FEDERAL COURT OF AUSTRALIA

Robinson v Deep Investments Pty Ltd [2018] FCAFC 232

Appeal from:

Deep Investments Pty Ltd v Casey [2018] FCA 603

File numbers:

NSD 853 of 2018

NSD 855 of 2018

NSD 856 of 2018

Judges:

PERRAM, JAGOT AND COLVIN JJ

Date of judgment:

20 December 2018

Catchwords:

PRACTICE AND PROCEDURE - appeal and cross-appeal from decision of primary judge striking out parts of statement of claim precluded by Anshun estoppel and abuse of process - where primary judge did not uphold application for summary dismissal - where proceedings seek to recover losses the subject of prior consent judgment in Supreme Court proceedings - where primary judge allowed proceedings to continue but limited to claims and causes of action arising from non-disclosure - Anshun estoppel - abuse of process

Legislation:

Australian Securities and Investments Commission Act 2001 (Cth)

Corporations Act 2001 (Cth)

Civil Procedure Act 2005 (NSW) s 91

Cases cited:

Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (No 2) [2001] FCA 1861; (2001) 119 FCR 1

Batistatos v Roads and Traffic Authority (NSW) [2006] HCA 27; (2006) 226 CLR 256

Breen v Williams [1996] HCA 57; (1996) 186 CLR 71

Chamberlain v Deputy Commissioner of Taxation (ACT) (1988) 164 CLR 502

Commissioner of Taxation v Day [2007] FCAFC 193; (2007) 164 FCR 250

Daly v Sydney Stock Exchange [1986] HCA 25; (1986) 160 CLR 372

Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589

Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93

Timbercorp Finance Pty Ltd (in liq) v Collins [2016] HCA 44; (2016) 259 CLR 212

Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; (2015) 256 CLR 507

UBS AG v Tyne [2018] HCA 45

Date of hearing:

14 and 15 November 2018

Registry:

New South Wales

Division:

General Division

National Practice Area:

Commercial and Corporations

Sub-area:

Commercial Contracts, Banking, Finance and Insurance

Category:

Catchwords

Number of paragraphs:

157

In NSD 853 of 2018:

Counsel for the Appellants:

Mr P Brereton SC with Mr SE Gray

Solicitor for the Appellants:

Moray & Agnew

Counsel for the Respondent:

Mr P Dunning QC with Dr W Wild

Solicitor for the Respondent:

K2 Law

In NSD 855 of 2018:

Counsel for the Appellant:

Mr DL Williams SC with Mr A Harding

Solicitor for the Appellant:

K&L Gates

Counsel for the Respondent:

Mr P Dunning QC with Dr W Wild

Solicitor for the Respondent:

K2 Law

In NSD 856 of 2018:

Counsel for the Appellants:

Mr J Stoljar SC with Mr M Friedgut

Solicitor for the Appellants:

Minter Ellison Lawyers

Counsel for the Respondent:

Mr P Dunning QC with Dr W Wild

Solicitor for the Respondent:

K2 Law

ORDERS

NSD 853 of 2018

BETWEEN:

SIMON ROBINSON

First Appellant/Cross-Respondent

RAVEN CAPITAL PTY LTD (ACN 149 962 649)

Second Appellant/Cross-Respondent

QWL PTY LTD (ACN 096 284 383)

Third Appellant/Cross-Respondent

AND:

DEEP INVESTMENTS PTY LTD (ACN 000 339 319)

Respondent/Cross-Appellant

JUDGES:

PERRAM, JAGOT AND COLVIN JJ

DATE OF ORDER:

20 December 2018

THE COURT ORDERS THAT:

1.    Leave to appeal and cross-appeal be granted.

2.    The appeal be allowed.

3.    The cross-appeal be dismissed.

4.    The orders of 4 May 2018 and order 1 of the orders of 22 May 2018 be set aside and in lieu thereof it be ordered that the proceedings be summarily dismissed.

5.    The parties confer and, within seven days, file agreed orders for the making of short written submissions about the costs of the proceeding below and the appeal/cross-appeal to enable costs to be determined without a further oral hearing.

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

ORDERS

NSD 855 of 2018

BETWEEN:

KEVIN EMANUEL

Appellant/Cross-Respondent

AND:

DEEP INVESTMENTS PTY LTD (ACN 000 339 319)

Respondent/Cross-Appellant

JUDGES:

PERRAM, JAGOT AND COLVIN JJ

DATE OF ORDER:

20 December 2018

THE COURT ORDERS THAT:

1.    Leave to appeal and cross-appeal be granted.

2.    The appeal be allowed.

3.    The cross-appeal be dismissed.

4.    The orders of 4 May 2018 and order 1 of the orders of 22 May 2018 be set aside and in lieu thereof it be ordered that the proceedings be summarily dismissed.

5.    The parties confer and, within seven days, file agreed orders for the making of short written submissions about the costs of the proceeding below and the appeal/cross-appeal to enable costs to be determined without a further oral hearing.

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

ORDERS

NSD 856 of 2018

BETWEEN:

KEVIN CASEY

First Appellant/Cross-Respondent

PAUL CLARKE

Second Appellant/Cross-Respondent

CBC PARTNERS PTY LTD (ACN 104 815 483)

Third Appellant/Cross-Respondent

AND:

DEEP INVESTMENTS PTY LTD (ACN 000 339 319)

Respondent/Cross-Appellant

JUDGES:

PERRAM, JAGOT AND COLVIN JJ

DATE OF ORDER:

20 December 2018

THE COURT ORDERS THAT:

1.    Leave to appeal and cross-appeal be granted.

2.    The appeal be allowed.

3.    The cross-appeal be dismissed.

4.    The orders of 4 May 2018 and order 1 of the orders of 22 May 2018 be set aside and in lieu thereof it be ordered that the proceedings be summarily dismissed.

5.    The parties confer and, within seven days, file agreed orders for the making of short written submissions about the costs of the proceeding below and the appeal/cross-appeal to enable costs to be determined without a further oral hearing.

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

REASONS FOR JUDGMENT

PERRAM J:

1    I have had the advantage of reading in draft the reasons of Jagot and Colvin JJ. Regrettably, I find myself unable to agree with their Honours’ analysis of the pleadings at [62]-[72]. In my view, Deep Investments’ case as disclosed in the pleading is that it would not have suffered the losses it suffered if it had been aware of the alleged dishonesty of Mr Robinson because it would have fired him before they could occur. I do not read it as alleging that Mr Robinson caused the losses through his mismanagement (in the sense of failing to carry out instructions) and that they would not have been suffered had his alleged dishonesty been disclosed. Put another way, I do not understand Deep Investments’ case on the losses it claims to have suffered as involving it proving that Mr Robinson mismanaged the fund. Its case is an everyday no-transaction case. Consequently, I see no inconsistency with the consent orders of the New South Wales Supreme Court (which, by contrast, do involve the acquittal of Mr Robinson from any suggestion of mismanagement of the fund).

2    That this is so is apparent from the wording of the pleadings. A good example is the pleading against Mr Emanuel, ¶56 of which provides (relevantly):

‘Had Emanuel not breached his duties…Deep Investments would…not have been exposed to the subsequent losses as a result of Robinson’s conduct in the course of providing MDA services to Deep Investments, as pleaded in paragraph 57 to 77 below.’

3    Similar pleadings against the other relevant parties may be found at ¶¶49 and 88-92. I agree with the primary judge that the case brought by Deep Investments against Mr Robinson is barred by an Anshun estoppel. It is that case which is contained in ¶¶57-77. Consequently, the pleading in paragraph 56 is defective because it refers to paragraphs which, on the view I take of the Anshun estoppel issues, will not exist. I would nevertheless give Deep Investments an opportunity to replead 56 (and its analogues) so that it identifies the losses which are set out in ¶¶57-77 without making the allegations against Mr Robinson. This is because I do not read 56 as involving the assertion of a case against Mr Robinson merely by its cross-reference to ¶¶57-77.

4    Whilst I accept that ¶56 (and its analogues) could, at a stretch, be read as involving the assertion of the substantive claims against Mr Robinson, that would be a very odd way to plead a loss and damage claim. It is evident that conspicuous efforts have been made by Deep Investments’ current advisers to evade the effect of the Supreme Court proceeding by alleging in this Court a no-transaction case based on non-disclosure. It strikes me as unlikely that it was intended to throw all that intellectual effort away by making those very same allegations in the paragraph in which the losses are claimed; more so when such an allegation is not only self-defeating but also pointless. A more natural reading of ¶56 is that it is about loss and not the assertion of a substantive claim. In that regard, I note that the primary judge did not read the pleading other than as a non-disclosure case and hence as not involving an impeachment of the result in the Supreme Court (cf. [201]).

5    My differing view on this issue means that I do not agree that the case against the Appellants is barred in the various ways that the majority would hold. In particular, in my opinion, there is no inconsistency with the consent orders of the Supreme Court.

6    That conclusion makes it necessary for me to express a view on all the other aspects of the appeals and cross-appeals with which the majority have not needed to deal. Since this is a dissent, there is little in expanding on these issues in detail.

7    Subject to two matters, I agree with the conclusions of the primary judge. Contrary to the submissions of Deep Investments, and as I have said above, I do not think her Honour erred in concluding that there was an Anshun estoppel (and an abuse of process) in relation to the claims made against the Raven Parties based on allegations of breach of fiduciary duty by the sale of the pre-CGT NAB shares and by the trading in Boart Longyear Ltd and Billabong International Ltd. There is no reason those claims could not have been made in the Supreme Court proceeding. I also do not think that her Honour erred in concluding that the CBC Parties were entitled to rely upon an Anshun estoppel (or an abuse of process argument) in relation to the breach of fiduciary duty claims against them for their failure to identify and inform Deep Investments of Mr Robinson’s trading in the NAB, Billabong or Boart Longyear shares. Just as that claim could reasonably have been raised against the Raven Parties in the Supreme Court so too it could have been raised against the CBC Parties. There were understandable tactical reasons for Deep Investments not to do so but that is no answer.

8    Her Honour was also correct to resist any application of s 91 of the Civil Procedure Act 2005 (NSW). Plainly it did not deprive the judgment for the Raven defendants of its operation. Nor is there any merit in the suggestion that the consent judgment was not operative. Plainly, it was.

9    On the other hand, I do not think her Honour was correct to strike out Deep Investments’ case against Mr Emanuel on the basis that it had alleged that the Wilson documents had been provided to the CBC parties (and hence that Deep Investments knew about the alleged misconduct of Mr Robinson). I would have instead permitted that case to advance to trial which appears, on its face, to involve a fact-rich inquiry. I also differ from the primary judge who concluded that the way in which the various fiduciary duties were pleaded should be struck out without leave to replead. I do not think that the agonies along the stony way from Daly v Sydney Stock Exchange Limited [1986] HCA 25; (1986) 160 CLR 371 to Breen v Williams [1996] HCA 57; (1996) 186 CLR 71 (and thereafter) make apt the striking out of claims based on prescriptive fiduciary duties. Such matters should be left to trial.

10    For those reasons, I would grant all parties leave to appeal but would dismiss the appeals of the Emanuel, CBC and Raven parties. I would allow Deep Investments’ cross-appeal to the extent I have indicated. The question of costs is of some nicety but as this is a dissent need it not be pursued.

I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.

Associate:

Dated:    20 December 2018

REASONS FOR JUDGMENT

JAGOT AND COLVIN JJ:

11    This appeal concerns proceedings in which Deep Investments Pty Ltd seeks to recover losses incurred on a substantial share portfolio held by the company. The losses were the subject of a damages claim in proceedings that went to trial in the Supreme Court of New South Wales in February 2016. After four days of hearing the parties reached a settlement and on 29 February 2016, judgment was entered for the defendants by consent in which the damages claim was dismissed and a cross-claim was discontinued. About 10 months later, proceedings were commenced in this Court against seven respondents, three of whom had been the defendants at the trial of the Supreme Court proceedings. The claims in this Court seek to recover part of the loss the subject of the Supreme Court proceedings.

12    The seven respondents brought interlocutory applications for dismissal of the new claims. They were partially successful. The respondents appeal claiming that the primary judge should have summarily dismissed all claims. The applicants bring a cross-appeal claiming they are entitled to proceed with all claims.

The main contentions

13    The arguments traverse principles of res judicata, issue estoppel, Anshun estoppel, abuse of process, the effect of s 91 of the Civil Procedure Act 2005 (NSW) and certain aspects of the law as to fiduciary duties and agency. However, at their heart the main issue in the appeal concerns whether Deep Investments can bring new claims related to the subject matter of the Supreme Court proceedings in circumstances where the explanation for doing so is the receipt of information a few weeks before the commencement of the trial in those proceedings. The information is relied upon to provide the foundation for the claims brought in the proceedings in this Court.

14    Deep Investments says that there was a legal duty upon each of the seven respondents to have disclosed the information. It says that the duty of disclosure arose before and independently of discovery obligations in the Supreme Court proceedings. It says the duty was breached well before the Supreme Court proceedings and it was placed in an invidious position when it received the information so close to trial. It was not until later that the manner in which the information might support different causes of action to recover the same loss was evaluated. In those circumstances, it says it has not acted unreasonably and because the case raises different causes of action and the issues in the Supreme Court proceedings were not adjudicated (because there was judgment by consent dismissing the claims) there is no impediment to it bringing the claims in this Court even though they seek to recover losses that were claimed in the proceedings that went to trial in the Supreme Court.

15    The appellants (the seven respondents in this Court) say that the information was provided as soon as it was requested by Deep Investments in the course of the Supreme Court proceedings. The reason that was late in the day was the result of forensic choices made in the conduct of the Supreme Court proceedings by lawyers acting for Deep Investments. In particular, it is said that those choices involved limiting the claim to one based upon principles of contract and agency and not proceeding with claims involving some of the seven respondents in the interests of securing the co-operation of two witnesses who were important to its case. It is said that no fault can be attributed to the respondents for the fact that the request for the documents was made late in the day.

16    The appellants also say that when the solicitor who had the conduct of the Supreme Court proceedings for Deep Investments gave evidence before the primary judge in opposition to the application to stay or dismiss the proceedings in this Court, he accepted that had he known of the information earlier he would have made the same forensic choices to secure the co-operation of the witnesses.

17    Finally, the appellants say that if the information was as significant as Deep Investments contends and there was a breach of duty in failing to disclose the information at an earlier time then that would have been apparent when the information was disclosed. So, even though it was close to trial, if Deep Investments wanted to use the information as a basis to advance different causes of action to recover the same loss then it needed to have raised that issue at the time. Had it done so, even though the trial was imminent, appropriate case management orders could have been made to deal with the issue, including the consideration of taking some or all of the evidence on the issues then joined or an adjournment on terms.

18    The information came into the hands of Deep Investments when a notice to produce resulted in the production of documents. The contents of those documents caused a request to be made to a Mr Emanuel (one of the seven respondents, who was a lawyer who had acted for Deep Investments at the time of the relevant events) to produce his file. He promptly provided his file in response to the request. Unlike the other respondents, Mr Emanuel did not feature in any way in the Supreme Court proceedings. Nevertheless, he too claims that it is an abuse to now bring a claim against him because all claims should have been brought in the Supreme Court proceedings.

19    Mr Emanuel also says that he discharged his obligation to provide the information to Deep Investments at the time it came into his hands because he communicated the information to the accountants who were acting for Deep Investments and they had express authority to receive that information. It is said that on agency principles the communication to the accountants operated as communication to Deep Investments and for that further reason the claim against Mr Emanuel lacks merit and should be summarily dismissed. The agency point was upheld by the primary judge, but that finding is challenged in a cross-appeal by Deep Investments.

20    The cross-appeals in each appeal claim that the primary judge should have allowed all claims to proceed. They say that principles of res judicata, issue estoppel, Anshun estoppel and abuse of process do not apply. They say separately that the primary judge erred in striking out certain paragraphs of the pleading on the basis that they otherwise disclosed no cause of action. As mentioned they claim that the agency point raised by Mr Emanuel was not a proper basis for summary dismissal. They also claim that the primary judge should not have confined the leave that was given to re-plead claims of breach of fiduciary duty.

21    All appeals are interlocutory and can only be brought with leave.

Summary of decision

22    For the following reasons, there should be leave to bring the appeals. The claims against all respondents are an abuse of process. Therefore, the appeals should be allowed and the cross-appeals should be dismissed. We will hear from the parties as to appropriate costs orders.

The parties and relevant events prior to the dispute about the share portfolio

23    The following account is taken from the unchallenged findings of the primary judge and the documents relied upon on the applications before the primary judge.

24    Deep Investments is a family company in which three siblings, Barry, Rhonda and Robert hold interests. CBC Partners Pty Ltd acted as accountant for Deep Investments between around 2011 and 2013. Mr Casey and Mr Clarke were accountants at CBC Partners and were considered by Barry, Rhonda and Robert to have day to day conduct of the affairs of Deep Investments. Mr Casey and Mr Clarke introduced them to Mr Robinson who was then working for Wilson HTM.

25    In June or July 2011, Deep Investments entered into a portfolio management agreement with Wilson HTM. The agreement provided for the payment of a large termination fee if the agreement was terminated within 12 months. After that, Mr Robinson as an employee of Wilson HTM provided services to Deep Investments.

26    In October 2011, Mr Robinson prepared a variation letter which provided that Wilson HTM would not be liable for the termination fee if Mr Robinson was not the manager of the portfolio at the time of termination. The circumstances concerning the variation letter and how it came to be prepared assume some significance and are considered in more detail below.

27    Mr Robinson resigned from Wilson HTM in February 2012 and commenced acting as a financial advisor for Raven Capital Pty Ltd and QWL Pty Ltd, companies with which Mr Robinson was associated (Raven Companies). At about the same time, Deep Investments terminated its agreement with Wilson HTM and appointed the Raven Companies to manage the portfolio.

28    On 22 March 2012, Wilson HTM sent a letter by email to Mr Clarke of CBC Partners demanding payment by Deep Investments of a termination fee of just under $720,000. It requested that the letter be provided by Mr Clarke to his client. Ten minutes later Mr Clarke forwarded the email attaching the letter to Mr Robinson. In the covering email to Mr Robinson, Mr Clarke said:

Game on!

WE need to conduct Rhonda [Deep] ASAP so she does not panic.

Step 2 we need letter from law firm to stick it up Wilsons.

Speak soon.

29    About an hour later Mr Clarke emailed Mr Casey with a copy to Mr Robinson saying:

I have forwarded this on to Simon [Robinson] and called him briefly to discuss.

I understand that Simon will contact Rhonda and confirm that Ravens will organise and fund response to this letter regarding a termination fee payable to Wilsons.

30    On 26 March 2012, Mr Robinson sent an email to Mr Emanuel. It said:

I refer to our telephone conversation on Friday in relation to the DEEPS.

Please find attached letters that they received from Wilson HTM relating to a demand to pay a termination fee. You will note that Wilson HTM have requested payment within 7 days. We are presently compiling documentation for you to the extent that we have it in our possession. I will scan separately a copy of a notice of variation to the agreement signed by the Deeps.

My contact details are

31    So, on the materials before the primary judge on the summary judgment application brought by Mr Emanuel, the evidence was to the effect that it was Mr Robinson who engaged Mr Emanuel and established his retainer. There was no evidence as to what was in fact communicated to Ms Deep concerning those arrangements to instruct Mr Emanuel.

32    The case pleaded by Deep Investments concerning the retainer is that each of Mr Clarke, Mr Casey and CBC Partners 'undertook and assumed responsibility to Deep Investments to instruct [Mr] Emanuel in respect of the matters the subject of the Wilson Dispute Legal Services Retainer' (para 9(b) and (f)). The plea is said to be based upon inferences to be drawn from documents. There is a separate plea that Mr Emanuel was retained by Deep Investments to act as legal advisor from time to time for Deep Investments and to act in relation to the claims made against it by Wilson HTM in relation to an alleged termination fee payable by Deep Investments as a result of Deep Investments moving the management of its share portfolio to Raven Capital (described as the Wilson Dispute Legal services Retainer) (para 15).

33    On 29 March 2012, Mr Emanuel wrote to Wilson HTM stating that he acted for Deep Investments. The letter requested copies of relevant documents relied upon to support the claim to the termination fee.

34    It appears that there was a broader dispute as between Mr Robinson and Wilson HTM concerning the circumstances of his departure and Mr Robinson had engaged another lawyer, Mr Watson, to act for him in that dispute.

35    Communications ensued between Mr Clarke and Mr Emanuel about what to do concerning the claim made by Wilson HTM to the termination fee. Some of the communications also involved Mr Robinson and his lawyer Mr Watson. They began with an email from Mr Emanuel to Mr Clarke dated 4 April 2012 in which, amongst other things, he said:

I attach for your information a copy of a letter I sent by email to Wilson HTM on 29 March

I also have spoken to Mark Watson who is acting for Simon Robertson in relation to the potential claim Wilson HTM are making on him. We will be able to work together in that regard

I think you and I should meet soon. The question is whether we should bring the various members of the Deep family to a meeting at your office at this stage. As we discussed before you went away, I have not been in contact with them at all so far.

36    Mr Clarke responded:

I am pretty flexible with meeting this week and next.

At this stage I don't think we involve the Deeps at the meetings initially. My only question would be if we involve Simon [being an evident reference to Mr Robertson].

37    A key part of the communications for the purposes of the present appeal is a claim by Deep Investments that on 5 April 2012 Mr Emanuel received a copy of a letter from Wilson HTM to the Australian Securities and Investments Commission. It enclosed a form FS80 in relation to a potential breach of the financial securities licence held by Wilson HTM. The form was provided pursuant to an obligation to report potential breaches. The following statements (the truth of which have not been tested in any court proceedings) formed part of an appendix to the form:

    that Mr Robinson entered the Licensee's premises at approximately 2.30am on the morning of his resignation and stayed for approximately an hour. During that time, the desk top of his computer was heavily modified;

    by comparison with restored emails and documents to the Licensee's server from back-up tapes, that Mr Robinson deleted many documents from his computer, including a copy of the Purported Variation, which does not appear to have been created or stored on the Licensee's central server;

    that, to the best of the Licensee's knowledge (and in circumstances where Mr Robinson has declined to be interviewed or to provide an explanation):

o    Mr Robinson prepared the Purported Variation in breach of his contract of employment which expressly provided that he had no authority to contract on behalf of the Licensee;

o    Mr Robinson prepared the Purported Variation in breach of internal policies and guidelines concerning the execution of documents by authorised attorneys only;

o    the effect of the Purported Variation is to permit the Clients to transfer the management of their portfolios to Mr Robinson at his new employer without having to pay a termination fee.

38    Later in the appendix, there was the following further statement:

The Licensee does not believe that the breach indicates that its compliance arrangements are inadequate. The actions of Mr Robinson, which include creating the Purported Variation on his computer desktop to avoid monitoring and accessing the Licensee's premises in the early hours of the morning on a weekend to attempt to delete any trace of the Purported Variation, suggest the conduct of a rogue employee who has gone to considerable lengths to conceal inappropriate and deceitful conduct from the Licensee. In those circumstances, the Licensee does not believe that its supervision or compliance arrangements could have reasonably uncovered the conduct.

39    Deep Investments also claims that about two weeks after receiving the form FS80, Mr Emanuel received a letter from Wilson HTM requesting an explanation of how and when the variation agreement came to be signed by Deep Investments. It also claims that Mr Robinson became aware of the form FS80 and the letter from Wilson HTM within a week or two thereafter.

40    As to these communications, the unchallenged finding of the primary judge on the interlocutory applications was that they first came to the attention of Mr Kumnick, a solicitor acting for Deep Investments in the Supreme Court proceedings, on 29 January 2016 and there was no evidence that they came to the attention of officers of Deep Investments or anyone on their behalf before that date.

41    It is the non-disclosure of both the letter by Wilson HTM to ASIC and the form FS80 (and its contents) that is advanced both as the foundation for the claims now brought in this Court and the justification for not bringing forth such claims in the Supreme Court proceedings. Therefore, the facts concerning the alleged non-disclosure have relevance upon the present application, but will also be in issue if the matter in this Court was to proceed to trial.

42    On 27 April 2012, Mr Clarke sent an email to Mr Emanuel copied to Mr Robinson. It said that he had not been able to get in touch for a month. He asked whether Mr Emanuel could meet with Mr Robinson.

43    The same day, Mr Emanuel sent an email to Mr Clarke in which he said, amongst other things:

Last week I heard from the head of Legal Risk and Compliance at Wilson HTM.

Firstly, she advised me that the letter she sent me by email on 5 April, being a copy of a letter to ASIC, was sent to me mistakenly. She asked me to confirm that that letter has not been circulated. I confirmed with her that it was not circulated.

She has also attached the letter that was meant to be sent to me on 5 April, which letter responds to my letter dated 29 March 2012. I attach a copy

You will see in her letter dated 5 April that she has asked me to obtain instructions in relation to the preparation and execution of the Variation. I don't think we will be giving her any particulars of that. That is something we need to speak about.

What I suggest is that you and I and probably Kevin Casey should get together towards the end of next week to look at all the documents and decide how we want to proceed.

44    On 2 April 2012, Mr Clarke forwarded the email from Mr Emanuel to Mr Robinson.

45    The next day Mr Robinson sent an email to Mr Emanuel (copied to Mr Clarke and Mr Casey) in which he said 'In an effort to cut through this I have taken the liberty of drafting a response on behalf of the Deeps. The draft letter is aggressive but we have an opportunity to shut this matter down & I think we should aggressively take it'.

46    The email set out a draft letter to Wilson HTM in which a demand was made for an amount of $49,000 held by Wilson HTM to be paid into an account for Deep Investments and for a deed of release to be signed 'stating that Wilson HTM has no further rights against our clients'. The draft letter then said: 'In the event that we do not receive the following by 5pm on Friday 1 June then we intend to report Wilson HTM to ASIC for amongst other things misappropriating clients funds as well as misrepresentation'. It also suggested that a complaint be made about Wilson HTM imposing a period of 'gardening leave' on Mr Robinson preventing his from acting for the Deeps and consideration was being given to pursing losses sustained as a result.

47    On 2 May 2012, Mr Robinson sent an email to his lawyer Mr Watson in which he expressed disappointment in the approach that Mr Emanuel was taking. The email chain included the email from Mr Emanuel to Mr Clarke of 27 April 2012 (set out above) and the email forwarding it on to Mr Robinson. The 2 May email began by referring to matters in the email from Mr Emanuel to Mr Clarke. As to the distribution of the letter from Wilson HTM to ASIC enclosing the form FS80, Mr Robinson said:

He [meaning Mr Emanuel] did distribute the letter [to ASIC] That letter is clearly defamatory. My view is he should respond in writing & state that the letter was sent to Deeps Accountants and he cannot confirm whether it has been on forwarded. To be clear I have a copy of the ASIC letter, so it has been distributed - why would we let Wilsons off the hook for this "cock up".

[The email then deal with a claim by Wilson HTM to a management fee and the banking of a cheque payable to Deep Investments]

I would appreciate a quick view on these issues as I am going to talk to DEEP ACCOUNTANTS tomorrow with a view to giving instructions to Kevin Emanuel. It just strikes me that Wilsons have made too may mistakes and this is the chance to close the entire matter down.

ONE VERY IMPORTANT POINT regarding my position - you will note in the attached letter that Wilsons are conducting an internal investigation into the DEED of VARIATION and its approval process. Remember that I drafted the original ANNEXURE A (which was never approved) - I also drafted the AMMENDMENT LETTER (sic) (I made the compliance officer read that letter on numerous times - albeit it post its execution…there is no way Wilsons can ever state that they were not aware of the existence of the letter or its terms.

I think Kevin Emanuel needs to really blast Wilsons particularly on the banking of the cheque issue.

48    On 26 June 2012, Mr Emanuel sent an email to Mr Casey responding to a request for an update. In the email he said that after a conference with Paul [Clarke] and Simon [Robinson] he had drafted a letter to Wilson HTM which he had now sent.

49    On 4 July 2012, Mr Robinson sent an email to Mr Emanuel (with a copy to Mr Casey of CBC Partners) in which he said:

I have a meeting with the Deeps at 3pm this afternoon and would like to bring them up to date with the latest from Wilson HTM.

Can you please provide Kevin Casey with an email as to whether you have had a response to your letter from Wilson HTM and if not when we are expecting it. I would appreciate the response pre 3pm this afternoon thanks.

50    On 5 July 2012, Ms Rhonda Deep sent an email to Mr Robinson saying that they wanted to vote to reduce the margin loans to zero over all portfolios 'as timely as possible without making any losses'.

51    Mr Robinson responded with a long email expressing his disappointment. It included the following:

I have always acted in your best interests and this has included without limitation:-

    Ensuring that when you left Wilson HTM that you would come with me as a client

    Paying for legal advice on behalf of Deep Investments to ensure that you were protected from Wilson HTM when I left (including the payment of a termination fee); and

    Advancing your interests in terms of ensuring that you were not charged management fees for my first month at Raven Capital

52    As the primary judge observed, the statement about payment by Mr Robinson to Wilson HTM of a termination fee did not reflect the position because there continued to be dealings about the termination fee until 17 August 2018 when Mr Emanuel reported to Mr Robinson that it seemed likely that Wilson HTM would not pursue any action against the Deeps: at [38]-[39]. Further, as appears below, when the Supreme Court proceedings were commenced, Wilson HTM raised issues about liability for the termination fee in those proceedings.

53    The long email from Mr Robinson did not refer to the form FS80 or the inquiries from Wilson HTM as to the circumstances in which the variation agreement came to be prepared.

54    On 9 July 2012, Mr Robinson sent an email to Mr Casey and Mr Clarke attaching a list of 'key messages' that he proposed to 'give the Deeps' at a meeting that was scheduled for the following day. The email referred to them in most pejorative terms. It had four messages relating to the management of the portfolio. Then under the heading 'Wilson HTM' the following message was recorded: 'Wilson HTM legal process managed and paid for by Raven Capital (potentially was a $1.5 million problem)'. The terms in which the message was expressed provides support for claims that the officers of Deep Investments had not been involved in communications with their lawyer Mr Emanuel, CBC Partners or Mr Robinson concerning the communications that had occurred about that dispute. Rather, it was being managed by Mr Robinson who had his own interest in the dispute and had engaged his own lawyer Mr Watson. There is no suggestion that any message was to be communicated by CBC Partners at the meeting about the matters that had been raised concerning the conduct of Mr Robinson.

55    On 10 July 2012, Wilson HTM sent an email to Mr Emanuel which included the following:

Finally, I note that your letter does not address in a satisfactory manner my inquiry concerning your client's knowledge of or involvement in which the Variation came to be signed. Please be advised that in the circumstances Wilson HTM fully reserves its rights against your clients in this regard.

56    On 16 July 2012, Mr Emanuel sent a without prejudice proposal to Wilson HTM to settle any claims by Deep Investments and other related parties pursuant to the agreements by which Wilson HTM had been engaged to manage the share portfolio. There is an issue as to whether Mr Emanuel had proper instructions to send the proposal.

57    By 18 July 2012, Mr Casey was proposing a letter be sent to Wilson HTM threatening to refer the conduct of Wilson HTM to ASIC. On 19 July 2012, Mr Casey sent an email to Mr Emanuel passing on thoughts from Mr Robinson in a form that had evidently been provided by Mr Robinson for that purpose. It included:

The key point is we don't want Wilsons to have any of Deeps money and we also want to be able to report to Deep that we have acted in the best interests of Deep to get the money back from Wilsons.

If you could pass these points onto Kevin Emanuel that would be appreciated.

58    On 17 August 2018, Mr Emanuel sent an email to Mr Robinson in which he said, amongst other things, that it seemed likely that Wilson HTM 'will not pursue any action against the Deeps'. He then said:

Kevin Casey and I, therefore, agreed that it would be best to simply wait and see if there is any further contact from Wilson HTM. I assume you agree.

Given that position, it is an appropriate time for me to render our memorandum of fees for work done to date. I note that at the commencement of the matter you indicated that you would arrange payment of fees. To whom do you want me to address the memorandum of fees?

59    Mr Robinson responded asking the fees to be addressed to Raven Capital. The fees rendered by Mr Emanuel for considering the communications and discussing matters with CBC Partners and Mr Robinson were sent by Mr Emanuel in a note of fees to Raven Capital and payment of the account was arranged by Mr Robinson.

60    It is common ground that Mr Emanuel did not communicate the matters in the Wilson HTM letter to ASIC or the form FS80 to Deep Investments.

61    Thereafter, it appears that by November 2012, Deep Investments had taken advice from K2 Law about termination of its agreement with Raven Capital.

The claims concerning the failure to disclose the Wilson HTM letter and the form FS80

62    Based upon the above events, the claim that Deep Investments seeks to advance in this Court is founded upon a complaint that each of Mr Emanuel, Mr Robinson, the Raven Companies, Mr Clarke, Mr Casey and CBC Partners was under a duty to disclose the contents of the Wilson HTM letter and the form FS80 to Deep Investments. It is alleged that had they disclosed the information, the fact that the matters raised in the form FS80 reflected upon the trustworthiness of Mr Robinson would have led to Deep Investments terminating further dealings with Mr Robinson and the Raven Companies. It is then claimed that, as a result, Deep Investments would not have suffered losses that were incurred by the manner in which Mr Robinson subsequently managed its share portfolio.

63    It is not necessary to consider in detail the causation questions that arise for a claim of that kind. They may be different depending upon each cause of action relied upon. In that regard, Deep Investments seeks to advance claims for breach of fiduciary, contractual and tortious duties as well as a claim based upon breach of the statutory standard requiring providers of financial services to refrain from misleading or deceptive conduct. However, it is significant that each cause of action is advanced on the basis that had Deep Investments known of the allegations being made by Wilson HTM about Mr Robinson it would not have continued dealing with Mr Robinson (and the Raven Companies) and would not have suffered loss on the share portfolios as a result of Mr Robinson's conduct. Inherent in each cause of action formulated in such a way is an allegation that the loss was a consequence of the way the portfolio was managed by Mr Robinson.

64    So, the claim by Deep Investments would go nowhere if, despite any view that may have been formed about the trustworthiness of Mr Robinson, he nevertheless managed the portfolio competently and consistently with what he was asked to do. Fundamental to each claim in this Court is an assertion that Mr Robinson and the Raven Companies mismanaged the share portfolio. Indeed, the statement of claim filed in this Court pleads complaints about such management in some detail.

65    The statement of claim considered by the primary judge described the claimed losses as against Mr Clarke, Mr Casey and CBC Partners at para 49, against Mr Emanuel at para 56 and Mr Robinson and the Raven Companies at 88 to 92.

66    As to Mr Clarke, Mr Casey, CBC Partners and Mr Emanuel the pleading said that had the alleged breaches not occurred, Deep Investments would have withdrawn the mandate of Mr Robinson and 'thereby would not have been exposed to its subsequent losses as a result of [Mr] Robinson's conduct in the course of providing services to Deep Investments, as pleaded below'. The conduct pleaded below concerns the manner in which the portfolio was managed.

67    As to Mr Robinson and the Raven Companies, the complaint was that by reason of the same pleaded conduct concerning the manner in which the portfolio was managed, Deep Investments suffered loss and damage.

68    The conduct pleaded traverses a number of allegations about what was done by Mr Robinson in buying and selling shares. For example, complaint is made about Mr Robinson's conduct in selling NAB shares held in the portfolio. It is said that the sale was in the interests of Mr Robinson and Raven Capital because it increased commission income. It is said that a margin loan for trading was recommended and complaint is made about his advice concerning the margin loan. It is said that Mr Robinson knew that it was not in the best interests of Deep Investments to sell the NAB shares and in that context reliance is placed, amongst other things, upon the failure to inform Deep Investments of the allegations made by Wilson HTM. However, as to loss, it is the actual trading that is said to have been contrary to the interests of Deep Investments. There are other claims made in similar terms about the trading in other shares.

69    The primary judge described the pleas as to loss in the following terms at [117]-[119]:

The losses are claimed are identified as 'subsequent losses as a result of Robinson's conduct in the course of providing MDA services to Deep Investments, as pleaded in 57 to 77' against the CBC respondents by para 49 of the statement of claim; against Mr Emanuel by para 56 of the statement of claim, against QWL by paras 88 to 92 of the statement of claim and against Mr Robinson and Raven by paras 89 to 91 of the statement of claim.

The losses comprise:

(1)    a loss of $3,769,079 being the then present value to  Deep Investments of the pre-CGT status of the NAB shares;

(2)    a total capital loss of $3,562,591 due to Mr Robinson's conduct in relation to Boart Longyear shares (summarised by Mr Emanuel's submissions, apparently uncontentiously, as the acquisition of significant quantities of the shares and the subsequent implementation of risky trading strategies with respect to those shares); and

(3)    a total capital loss of $2,118,883 due to Mr Robinson's conduct in relation to Billabong shares (being conduct of a similar kind to the conduct concerning the Boart Longyear shares).

There is no dispute that the losses claimed in the current proceeding are a subset of the losses claimed in the Supreme Court proceeding.

70    In the appeal it was accepted that the primary judge properly described the nature of the claims advanced.

71    Accordingly, the claim by Deep Investments in this Court depends upon demonstrating wrongdoing by Mr Robinson and the Raven Companies in managing the portfolio. Further, the claims concern whether the trading in shares that occurred was in the interests of Deep Investments or in the interests of Mr Robinson and Raven Capital. They allege that the trading was reckless or careless as to whether it was in the interests of Deep Investments. These are all allegations which depend upon a consideration of the trading itself, not upon the trustworthiness of Mr Robinson. They are allegations of mismanagement of the portfolio.

72    Further, the case alleged does not seek disgorgement of profits made or reinstatement to a previous financial position as a remedy for dealing with funds in breach of the conflict or profit duties of a fiduciary. There is no suggestion that there were gains or benefits retained by a fiduciary in breach of the conflict or profit rules. Rather, the various claims assert a right to recover loss and damage. A claim of that kind cannot be maintained unless it be shown in some way that there was mismanagement by Mr Robinson and the Raven Companies. Put another way, it is not sufficient to simply assert that Deep Investments would have terminated the involvement of Mr Robinson and the Raven Companies. On the claims advanced, the reason the failure to terminate had significance was because it was said to be followed by mismanagement. So, to maintain the causes of action it asserts, Deep Investments must go further, as it does by its pleading, and identify the consequence of not terminating, namely loss due to mismanagement. For that reason, the claims necessarily involve scrutiny of the conduct of Mr Robinson and the Raven Companies in managing the portfolio.

73    The fact that the loss claimed depends upon allegations of the above kind has considerable significance for the appeal because the issue whether the portfolio was properly managed by Mr Robinson and the Raven Companies was the subject matter of the Supreme Court proceedings. It is important to consider what occurred in those proceedings with that point in mind.

The Supreme Court proceedings

74    The following account is taken from the documents referred to on the appeal.

75    On 1 November 2012, Mr Kumnick of K2 Law sent a letter to Mr Robinson and the Raven Companies terminating that agreement and outlining claims on behalf of Deep Investments and related parties concerning the management of the portfolio. The claims included statements to the effect that 'it appears that Mr Robinson':

(1)    invested a significant proportion of the portfolio in other than blue chip stocks;

(2)    sold certain shares without instructions and without consideration of tax consequences;

(3)    engaged in short term speculative trading;

(4)    used margin lending facilities;

(5)    diverted dividends to bank accounts for the purpose of short term trading without their knowledge or consent; and

(6)    failing to ensure that dividends were received from companies in which the portfolio was invested.

76    Losses in excess of $10 million were claimed to have resulted. The letter said that K2 Law had been instructed to investigate the conduct of Raven Capital and Mr Robinson with a view to commencing legal proceedings. It requested a full and complete accounting to include 'a complete record of all management fees, bonuses, discretionary payments, fees charges and commissions earned or incurred by Raven [Capital] and Mr Robinson'. It then said:

We require the above information to be provided to this office by 23 November 2012, and to be supported by copies of all relevant documents held by Raven and Mr Robinson in respect of our clients including all email records.

77    The reference to 'above information' was to the accounting that had been demanded. Therefore, contrary to submissions advanced for Deep Investments, the letter did not demand all email records. It demanded all those records that supported the claims to fees charges and commissions.

78    For the appellants, the allegation in (5) was said to be an allegation of dishonesty and the other allegations were said to raise complaints of serious misconduct. In our view, they do not rise to allegations that are equivalent in seriousness or character to those that were made by Wilson HTM and included in form FS80.

79    On 20 November, 2012 Mr Tredinnick of Moray & Agnew responded stating that the firm acted for Raven Capital and that it was seeking instructions as to the matters raised in the letter and would revert once those instructions had been obtained.

80    On 7 December 2012, Mr Tredinnick responded reserving the rights of Raven Capital as to the termination of the agreement. As to the particular request for documents it provided information about the amounts earned by Raven Capital, but provided no documents.

81    On 16 January 2013, Mr Kumnick wrote to Moray & Agnew stating that his clients (including Deep Investments) intended to bring proceedings in the Supreme Court and referring to obligations under Part 2A of the Civil Procedure Act 2005 (NSW) which had been enacted but not proclaimed. Section 18E of Part 2A was expressed in terms that required each person involved in a civil dispute to take reasonable steps having regard to the person's situation and the nature of the dispute. Reasonable steps were defined to include, amongst other things:

responding appropriately to any such notification by communicating about what issues are, or may be, in dispute, and offering to discuss them, with a view to resolving the dispute

exchanging appropriate pre-litigation correspondence, information and documents critical to the resolution of the dispute.

82    There was express provision that nothing in the section required a person to provide any correspondence, information or document that might tend to incriminate the person.

83    The balance of the letter of 16 January 2013 to Moray & Agnew is to be read in that context. It referred to a 'pre-litigation process' and proposed that the parties exchange documents 'relevant to the dispute'. It referred to Mr Robinson as the 'common actor' and identified both Raven Capital and Wilson HTM as having responsibility for his actions. In that context, amongst a list of documents sought was the following category:

copies of all communications between Raven and CBC Partners regarding our clients' affairs including all emails involving Simon Robinson.

84    The request was for disclosure of documents relating to the matters that had been raised by K2 Law in correspondence with Moray & Agnew. Those claims were a demand for a full accounting in the context of specific complaints about the way the share portfolio had been managed. It was not a request to provide all documents. It was, in context, a request to provide documents critical to the resolution of the dispute which concerned the way the portfolio had been managed and the fees that had been charged and to do so for the purposes of the 'pre-litigation process'.

85    On the same date a letter was sent to the directors of Wilson HTM. It outlined the same claims concerning Mr Robinson's dealings in managing the share portfolio that had been stated in the letter of termination of 1 November 2012. It requested the same accounting and made the same request for documents supporting the accounting that had been made of Raven Capital and Mr Robinson.

86    On 6 March 2013, Mr Tredinnick of Moray & Agnew responded to the letter of 16 January 2013 and said, amongst other things: 'We enclose copies of our clients' communications with CBC Partners'. Those documents did not include the Wilson HTM letter to ASIC or the form FS80. It is not suggested that Moray & Agnew had those documents at the time and the evidence of Mr Tredinnick on the interlocutory application was that he did not receive them until 12 February 2016. His evidence was that at the time of sending the 6 March 2013 letter he had been told by Mr Robinson 'that he had acted in the Deeps' interests in avoiding a termination fee payable to Wilson for the Deeps'. Mr Tredinnick said he did not ask for any documents in relation to that. He said he provided documents which he thought were relevant to the dispute at the time. Such an approach at that time is understandable given that the focus of the allegations being made by Mr Kumnick for his clients was upon the management of the portfolio and the provision of a full accounting.

87    Thereafter, the Supreme Court proceedings were commenced by Deep Investments and certain related parties against Wilson HTM, Mr Robinson and the Raven Companies. In those proceedings claims were made that the portfolios had been managed in a manner that was negligent and in breach of contract.

88    On 6 June 2014, Wilson HTM filed its response in the Supreme Court proceedings. Relevantly for present purposes the response dealt with two matters of significance. First, it was said that the plaintiffs were aware or should have been aware that Mr Robinson had no authority to enter into the variation agreement on behalf of Wilson HTM and that Mr Robinson had deprived it of payment of the termination fee. Second, it was said that the loss or damage claimed was caused or contributed by CBC Partners.

89    These claims raised no issue about the honesty or integrity of Mr Robinson. They certainly did not hint at the kind of conduct that Wilson HTM had raised in the form FS80.

90    In August 2014, the plaintiffs filed a witness statement of Mr Clarke in which he said, amongst other things, that the role of CBC Partners was to attend to accounting matters and as to the portfolio was 'the record keeper'. Later a statement of Mr Casey was also filed by the plaintiffs. They were important witnesses for the plaintiffs corroborating aspects of the evidence to be given by directors of Deep Investments.

91    In September 2014, the commercial list statement of the plaintiffs was amended to delete claims against Wilson HTM (with the consequence that the claims by Wilson HTM against CBC Partners fell away). Claims in negligence against Mr Robinson and the Raven Companies were deleted leaving claims in contract and agency. The commercial list statement was further amended in June 2015 to add a claim based upon terms implied by operation of the Australian Securities and Investments Commission Act 2001 (Cth) as to the fitness of services provided by the defendants. Mr Kumnick gave evidence about the forensic decisions involved in these steps and we deal with his evidence below.

92    No submission was raised which suggested that there was any other matter that gave rise to an obligation as part of the disclosure process for Mr Robinson or the Raven Companies to disclose the copy of the Wilson HTM letter to ASIC or the form FS80 that was in the possession of Mr Robinson.

93    The trial of the Supreme Court proceedings was set down for three weeks to commence on 22 February 2016.

94    On 27 January 2016, Mr Kumnick made a request of Mr Emanuel to release a complete copy of his files held on behalf of Deep Investments and associated parties. The documents produced in response included a copy of the Wilson HTM letter to ASIC and the form FS80. It appears they also included much of the email correspondence to which we have referred. Deep Investments and its officers claim that none of those documents was previously known to them.

95    The trial of the Supreme Court proceedings proceeded without any matter being raised in the conduct of those proceedings concerning the documents in the file of Mr Emanuel. The defendants at trial were Mr Robinson and the Raven Companies.

96    After four days of hearing, the parties informed the Court that a settlement had been reached. On 29 February 2016, judgment was entered, by consent for the defendants. The orders made were:

1    Judgment for the defendants on the Further Amended Commercial List Statement.

2    The Amended Summons and the Further Amended Commercial List Statement be dismissed.

3    The First Cross Claim by the defendants against the plaintiffs and Wilson HTM Ltd is discontinued.

4    All prior costs orders in the proceedings are vacated.

5    Each party to pay their own costs of these proceedings.

97    So, the claims concerning the alleged improper management of the share portfolio by Mr Robinson and the Raven Companies were determined by judgment being entered in their favour.

Observations concerning the parties' contentions

98    Having regard to the contentions advanced by the parties in the appeal concerning the consequences of the judgment in the Supreme Court proceedings we make the following observations:

(1)    The requests for documents that were made by K2 Law did not seek documents of a class or kind that included the Wilson HTM letter or the form FS80. Therefore, there could be no criticism of Mr Robinson, the Raven Companies, Wilson HTM or CBC Partners in failing to produce those documents in response to those requests.

(2)    Although the claims made by K2 Law in its correspondence on behalf of Deep Investments and related parties might be described as allegations of misconduct, even dishonesty, they were confined to claims about the management of the portfolio. It could not be said that those claims about the way the portfolio was managed were similar in character to the issues raised in the form FS80. The allegations raised by Wilson HTM (which have never been tested in any proceedings) were that Mr Robinson had deliberately and clandestinely deleted documentary records in order to conceal his own inappropriate and deceitful conduct from Wilson HTM. They did not concern his conduct in managing any share portfolio for any client.

(3)    Although there was reference in the defence filed for Wilson HTM to the authority of Mr Robinson to enter into the variation agreement, it was prompted by a claim by the plaintiffs (including Deep Investments) that there had been a variation. Whether Mr Robinson had authority to enter into the variation agreement on behalf of Wilson HTM with Deep Investments was not a matter that would depend upon facts unknown to Deep Investments at the time of the alleged variation. It is difficult to see how the matters in the letter to ASIC and the form FS80 might be relevant forensically to a resolution of that issue.

(4)    It is evident that Deep Investments (with the advice of their lawyer Mr Kumnick of K2 Law) made a series forensic decisions to pursue claims to trial only against Mr Robinson and the Raven companies in respect of causes of action for breach of contract, agency and statutorily implied terms that services would be fit for purpose. Part of that series of forensic decisions included discontinuing claims against Wilson HTM so that it did not pursue cross-claims against CBC Partners. Another part was to abandon claims in negligence. Another part was not to pursue requests for documents relating to matters that might be relevant had other causes of action been pursued against Mr Robinson and the Raven Companies. These decisions are consistent with K2 Law seeking to ensure that Mr Clarke and Mr Casey of CBC Partners remained in the Deep Investments camp and were available to be called as witnesses at trial to support the claim by Deep Investments against Mr Robinson and the Raven Companies.

(5)    The forensic scope of the Supreme Court proceedings encompassed a dispute about the way the share portfolios of each of Deep Investments (and the other plaintiffs in those proceedings) were managed by Mr Robinson and the Raven Companies.

The evidence of Mr Kumnick

99    Mr Kumnick gave evidence on the interlocutory applications before the primary judge.

100    We take some care in recounting the evidence of Mr Kumnick for a number of reasons. First, the evidence concerns matters which concern the substantive claims that Deep Investments seek to bring in this court. Second, although Mr Kumnick was the person who provided the forensic advice as to the course to follow in the Supreme Court he was not the person who would have decided what to do if the information in the form FS80 had been known to the officers of Deep Investments at the time that it came into the hands of Mr Emanuel (and was passed on to Mr Robinson and Mr Clarke). That was a matter for the officers of Deep Investments. Third, we were taken in some detail to matters in the transcript of Mr Kumnick's evidence for the purpose of inviting findings on the evidence as to matters that were not addressed in the reasons of the primary judge and in circumstances where none of the oral submissions advanced for the appellants sought to deal with the appeal on the basis of factual error by the primary judge. Fourth, the main passages from the evidence of Mr Kumnick upon which the appellants sought to rely were responses to hypothetical scenarios posed to Mr Kumnick without any opportunity to deliberate on the response.

101    In his affidavit relied upon by Deep Investments in opposing the summary judgment application, Mr Kumnick said:

After 29 January 2016, there were 15 business days remaining until commencement of the trial … that period was fully occupied by preparation for the trial, which was scheduled to run for 3 weeks. My and counsels' involvement in that preparation was typical of the full-time commitment necessary to prepare for a trial of that length.

There was no opportunity to investigate, give advice to the client and take instructions because preparing for the trial was the priority.

It was only after conclusion of the trial in the Supreme Court that it was opportune and appropriate to properly consider the ramifications, take full and proper instructions, obtain advice and act upon it.

In any event, it would have been impossible to have the claims now brought in the Federal Court proceedings heard in the trial of the Supreme Court proceedings, which commenced only 15 business days later, and to which the first to fourth respondents in these Federal Court proceedings were not even party.

102    In summary terms, the evidence that was given by Mr Kumnick when cross-examined was to the following effect:

(1)    as a result of interlocutory steps a few weeks prior to the trial in the Supreme Court proceedings he obtained a copy of the letter sent to ASIC by Wilson HTM and the form FS80;

(2)    he realised immediately that the documents had implications for Mr Robinson's credit;

(3)    he said he was frantic with preparation of the trial and it was a judgment call as to whether to look at investigating something that may or may not have something in it;

(4)    having regard to other things he had seen he did not consider the documents to be explosive;

(5)    in July 2014 he believed that Mr Robinson in his dealings with Wilson HTM and in respect of the affairs of Deep Investments had engaged in deceitful and inappropriate conduct and conduct that was serious conduct which was potentially a breach of the Corporations Act 2001 (Cth);

(6)    he said that had he been aware of the documents obtained from the file of Mr Emanuel at an earlier time and aware that they had been received by the CBC respondents (being Mr Casey, Mr Clarke and CBC Partners) he would not have joined the CBC respondents in the case because 'they were our witnesses';

(7)    he agreed that at a very early stage of the Supreme Court proceedings it was suggested by the lawyers acting for Mr Robinson and the Raven Companies that CBC Partners ought to be involved in settlement negotiations because they had a degree of responsibility for the losses being asserted by Deep Investments and related parties;

(8)    he said that after concurrent wrongdoer defences had been raised a forensic decision had been taken to remove the negligence claims rather than join the CBC respondents; and

(9)    he said that in his view the plaintiffs' interests were best served by declining to pursue any claim against the CBC respondents and keep them in the plaintiffs' camp as witnesses.

103    For the appellants, reliance was placed upon Mr Kumnick's agreement with a question in cross-examination to the effect that by July 2014, he had formed a view that there was a proper basis to assert that Mr Robinson in his dealings with Wilson HTM as his employer had fabricated the variation to the agreement with Wilson HTM. The question was posed as part of a series of questions concerning what Mr Kumnick had a proper basis to assert by 29 January 2016. In that context, it is not clear that Mr Kumnick understood his response to relate to July 2014. Further, the term 'fabrication' may have been understood by Mr Kumnick as a reference to the claims that Mr Robinson had acted without authority. Nowhere else in the course of a long cross-examination was Mr Kumnick's knowledge of the matters concerning the alleged fabrication of the agreement explored. The unchallenged finding of the primary judge was that the correspondence from Wilson HTM to ASIC first came to the attention of Mr Kumnick's attention on 29 January 2016. In those circumstances, for present purposes we place no weight on the particular answer given by Mr Kumnick.

104    Mr Kumnick agreed with the proposition that when he received the correspondence from Wilson HTM to ASIC his view concerning the CBC respondents did not change 'because it remained far more important to keep the CBC respondents in your camp as witnesses corroborating the Deeps case'. Immediately before agreeing with that proposition, Mr Kumnick had said that when he saw the correspondence 'it didn't jump out and say to me, I have to look at serving everyone'. Therefore, it appears that he was addressing his state of mind when he first received the correspondence, not what his considered position may have been.

105    As to this evidence, we also observe that the context in which the hypothetical was proposed to Mr Kumnick concerned the conduct of the claims that had been advanced in the Supreme Court proceedings which were about the alleged mismanagement of the portfolio. He was not asked about what he might have done concerning a different claim based upon the failure to disclose the correspondence from Wilson HTM to ASIC. Further, the course that might have been followed depended upon many matters, most importantly the instructions that Mr Kumnick would have received from officers of Deep Investments. Finally, the evidence given by Mr Kumnick about what he might have done emerged in the course of cross-examination on an affidavit that sought to explain why nothing was done in the short period of time just before trial after receiving the file of Mr Emanuel. Mr Kumnick was not given an opportunity to reflect on what his answer may be to the hypothetical circumstances that were put to him in the course of that cross-examination. For all these reasons, we do not accept that because Mr Kumnick when confronted with the hypothetical as to what his advice might have been had he known about the correspondence by Wilson HTM with ASIC means that the present appeals should be approached on the basis that Mr Clarke, Mr Casey and CBC Partners would not have been sued by Deep Investments in any event.

Mr Robinson and the Raven Companies

106    The claims sought to be advanced in this Court against Mr Robinson and the Raven Companies (the defendants in the Supreme Court proceedings) is that they engaged in a breach of fiduciary duty in the management of the share portfolio. This is characterised as:

(1)    allowing their interests to conflict with Deep Investments interests in breach of a duty not to do so;

(2)    withholding information from Deep Investments that was relevant to its interests under the agreement with Mr Robinson and the Raven Companies to manage its portfolio of shareholdings in breach of a duty not to do so;

(3)    misleading or deceiving Deep Investments on matters relating to the management of the portfolio in breach of a duty not to do so; and

(4)    exercising a power or authority in the management of the portfolio for the benefit of Mr Robinson and the Raven Companies in breach of a duty not to do so.

107    The claims in (1), (2) and (3) concern an alleged failure to provide information about the allegations in the Wilson HTM letter to ASIC and the form FS80. The claim in (4) concerns the way the portfolio was managed and casts the claim as one in which decisions were made in the financial interests of Mr Robinson and the Raven Companies rather than Deep Investments.

108    The loss said to have arisen from the breaches of fiduciary duty alleged in (1), (2) and (3) is the loss in the value of the portfolio resulting from the way it was managed. This is the claim that was made in the Supreme Court proceedings. Therefore, those claims cannot succeed without demonstrating the merits of claims that were dismissed as part of a judgment entered in favour of Mr Robinson and the Raven Companies by the Supreme Court. Put another way, Deep Investments cannot succeed in those claims without demonstrating that the portfolio was mismanaged, a conclusion that would be at odds with the judgment secured by Mr Robinson and the Raven Companies in the Supreme Court.

109    Claim (4) is a claim that could have been advanced in the Supreme Court proceedings. It is not dependent upon the failure to disclose the Wilson HTM letter sent to ASIC of the form FS80. It is simply a claim that Mr Robinson and the Raven Companies were fiduciaries in the management of the portfolio and they acted in their own interests in providing those services. It is different legal basis upon which to found the claim that was made in the Supreme Court proceedings. It was contended for Deep Investments that the failure to disclose the correspondence places the breach of fiduciary duty claim in a different context than would have been the case if it had been advanced in the Supreme Court proceedings. We do not accept that submission. It is not an integer of claim (4) in any respect.

110    The primary judge accepted the following summary of the causes of action the subject of the consent judgment in the Supreme Court (referring to Mr Robinson and the Raven Companies as Raven):

the claims for damages arising from breaches of contract by Raven and breaches of agency by Robinson (for which QWL were also alleged to be liable) as a result of:

(a)    The failure of Robinson and Raven to follow the plaintiffs' instructions for the management of their portfolios;

(b)    The failure of Robinson and Raven to provide services in managing the portfolios which were reasonably fit for the purposes made known by the plaintiffs [including Deep Investments] in accordance with the warranty implied by s 12ED of the ASIC Act.

(c)    The failure of Robinson and Raven to provide services in managing the portfolios which were of a nature and quality that might reasonably be expected to achieve the results the plaintiffs [including Deep Investments] desired to achieve in accordance with the warranty implied by s 12ED of the ASIC Act.

111    The accuracy of that summary was accepted by Deep Investments for the purposes of the appeal. It was also accepted, as the primary judge found, that the losses claimed in the proceedings in this Court are a subset of the losses claimed in the Supreme Court proceedings.

112    In the above circumstances, the primary judge found, amongst other things, that the claims against Mr Robinson and the Raven Companies in this court were an abuse of process.

113    In Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; (2015) 256 CLR 507, the plurality held at [24]-[26] that the doctrine of abuse of process is informed by considerations of finality and fairness. It may be invoked in areas where estoppels apply, but is inherently more flexible. So, 'making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel'.

114    Since the decision by the primary judge, the High Court has delivered its decision in UBS AG v Tyne [2018] HCA 45, where the plurality (Kiefel CJ, Bell and Keane JJ) stated that either of two conditions enlivens the court's power to permanently stay proceedings as an abuse of process, namely 'where the use of the court's procedures occasions unjustifiable oppression to a party, or where the use serves to bring the administration of justice into disrepute': at [1]. As to the latter, their Honours said at [45]-[46]:

The courts must be astute to protect litigants and the system of justice itself against abuse of process. It is to hark back to a time before this Court's decisions in Aon and Tomlinson and the enactment of s 37M of the [Federal Court of Australia Act 1976 (Cth)] to expect that the courts will indulge parties who engage in tactical manoeuvring that impedes the "just, quick and efficient" resolution of litigation. To insist, for example, on "inexcusable delay" as a precondition of the exercise of the power to stay proceedings as an abuse of process is to fail to appreciate that any substantial delay is apt to occasion an increase in the cost of justice and a decrease in the quality of justice. And other litigants are left in the queue awaiting justice. Further, there is no reason why the courts should tolerate attempts to manipulate other parties and the courts themselves by the deployment, by a single directing mind and will, of different legal entities under common control for such a purpose. The concern is as to whether the processes of the court are being abused. Given that this is the central concern, the circumstance that the abuse is effected by the use of multiple entities orchestrated by a single mind and will is no reason to tolerate it.

Nor does the undue vexation which a stay of proceedings is concerned to prevent arise only when proceedings in respect of the same issue have been concluded by a judgment on the merits. Serial proceedings discontinued prior to judgment would be an obvious example of an abuse of process. The pursuit of substantially the same claim by serial proceedings conducted by different entities under common control is no less obviously an abuse of process.

115    There is in the above passage a focus upon concerns about tactical behaviour by parties. Later, their Honours refer to the 'forensic advantage' that Mr Tyne perceived in holding back a claim by the trust of which he was trustee: at [55]. The significance of that conduct for whether there had been an abuse of process was then viewed through the lens of the duty to conduct proceedings in a way that was consistent with the overriding purpose of timely, effective and efficient conduct of modern litigation that takes account of wider public interests. Hiving off the claim was found to be 'the antithesis of the discharge of the duty' to give effect to that purpose. At [58] it was concluded that the oppression that resulted: 'At its core is the vexation of being required to deal again with claims that should have been resolved in [the earlier proceedings]'.

116    Gageler J agreed with the reasons of Kiefel CJ, Bell and Keane JJ: at [61]. In delivering additional reasons, his Honour emphasised that the question whether a claim should have been brought in earlier proceedings cannot be determined solely by reference to the interests of the parties as there is 'a public interest in the timely and efficient administration of justice': at [70]. This brings together the two aspects of abuse: oppression of the parties and bringing the administration of justice into disrepute. His Honour found that gauged solely by reference to the interests of the trust, Mr Tyne's explanation of why the claims had not been pursued in the earlier proceedings was not unreasonable: at [80]. It was when there was regard to the public interest of timely and efficient administration of justice that the explanation as to why the claims of the trust were held in abeyance meant that the actions were not reasonable. The position would be different if it were shown that the separation had been achieved by appropriate case management orders. The problem was that Mr Tyne took it upon himself to determine that matter: at [81].

117    Here there was no conscious decision not to bring the claims based upon the failure to disclose the Wilson ATM correspondence with ASIC and the form FS80. Even when the correspondence came to the attention of Mr Kumnick close to trial, there was no considered decision not to include a claim based upon the non-disclosure in the Supreme Court proceedings.

118    However, there were conscious decisions made for forensic reasons to confine the claims made in the Supreme Court about the way the portfolio was managed to claims against the Mr Robinson and the Raven Companies and for those claims to be made in contract and agency and for breach of the implied standard of fitness for purpose. If claims arising concerning the same subject matter were to be held back for later resolution then it was incumbent upon Deep Investments to raise those matters and seek case management directions so as to ensure the cost effective, efficient and fair resolution of the dispute.

119    Therefore, there was an abuse of process in seeking to raise in this Court claims about the management of the portfolio in the form of claim (4). The primary judge was correct to so find.

120    However, in our view the primary judge was in error in finding that there was no abuse of process in advancing claims (1), (2) and (3) on the basis that the primary concern of those claims was not the management of the portfolio but whether there were breaches of fiduciary duty or misleading or deceptive conduct that have led Deep Investments to terminate or limit its retainer with Mr Robinson and the Raven Companies: reasons at [201]. Plainly it is correct that the three claims in this Court that are based upon the failure to disclose the correspondence complain of different conduct to that which was in issue in the Supreme Court proceedings. However, as we have observed, those claims depend upon Deep Investments demonstrating that there was mismanagement of the portfolio. The loss claimed will not be established unless that is demonstrated to be the case. This means that inherent in the three claims is a case that invites the court to determine a discrete issue in a manner that is contrary to the outcome of the Supreme Court proceedings. This gives rise to a different form of abuse, namely an inconsistency with the conduct and outcome of the Supreme Court proceedings where Deep Investments advanced its case that there had been mismanagement of the portfolio, resulting in a consent judgment dismissing its claim after the first four days of trial.

121    For those reasons we uphold the appeal by Mr Robinson and the Raven parties on that point and find that the whole of the claim brought by Deep Investments against them is an abuse.

122    Although it is not necessary to reach a conclusion on Anshun estoppel, we would have found that such an estoppel operates also. It applies to 'the assertion of a claim or an issue of law or fact if the claim or issue was so connected to the subject matter of the first proceeding as to make it unreasonable, in the context of the first proceeding, for the claim or issue not to have been made or raised in it': Timbercorp Finance Pty Ltd (in liq) v Collins [2016] HCA 44; (2016) 259 CLR 212 at [27]. Generally, an Anshun estoppel arises where the new claim if it succeeds will result in a judgment which conflicts with an earlier judgment: at [60].

123    In this case, claim (4) is simply an alternative legal basis upon which to advance the same complaint about the management of the portfolio that was the subject matter of the proceedings in the Supreme Court. It seeks a sub-set of the same losses by reason of the same conduct. It is therefore intimately connected to the issues raised in the earlier proceedings. Further, claims (1), (2) and (3) cannot succeed without demonstrating an outcome as to the facts that were in issue in those proceedings that would be directly contrary to the judgment in which those factual claims were dismissed. Put another way, the loss alleged to have been suffered depends upon demonstrating that there was mismanagement of the portfolios of the same kind alleged in the Supreme Court proceedings which claims were dismissed by the consent judgment. It is not necessary to identify the precise basis on which the Supreme Court proceedings were dismissed to reach this conclusion.

124    These conclusions do not rest upon any view as to what Deep Investments should have done when confronted with the Wilson HTM letter and the form FS80 close to trial. We would reach the same conclusion if those documents had not been known to Deep Investments until after the Supreme Court proceedings had concluded. Further, in our view, had the claims that were to be advanced based upon those documents not depended upon a need to establish that there had been mismanagement of the share portfolio then it would have been difficult to conclude that the failure to try and seek to include those claims in the Supreme Court proceedings at such a late stage was unreasonable. It may be said that it would have been reasonable to raise the matter with the judge and seek appropriate case management directions. However, in order to take that step it would have been necessary to necessary to be in a position to formulate, at least in general terms, the nature of the case to be raised. To do so in the time available whilst preparing for trial would have been a difficult task. A matter that would loom large in any consideration as to whether it was unreasonable not to raise the matter with the judge in the Supreme Court proceedings would be that the failure to disclose the documents was itself claimed to be a breach of duty and the very foundation for the new claims. If there was a proper basis for such a duty then there would be an injustice in allowing parties who had breached that duty to, in effect, take advantage of their breach as a reason why the proceedings could not be brought. However, for reasons we have given it is not necessary to consider such matters.

Mr Clarke, Mr Casey and CBC Partners

125    The claims that are sought to be advanced in this Court against each of Mr Clarke, Mr Casey and CBC Partners (CBC Parties) are based upon alleged breaches of duties in contract and in tort, fiduciary duties and the statutory standard not to engage in misleading or deceptive conduct. Factually, the claims are alleged to arise in two ways.

126    First, it is said that each party failed to inform Deep Investments about the matters that had been raised with ASIC by Wilson HTM. Losses to the share portfolio are then claimed on the basis, in effect, that had the officers of Deep Investments known about the conduct of Mr Robinson they would not have allowed Mr Robinson's mandate to continue and that would have avoided considerable losses on the share portfolio.

127    Second, it is said that each party failed to inform Deep Investments that certain trading being undertaken by Mr Robinson and the Raven Companies was not in its best interests. As to these claims, losses to the share portfolio are said to have been caused by the breaches alleged because Mr Robinson's mandate would have been terminated had the officers of Deep Investments known the position.

128    It can be seen that the claims against the CBC Parties have a similar conceptual character to the claims sought to be advanced against Mr Robinson and the Raven Companies. The distinguishing feature is that none of Mr Clarke, Mr Casey or CBC Partners were parties to the Supreme Court proceedings that went to trial. Therefore, the judgment in the Supreme Court proceedings did not bind them.

129    However, the evidence discloses that a conscious decision was made for forensic reasons not to advance any claim that might involve CBC Partners in order to ensure the cooperation of Mr Clarke and Mr Casey as witnesses for Deep Investments and the other plaintiffs in the Supreme Court proceedings. Therefore, the claim against those parties has a similar character to the claim by Mr Tyne as trustee of the trust in UBS AG v Tyne.

130    If all that Deep Investments now sought to do was to advance the claim that it chose not to raise at the time of the Supreme Court proceedings then, applying the principles already explained, there would be an Anshun estoppel and the proceedings would be an abuse of process. However, Deep Investments says that what it now seeks to do is to advance a different claim that arises because of the breach of duty by the CBC Parties to disclose the Wilson HTM letter to ASIC and the form FS80. In our view, it was not unreasonable for Deep Investments to refrain from bringing such a claim in the Supreme Court proceedings. By the very nature of the claim it was not one which could have been brought until the matters in the correspondence were known. On the evidence, when Deep Investments made the forensic decision not to involve the CBC Parties, the possibility of a claim of the kind that Deep Investments now seeks to advance was not in contemplation. At that time, as we have explained, the dispute was confined to allegations about the way the portfolio had been managed. It did not extend to include claims which might arise if parties had knowledge about the trustworthiness of Mr Robinson that they had a duty to disclose to Deep Investments, yet did not do so.

131    In our view, a claim of that kind was outside the subject matter of the dispute being litigated in the Supreme Court proceedings. It could not be said that it was a claim that reasonable diligence in pursuing claims about the way the portfolio was managed would have exposed. Indeed, as we have noted, Mr Tredinnick of Moray & Agnew acting for Mr Robinson and the Raven Companies formed the view that matters relating to the termination fee and whether it was payable were outside the scope of the dispute. All the more so, it might be said, matters relating to whether anyone had information about whether Mr Robinson was trustworthy that they had a duty to disclose to Deep Investments, but did not disclose. Although the issue is not to be determined by reference to what Mr Tredinnick thought at the time, his contemporaneous view as the solicitor with conduct of the matter for the defendants provides some insight as to what was thought to be the scope of what was being dealt with by the Supreme Court proceedings at the time of those proceedings.

132    The question which remains is whether the fact that the claim that is sought to be advanced against the CBC Parties involves claiming that the portfolio had not been properly managed is a reason why Deep Investments cannot now raise the claims it seeks to advance in this Court.

133    The consent judgment in favour of Mr Robinson and the Raven Companies was a determination that they had not mismanaged the portfolio as alleged. It was a determination of that issue in proceedings in which Deep Investments, through its legal advisers, made a considered decision not to involve the CBC Parties or make any claim against them. In those circumstances, it would be unreasonable if Deep Investments having made the forensic decision not to involve the CBC Parties could now bring claims against the CBC Parties which could only succeed if there was a determination that the share portfolio had been mismanaged. Yet, as we have stated above, both ways in which Deep Investments seek to advance its claim depend upon establishing that to be the case.

134    In those circumstances, we are of the view that it would be an abuse of process if Deep Investments could now bring the claims. The abuse arises because, any complaint that Deep Investments wished to make about the liability of any party for the way the share portfolio was managed by Mr Robinson and the Raven Companies should have been brought forth in the Supreme Court proceedings. The fact that Deep Investments may not have contemplated at the time that it may have a different basis for bringing a claim (such as the failure to disclose the matters in the form FS80) that may have depended upon establishing mismanagement of the portfolio does not mean that it was reasonable to, in effect, reserve an ability to litigate the issue of alleged mismanagement again for that purpose in later proceedings. Whatever future significance there may have been for any claim against any party for any alleged mismanagement of the portfolio, when the claim was made in the Supreme Court proceedings it was incumbent upon Deep Investments to deal with that part of the dispute as a whole. Given that obligation, it is an abuse to now bring proceedings against the CBC Parties which depend upon demonstrating that the portfolio was mismanaged.

135    Therefore, in our view the primary judge should have upheld the abuse of process claim in respect of the whole of the proceedings that Deep Investments seeks to bring against the CBC Parties in this Court.

136    As to Anshun estoppel, the CBC Parties say that the claims now sought to be advanced will result in judgments that appear to declare rights which are inconsistent in respect of the same transaction, relying on Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 604. Given our view about abuse of process, it is not necessary to deal with this separate claim. We have some difficulty with the claim based upon an Anshun estoppel. The CBC Parties were not involved in the trial that resulted in the judgment. Further, as the judgment was a dismissal by consent, there is no reasoning by the Court concerning the underlying issues that is of a kind that may result in inconsistent findings concerning the events which occurred.

137    There are analogies with the cases concerned with the extent to which a consent judgment may give rise to an issue estoppel. In such cases, there must be an inquiry as to the issues that were determined by the consent judgment and any issue estoppel only arises to the extent that the consent determined a particular issue: Chamberlain v Deputy Commissioner of Taxation (ACT) (1988) 164 CLR 502 at 508; Commissioner of Taxation v Day [2007] FCAFC 193; (2007) 164 FCR 250 at [15]-[19] and Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (No 2) [2001] FCA 1861; (2001) 119 FCR 1 at [1148]-[1154]. The reason why it is necessary to identify with some care the issues determined by a consent judgment because it is the prospect of conflicting determinations of the same issue that provides the justification for the estoppel.

138    An Anshun estoppel is not confined to the parties to the original proceedings: Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93 at [121]. So, an Anshun estoppel may arise even though there in no issue estoppel. However, where a party who was not joined in the original proceedings relies upon the prospect of conflicting determinations with an earlier consent determination as the basis for the Anshun estoppel then the same type of inquiry is required concerning the issues that were determined by the earlier proceedings. In this case, there is difficulty in identifying precisely what was determined by the consent judgment. Unlike the case with the claim against Mr Robinson and the Raven Companies it cannot be said that the judgment determines and rejects the whole of any liability for mismanagement. The responsibility of the CBC Parties will not follow the same pathway in all respects as the liability of Mr Robinson and the Raven Companies. For that reason it is difficult to support a conclusion that a determination of the issues raised in these proceedings would result in conflicting determinations of the kind that would give rise to an Anshun estoppel.

Mr Emanuel

139    The claim raised against Mr Emanuel is of a similar character to that raised against the CBC Parties. It is alleged to arise in two ways. First, there is a claim based upon an alleged breach of a duty to inform Deep Investments about the matters that had been raised with ASIC by Wilson HTM. Second, it is said that he was under a duty to inform Deep Investments of matters that might be material to its commercial decisions or be a risk to Deep Investments and he breached that duty by failing to inform Deep Investments that certain trading being undertaken by Mr Robinson and the Raven Companies was not in its best interests.

140    As with the other respondents to the claims, the loss alleged to have been suffered is a loss consequent upon the mismanagement of the share portfolio by Mr Robinson and the Raven Companies.

141    However, there are a number of aspects of the duties as pleaded (and their breach) that are alleged in distinct terms as against Mr Emanuel reflecting his particular obligations as a solicitor. For example, there is a particular claim that Mr Emanuel was under a duty to advise Deep Investments that it was not appropriate for Mr Robinson to be involved in instructing Mr Emanuel. There is also a claim, in effect, that Mr Emanuel breached his fiduciary duties to Deep Investments by reason that he acted on the instructions of Mr Robinson despite the conflict between his interests and those of Deep Investments.

142    Mr Emanuel is not in the same position as the other parties for two reasons.

143    First, he was not involved at any stage in the Supreme Court proceedings.

144    Second, he is not alleged to have had a responsibility in respect of the management of the share portfolio. Obviously, Mr Robinson and the Raven Companies are alleged to have had a direct responsibility in the regard. The CBC Parties were also identified as parties who may share in any legal responsibility if mismanagement of the share portfolio had been demonstrated in the Supreme Court proceedings. However, in the proceedings in this Court, Mr Emanuel's liability is said to arise because of his failure to warn or notify Deep Investments. He is not said to otherwise have had any responsibility as to the way the share portfolio was managed.

145    Therefore, there is no vexation or oppression to Mr Emanuel in the bringing of these proceedings. He is not being brought to the Court in circumstances where he was within the scope of those who might properly have been joined in the Supreme Court proceedings based upon the scope of that dispute. Unlike the other respondents, his liability is confined to one which arises from the failure to disclose the information in the correspondence by Wilson HTM with ASIC. For the same reasons, the proceedings brought in this Court against Mr Emanuel are not properly viewed from his perspective as successive to the Supreme Court proceedings.

146    Therefore, in our view, it has not been shown that there is any unfairness to him in the bringing the proceedings in this Court.

147    Many of the cases concerned with abuse of process arising from the fact that there have been earlier proceedings in which connected issues were addressed or ought to have been addressed identify the oppression to a party as the reason why there is an abuse. However, the principles are not so confined. They were summarised by Buss P in Sheraz Pty Ltd v Vegas Enterprises Pty Ltd in the following terms at [5]-[8] (referring in particular to Batistatos v Roads and Traffic Authority (NSW) [2006] HCA 27; (2006) 226 CLR 256 at [9]-[15] (Gleeson CJ, Gummow, Hayne and Crennan JJ)):

What will constitute an abuse of process is incapable of being described exhaustively. …

The High Court has stated, however, that at least one of three characteristics will be apparent in many cases of abuse of process, namely:

(a)    a court's processes being invoked for an illegitimate or collateral purpose;

(b)    the use of a court's procedures being unjustifiably oppressive to a party; or

(c)    the use of a court's procedures bringing the administration of justice into disrepute.

Several propositions as to the nature of abuse of process, and what can constitute abuse of process, may be discerned from the reasons of French CJ, Gummow, Hayne and Crennan JJ in Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd [2009] HCA 43; (2009) 239 CLR 75 [27] - [28].

First, a court has inherent or implied power to prevent misuse of its procedures in a manner which, although not inconsistent with the literal application of its procedural rules, would nevertheless be 'manifestly unfair to a party to litigation … or would otherwise bring the administration of justice into disrepute among right-thinking people' … . Secondly, abuse of process extends to proceedings that are 'seriously and unfairly burdensome, prejudicial or damaging' or 'productive of serious and unjustified trouble and harassment' … . Thirdly, the categories of abuse of process are not closed, and a court may exercise its power in relation to an abuse of process 'as and when the administration of justice demands' … . Fourthly, the categories of conduct which have attracted the intervention of the courts on the ground of abuse of process have included successive proceedings which cause or are likely to cause 'improper vexation or oppression' … .

(references to citations omitted)

148    The real issue concerning the claim against Mr Emanuel is whether the bringing of the proceedings will bring the administration of justice into disrepute because the proceedings involve Deep Investments making a claim that depends upon demonstrating that there was mismanagement of its share portfolio when it brought a claim to that effect in the Supreme Court proceedings and they resulted in a consent judgment dismissing the case after four days of hearing.

149    In that regard, an important consideration is the likely consequence for each of Mr Robinson, the Raven Companies and the CBC Parties if the claim against Mr Emanuel were allowed to proceed as against Mr Emanuel only. In that event, in all likelihood, Mr Emanuel would bring cross-claims against those other parties who might be said to have had some form of joint or coordinate liability for losses caused by any mismanagement of the portfolio. The result would be that despite what had occurred in the Supreme Court proceedings those parties would be before the court in circumstances were, for reasons we have already expressed, they would be seriously and unfairly burdened.

150    Further, it remains relevant that Deep Investments has had its opportunity to seek to demonstrate that there was mismanagement of the portfolio and failed. The fact that it did not know at the time that there was another pathway that might have enabled it to claim the same loss but only if it could be shown contrary to the outcome in the Supreme Court proceedings that there was mismanagement of the portfolio is not a matter that counts strongly against a conclusion that the bringing of the proceedings against Mr Emanuel is likely to unfairly burden, harass, oppress and vex Mr Robinson, the Raven Companies and the CBC Parties with successive proceedings.

151    Indeed, on the application before the primary judge, an affidavit sworn by Ms Williams (a solicitor at K&L Gates) was filed for Mr Emanuel. In that affidavit she deposed to the fact that if the proceedings continued against Mr Emanuel it is likely that Mr Emanuel will plead that if the matters alleged are established then 'any liability on the part of [Mr] Emanuel should be limited having regard to the extent of the responsibility of [Mr Robinson, the Raven Companies or the CBC Parties] for any loss suffered by Deep Investments' (para 22(e)).

152    For those reasons, in our view it is an abuse of process for Deep Investments to advance claims in this Court because they would likely result in Mr Emanuel bringing cross-claims against Mr Robinson, the Raven Companies or the CBC Parties for joint or coordinate liability on the basis of their involvement in the alleged mismanagement of the portfolio. It follows that the primary judge was in error in failing to find that the whole of the proceedings against Mr Emanuel was an abuse of process.

Other arguments

153    As to the claims concerning breach of fiduciary duty, the primary judge struck out those claims on the basis that they pleaded positive duties to disclose information of a kind that did not arise under Australian law. Further, having regard to principles of agency and an argument advanced for Mr Emanuel that it was not disputed that he had informed Deep Investments of the relevant matters by informing their agent CBC Partners at the relevant time, the primary judge found that the pleading was deficient insofar as it advanced a case as to why Mr Emanuel should be liable and it should be struck out with leave to re-plead. The primary judge also found that the pleading of the retainer by Deep Investments of Mr Emanuel was deficiently pleaded and that there was an insufficient factual foundation for the alleged duties in contract and tort and those claims were struck out with leave to re-plead.

154    It is not necessary to consider the issues raised in the appeal as to these aspects of the reasons of the primary judge.

155    Nor is it necessary to consider alternative arguments based upon res judicata and issue estoppel or the response to those arguments based upon the terms of s 91 of the Civil Procedure Act.

Leave to appeal and conclusion

156    It follows that there is merit in the appeal. The issues raised by the appellants are of a kind that may result in the summary determination of the proceedings. Further, the main issues sought to be raised by the appeals concern the application of principles that seek to ensure there is no injustice in allowing claims to proceed where they have been adjudicated or should have been adjudicated in earlier proceedings. In most instances, that is a compelling reason why such matters should be dealt with at an interlocutory stage, including on appeal where there is merit in a claim that the whole proceedings should not be allowed to continue. In those circumstances, there should be leave to appeal.

157    For the reasons we have given, the interlocutory applications before the primary judge should have been upheld. The applications sought summary dismissal on the various grounds advanced. As we have upheld the application on the basis of the ground that the proceedings are an abuse of process, there should be an order for summary dismissal of the proceedings against all seven respondents. We will hear from the parties as to costs and will make directions for written submissions in that regard.

I certify that the preceding one hundred and forty-seven (147) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Jagot and Colvin.

Associate:

Dated:    20 December 2018