicata to succeed, the judgment relied upon to found that plea must be won on the merits, if I could put those words there.

GAGELER J:   Whatever that means.

MR JACKSON:   Whatever that means, your Honour, of course.  May I come to the in just a moment.  Your Honours, this was a case where the earlier judgment was one for dismissal of the proceedings but it had been given in circumstances where, although the matter was called on for trial, no evidence was adduced and the applicants did not even open their case.  I will take your Honours to the detail of that if necessary.  Your Honours, that gives rise, of course, to the question whether there is a requirement in Australian law for the earlier decision to be on the merits and if so whether that requirement was satisfied in the particular case. 

Your Honours, could I just say in relation to that that as to the broader proposition, there is a body of opinion in the United Kingdom, the United States and in Australia that for a plea of res judicata to succeed the earlier decision should have been ‑ I use the phrase again – on the merits.

GAGELER J:   The Court should have had jurisdiction and the plaintiff should have had standing, but what more is there to it than that?

MR JACKSON:   Your Honour, what there needs to be, in our submission, is a consideration of the case on the material that is used in support of it, to take the simplest case, the plaintiff’s case.

GAGELER J:   What about Chamberlain’s Case?

MR JACKSON:   Chamberlain’s Case, your Honour, was one where the facts were agreed.  Of course, there would be a wide variety of circumstances, but Chamberlain was one where the facts were agreed and then they came into judgment.

EDELMAN J:   What is wrong with a test on the merits that asks whether it was a matter that was more than just one, that was on procedure alone?

MR JACKSON:   I am sorry, your Honour; I just did not catch the last part of what your Honour said.

EDELMAN J:   Which is more than a matter which was concerned with procedure alone?

MR JACKSON:   Your Honour, that would be a circumstance where what one would have would be a case which has been heard to a degree.  The question of the degree would be one depending on each case.

EDELMAN J:   Although a default judgment need not be heard to a degree but it is not a matter that is regarded as being decided on procedure alone and therefore it is one where the cause of action estoppel will still arise.

MR JACKSON:   Cause of action estoppel may arise, your Honour, in the case of a default judgment because the view of the conduct of the proceedings is that, in effect, it is the same is if the matter had been heard adversely to the party in question.  Your Honour the presiding judge asked me about on the merits.  Your Honours would have seen the summary of the position in the United Kingdom by the Master of the Rolls in Gray v Police Appeals Tribunal [2018] 1 WLR 1609. There is a volume of appellant’s authorities and your Honours will see that decision behind tab 3. The relevant parts of it are at the page numbered 1620 – I am sorry, your Honour, they are here.

GAGELER J:   Perhaps you should hand it up.  For my own part, Mr Jackson, I have not focused on this judgment or the passage that you have referred to.

MR JACKSON:   No, your Honour.  I was going to take your Honours to page 1620 in that and your Honours will see in paragraph 43 it was said:

It is also common ground that the constituent elements of cause of action estoppel were the following six matters -

I will not read them out but your Honours will see the third‑last line of the paragraph:

and (b) on the merits ‑ ‑ ‑

GAGELER J:   That is just taken from Justice Handley’s recitation, I think.

MR JACKSON:   It is, your Honour.  It also is reflected in what is in paragraph 47, which is what was said by the House of Lords per Lord Brandon in the The Sennar (No 2) and you will see the examination of what is said to be on the merits.

EDELMAN J:   The other judges all agreed with both Lord Diplock and Lord Brandon.

MR JACKSON:   Yes.

EDELMAN J:   Lord Diplock’s formulation - at least his positive formulation upon the merits is a fair bit broader than Lord Brandon’s.

MR JACKSON:   Tends to be more the question of finality, I think, your Honour.

EDELMAN J:   Yes.

MR JACKSON:   Yes.  Your Honour, that is so, and it may be that the matter could be better or differently put but it is, in our submission, a case where one has that summary of the position in the United Kingdom.  In paragraph 29 of our application at page 69 of the application book there is a reference to the position in the United States and one has the decision of the Court of Appeal in Western Australia in Willoughby v Clayton Utz (No 2), which is behind tab 4 in that booklet.

GAGELER J:   Was that a case where the plaintiff was found not to have standing?

MR JACKSON:   I think that is so, your Honour, yes, but in terms of the principle applicable the relevant parts are paragraphs 28 and 29, which you will see at page 107.

GAGELER J:   Mr Jackson, have you found any case in any jurisdiction that resembles factually the present case - the plaintiff turns up for one reason or another, does not present any evidence and suffers the inevitable consequence at a final hearing?

MR JACKSON:   Your Honour, I cannot point to one that says that, but that is really because most of such cases are ones dealt with by abuse of process.  The Court has quite recently of course dealt with questions of abuse of process and ‑ ‑ ‑

EDELMAN J:   Why would not the facts of this case be, a fortiori, the default judgment circumstances?

MR JACKSON:   Your Honour, there would for this reason, that what one had was a case where there had been prima facie fraud of a significant kind.  In relation to that it appeared that the reason why the case was not proceeding was because of the lack of availability, perhaps lack of willingness of some witnesses.  The circumstances were such where the ultimate issue had not been decided ‑ by consideration of the ultimate issue, I mean.  Your Honour, it is a case where there would be an argument each way, I suppose, on the question of whether there should or should not be a dismissal of the case for abuse of process, but not because there had been a res judicata.

NETTLE J:   Mr Jackson, accepting at this point the principle and that you might win it – you might not but you might – would you not then be stuck with abuse of process, given the way it was run below?

MR JACKSON:   Your Honour, undoubtedly there may well be an argument about abuse of process, but in relation to that there would be a question of going into in some detail the reasons why the case on the second occasion had not been able to be presented in the appropriate way.  Your Honour, we might win, we might lose, but the point we seek to make is that if one is talking about cases where there is a second go, as it were, involved, we would submit that it is more appropriate for them to be dealt with as matters of abuse of process rather than by the application of res judicata because it is possible to go a little more into what happened in the interests of justice.  We have referred in paragraph 8 of our application to the considerations relating to the interests of justice.

Your Honours, much reliance is placed by the respondents and in the courts below on the Court’s decision in Tomlinson v Ramsey Food Processing 256 CLR 507. The relevant passage in Tomlinson, which is the first of the cases in that book, is page 516, paragraph 20.  Your Honours, if one looks at that passage what it says, and if I may say so, with respect, all that it says is that res judicata in Australia involves the quelling by a final judgment of the relevant controversy.  It does not deal with the method of quelling and as I – Chamberlain, the decision principally relied on for that passage, your Honours, was one where there were agreed facts.  That that is so you can see from Chamberlain 164 CLR 502 about halfway down the page.

In the present case, the Full Court in paragraphs 15 to 17 of its reasons at page 44 of the application book attributed, we would submit, rather too much to Tomlinson and the Australian cases which are footnoted to paragraph 17 of the Full Court’s reasons do not, in our submission, go as far as there suggested.  Your Honours, in particular you will see a passing footnoted reference to Virgin Atlantic but that is simply a recitation of Lord Sumption’s frequently referred to division of res judicata, or use it as a res judicata into six different kinds.

EDELMAN J:   In the end, though, this point really just reduces to a matter of nomenclature, does it not?  Even if one were to accept everything you say, that this is not really a merger type case, it is really a cause of action estoppel and that one needs to have a decision on the merits it still comes down to whether one takes a very broad view of “on the merits” or a very narrow view of “on the merits”.

MR JACKSON:   Your Honour, in that regard, there are, if I could say, two aspects of “on the merits”.  One does need to bear in mind in relation to one aspect that different cases are conducted differently.  One can have a simple case involving elementary principles of negligence and it is hardly necessary for a judge to recite what are the elements of a tort of negligence in dealing with a claim.

One can have cases where the facts are agreed.  One can have a demurrer type of argument.  One can have cases where the facts are very much in issue.  But in the end there does need to be a decision, if I can put it shortly, on the facts, and when I say “on the facts” I mean as facts leading to a legal conclusion.  That is one thing, your Honour.

The other thing is, if one is looking at it from the point of view – and we would submit it is the preferable point of view – of there being a question of possible abuse of process, the facts one is able to look at then are ones that are more conducive to seeing whether it is appropriate for the various reasons of court efficiency and court systems and not troubling people when they should not be, to deal with them on those facts.

Could I deal with another aspect and that is is this an appropriate case?  That turns on what took place when the matter came on for trial.  What took place can be seen from an extract from the transcript on 7 June 2018.  The relevant passages, your Honours, are in a document that your Honours should have, which is the affidavit of Mr Tsiakis.  It contains the transcript of the hearings but it is very much towards the back of that.  Page numbers are at the bottom of the page.  It is page 79.  It commences really at about line 7. 

The pendulum swings a little, I have to say, as one goes through it.  The passage goes on to page 82 at about lines 15 to 20.  The judge was not trying to box him into anything but your Honours will see that passage – it goes down to the bottom of the page – and in the event the order for dismissal ensued.

Finally, if I could just say this.  I have submitted already that cases of wasted expenditure, costs of preparing for two trials, et cetera, can better be dealt with by exercise of the discretion to stay proceedings or by appropriate orders for costs, rather than by a rigid rule which attributes to judgments, not just finality in the matter before it, but blocks the future potential resolution of the underlying issue which is, your Honours, in our submission, the true “quelling”, if I could pick up that word, of the controversy.

GAGELER J:   Thank you, Mr Jackson.  Mr Stewart, we do not need to call on you.

We are not persuaded that there is any reason to doubt the correctness of the outcome in the Full Court of the Federal Court and we are not persuaded that this is an appropriate vehicle for exploring any general issue concerning the operation of the doctrine of res judicata.  Special leave to appeal is refused with costs.

AT 11.09 AM THE MATTER WAS CONCLUDED