[2021] NSWCA 258
Hana v Shad Legal Services Pty Ltd
(1) Summons seeking leave to appeal dismissed. (2) Applicant to pay the costs of the respondent.
Catchwords
CIVIL PROCEDURE — pleadings — striking out — abuse of process — where statement of claim pleads fact inconsistent with finding of Court of Appeal in earlier proceedings — statement of claim constitutes collateral attack on Court of Appeal’s decision — statement of claim struck out as abuse of process
Cases cited
- Abriel v Levitt[2004] NSWCA 258
- Cleary v Jeans (2006) 65 NSWLR 355;[2006] NSWCA 9
- D’Orta-Ekenaike v Victorian Legal Aid (2005) 223 CLR 1;[2005] HCA 12
- Driclad Pty Ltd v Federal Commissioner of Taxation (1968) 121 CLR 45 at 64;[1968] HCA 91
- Ekes v Commonwealth Bank of Australia[2014] NSWCA 336
- Foukkare v Angreb Pty Ltd[2006] NSWCA 335
- Habib v Radio 2UE Sydney Pty Ltd[2009] NSWCA 231
- Harris v Rapisarda[2019] NSWSC 1088
- Mekhail v Hana; Mekail v Hana; In the Estate of Nadia Mekhail (No 3)[2018] NSWSC 1452
- Mekhail v Hana; Mekail v Hana[2019] NSWCA 197
- O’Shane v Harbour Radio Pty Ltd (2013) 85 NSWLR 698;[2013] NSWCA 315
- Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589;[1981] HCA 45
- Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198;[2001] NSWCA 142
- Rogers v Roche (No 1) [2017] 2 Qd R 306;[2016] QCA 340
- State Bank of New South Wales v Stenhouse (1997) Aust Tort Reports ¶81-423
- Tobin v Ezekiel (2012) 83 NSWLR 757;[2012] NSWCA 285
- Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507;[2015] HCA 28
- TriCare (Hastings) Ltd v Allen[2015] NSWCA 344
- Walpole v Partridge and Wilson[1994] QB 106
Legislation cited
- Supreme Court Act 1970 (NSW), § 101
Judgment
The Court (per Payne JA, Bathurst CJ and Brereton JA agreeing) held, dismissing the summons seeking leave to appeal:
- [1]
BATHURST CJ: I have had the advantage of reading the judgment of Payne JA in draft. I agree with the orders proposed by his Honour and subject to what I have written below with his Honour’s reasons.
- [2]
Notwithstanding the views expressed by Payne JA, like the primary judge I have some doubt as to whether the applicant’s claim can be properly reformulated in such a manner as not to constitute an abuse of process.
- [3]
It is undoubtedly correct, proceedings can be brought against a solicitor (or counsel) claiming damages for loss suffered as a result of the negligent conduct of litigation. However, such litigation does not amount to a collateral attack on the judgment given in the previous proceedings as the judgment or order in those proceedings provides the foundation on which the claim is made. That is the rationale behind both the cases referred to by Payne JA: Cleary v Jeans (2006) 65 NSWLR 355; [2006] NSWCA 9 and Rogers v Roche (No 1) [2017] 2 Qd R 306; [2016] QCA 340.
- [4]
However, there may well be a difference where the claim effectively is a claim for a loss of opportunity for Ms Mekhail to execute a different will even if essentially in the same terms (see Payne JA at [67]). Ultimately such a claim may give rise to the issue of whether a will in the terms of the 2014 Will would have reflected the true will of the testator. If that is the case it could well be that such a claim amounted to an abuse of process.
- [5]
However, it is not necessary to express a definitive view on this issue. The applicant has been granted leave to replead and any consideration of whether any amended pleading amounts to an abuse of process can only be considered in the context of the pleading as formulated.
- [6]
PAYNE JA: The late Ms Nadia Mekhail passed away on 2 April 2015 after a sustained battle with cancer. On or about 12 December 2014, she executed a will prepared by Mr Thomas Liondos, an employed solicitor of the respondent, Shad Legal Services Pty Ltd. That will appointed the applicant, Ms Georgette Hana, as executor and left to the applicant the entirety of her (Ms Mekhail’s) estate (the “2014 Will”). The 2014 Will had been prepared by Mr Liondos based on instructions conveyed to him by the applicant’s son, Mr Bishoy Adel Hana, and followed a single consultation with Ms Mekhail, at which the applicant was also present.
- [7]
Ms Mekhail had previously made a will in 2001, in which she made a number of gifts to the Coptic Orthodox Church and left the residue of her estate to her husband or, if he predeceased her, to her five nephews through marriage (the “2001 Will”).
- [8]
Following Ms Mekhail’s death, two of her nephews who were residuary beneficiaries under the 2001 Will (by reason of Ms Mekhail having survived her husband), Messrs Magdy Mekhail and Yousseff Mekail (who I will refer to as “the nephews”), commenced proceedings in the Equity Division of the NSW Supreme Court against the applicant seeking a grant of probate in respect of the 2001 Will (the “Probate Proceedings”). By cross-claim, the applicant sought a grant of probate of the 2014 Will.
- [9]
On 5 October 2018, Slattery J dismissed the proceedings brought by Ms Mekhail’s nephews and granted the applicant probate of the 2014 Will: Mekhail v Hana; Mekail v Hana; In the Estate of Nadia Mekhail (No 3) [2018] NSWSC 1452. His Honour found that the nephews had established “suspicious circumstances” surrounding the making of the 2014 Will. Although a number of suspicious circumstances were identified, his Honour focused on the two “quite sufficient” suspicious circumstances that:
- (1)
the applicant and the applicant’s son, Mr Bishoy Adel Hana, had led Mr Liondos to believe that they had a relationship of mother, daughter and grandson and did not disabuse him of those relationships in a way that would allow him to give the complete advice to Ms Mekhail that he would otherwise have given (at [310]); and
- (2)
this conduct led to the 2014 Will falsely describing the applicant as Ms Mekhail’s “daughter”, and the applicant’s husband, Mr Adel Hana, as Ms Mekhail’s “son in law” (at [311]).
- (1)
- [10]
However, Slattery J was ultimately satisfied that Ms Mekhail “knew and approved the contents of [the 2014 Will] and comprehended the effect of what she was doing” (at [312]), and had testamentary capacity when she executed that will on 12 December 2014 (at [327]).
- [11]
On 14 August 2019, this Court set aside the primary judge’s orders: Mekhail v Hana; Mekail v Hana [2019] NSWCA 197. Leeming JA (with whom Basten JA and Emmett AJA agreed) found that the primary judge had adopted an “unduly circumscribed” approach by “expressly refrain[ing] from examining the quantity and quality of the matters giving rise to suspicion once he had concluded that the onus had shifted”, and should instead have “determine[d] the full nature of the suspicious circumstances – ‘the source and nature of any doubt or suspicion’ – as part of the evaluation of whether [the applicant’s] burden had been discharged” (at [136]). Leeming JA identified an additional eight “suspicious circumstances” (listed at [147]) which should have formed part of Slattery J’s assessment, which added to the suspicion surrounding the execution of the 2014 Will, and which were not sufficiently dispelled by the applicant so as to discharge her onus of proof (at [162]). Those eight matters which caused the applicant to bear the onus of proving the crucial fact of Ms Mekhail’s testamentary intention at the time she made the 2014 Will were:
- (1)
the 2014 Will was drafted on instructions from the applicant’s son rather than from Ms Mekhail;
- (2)
the 2014 Will left nothing to the Coptic Church, and there was no explanation for a dying woman to change her testamentary intentions so as to leave nothing to the Church;
- (3)
it was anticipated that the 2014 Will might be contested;
- (4)
the applicant and her son were present when the 2014 Will was made;
- (5)
Mr Liondos made various factual errors that were reflected in the drafting of the 2014 Will and which were because of lies told to him by the applicant’s son with the applicant’s full knowledge;
- (6)
there was an unexplained change in instructions relating to the executor and beneficiary under the will;
- (7)
the applicant’s son attempted to obtain two powers of attorney for Ms Mekhail; and
- (8)
the 2014 Will and documentation were made with a sense of urgency.
- (1)
- [12]
The Court was not satisfied that Ms Mekhail knew the contents of the will and appreciated the effect of what she was doing so that it could be said that the 2014 Will contained her real intention and reflected her true will as testator, applying Tobin v Ezekiel (2012) 83 NSWLR 757; [2012] NSWCA 285.
- [13]
A critical finding made by the Court was that the applicant and her son had lied to Mr Liondos about the nature of their relationship with Ms Mekhail; Mr Liondos was told that the applicant was Ms Mekhail’s daughter and Mr Bishoy Adel Hana was Ms Mekhail’s grandson. The Court found that those lies told to Mr Liondos prevented an inquiry into why Ms Mekhail no longer wished to leave part of her property to the Coptic Church and her deceased husband’s nephews:
- [14]
This Court set aside the grant of probate of the 2014 Will, and granted probate of the 2001 Will in solemn form.
The present case
- [15]
On 3 November 2020, the applicant commenced proceedings against the respondent, Shad Legal Services Pty Ltd, alleging professional negligence in relation to the preparation and execution of the 2014 Will. The terms of the Statement of Claim need to be addressed in detail.
- [16]
The first matter to notice is that the pleading is anchored by reference to the actual 2014 Will, which is a defined term in the Statement of Claim, and not by reference to a hypothetical will (even one in the same terms) which would or might have been made absent the pleaded negligence:
- [17]
The Statement of Claim then pleaded that the respondent owed a duty to Ms Mekhail as its client to take reasonable care in “the preparation and drafting” of the 2014 Will. It was alleged that Ms Mekhail’s testamentary intentions were for the applicant to be the sole beneficiary of her estate pursuant to the 2014 Will. Accordingly, the respondent also owed a duty of care to the applicant, as there was a coincidence between Ms Mekhail’s alleged testamentary intention and the applicant’s interest as sole beneficiary. The risk of harm to the applicant was said to be that no probate would be granted of the 2014 Will.
- [18]
The applicant alleged that the respondent breached its duty by failing to give Ms Mekhail “independent advice” without the applicant being present, and by not having a medical practitioner present in conference with Ms Mekhail who could thereby certify her testamentary capacity. The applicant pleaded that if not for the respondent’s breach, Ms Mekhail would have given the same instructions in relation to the preparation of the 2014 Will but in the absence of the “suspicious circumstances” identified in the Probate Proceedings; any challenge to probate being granted of the 2014 Will therefore either would not have been brought or would have been unsuccessful, and the applicant would have enjoyed the benefits of Ms Mekhail’s estate. Critically, for present purposes, the Statement of Claim made allegations of breach of duty by the respondent, absent which, it was alleged, probate of the 2014 Will would have been granted to the applicant.
Decision of the primary judge
- [19]
On 29 January 2021, the respondent filed a notice of motion seeking orders that the proceedings be dismissed or stayed, or the Statement of Claim be struck out on the basis that the proceedings are an abuse of process and/or the principles in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45 (“Anshun”) applied.
- [20]
The primary judge observed that abuse of process provides a broader principle than Anshun estoppel as it extends to persons who were neither a party to earlier proceedings, nor the privy of a party to those earlier proceedings.
- [21]
In identifying the basis of the abuse of process claim, the primary judge assessed the considerations set out by Giles CJ Comm Div in State Bank of New South Wales v Stenhouse (1997) Aust Tort Reports ¶81-423 (“Stenhouse”) (quoted at [43] below). His Honour concluded that “[a] consideration of these factors points strongly to a finding that the defendant has satisfied the heavy onus cast upon it of proving an abuse of process”. Chief among these factors was the identity between the relevant issues in the Probate Proceedings and in the Statement of Claim (factors (a) and (d) in Stenhouse). The primary judge considered that there was in substance no difference between:
- (1)
the entire predicate of the Statement of Claim, being that it was Ms Mekhail’s intention when executing the 2014 Will to leave the entirety of her estate to the applicant; and
- (2)
the ultimate issue in the Probate Proceedings, being whether “the testator or testatrix knew the contents of the [2014 Will] and appreciated its effect, so that it can be said that the will contains the real intention and reflects the true will of the testator or testatrix” (at [131] NSWCA judgment).
- (1)
- [22]
Given that the issue, common to both the Probate Proceedings and the Statement of Claim, was finally disposed of in this Court in a manner adverse to the applicant, this supported the respondent’s claim for abuse of process.
- [23]
The other Stenhouse factors which also assisted the respondent in discharging the onus of demonstrating abuse of process included:
- (1)
to the extent there was “fresh evidence”, this was merely counterfactual evidence that might have been available if the respondent had acted differently, and in any case only sought to contradict the critical finding in the Probate Proceedings;
- (2)
oppression and unfairness to the respondent if the issue is relitigated, in light of the relief granted in the Probate Proceedings;
- (3)
absence of any injustice flowing to the applicant from denying her the ability to contend that, but for the respondent’s negligence, she might have had additional evidence to prove now what she could not in the Probate Proceedings.
- (1)
- [24]
The primary judge then addressed the principle of finality which informs the doctrine of abuse of process. His Honour found that the premise of the applicant’s Statement of Claim was directly inconsistent with the Court of Appeal’s finding on the ultimate issue in the Probate Proceedings. The Statement of Claim therefore undermined the finality of the Probate Proceedings by challenging “precisely the same ultimate finding made in those proceedings” and was an abuse of process.
- [25]
Having found that the Statement of Claim should be struck out as an abuse of process, strictly speaking the primary judge did not need to consider the Anshun estoppel point. However, his Honour suggested that, if it were necessary to decide the point, the respondent’s Anshun estoppel argument would not have succeeded as he was “not satisfied that it was unreasonable for [the applicant] not to bring a cross-claim against [the respondent] in the probate proceedings”.
- [26]
Ultimately the primary judge concluded that the Statement of Claim should be struck out as an abuse of process but granted leave to replead. On 31 May 2021, his Honour made the following orders:
- (1)
The statement of claim be struck out;
- (2)
The plaintiff file and serve any amended statement of claim on or before 27 June 2021;
- (3)
The proceedings be listed for directions before the Registrar at 9.00am on 6 July 2021;
- (4)
The plaintiff pay the defendant’s costs of its notice of motion dated 29 January 2021; and
- (5)
The notice of motion be otherwise dismissed.
- (1)
Application for leave to appeal
- [27]
On 28 June 2021 (the day after the applicant was due to file and serve any amended statement of claim in accordance with the primary judge’s orders) the applicant filed a summons seeking leave to appeal. The Draft Notice of Appeal contains two grounds:
- (1)
The primary judge erred in finding that the proceedings are an abuse of process.
- (2)
The primary judge erred in finding at J[26]-[27] that the plaintiff’s cause of action was premised on making a finding inconsistent with the Court of Appeal’s finding in Mekhail v Hana; Mekail v Hana [2019] NSWCA 197 as to the Deceased’s testamentary intention in December 2014.
- (1)
Consideration
- [28]
Although, in writing, the applicant submitted that if the primary judge’s orders were not overturned, she could not reformulate her claim, at the commencement of Senior Counsel for the applicant’s oral address in this Court it was stated that “at the outset it's accepted that there would be the need to re‑plead”.
- [29]
As I have said, the primary judge gave the applicant an opportunity to replead. Whilst it is true that when doing so the primary judge expressed some scepticism, which I do not share, about the ability of the applicant properly to reformulate her claim in a manner that does not constitute an abuse of process, the orders actually made by the primary judge, striking out the pleading and giving the applicant an opportunity to replead, were correct.
- [30]
The application for leave to appeal is made pursuant to s 101(2)(e) of the Supreme Court Act 1970 (NSW), which permits an appeal to be brought, with leave, against “an interlocutory judgment or order in proceedings in the Court”. A “judgment or order” in this context means an operative judicial act and not the reasons for judgment: Driclad Pty Ltd v Federal Commissioner of Taxation (1968) 121 CLR 45 at 64; [1968] HCA 91; TriCare (Hastings) Ltd v Allen [2015] NSWCA 344 at [10]. The applicant for leave to appeal does not dispute that the orders made by the primary judge were correct. For that reason, I would refuse leave to appeal.
- [31]
In Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 (“Tomlinson”), French CJ, Bell, Gageler and Keane JJ explained that the doctrine of abuse of process is related to and overlaps with Anshun estoppel, but is also more extensive in that it is not confined to instances where the parties (or their privies) are the same:
- [32]
In O’Shane v Harbour Radio Pty Ltd (2013) 85 NSWLR 698; [2013] NSWCA 315 (“O’Shane”), Beazley P (McColl JA and Tobias AJA agreeing) [1] said:
- [33]
The respondent in the present proceedings was not a party in the Probate Proceedings. Nor was the respondent a privy of a party to those proceedings so as to be able to assert an estoppel against the applicant. It can hardly be said that the respondent had a legal interest in the Probate Proceedings which was represented by the nephews. It is not enough that there might be said to be some alignment between the “interests” of the applicant as proponent of the 2014 Will and of the respondent as the firm of solicitors instructed to prepare and procure the execution of the 2014 Will. This is because the interest of the privy must be a legal interest: Tomlinson at [35].
- [34]
In a case where the respondent was neither party nor privy to the earlier Probate Proceedings, Anshun estoppel does not supply the appropriate test to determine whether the later proceedings should be allowed or restrained. In Ekes v Commonwealth Bank of Australia [2014] NSWCA 336 Bathurst CJ (Beazley P and Emmett JA agreeing) said:
- [35]
Instead, as his Honour then explained, where the party resisting the bringing of the latter proceedings was not a party to the earlier proceedings:
- [36]
The Court has an inherent jurisdiction to prevent an abuse of its procedure. Such an abuse of process may arise from two bases: oppression to a party, or disrepute to the administration of justice. As explained in Tomlinson:
- [37]
Those bases of oppression and disrepute to the administration of justice had been earlier recognised by Giles CJ Comm Div in Stenhouse:
- [38]
The doctrine of abuse of process is also informed by the principle of finality of litigation, in that if finality is violated this could both prejudice the other party to that litigation and bring disrepute to the administration of justice by throwing doubt on the conclusiveness of a court’s determination.
- [39]
In D’Orta-Ekenaike v Victorian Legal Aid (2005) 223 CLR 1; [2005] HCA 12, Gleeson CJ, Gummow, Hayne and Heydon JJ said of the doctrine of finality:
- [40]
Their Honours also observed that to the extent that there are “qualification[s]” to the rule against reopening controversies, such as the appeal process and the “fresh evidence rule”, these exceptions still abide by the concept of finality (at [35]).
- [41]
Abuse of process is not confined to instances where a party seeks to relitigate a positive finding of fact or law, but also covers instances where an issue was raised (but not necessarily determined) or should have been raised (and therefore certainly was not determined by reason of its omission) in those earlier proceedings. So much was determined by the High Court in Tomlinson:
- [42]
However, not all attempts to litigate issues already resolved in prior proceedings will amount to an abuse of process. As I will explain, there are principles, particularly drawn from solicitor’s negligence cases, which are applicable in considering the case the applicant submitted that she wished to advance in an amended pleading.
- [43]
A useful non-exhaustive list of considerations which may inform a finding of abuse of process is set out in Stenhouse. As noted by Beazley P in O’Shane at [107], the approach in Stenhouse was approved by this Court in Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198; [2001] NSWCA 142; it has been applied on a number of occasions since: see eg. Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231; Foukkare v Angreb Pty Ltd [2006] NSWCA 335; Abriel v Levitt [2004] NSWCA 258. The matters identified by Giles CJ Comm Div in Stenhouse were the following:
- [44]
The High Court has cautioned that the party asserting the abuse of process bears a heavy onus. As explained by Beazley P in O’Shane:
- [45]
Both parties referred to the decision of Stevenson J in Harris v Rapisarda [2019] NSWSC 1088 (“Harris”). The primary judge and the respondent distinguished the present case from Harris. In Harris, the plaintiff was only partly successful in claiming damages from a builder for defective building work, which was subject to a set-off for amounts payable to the builder under the building contract. The plaintiff then commenced proceedings for negligence against the firm of architects responsible for drafting the building contract. Stevenson J described the subsequent claim against the architects as involving:
- [46]
The applicant’s principal submission was that the primary judge erred in holding that her Statement of Claim was premised on a finding inconsistent with a finding made in the Probate Proceedings. It was submitted that the factual premise was not that Ms Mekhail intended to leave the entirety of her estate to the applicant when she executed the 2014 Will, but rather that “the proceedings below would be conducted on a different evidentiary basis to the Probate Proceedings and would involve a counterfactual inquiry as to whether the applicant would have succeeded in the Probate Proceedings with different evidence”.
- [47]
I am unable to agree. The critical factual issue underpinning the present proceedings, as pleaded, was that it was Ms Mekhail’s intention when executing the 2014 Will to leave the entirety of her estate to the applicant pursuant to that Will. The “ultimate issue” in the Probate Proceedings, was whether “the testator or testatrix knew the contents of the [2014 Will] and appreciated its effect, so that it can be said that the will contains the real intention and reflects the true will of the testator or testatrix” (at [131] NSWCA judgment).
- [48]
I agree with the primary judge that the respondent satisfied the heavy onus cast upon it of proving an abuse of process. The risk of inconsistent findings about the critical issue raised in each case was a significant one. It is not correct that the proceedings, as pleaded, would entail “an inquiry into a different (hypothetical) set of events and their legal consequences”, which is distinguishable from “an inquiry into the same events with additional evidence”.
- [49]
The findings contended for by the applicant’s pleading amount to a collateral challenge to the correctness of the Court of Appeal’s finding and an abuse of process as they necessarily raise the prospect of inconsistent findings about an issue which has been determined to finality. The primary judge was correct to conclude that in the Probate Proceedings, the applicant had the opportunity to fully litigate the making of the 2014 Will, which was finally disposed of in a manner that was adverse to her.
- [50]
It is correct, as the applicant submitted, that this Court in the Probate Proceedings did not make any “positive finding about what the deceased’s actual subjective testamentary intentions were”. As I will explain, it is for that reason that a case pleaded about a failure to give effect to those testamentary intentions, rather than to have a particular document (the 2014 Will) admitted to probate, could properly be advanced. At the risk of repetition, this was not the case pleaded by the applicant and addressed by the primary judge. The primary judge did not err in describing the “ultimate issue”, as pleaded, as being “whether the 2014 Will reflected Ms Mekhail’s ‘real intention’”.
- [51]
Finally, in relation to the applicant’s reliance on Harris, the primary judge was correct that the present case differs from Harris. In the present case both sets of proceedings, as pleaded, are predicated on a finding about Ms Mekhail’s intention in executing the 2014 Will. The applicant’s pleaded cause of action was premised on the establishment of a fact directly inconsistent with the Court of Appeal’s finding on the ultimate issue, namely the extent to which the 2014 Will contained the real intention, and reflected the true will, of Ms Mekhail.
- [52]
The pleaded cause of action could only succeed by establishing that, contrary to the findings of and relief granted by this Court, probate should have been granted under the 2014 Will. I am satisfied that, as formulated, the applicant’s Statement of Claim was an abuse of process.
- [53]
The primary judge made clear that his decision to strike out the Statement of Claim as an abuse of process was based upon “the precise manner in which the statement of claim is framed.” I agree with his Honour’s analysis.
- [54]
Despite the primary judge expressing doubt about the applicant’s ability properly to replead (which doubt I do not share), the significant point is that the primary judge granted the applicant leave to amend her pleading. His Honour was correct to do so.
- [55]
I will now explain why the applicant, if she had chosen to do so, could properly have pleaded a case against the respondent relating to the deceased’s testamentary intentions which did not involve any abuse of process.
- [56]
Two cases referred to by the applicant in this Court make it clear that such a case may be pleaded: Cleary v Jeans (2006) 65 NSWLR 355; [2006] NSWCA 9 and Rogers v Roche (No 1) [2017] 2 Qd R 306; [2016] QCA 340.
- [57]
In Cleary v Jeans, Mr Cleary was a bank officer of the Commonwealth Bank which in June 1998 loaned money to the respondent’s company, Deangrove Pty Ltd, secured by a personal guarantee executed by the respondent, Mr Jeans. The loan transaction was implemented by Mr Cleary, who purported to attest to the respondent’s execution of the guarantee.
- [58]
The respondent and his company commenced proceedings against the Bank in the Federal Court, alleging misleading and deceptive conduct and seeking an order setting aside the respondent’s guarantee; the Bank cross-claimed to enforce the guarantee. In his pleadings, the respondent admitted that he had executed the guarantee. After trial had commenced and the respondent was cross-examined on the document, the respondent sought leave to withdraw his admissions in the pleadings that he had executed the guarantee. Leave was refused, on the basis that the respondent was estopped from resiling from the representation contained in the admissions, as the Bank had conducted the proceedings in reliance on those admissions and would suffer prejudice if they were withdrawn: at [16]-[19]. Special leave was ultimately refused by the High Court.
- [59]
The respondent subsequently commenced Supreme Court proceedings against Mr Cleary alleging fraud. The respondent claimed that Mr Cleary had forged his signature on the deed, and that he had relied on Mr Cleary’s fraudulent misrepresentation in the attestation clause on the guarantee when he admitted that his signature was genuine. Handley JA (with whom Young CJ in Eq agreed) found that the Supreme Court proceedings did not constitute an abuse of process. There was no inconsistency between the Federal Court judgment, that the appellant was estopped from withdrawing his admissions, and a decision of the Supreme Court “based on the truth”: at [21]. This Court explained that a party may bring a claim for negligence against legal representatives whose conduct in the management of earlier court proceedings resulted in an adverse judgment (at [25]-[26]) without attracting the doctrine of abuse of process. As Handley JA put it:
- [60]
Handley JA concluded that there was no collateral attack upon the Federal Court judgment or abuse of process by the respondent contesting his signature to the guarantee in the Supreme Court, since he was denied a full opportunity to litigate that issue in the earlier proceedings by reason of estoppel:
- [61]
Bryson JA, who dissented in the result, acknowledged that a “collateral attack” on an earlier decision may not constitute an abuse of process in some circumstances, referring (like Handley JA) to the example of a claim against legal advisors for negligent conduct of earlier litigation:
- [62]
The applicant acknowledged in oral submissions that the decision “was quite a different case factually” and that “it’s quite a different case to this one” in that it did not involve a solicitor. Nevertheless, Cleary v Jeans provides important guidance on the distinction drawn in the application of the abuse of process doctrine to cases where claims against legal advisers relate to the manner in which earlier litigation was conducted.
- [63]
The second decision referred to by the applicant, Rogers v Roche (No 1), is much closer to the present facts and makes the point even more emphatically. The appellant, Mr Rogers, was injured while riding a jet ski. The appellant made a successful claim against the resort’s operator for economic loss arising from personal injury. He subsequently commenced proceedings against his solicitors claiming that, by reason of their negligence, in the first case the damages he recovered did not fully compensate him for his loss. In this second case the appellant pleaded that the respondents negligently failed to obtain evidence necessary properly to prove his economic loss in the earlier proceedings. The appellant thereby lost a chance to receive a higher award of damages.
- [64]
Fraser JA (with whom Gotterson JA and Burns J agreed) summarised the substance of the appellant’s submissions that there was no abuse of process:
- [65]
Fraser JA accepted that the second case amounted to a collateral challenge to the personal injury judgment but concluded that the collateral challenge did not amount to an abuse of process because:
- (1)
The mere fact that a person against whom a re-litigation abuse of process is alleged was a party in two sets of proceedings and seeks to litigate an issue decided in the earlier proceedings is not of itself sufficient to give rise to abuse of process. It may be an abuse to rely upon a claim which was determined adversely to the litigant in previous litigation, but this will turn on the precise circumstances on the case: at [46];
- (2)
Where the earlier litigation was decided adversely to the appellant as a result of wrongful conduct of the respondents, it is difficult to see how a claim for redress against the respondents whose wrongful conduct in connection with litigation was responsible for the appellant’s misadventure in the earlier civil case is unjustifiably oppressive to the respondents or would be likely to bring the administration of justice into disrepute: at [47].
- (1)
- [66]
Fraser JA’s ultimate conclusion bears repeating:
- [67]
Applying these principles, there may be a number of ways that the applicant may have been able to replead without seeking to relitigate the extent to which the 2014 Will itself contained the real intention, and reflected the true will, of Ms Mekhail. Some of those possible cases were explored in submissions by Senior Counsel for the applicant. It would be, for example, quite a different thing to plead that by reason of the alleged negligence of Mr Liondos, the applicant lost an opportunity to share in a distribution from Ms Mekhail’s estate. In the relevant hypothetical, the question would not be whether the 2014 Will should have been admitted to probate but rather whether, by reason of Mr Liondos’ negligence, the applicant lost a chance for Ms Mekhail to execute a different will, even if in essentially the same terms, leading the applicant to obtain a distribution from the deceased’s estate. No doubt such a case would need to confront the evidence about what Mr Liondos’ was told by the applicant’s son with the applicant’s knowledge (characterised by Leeming JA in the Probate Proceedings as “a series of lies”). Formidable though the factual challenges may be for the applicant in such a case, it would not be an abuse of process by reason of challenging the finality of the Probate Proceedings.
- [68]
If any attempt is made by the applicant to exercise, out of time, the liberty to replead there will no doubt be discretionary questions to consider. Those considerations will be matter for a judge in the Common Law Division.
Orders
- [69]
For the foregoing reasons I propose the following orders:
- (1)
Summons seeking leave to appeal dismissed;
- (2)
Applicant to pay the costs of the respondent.
- (1)
- [70]
BRERETON JA: I have had the benefit of reading in draft the judgment to be delivered by Payne JA, with which I agree.
- [71]
In principle, no abuse of process is involved in a claim against a solicitor for negligence in which damages are claimed for the loss of an earlier case founded on the proposition that but for the alleged negligence there would have been a different and more favourable result. [2] Thus, if the facts supported it, the applicant would not have been precluded from advancing a case that had her solicitors obtained and adduced at the trial relevant available evidence, the outcome would have been different and the 2014 Will would have been admitted to probate. In such a case there is not truly a collateral attack on the earlier judgment, which to the contrary is relied upon for the purpose of proving the loss. [3] However, that is not the case put here: the applicant’s claim, as presently pleaded, is founded on the contention that Ms Mekhail’s intentions, when she executed the 2014 Will were for the applicant to be the sole beneficiary of her estate pursuant to that Will. That specific issue was resolved adversely to the applicant by this Court’s judgment in the earlier proceedings. The hypothetical (non-negligent) counterfactual proposed is not that available evidence was obtained and adduced, which might have resulted in a different outcome; but that the deceased executed the 2014 Will in circumstances which did not attract suspicion. In substance, that amounts to a contention that the earlier judgment was wrong to reject the proposition that the 2014 Will embodied her testamentary intentions. That involves a collateral attack on the earlier adverse conclusion. It may well be open to the applicant to plead that the deceased’s intention was to leave her entire estate to her, and that by reason of the respondent’s (alleged) negligence that intention was defeated – but not by contending that, contrary to the earlier judgment, the 2014 Will in fact embodied her testamentary intentions. As the claim as presently pleaded depends on that contention, the primary judge was right to conclude that it was an abuse of process.
- [72]
As Payne JA explains, that is not to say that no permissible claim arising out of substantially the same facts could be formulated, and that course is not precluded by the orders of the primary judge, which reserved leave to replead. The primary judge rightly considered that the respondent’s Anshun estoppel argument would not have succeeded, as it was not unreasonable for the applicant not to bring a cross-claim against her solicitors in the probate proceedings. Although, like Payne JA, I do not share his Honour’s scepticism as to whether a permissible claim could be formulated, his Honour was right to strike out the pleading as an abuse of process, with leave to replead.
- [73]
Leave to appeal should be refused. I agree with the orders proposed by Payne JA.