FEDERAL COURT OF AUSTRALIA

Knott Investments Pty Ltd v Winnebago Industries, Inc [2015] FCA 827

THE COURT ORDERS THAT:

1.    The respondents’ interlocutory application dated 21 October 2014 be dismissed.

2.    The respondents pay the applicant’s costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

Introduction

1    The respondents have filed an interlocutory application seeking an order pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) (the Act) that judgment be given in the proceeding for them against the applicant, Knott Investments Pty Ltd (Knott). Alternatively, the respondents rely upon r 26.01 of the Federal Court Rules 2011 (the Rules) for the same order, on the grounds that: Knott has no reasonable prospect of successfully prosecuting the proceeding; the proceeding is oppressive or vexatious; and, or alternatively, the proceeding is an abuse of the Court’s process.

2    There are five respondents. The first respondent, Winnebago Industries, Inc (Winnebago), and the second respondent, Winnebago of Indiana, LLC (Winnebago Indiana), are companies incorporated under the laws of Iowa in the United States of America (the United States). They carry on business in the United States and, it would seem, Canada and other countries, as manufacturers and distributors of recreational vehicles and caravans. Winnebago Indiana is a wholly-owned subsidiary of Winnebago. The third respondent, Winnebago RV Pty Ltd (Winnebago RV), and the fourth respondent, Apollo Motorhome Holidays Pty Ltd (Apollo), are local companies that carry on business in Australia as sellers and rental providers of recreational vehicles and caravans. The fifth respondent, Barmil Enterprises Pty Ltd (Barmil) is also a local company. It is the ultimate holding company of Winnebago RV and Apollo. For simplicity, it is convenient to treat Winnebago RV, Apollo and Barmil collectively and to refer to them as Winnebago Australia.

Factual background

3    The present application is set against the background of proceeding NSD 1355 of 2010 in which Winnebago successfully sued Knott for, amongst other things, passing off and contraventions of various provisions of the Trade Practices Act 1974 (Cth) (the Trade Practices Act) and of Schedule 2 of the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law) in relation to Knott’s manufacture, sale and distribution in Australia of recreational vehicles using the Winnebago name and two logos: Winnebago Industries Inc v Knott Investments Pty Ltd (No 2) (2012) 293 ALR 108 (the first instance proceeding); on appeal, Knott Investments Pty Ltd v Winnebago Industries Inc (2013) 211 FCR 449 (the appeal). I will refer to the first instance proceeding and the appeal as the first proceeding.

4    Injunctive relief was granted in relation to the manner of Knott’s further use of the Winnebago name and the two logos. The relief extended to substantially identical or deceptively similar names, marks or logos: Knott Investments Pty Ltd v Winnebago Industries Inc (No 2) (2013) 305 ALR 387. Judgment has been reserved on Winnebago’s claim for damages.

5    In the present proceeding, Knott alleges that Winnebago has engaged in conduct that is misleading or deceptive, or likely to mislead or deceive, by promoting, in Australia, a range of outdoor clothing using the Winnebago name and a logo comprising the name Winnebago (referred to in the statement of claim as the Winnebago Logo), in contravention of the Australian Consumer Law.

6    Knott also alleges that Winnebago Australia has engaged in conduct that is misleading or deceptive, or likely to mislead or deceive, by promoting, in Australia, the sale of recreational vehicles and caravans using the Winnebago name, the Winnebago Logo and another logo identified in the statement of claim as the W Logo (together, the Winnebago logos), and the business name Winnebago Australia, in contravention of the Australian Consumer Law.

7    Further, Knott alleges that, by reason of certain licensing arrangements between Winnebago and Winnebago Indiana (or one of them), on the one hand, and Winnebago Australia (or one of them), on the other, Winnebago and Winnebago Indiana are, or either one of them is, involved in Winnebago Australia’s contraventions.

8    The respondents’ impugned conduct is alleged to have commenced in 2014.

9    Knott seeks injunctive relief in relation to the manner of the respondents’ use of the Winnebago name and the Winnebago logos, and in relation to the respondents’ use of the business name Winnebago Australia. It also seeks damages.

10    The respondents have filed a defence in which a number of Knott’s pleaded allegations are admitted. However, they deny the essentials of any wrongdoing and rely on Knott’s own wrongdoing as found in the first proceeding. They allege, in that regard, that Knott’s conduct was engaged in fraudulently.

11    Importantly, for present purposes, the respondents also plead in paragraph 34 of their defence that Knott could have, and should have, brought a cross-claim in the first instance proceeding seeking “restraints preventing the manufacture, sale, distribution or rental in Australia of recreational vehicles, caravans or other products branded with the Winnebago name, the W Logo and the Winnebago Logo”. The respondents plead that it was unreasonable for Knott not to have done so, with the consequence that Knott is now estopped from pursuing the claims made in this proceeding. Alternatively, they allege that Knott’s pursuit of the claims in this proceeding is vexatious, oppressive or an abuse of process.

12    The essence of the respondents’ submissions in the present application is that Knott was aware of Winnebago’s intentions to enter the Australian market before the first instance proceeding was commenced and, indeed, had threatened to sue Knott at that time. The respondents say that the substance of the allegations now pleaded by Knott was raised defensively in the appeal in opposition to Winnebago being granted relief. They say that there is a plain overlap of issues and subject matter between the first proceeding and this proceeding, and that “obvious duplication and vexation” will be entailed by “the bringing of two proceedings where one could lie”.

Legal background

13    Section 31A of the Act relevantly provides:

...

(2)    The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

(a)    the first party is defending the proceeding or that part of the proceeding; and

(b)    the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.

(3)    For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:

(a)     hopeless; or

(b)    bound to fail;

for it to have no reasonable prospect of success.

(4)     This section does not limit any powers that the Court has apart from this section.

...

14    Rule 26.01 of the Rules relevantly provides:

A party may apply to the Court for an order that judgment be given against another party because:

(a)     the applicant has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding; or

(b)    the proceeding is frivolous or vexatious; or

...    

(d)    the proceeding is an abuse of the process of the Court; or

…

The evidence on the application

15    The respondents’ application is supported by an affidavit given by its solicitor, Odette Margaret Gourley, who has deposed to events leading up to the commencement of the first instance proceeding by Winnebago on 14 October 2010, and the course of that proceeding and the appeal. Ms Gourley was not cross-examined. Knott did not adduce affidavit evidence on the application.

16    The evidence shows that, prior to commencing the first instance proceeding, Winnebago’s solicitors sent a letter of demand dated 21 April 2010 to Knott’s directors. That letter did not state that Winnebago intended to enter the Australian market. Further correspondence ensued between Winnebago’s solicitors and Knott’s solicitors. By letter dated 16 June 2010, Knott’s solicitors made a substantive response to the letter of demand. They denied a number of allegations that had been raised. Their letter also directed attention to Winnebago’s conduct. In that connection, the letter stated:

Your client’s conduct

7    Our client has become aware of your client’s recent application to register the Winnebago Marks as trade marks in Australia. Our client is concerned that your client is now, for the first time, intending to use the Winnebago Marks in Australia. Any such use would constitute passing off and breach of the Trade Practices Act as well as infringement of our client’s registered trade mark. Our client reserves all its rights in relation to your client’s use or threatened use of the Winnebago Marks in Australia.

17    The respondents place considerable reliance on this letter. They say that it signifies Knott’s awareness at 16 June 2010 that Winnebago intended to enter the Australian market. The reference in paragraph 7 of the letter to “the Winnebago Marks” is to the Winnebago name and the Winnebago Logo.

18    The hearing of the first instance hearing, which was on issues of liability only, commenced on 30 May 2011. The existence and extent of Winnebago’s reputation in Australia was clearly a key issue. Ms Gourley gave evidence of the preparation of evidence directed to establishing Winnebago’s reputation in Australia in 1978, 1982 and thereafter up to 2010. This evidence included an affidavit by Raymond Mark Beebe, Winnebago’s General Counsel, in which Mr Beebe stated that, at the time of making the affidavit, Winnebago was then working with another Australian-based business about opportunities to market its (Winnebago’s) Winnebago-branded motor homes in Australia. Mr Beebe said that Winnebago had previously exported motor homes to Australia bearing Winnebago’s Itasca brand, although not the Winnebago brand itself. Although Mr Beebe’s affidavit is not dated, the respondents say that it was made on 26 May 2011.

19    In that affidavit, Mr Beebe also said:

7    Winnebago has pursued these Australian opportunities largely because its opportunities for further growth in the United States market have been more limited than in the past. This is largely due to adverse economic conditions in the United States and the mature state of the RV industry in the United States, whereas Winnebago regards Australia as a market in its infancy with a great potential growth and more favourable economic conditions.

20    In its evidence, Knott stressed its own reputation in relation to the use in Australia of the Winnebago name and the Winnebago Logo. It relied on an affidavit by Bruce Arthur Binns, one of Knott’s directors and shareholders. Mr Binns’ affidavit introduced a significant amount of documentary material directed to Knott’s promotional activities in Australia in relation to the Winnebago name and the Winnebago Logo. Mr Binns was cross-examined.

21    The parties had also provided written outlines of opening submissions. In its written outline dated 25 May 2010, Knott submitted:

[Winnebago] does not manufacture right hand drive vehicles, does not sell in Australia and has no intention of selling in Australia. There is no commercial rivalry.

22    It is not suggested that this submission was not advanced genuinely. As I have noted, Mr Beebe’s affidavit is said to have been made on 26 May 2010, after the apparent date of Knott’s opening submissions. I infer that Mr Beebe’s affidavit was made in response to Knott’s statement in its opening submissions that Winnebago did not sell and had no intention of selling in Australia.

23    I note, in this connection, that Mr Beebe made an earlier affidavit (7 April 2011) for the purposes of the first instance hearing. In that affidavit, Mr Beebe referred to a request that Winnebago had received on about 5 December 2005 to license the use of the Winnebago name in New Zealand. Mr Beebe responded to this request in a letter dated 14 February 2006. In the response, Mr Beebe said that Winnebago had never distributed any of its products in Australia or New Zealand, “probably in large part because the freight costs would be prohibitive”. In his response, he also said that Winnebago had no interest in licensing its trade marks to another company to manufacture motor homes under the Winnebago name.

24    These statements in Mr Beebe’s affidavit plainly support that part of Knott’s opening submissions to which I have referred.

25    In his affidavit, Mr Beebe also referred to correspondence within Winnebago discussing Knott’s application to register the Winnebago name and the W Logo as trade marks in Australia. One email (6 August 2009) addressed to Mr Beebe asked for his thoughts on that matter. In that connection, the author of the email, Mr Gernetzke (Winnebago’s International Sales and Service Administrator), said:

All of this leads me to believe that we should start thinking about some type of action against “Winnebago” in Australia.

26    The email does not refer to any intention of Winnebago itself to supply vehicles in Australia. Mr Gernetzke’s remark seems to refer to the possibility of Winnebago taking some form of legal action against Knott.

27    Further, no allegation is made in Winnebago’s pleadings in the first instance proceeding that it had entered or was intending to enter the Australian market.

28    Certainly in the course of closing submissions, Knott acknowledged that Winnebago was intending to enter the Australian market. I was taken to a number of passages in the transcript of closing submissions. The following is an example of the submissions made in that regard:

[I]f you have two entities in two separate jurisdictions, let’s call them Australia and the USA, and the entity in each case conducts a similar sort of business under exactly the same name. In the USA the US business because of the size of that market expands to a much bigger size than the size of the Australian business. The USA company cannot come along years later and say, “Well, by now I’m a big gorilla and you’re not and I’ve exhausted my market and I’m going to look at your market. You must now stop using the name that I’m using because I’m going to use it and my reputation is bigger and people will be confused”.

29    When judgment was given in the first instance proceeding, Foster J found (at [16]):

[16]    In recent years, commencing in about 2008, Winnebago began to show real interest in manufacturing RVs for import and sale into the Australian market. For that reason, in 2010, it revisited its consideration of Knott’s activities in Australia.

30    His Honour found (at [31]) that Knott’s impugned conduct commenced in early June 1982. His Honour reasoned (at [37]) that Winnebago’s case for passing off and its coordinate case under the Trade Practices Act and the Australian Consumer Law depended on whether it could establish a sufficient reputation in Australia as at 1 June 1982. His Honour found such a reputation and concluded (at [131]) that his findings in that regard were sufficient to entitle Winnebago to relief. His Honour subsequently granted injunctive relief restraining Knott from using the Winnebago name and the Winnebago logos, or any other substantially identical or deceptively similar name or logo, in relation to the manufacture, promotion or sale of recreational vehicles in Australia.

31    On appeal, one of Knott’s grounds was that Foster J erred in finding any basis for Winnebago’s claims for relief where it (Knott) had developed and would continue to enjoy a substantial reputation and goodwill in the Winnebago brand in Australia. Knott alleged that that its reputation was such that Winnebago’s use of the Winnebago brand in Australia would amount to passing off and misleading or deceptive conduct within the meaning of s 18 of the Australian Consumer Law: see ground 1. It should be noted, however, that, at that time (19 September 2012), there was and had been no such use by Winnebago. Indeed, in this ground of appeal, Knott also relied on the fact that Winnebago had never sold, or offered for sale, in Australia, Winnebago-branded vehicles manufactured by it.

32    Another ground of appeal was that the primary judge erred in considering that the date at which Knott’s conduct should be considered was early June 1982 and not late March 1978: ground 3. In this connection, Winnebago filed a notice of contention in which it contended that Foster J should have found that its reputation in Australia in late March or mid-1978 was sufficient to found its causes of action for passing off and of contravention of the Trade Practices Act and the Australian Consumer Law.

33    The Full Court (Allsop CJ, Cowdroy and Jagot JJ, each in separate reasons) held that the correct date for assessing Knott’s conduct was 1978: see at [9], [82] and [141]. The Full Court also held that Winnebago had a sufficient reputation in Australia as at 1978 to support its causes of action for passing off and contravention of the Trade Practices Act and the Australian Consumer Law: see at [39], [82] and [151]. In her reasons, Jagot J noted (at [121]) that Winnebago had started the first instance proceeding in 2010 because, by that time, “it had decided that it wished to enter the Australian market using its Winnebago name and logo”. Her Honour noted the possibility that, should it enter the Australian market, Winnebago would be able to take advantage of the reputation and goodwill that Knott had developed over some 30 years. The Full Court set aside the injunctions granted by Foster J and in lieu thereof made orders restraining Knott from using the Winnebago name and the Winnebago logos, and any substantially identical or deceptively similar name or logos, except with certain disclaimers distinguishing Knott or its vehicles from Winnebago and its vehicles.

Anshun estoppel

Relevant principles

34    The respondents submit that the key issues in the present proceeding, commenced on 4 September 2014, include the extent of Winnebago’s reputation in Australia in the Winnebago name and the Winnebago logos over an extended period of time. The respondents submit that the present proceeding will also involve consideration of the history and circumstances of the adoption and continuing use by Knott of the Winnebago name and the Winnebago logos, and its reputation therein.

35    The respondents base their case for summary dismissal primarily on the ground that an estoppel operates to prevent Knott from agitating these issues afresh and pursuing its claims for relief in the present proceeding: Port of Melbourne Authority v Anshun Proprietary Limited (1981) 147 CLR 589 (Anshun). In essence, the respondents say that Knott should have brought its present claims in the first proceeding.

36    In Anshun, the Port of Melbourne Authority (the Authority), as plaintiff, claimed an indemnity from Anshun Pty Ltd (Anshun), as defendant, in relation to damages awarded in an earlier proceeding in which the Authority and Anshun were both sued by a worker who had suffered significant injuries in an industrial accident. In the earlier proceeding, the Authority and Anshun, as defendants, each claimed contribution from the other pursuant to s 24 of the Wrongs Act 1958 (Vic). Importantly, the notice claiming contribution served by the Authority did not claim an indemnity from Anshun, even though Anshun was contractually bound to give an indemnity under a previous agreement into which the Authority and Anshun had entered. In the earlier proceeding, judgment was entered in favour of the injured worker against both the Authority and Anshun, with Anshun recovering contribution from the Authority to the extent of 90% of the damages and costs awarded and the Authority recovering from Anshun contribution to the extent of 10% of the damages and costs awarded. The Authority paid 90% of the damages and costs and Anshun paid the remaining 10%. However, subsequently, the Authority commenced its action against Anshun claiming by way of indemnity the amount that it (the Authority) had paid pursuant to the judgment in the earlier proceeding. The claim was based on the indemnity in the agreement. Anshun claimed that the Authority was estopped from bringing its claim.

37    The plurality in the High Court (Gibbs CJ, Mason and Aickin JJ) viewed the case as falling within the following principle expressed by Sir James Wigram V-C in Henderson v Henderson (1843) 3 Hare 100 at 115:

[W]here a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.

38    Their Honours considered how the principle in Henderson v Henderson had been applied in later cases and, at 602-603, expressed their preference for stating that principle in the following terms (Anshun estoppel or the Anshun principle):

In this situation we would prefer to say that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff’s claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in one proceeding. In this respect, we need to recall that there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings e.g. expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few.

39    Their Honours also referred to the principle that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment: see at 603-604. Their Honours said:

The likelihood that the omission to plead a defence will contribute to the existence of conflicting judgments is obviously an important factor to be taken into account in deciding where the omission to plead can found an estoppel against the assertion of the same matter as a foundation for a cause of action in a second proceeding. By “conflicting” judgments we include judgments which are contradictory, though they may not be pronounced on the same cause of action. It is enough that they appear to declare rights which are inconsistent in respect of the same transaction.

40    Their Honours concluded that the judgment which the Authority sought to obtain against Anshun in the second proceeding was one which would conflict with the judgment in the earlier proceeding, even though the new judgment would be based on a different cause of action—a contractual indemnity. The conflict would arise because the judgment in the earlier proceeding was that Anshun should recover contribution from the Authority to the extent of 90% of the damages and costs awarded and that the Authority should recover from Anshun contribution to the extent of 10% of the damages and costs. The judgment which the Authority sought to obtain in the second action was one whereby it recovered from Anshun the whole of the damages and costs in the earlier proceeding.

41    It is important to note the “double negative” used in the formulation of Anshun estoppel. Noting that double negative, Ormiston JA in Gibbs v Kinna [1999] 2 VR 19 at [1] said:

[1]    The question, shortly stated, arising out of the facts set out in the judgment of Kenny J.A., is whether the respondent was properly precluded from suing the appellants in the Magistrates’ Court by reason of the principles stated in Port of Melbourne Authority v. Anshun Pty. Ltd. (1981) 147 C.L.R. 589. The issue which the parties said arose before the magistrate and the primary judge was whether the subject matter of the later proceeding in the Magistrates’ Court was “so relevant to the subject matter” of the action heard by a judicial registrar of the former Industrial Relations Court that “it would have been unreasonable not to rely on it”: at 602. The double negative is here significant because the question is not whether it would have been reasonable to take the course of relying on a particular defence or cause of action in the first proceeding, for more often than not it was then possible to rely upon the proposed defence or cause of action. The issue is whether it was unreasonable to defer reliance upon the defence or cause of action, so, if it cannot be shown to have been unreasonable not to have relied earlier on the defence or cause of action, then the principle stated by the majority in Anshun’s case will not shut out a party’s later reliance on the defence or cause of action, unless some other principle of estoppel or the law can be called in aid. Only if deferring reliance can be shown to be unreasonable, will the party be shut out. Frequently there is no clear answer as to what was possible and reasonable in the earlier proceedings; sometimes it will have been technically possible for the party to have relied on a particular defence or set up a particular claim, but nevertheless it may not have been demonstrated that it was unreasonable in all the circumstances not to have relied on that defence or not to have set up the claim. The answer depends not so much on legalities as practicalities.

(Emphasis in original.)

42    In Tanning Research Laboratories Inc v O’Brien (1990) 169 CLR 332, Brennan and Dawson JJ considered (at 346) whether Anshun estoppel extended to the bringing of a cause of action in a second proceeding where the cause of action could have been brought in an earlier proceeding by way of cross-claim. Their Honours said:

A plaintiff who has an unadjudicated cause of action which can be enforced only in fresh proceedings … cannot be precluded from taking fresh proceedings merely because he could have and, if you will, should have counterclaimed on that cause of action in a forum chosen by the opposite party in proceedings in which the opposite party sued him. We do not read the majority judgment in Port of Melbourne Authority v. Anshun Pty. Ltd. as holding the contrary, except in a case where the relief claimed in the second proceeding is inconsistent with the judgment in the first …

43    However, in Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287 (Bryant), a Full Court of this Court concluded that the Anshun principle can apply to cross-claims as well as defences. At 297-298, the Full Court said:

It is true that, in Tanning Research Laboratories at 346, Brennan and Dawson JJ stated that the Anshun principle will ordinarily not apply to cross-claims. They made an exception of cases where the relief claimed in the second proceedings is inconsistent with the judgment in the first. In making this distinction, their Honours may have had in mind a situation, such as the one before them in that case, where the cross-claim depended on facts remote from those of the principal claim. Questions of substantive degree may be involved; and in contrast to defences, many cross-claims may have little or no connection with the principal claim in the action; there may be no more than an identicality of parties. Where that is so, there may be no policy justification for forcing defendants to litigate their claims as cross-claims rather than as principal claims in separate actions in the forum of their choice. But, where, as here, a defendant’s claim is intimately connected with that of the plaintiff, in the sense that each arises, substantially, out of the same matters of fact, there is every reason to require that both be litigated at the one time; thereby minimising costs and avoiding the possibility of inconsistent judgments …

44    In that case, the Full Court held that Anshun estoppel applied in an action where claims that had been withdrawn from defences and cross-claims adjudicated in earlier proceedings in the Supreme Court of New South Wales were sought to be raised in fresh proceedings in this Court. Their Honours said (at 298):

The matters sought to be raised by the appellant in this Court were all matters connected with the claims made by the [respondent]. The appellant, and his former legal advisers, recognised this. They pleaded his claims as defences to the [respondent’s] two Supreme Court actions and as cross-claims to those proceedings. The appellant widened his defence and cross-claims, so as to abandon reliance on those matters in the Supreme Court, not because of a belief that they were insufficiently connected with [the respondent’s] claim but because he was dissatisfied with the extent of discovery accorded to him. …

What is clear is that any deficiencies in the Supreme Court discovery process did not, in our view, justify the appellant taking the course of splitting the case between two proceedings in different courts. We agree … that the facts of this case provide a classic example of the evil that the Anshun principle was intended to prevent.

45    In Ling v Commonwealth (1996) 68 FCR 180 (Ling), Wilcox J referred to Bryant and said (at 183):

The decision in Bryant does not mean that it will always be appropriate to apply the Anshun principle to cross-claims. Some cross-claims have little or no connection with the claim in the action. There may be no more than an identicality of parties. It is difficult to see any justification for applying the Anshun principle to a case of that kind. Some cross-claims overlap the facts of the principle claim but involve additional facts. Where this occurs, a question of degree arises. It would be wrong to say that the Anshun principle is excluded whenever there are additional facts; to go so far would be to render it nugatory. However, where the additional facts are substantial, it may be appropriate to accept the reasonableness of separate proceedings.

46    His Honour addressed (at 184) the question of reasonableness in the following terms:

In considering reasonableness, as it seems to me, consideration must be given to all aspects of the case. They include the extent of the overlap between the facts underlying each claim; the greater the overlap, the easier it is to argue that it was unreasonable not to raise the matter in the first case. They also include an difficulties that existed, or might reasonably have been perceived, in raising the matter earlier. Where the matter can be raised only by way of cross-claim, as distinct from defence, and there was a serious question about the entitlement of the Court to consider the cross-claim, there is an obvious difficulty in arguing that it was unreasonable for the party not to have done so.

47    There is no requirement for identical parties before the Anshun principle will apply: Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231 at [83]. In that case, McColl JA at [83] said:

An Anshun estoppel also arises where an omission to plead a claim or defence will contribute to the existence of conflicting judgments, including those which are contradictory, though they may not be pronounced on the same cause of action as long as they appear to declare rights which are inconsistent in respect of the same transaction: Anshun (at 603 - 604). Thus an Anshun estoppel will apply even though the parties to the second proceedings are not the same as in the first. Although there may be “no question … of oppression and unfairness” where the parties in the second action “were not parties to the earlier action”, the new proceedings may threaten the integrity of the administration of justice if they raise the prospect of conflicting judgments: Spalla (at [64] - [65]), referring to Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287 (at [36]).

The respondents’ submissions

48    The respondents submit that the issues to be ventilated in the present proceeding are intimately connected with the subject matter of the first proceeding. The subject matter of the first proceeding included Winnebago’s reputation in Australia in the Winnebago name and the Winnebago logos between 1978 and 2010. It also included the history and circumstances of adoption and continuing use by Knott of the Winnebago name and the Winnebago logos and Knott’s claimed reputation in that name and those logos in Australia. The respondents submit that that subject matter is echoed in the pleading of Knott’s statement of claim in the present proceeding.

49    For example, Knott pleads that, since 1978, it and its predecessors in business have manufactured, promoted and sold throughout Australia recreational vehicles under and by reference to the Winnebago name and the Winnebago logos and, between 1978 and 2012, traded under the business name “Winnebago Industries”. Knott pleads that, by reason of those matters, it has acquired a substantial reputation in the Winnebago name and the Winnebago logos when used for or in connection with recreational vehicles in Australia: see paras 2, 3 and 4 of the statement of claim. The allegations of misleading or deceptive conduct on the part of the respondents proceed from the existence, at relevant times, of this reputation. Correspondingly, the allegations on which Knott now relies to establish its reputation in Australia in the Winnebago name and the Winnebago logos found like expression in its defence filed in the first instance proceeding.

50    The respondents submit that much evidence was adduced in the first instance proceeding on these matters. Findings of fact were made by Foster J in that regard. Further, on appeal, Knott relied on its reputation in the Winnebago name and the Winnebago logos as a reason why relief should be denied to Winnebago because any use by Winnebago itself of the Winnebago brand in Australia would amount to passing off and misleading or deceptive conduct. The respondents refer in that regard to Jagot J’s finding in the Full Court that, should Winnebago enter the Australian market, it would be able to take advantage of Knott’s reputation in the Winnebago name and the Winnebago logos which it had developed over some 30 years.

51    Although acknowledging that the present proceeding will involve additional facts, the respondents nevertheless submit that “it is beyond sensible argument” that the causes of action pleaded by Knott in the present proceeding arise substantially out of the same facts as those in the first proceeding, given “the centrality of the reputation issues”.

52    The respondents also acknowledged that the full scope of Knott’s present claims (now brought against other respondents in addition to Winnebago) could not have been brought by way of cross-claim in the first instance proceeding. They submit, however, that the position of the other respondents in the present proceeding is “derivative” in the sense that their conduct is consequential to Winnebago’s intention to enter the Australian market and that, had Knott cross-claimed in the first instance proceeding, it could have sought relief against Winnebago in terms that, practically speaking, would have prevented the conduct of the other respondents which Knott now challenges.

53    The respondents submit that the unreasonableness of Knott’s conduct is highlighted by its awareness of Winnebago’s intention to enter the Australian market, prior to the commencement of the first instance proceeding. The respondents say that this awareness is manifested in Knott’s solicitors’ letter dated 16 June 2010. The respondents say that the allegations made in that letter are “the very same allegations” made by Knott in the present proceeding. They also say that Knott’s threats of litigation in the passage I have quoted at [16] must have been made on Knott’s instructions, “obviously on some advice”. The respondents say that this “retaliatory threat” displays an awareness by Knott and its legal advisers of the connection between the allegations in Winnebago’s solicitors’ letter of demand and the counter-allegations in Knott’s solicitors’ response. This awareness, the respondents say, is also reflected in Knott’s notice of appeal in which Knott alleged that Winnebago’s use of the Winnebago brand in Australia would amount to passing-off and misleading or deceptive conduct.

54    Further in this connection, the respondents refer to the evidence in Mr Beebe’s affidavit of 26 May 2011 about Winnebago’s activities in respect of business opportunities to market Winnebago-branded motorhomes in Australia (see [18]-[19] above) and Knott’s closing submissions which referred to Winnebago’s prospective entry into the Australian market (see [28] above).

55    The respondents submit:

The Court should conclude that Knott was monitoring Winnebago’s activities, was aware of Winnebago’s intentions to enter into the Australian market and use the Winnebago name and logos, was aware of the existence of potential causes of action and had received advice about that possibility. The inference should be drawn that a deliberate forensic decision was made not to bring a counterclaim within the Winnebago Proceedings alleging passing off or statutory misleading or deceptive conduct, despite it having been known to be available prior to the initiation of the Winnebago Proceedings and throughout. Those inferences can and should more readily be drawn given the absence of any evidence from Knott. Just as in Anshun itself, no evidence has been adduced to show why Knott failed to raise the relevant issue in the first action (at CLR 604).

56    The respondents submit that there was no jurisdictional or procedural impediment to Knott bringing its present claims by way of cross-claim in the first instance proceeding, and no evidence from Knott that it perceived any difficulty in raising its claims earlier.

57    The respondents also point to the duplication of time and cost in reventilating what are, in substance, the same issues in two proceedings. Ms Gourley’s evidence is that Winnebago has already incurred legal costs in excess of $1 million (of which $410,000 has been recovered through costs orders made by the Full Court in the appeal) and that the costs which the respondents expect to incur in the present proceeding is in the range of $600,000 to $750,000. There is no challenge to this evidence. The respondents submit that, had Knott cross-claimed in the first instance proceeding, most of these anticipated costs could have been avoided.

58    The respondents also point to the possibility of inconsistent findings—in particular, the possibility of different factual findings on the question of reputation—should the present proceeding be permitted to continue to trial. In this connection, Knott admits in its reply to the respondents’ defence that it is bound by findings in the appeal. However, the extent to which Knott considers itself to be bound, particularly in relation to the allegations pleaded in the respondents’ defence, is not clear. The respondents submit that it is not apparent which aspects of the allegations of misconduct pleaded in their defence are admitted by Knott and which allegations are denied. In the first proceeding, it was found that Knott’s conduct was engaged in intentionally to trade off Winnebago’s reputation. The respondents submit that to the extent that Knott does not admit all of the matters relied upon by the respondents, including fraudulent conduct by Knott, then there will be a relitigation of issues concerning the nature and character of Knott’s conduct. Such relitigation, the respondents say, will also give rise to the possibility of inconsistent findings.

Knott’s submissions

59    Knott says that the respondents’ application for summary judgment is “fundamentally flawed” for a number of reasons.

60    First, Knott submits that the evidence in the present application does not establish that the claims in the present proceeding could, as a matter of law, have been brought by way of cross-claim in the first proceeding. Thus, Knott submits, no Anshun estoppel can arise. This submission requires an analysis of the present claims and an evaluation of the facts leading up to the hearing of the first instance proceeding. Secondly, Knott submits that even if its present claim could have been raised in the first proceeding, it was not unreasonable for it not to have done so. Thirdly, Knott submits that, as a matter of broader principle, there are strong public policy grounds militating against an Anshun estoppel in the present case: Egglishaw v Australian Crime Commission (2007) 164 FCR 224 at [35]. Fourthly, the issue of whether Anshun estoppel applies to the present case is “not ripe for determination” in the context of a summary judgment application.

61    Knott expanded on these reasons in written and oral submissions. It is not necessary for me to summarise all of the matters that were put. It is, however, necessary for me to descend to some detail to the particular submissions that Knott made with respect to the first and second reasons noted above.

62    As to whether the claims in the present proceeding could have been brought in the first proceeding, Knott advanced a number of submissions, the general thrust of which may be summarised as follows.

63    Knott submits that the claims in the present proceeding concern the actual use and licensing of the Winnebago name and the Winnebago logos, which commenced in 2014. There was no use by any of the respondents of the Winnebago name and the Winnebago logos before that time. Knott says that its claims could not have been brought in the earlier proceeding because the relevant conduct commenced some three years after the hearing of the first instance proceeding. I note, in this connection, the respondents’ qualified acceptance that the claims against Winnebago Australia could not have been brought at the time of the first instance proceeding: see [52] above.

64    Knott also submits that “the factual environment” is “fundamentally different” from that which existed at the time of the first proceeding. The “factual environment” of the present proceeding includes the period post-July 2012. In that period, Knott has used the Winnebago name and the Winnebago logos with disclaimers. This, according to Knott, is a circumstance that will affect the determination of whether the respondents’ conduct on and from 2014 is misleading or deceptive in the circumstances.

65    Further, Knott submits that the thrust of the respondents’ present application is that Knott should have brought a cross-claim in the first instance proceeding claiming quia timet relief against Winnebago. Knott submits that any such claim would not have succeeded because, on the state of the then known facts, there was no imminent threat by Winnebago (or any other respondent or person) to enter the Australian market using the Winnebago name or the Winnebago logos. Also, no viable claim for misleading or deceptive conduct could have been advanced without knowing the precise manner or mode in which the Winnebago name or the Winnebago logos might be used, including whether other indicia (such as a country of origin designation) or a disclaimer might be used.

66    As to the question of imminency, Knott called in aid the following statements of principle summarised by Bennett J in Apotex Pty Ltd v Les Laboratoires Servier (No 2) (2012) 293 ALR 272 at [46]:

[46]    The following principles generally apply to the grant of a quia timet injunction:

•    A quia timet injunction is granted to prevent a threatened infringement of the rights of the applicant. The applicant must show that what the respondent is threatening and intending to do will cause imminent and substantial damage to the applicant: Royal Insurance Co Ltd v Midland Insurance Co Ltd (1908) 26 RPC 95 at 97; followed in Bendigo and Country Districts Trustees and Executors Co Ltd v Sandhurst and Northern District Agency Co Ltd (1909) 9 CLR 474 at 478; [1909] HCA 63 (Bendigo).

•    The word “imminent” means that the injunction must not be granted prematurely. The degree of probability of future injury is not an absolute standard. What is to be aimed at is justice between the parties, having regard to all the relevant circumstances: Hooper v Rogers [1975] Ch 43 at 50; [1974] 3 All ER 417 at 421. However, this is not to be taken as conveying that future injury need not be shown to be likely at all: Magic Menu Systems at FCR 270; ALR 208.

•    Quia timet injunctions are not to be granted unless the imminence of the act to be prohibited is sufficiently clearly established to justify the court’s intervention. (I C F Spry The Principle of Equitable Remedies: Specific Performance, Injunctions, Rectification and Equitable Damages, 8th ed, Law Book Co, NSW, 2010 (Spry), referred to and adopted by Weinberg J in Glaxosmithkline at [94].)

•    In deciding whether to grant a quia timet injunction, the court will have regard to the degree of probability of the apprehended injury, the degree of seriousness of the injury and the requirements of justice between the parties: Hurst v Queensland (No 2) [2006] FCAFC 151 at [21].

67    Knott submits that, in 2010, Winnebago had no intention to enter the Australian market imminently—a state of affairs which is “eloquently proved”, it says, by the fact that entry did not occur until four years later in 2014.

68    Knott says that Winnebago’s solicitors’ letter of demand dated 21 April 2010 did not assert that Winnebago intended to enter the Australian market. Further, it says that its solicitors’ letter of 16 June 2010 did not threaten proceedings, but merely reserved Knott’s rights. In this connection, Knott submits that, at that time, there was an insufficient basis to assert that it was entitled to a quia timet injunction.

69    Knott submits that the events which then followed made plain that Winnebago had no plans to come to Australia imminently. Had Winnebago had such plans, Knott said that these would have been revealed in Winnebago’s pleadings and in its evidence as originally filed. However, the contrary impression was given. As I have noted, no allegation was made in Winnebago’s pleadings that it had entered or was intending to enter the Australian market, even though such facts would likely have assisted its claims against Knott. Further, as I have also noted, Mr Beebe’s affidavit indicated that the cost of shipping vehicles to Australia was prohibitive and that Winnebago had no interest in licensing its trade marks to another company to manufacture motor homes under the Winnebago name. Knott says that its opening submissions set out the position as it understood it to be—Winnebago had no intention of selling in Australia. It was not until the late receipt of Mr Beebe’s second affidavit that Knott was informed that Winnebago was working with an Australian-based business about opportunities to market Winnebago-branded motor homes in Australia. Even this disclosure, Knott says, was deliberately vague; it did not signify an imminent threat. Further, Knott submits that Foster J’s findings in respect of Winnebago’s interest in coming to Australia, and Jagot J’s findings in the appeal fall short of a finding of imminent threat.

70    In any event, Knott submits, by the time the information in Mr Beebe’s second affidavit was received (two business days before the commencement of the first instance hearing), it was, practically speaking, far too late for it to bring a cross-claim.

71    As regards the second matter (the manner or mode in which Winnebago might use the Winnebago name or the Winnebago logos), Knott submits that, without knowing the circumstances of Winnebago’s actual use of the Winnebago name and the Winnebago logos in parallel with Knott’s then use, any claim of misleading or deceptive conduct would be missing a “vital factor”. Knott submits that until these matters “assumed a final and concrete form”, any claim of misleading or deceptive conduct on the part of Winnebago would have been speculative and premature.

72    On the question of reasonableness, Knott submits that, even if its claims in the present proceeding could have been brought in the first proceeding, it was not unreasonable for it not to have done so. A number of Knott’s submissions in this regard echo a number of the submissions I have summarised above. For example, Knott submits that, in circumstances where Winnebago had not used the Winnebago name and the Winnebago logos in Australia, any threat at the time of the first instance proceeding to do so, even taking into account Mr Beebe’s evidence, was so vague and indeterminate that its claim could not be considered to have sufficient prospects of success to warrant pursuit of a cross-claim at that time. The late service of Mr Beebe’s second affidavit meant that it was plainly not unreasonable for it not to have sought leave to bring a cross-claim at such a late stage.

73    Further, Knott submits that the causes of action in the present proceeding are not so relevant to the subject matter of the first instance proceeding as to warrant a finding that it was unreasonable of it not to have raised them earlier. Whilst accepting that there will be an overlap in evidence, Knott submits that the subject matter of the present proceeding is whether the use of the Winnebago name and the Winnebago logos by Winnebago and the other respondents as at 2014, in the context of Knott’s use of the Winnebago name and the Winnebago logos with a disclaimer since 2013, constitutes misleading or deceptive conduct. Knott submits that this was not the subject matter of the first proceeding, which was whether its use of the Winnebago name and the Winnebago logos, based on conduct commencing in 1978, was misleading or deceptive, or constituted passing off.

74    Contrary to the respondents’ submission, Knott also submits that there will be very little overlap or duplication of time and costs in the present proceeding. It acknowledges, as it must, that the parties will be bound to findings of fact where an issue estoppel arises. Knott submits that there are many “critical factual matters” that have already been established and will be subject to such an estoppel. It has not, however, identified what it regards those factual matters to be. Nevertheless, it submits that, if permitted, the present proceedings will be confined to the determination of a limited number of new issues which, it says, were not the subject of the first proceeding.

75    In this connection, Knott identifies the following questions as principal questions arising in the present proceeding:

    Whether as a result of Knott’s reputation in the Winnebago name and the Winnebago logos, as found by the Full Court, consumers are likely to be misled by the use by the respondents of the Winnebago name and the Winnebago logos without a disclaimer.

    Whether the respondents can rely on the alleged defence of unlawful or wrongful conduct pleaded in paragraph 32 of the defence.

    Whether Knott should be denied relief in the exercise of the Court’s discretion as pleaded in paragraph 33 of the defence.

76    Knott also submits that there is no risk of an inconsistent judgment or finding being made in the present proceeding because the present proceeding concerns the propriety of the respondents’ conduct in using the Winnebago name and the Winnebago logos in 2014, not Knott’s conduct in that regard at earlier times. The basis of the earlier judgments would be untouched by a finding that the respondents’ use of the Winnebago name and the Winnebago logos may also be likely to mislead or deceive.

Consideration

77    I will deal, firstly, with Knott’s submission that the question of whether Anshun estoppel should be applied to its claims in the present proceeding is “not ripe for determination” in the context of an application for summary judgment.

78    I do not accept that submission. The basis of the respondents’ application for summary judgment is their contention that Anshun estoppel does apply. That being so, their argument is that Knott has no reasonable prospect of successfully prosecuting the present proceeding. In other words, the existence of the estoppel, as opposed to its cogency as a defence to be determined at trial, is the reason why, they say, Knott’s claims should be summarily dismissed.

79    In this connection, the respondents point to the public policy considerations underlying Anshun estoppel, which is not only to avoid inconsistent judgments but to avoid the duplication of the effort and expense of, and harassment occasioned by, multiple proceedings: Ling at 182; Foodco Group Pty Ltd v Northgan Pty Ltd (1998) 83 FCR 356 at 361-362; Ford Motor Company of Australia Limited v Tristar Steering & Suspension Australia Limited [2003] FCA 596 at [35]. The respondents submit that those objectives will be defeated if the question of the application of Anshun estoppel is left to be dealt with in a final judgment after a full trial of the action because, by then, the costs will have been incurred, the other party will have been vexed twice, and efficiency, economy and finality will have been effectively lost.

80    The respondents submit, therefore, that raising the question of the application of Anshun estoppel now is an appropriate use of the summary judgment procedure. They point to examples of where summary judgment has been given on the basis that the existence of an Anshun estoppel has been raised and applied: Ling v Commonwealth of Australia (unreported, Lehane J, 29 April 1996); Rahme v Commonwealth Bank of Australia [1991] NSWCA 230; Bryant; R&J Lyons Family Settlement Pty Ltd v 155 Macquarie Street Pty Ltd [2008] NSWSC 232.

81    I accept the respondents’ submissions in this regard. The question of the existence of an Anshun estoppel in respect of Knott’s claims having been raised, it is appropriate that I should deal now with the question of whether, in the circumstances of the present case, that estoppel has application and should be applied. This is how the respondents have advanced their summary judgment application. I am satisfied that an application for summary judgment is an appropriate vehicle for dealing with that question. In coming to that view, I am conscious that White J in Sahab Holdings Pty Ltd v Castle Constructions Pty Ltd [2014] NSWSC 1281 proceeded differently, reasoning (at [18]) that, in the context of a summary judgment application, the question was not whether the defence based on Anshun estoppel should succeed, but whether it was so clear that the defence must succeed that the proceeding should not go to trial. His Honour concluded (at [25]) that the question of whether it was reasonable for the plaintiff not have brought its claim in the first proceeding was not a question that, on the facts before him, should be determined on an application for summary judgment. I respectfully disagree that that should be the approach in the case before me.

82    I turn, therefore, to consider the substance of the respondents’ defence based on the Anshun principle. I do so bearing in mind that what is required is an evaluative judgment based on what a litigant could reasonably have been expected to do in the earlier proceeding: Spalla v St George Motor Finance Ltd (ACN 007 656 555) (No 6) [2004] FCA 1699 at [64]-[65]; Champerslife Pty Ltd v Manojlovski (2010) 75 NSWLR 245 at [3] (Champerslife). This evaluation proceeds on essentially objective criteria. In arriving at my conclusion, and in providing these reasons, it is not necessary for me to explicitly address every submission that was advanced by the parties.

83    I accept that there is a considerable overlap in facts in the subject matter of the first proceeding and the present proceeding, particularly as to the respective reputations in Australia of Knott and Winnebago in the Winnebago name and the Winnebago logos in the period up to 2010. The present proceeding provides, however, a different framework to that of the first proceeding in that the present proceeding looks, in particular, to the period from 2013, when Knott’s use of the Winnebago name and the Winnebago logos changed, and when, from 2014, the impugned conduct commenced.

84    Here, of course, the question is the legality of the respondents’ use of the Winnebago name and the Winnebago logos in that particular period in light of the facts that then obtained. I do not see how litigating Knott’s claims against the respondents in that regard can lead to a judgment which is inconsistent with the judgment in the first proceeding concerning Winnebago’s claims against Knott for particular conduct occurring in an earlier period. The correctness of the judgment against Knott in the first proceeding is not in issue.

85    There is, of course, the possibility that conflicting findings of fact might be made, at least in relation to that period covered by the present proceeding which is coterminous with the period dealt with by the judgment in the first proceeding. But the problems presented by such a possibility are significantly diminished by the application of the doctrine of issue estoppel which specifically recognises the realities of such conflicts in litigation and provides the mechanism for justly regulating the rights of the parties in that regard.

86    Thus, for these reasons alone, I am not persuaded that the Anshun principle applies in the present case to defeat the bringing of Knott’s claims against the respondents. Indeed, I accept that in a true and substantive sense, the claims Knott seeks to agitate now were not available to it at the time of the first proceeding.

87    I do not think that this finding is gainsaid by the respondents’ submission that the position of Winnebago Australia is merely derivative in the sense that I have explained. I do not think that that submission really embraces the fact that there is a difference in the factual setting in which the respondents’ impugned conduct falls to be assessed, compared to that obtaining when Knott’s conduct fell to be assessed. That factual context could not have been known at the time of the first proceeding.

88    In any event, in light of other circumstances, I am not persuaded that it was unreasonable for Knott not to have brought its claims in 2010, or at any other time during the course of the first proceeding. I do not think that Knott’s solicitors’ letter of 16 June 2010 has the significance which the respondents place upon it. I accept that it shows an awareness by Knott that, purportedly, Winnebago had formed an intention to use “the Winnebago Marks” in Australia. However, the nature of that intention must be understood in the context of s 27 of the Trade Marks Act 1995 (Cth). A trade mark applicant’s intention to use a mark must be sufficiently definite to provide standing to apply for the mark’s registration under s 27, but it does not follow that the effectuation of that intention must be immediate or within any limited time frame. In Aston v Harlee Manufacturing Company (1960) 103 CLR 391, Fullagar J observed (at 401):

A manufacturer of (say) confectionery would, I should suppose, be entitled to register three marks in relation to confectionery, though he intended only to use two of them and had not made up his mind as to which two he would use. If he in fact does not use any of them for [the period of non-use specified by the relevant legislation], the unused mark or marks may be expunged … On the other hand, a manufacturer of confectionery, who had no intention of ever manufacturing motor cars, might be held disentitled to register a mark in relation to motor cars …

89    I think it is with this meaning of the word “intention” that the letter of 16 June 2010 should be understood. But whatever understanding Knott had of Winnebago’s “intention” at that time, I accept that from relatively shortly after the commencement of the first instance proceeding until 26 May 2011, two business days before the commencement of the hearing of that proceeding, Knott held the justified belief that, in fact, Winnebago had no intention to use the “Winnebago Marks” in Australia. It was only on service of Mr Beebe’s second affidavit that, for the first time, Winnebago revealed that it was pursuing opportunities in Australia in relation to Winnebago-branded vehicles. What form those opportunities took, and how and when they might be given effect to, were not matters elucidated in the affidavit or, indeed, in any other evidence in the first instance hearing, so far as I am aware.

90    At this point, there are two things to be said. First, I do not think that, at that very late stage, it was unreasonable for Knott not to commence proceedings against Winnebago by way of cross-claim. Whether or not it made a deliberate decision at that time not to bring a cross-claim (see [55]) is not a matter that I need to decide. Secondly, and relatedly, I hold great reservations that such a cross-claim, even if permitted to be brought at such a late stage, would have had reasonable prospects of success on the state of facts as then known.

91    In this connection, I accept that Knott’s claims for relief could only have been advanced, at that time, on a quia timet basis. But if the only facts known were the limited facts which Mr Beebe revealed in his second affidavit—and there is no evidence before me that more facts were revealed—I doubt that Winnebago’s conduct would have been considered to have been sufficiently known and imminent to justify the grant of injunctive relief. At the very least, it seems to me that there is a real doubt that any cross-claim by Knott against Winnebago, brought at that time, would have been successful. Knott’s closing submissions before Foster J at the first instance hearing do not reveal an awareness of Winnebago’s intentions beyond the somewhat vague statements made in Mr Beebe’s second affidavit.

92    I am not persuaded, therefore, that Knott should be estopped from pursuing its present claims against the respondents on the basis of the Anshun principle. Given that conclusion, it is not necessary for me to deal with Knott’s submissions concerning public policy considerations that might militate against the application of that principle in the present case.

Abuse of process

93    Although advancing an alternative argument relying on r 26.01 of the Rules, the respondents accept that the appropriate principle to apply in the circumstances of the present case is the Anshun principle, rather than the principles applicable to staying a particular proceeding as an abuse of process because other relevantly related proceedings are also on foot: see, for example, Henry v Henry (1996) 185 CLR 571 at 591; Re AWB (No 10); Australian Securities and Investments Commission v Lindberg (2009) 76 ACSR 181 at [264]. The difference in the present case is that, rather than multiple proceedings being on foot, there is only one proceeding on foot, with an earlier proceeding having proceeded to judgment.

94    Notwithstanding this difference, there are cases which hold that, regardless of a possible Anshun estoppel defence, an additional basis for bringing a proceeding to an end is that it constitutes an abuse of process: see, for example, Tomlinson v Ramsey Food Processing Pty Limited [2015] HCA 28 at [24]-[26]; Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 at [33]-[34]; Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198 at [23]-[24].

95    In Aon, French CJ said (at [33]):

[33]    … Abuse of process principles may be invoked to prevent attempts to litigate that which should have been litigated in earlier proceedings as well as attempts to re-litigate that which has already been determined. Reichel v Magrath is a long standing example of a re-litigation case decided on abuse of process grounds, rather than on the basis of res judicata or issue estoppel. It was relied upon in Walton v Gardiner and Rogers v The Queen. In the former case, Mason CJ, Deane and Dawson JJ said that: “proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings.” (Footnote omitted.) The majority also endorsed the observation in Hunter v Chief Constable of West Midland Police that courts have an inherent power to prevent misuse of their procedures in a way which, although not inconsistent with the literal application of the Rules, would nevertheless be unfair to a party to the litigation “or would otherwise bring the administration of justice into disrepute among right-thinking people”. In Rogers v The Queen, the majority characterised as an abuse the tender of records of interview at a criminal trial in circumstances where the records had been rejected as involuntary at another trial on other charges. Mason CJ said:

“The circumstances in which abuse of process may arise are extremely varied and it would be unwise to limit those circumstances to fixed categories. Likewise, it would be a mistake to treat the discussion in judgments of particular circumstances as necessarily confining the concept of abuse of process.” (Footnote omitted.)

(Citations omitted.)

96    In that case, French CJ quoted (at [34]) the following observations of Lord Bingham of Cornhill in Johnson v Gore Wood & Co (a firm) [2002] 2 AC 1 at 31:

The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all.

97    It is important to bear in mind that, doctrinally, Anshun estoppel is founded on unreasonable conduct, not on an abuse of process. Further, the unreasonableness that activates the estoppel is the degree of relationship between the subject matter of the first proceeding and the subject matter of the second proceeding in respect of which the estoppel is sought to be raised: Champerslife at [1]-[4] and [89]; Truthful Endeavour Pty Ltd v Condon (Trustee), in the matter of Rayhill (Bankrupt) [2015] FCAFC 70 at [12]. Nevertheless, the respondents submit that the principles with respect to Anshun estoppel and abuse of process are informed by the same considerations of public policy and that, in the context of the present matter, the principles concerning abuse of process provide further support for the approach to be taken when an Anshun estoppel is raised.

98    The respondents’ submissions directed to the question of whether the present proceeding is an abuse of process are materially the same as their submissions I have summarised and considered above with respect to Anshun estoppel. Correspondingly, Knott’s submissions directed to this issue proceed on essentially the same lines as its submissions on Anshun estoppel. It is not necessary for me to repeat the respective submissions made, nor is it necessary for me to give separate consideration to them. The same outcome ensues. For the reasons I have given at [83]-[92], I am not persuaded that the commencement or maintenance of the present proceeding is an abuse of process.

Conclusion and disposition

99    The respondents’ interlocutory application should be dismissed, with costs.

Associate:

Dated:    12 August 2015