FEDERAL COURT OF AUSTRALIA

 

Australian Associated Motor Insurers Limited v NRMA Insurance Limited [2002] FCA 1061

INSURANCE– multiplicity of small demurrage claims brought in Local Court in name of insured motor vehicle owner as plaintiff against another insured motor vehicle owner as defendant – same insurer for all plaintiffs and different insurer for all defendants - many Local Court proceedings already concluded judgment – larger number of such proceedings awaiting hearing in Local Court and even larger number yet to be commenced – absence of rights of subrogation held by insurer of plaintiffs involved in Local Court proceedings – defence of absence of right of subrogation of plaintiffs required to be but not pleaded in Local Court.

LOCAL COURT – upper limit of jurisdiction of $40,000 – sufficient for each individual claim involved – jurisdiction included causes of action for misleading and deceptive and unconscionable conduct – no jurisdiction to grant injunctions (including orders for corrective advertising) or declaratory relief.

ESTOPPEL – judgments entered in Local Court were in default of defences of right of subrogation held by insurer of plaintiffs – whether absence of right of subrogation open to be relied upon in subsequent Federal Court proceedings brought by insurer of defendants’ motor vehicles against insurer of plaintiffs’ motor vehicles principally for misleading and deceptive conduct and unconscionable conduct – circumstances constituted Anshun estoppel and abuse of process though not issue estoppel or res judicata – NRMA and persons having benefit of NRMA special form of cover “privies” – AAMI and persons having benefit of AAMI insurance policies “privies”.

TRADE AND COMMERCE – causes of actions based on representations of motor vehicle insurer and its solicitor relating to pursuit of proceedings in Local Court and to obtaining of retainers of its solicitor from insured for that purpose - conduct of that motor vehicle insurer and its solicitor not in trade and commerce.

STAY OF PROCEEDINGS– Local Court proceedings commenced prior to Federal Court proceedings – Federal Court proceedings “parallel” to Local Court proceedings – Local Court proceedings more appropriate to address consequences of misleading and deceptive and unconscionable conduct in context of determining numerous motor vehicle demurrage claims based on negligent control of motor vehicles – vexatious for insurer for defendants in Local Court proceedings to maintain Federal Court proceedings as applicant relating to such conduct – stay granted of Federal Court proceedings.

Local Courts (Civil Claims) Act 1970 (NSW) ss 13, 39A, 69

Trade Practices Act 1974 (Cth) ss 6(3), 51A, 51AA, 51AB, 52, 75B, 80, 80(1)(c), 80(1)(e), 86(2), Pt IVA

Fair Trading Act 1987 (NSW) ss 41, 42, 43, 68

Federal Court Act 1976 (Cth) Pt IVA, s 22

Federal Court Rules O 6 r 13, O 11 rr 2(a) and 16, O 12 rr 2 and 5, O 20 r 2

Local Courts (Civil Claims) Rules 1988 (NSW) Pt 13 r 1, Pt 14 r 4, Pt 19, Pt 23 rr 9 and 10, Pt 24, Pt 25

Practice and Procedure : High Court and Federal Court of Australia 2000

Spencer Bower, Turner and Handley, The Doctrine of Res Judicata 3^rd ed. 1996 at paras 21, 23 and 26

Jackson & Powell on Professional Negligence 5^th ed. 2002 at 536

Miller, R, Miller’s Annotated Trade Practices Act 23^rd ed. 2002 at 658

Handley, JA, “Res Judicata in the European Court” (2000) 116 Law Quarterly Review 191 cited

Mitchell, Dr CM, “Defences to an insurer’s subrogated action” (1996) Lloyd’s Maritime & Commercial Law Quarterly 343 cited

Anthanasopoulos & Ors v Moseley & Ors (2001) 52 NSWLR 262 cited and applied

Greta Holme, The Owners of No 7 Steam Sand Pump Dredger v Owner’s of SS “Greta Holme” [1897] AC 596 cited

Woodside Petroleum Development Pty Ltd v H & R – E & W Pty Ltd (1999) 20 WAR 380 cited and applied

Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275 cited

Australian Building Industries Pty Ltd v Stramit Corporation Limited [1997] FCA 1318 cited

Fejo v Northern Territory of Australia (1998) 195 CLR 96 cited

Bartlett v Swan Television & Radio Broadcasters Pty Ltd (1995) 17 ATPR 41-434 cited

Blair v Curran (1939) 62 CLR 464 applied

Ex parte The Amalgamated Engineering Union (Australian Section); Re Jackson (1937) 38 SR (NSW) 13 cited

Walton v Gardiner (1992-1993) 177 CLR 378 cited

Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589 cited and applied

Macquarie Bank Ltd v National Mutual Life Association of Australasia Ltd (1996) 40 NSWLR 543 cited

Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287 cited

Ling v Commonwealth (1996) 68 FCR 180 referred to

Yat Tung Investment Co Ltd v Dao Heng Bank Ltd [1975] AC 581 referred to

Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404 cited

Tiufino v Warland (2000) 50 NSWLR 504 applied

Drouot Assurances S.A. v Consolidated Metallurgical Industries [1999] Q.B. 497 referred to

Arnold v National Westminster Bank Plc [1991] 2 AC 93 referred to

O’Toole v Charles David Pty Ltd (1991) 171 CLR 232 referred to

Linsley v Petrie [1998] 1 VR 427 referred to

Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198 cited

Henry v Henry (1995-1996) 185 CLR 571 applied

Royal Bank of Scotland Ltd v Citrusdal Investments Ltd [1971] 1 WLR 1469 cited

Johnson Tiles Pty Ltd v Esso Australia Limited (1999) ATPR 41-679 cited

News Limited and Others v Australian Rugby Football League Limited and Others (1996) 64 FCR 410 cited

Australian Conservation Foundation Incorporated v The Commonwealth (1978-1980) 146 CLR 493 cited

Bateman’s Bay Local Aboriginal Land Council and Another v The Aboriginal Community Benefit Fund Pty Limited and Another (1998) 194 CLR 247 referred to

Re McBain; Ex parte Australian Catholic Bishops Conference [2002] HCA 16 cited

Webster v Lampard (1993) 177 CLR 598 cited

Concrete Constructions (NSW) Pty Limited v Nelson (1989-1990) 169 CLR 594 cited and applied

Prestia v Aknar (1996) 40 NSWLR 165 referred to

Little v Law Institute of Victoria (1990) VR 257 cited

Chapman v Luminis Pty Ltd [2001] FCA 1106 referred to

Sterling Pharmaceuticals Pty Ltd v The Boots Company (Australia) Pty Ltd (1992) 34 FCR 287 cited

Lanitis v Lanitis (1970) 1 WLR 503 cited

Boyd v Halstead [1985] 2 Qd R 429 referred to

Banque Commerciale SA (in Liquidation) v Akhil Holdings Ltd (1989-1990) 169 CLR 279 cited

Dare v Pulham (1982) 148 CLR 658 cited

Allstate Life Insurance Co v ANZ Banking Group Limited (Unreported, Federal Court of Australia, 18 August 1995, Lindgren J) cited

Giraffe World Australia Pty Limited v Australian Competition and Consumer Commission (1999) ATPR 41-669 cited

Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1981-1982) 149 CLR 191 referred to

Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 cited

Hurley v McDonald’s Australia Ltd (2000) 22 ATPR 41-741 cited

Ramsay v Pigram (1967-1968) 118 CLR 271 cited and applied

Lloyds Bank Plc v Independent Insurance Co Ltd [1999] 2 WLR 986 referred to

Page v Roberts (1997) 70 FCR 489 referred to

Richmond v Branson (1914) 1 Ch 968 referred to

Adams v London Improved Motor Coach Builders Limited [1921] 1 KB 495 referred to

Fasold v Roberts (1997) 70 FCR 489 referred to

Robin Pty Ltd v Canberra International Airport Pty Ltd (1999) 179 ALR 449 cited and applied

 

 

 

 

 

 

 

AUSTRALIAN ASSOCIATED MOTOR INSURERS LIMITED v NRMA INSURANCE LIMITED & BRONWYN SMITH

 

N 1604 OF 2001

 

 

 

CONTI J

28 AUGUST 2002

SYDNEY

 

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1604 OF 2001

 

BETWEEN:	AUSTRALIAN ASSOCIATED MOTOR INSURERS LIMITED APPLICANT
AND:	NRMA INSURANCE LIMITED (ACN 000 016 722) FIRST RESPONDENT   BRONWYN SMITH SECOND RESPONDENT
JUDGE:	CONTI J
DATE OF ORDER:	28 AUGUST 2002
WHERE MADE:	SYDNEY

 

INDEX OF JUDGMENT

 

Page	Paragraphs	Headings
1	1 to 8	Background
6	9 to 12	The relief sought and causes of action framed by AAMI against NRMA and Ms Smith in the present proceedings
10	13 to 17	The strike-out and stay application of the NRMA Parties in broad outline
14	18 to 20	Submissions made on behalf of the NRMA Parties for the strike out or stay of the Federal Court proceedings
14	18 to 20	Introduction
16	21 to 24	Issue estoppel and res judicata
18	25 to 35	Anshun estoppel and/or abuse of process
27	36 to 39	Vexatious nature of the proceedings
31	40	Want of parties
33	41 to 43	Representative proceedings and absence of interest in subject matter of claims
35	44 to 47	No reasonable cause of action in relation to the conduct of Ms Smith because no conduct relevantly in trade or commerce
Page	Paragraphs	Headings
38	48	Generally as to pleadings and particulars
40	49 to 56	Alternatively to strike-out, the Federal Court proceedings should be stayed pending the outcome of the claims in the Local Court
44	57 to 64	Tendency to cause prejudice, embarrassment or delay
47		Submissions made on behalf of AAMI in response to the submissions of the NRMA Parties for the strike out or stay of the Federal Court proceedings, and my conclusions upon the submissions of both parties
47	65-70	Observations upon AAMI’s causes of action
51	71 to 92	Issue estoppel and res judicata
64	93 to 98	Anshun estoppel and/or abuse of process
67	99 to 104	Vexatious nature of the proceedings
71	105 to 107	Want of parties
72	108 to 109	Representative proceedings and absence of interest in subject matter of claims
73	110 to 114	No reasonable cause of action against Ms Smith because no conduct relevantly in trade or commerce
75	115	Generally as to pleadings and particulars
77	116 to 122	The Federal Court proceedings should be stayed pending the outcome of the claims in the Local Court
79	123	Tendency to cause prejudice, embarrassment or delay
		Schedule to Reasons for Judgment of Conti J delivered 28 August 2002

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1604 OF 2001

 

BETWEEN:	AUSTRALIAN ASSOCIATED MOTOR INSURERS LIMITED APPLICANT
AND:	NRMA INSURANCE LIMITED (ACN 000 016 722) FIRST RESPONDENT   BRONWYN SMITH SECOND RESPONDENT
JUDGE:	CONTI J
DATE OF ORDER:	28 AUGUST 2002
WHERE MADE:	SYDNEY

 

THE COURT ORDERS THAT:

 

1.         The amended statement of claim filed herein on 14 February 2002 be struck out, in so far as the same relates to the following causes of action:

(i)         those for misleading and deceptive conduct the subject of paragraphs 16 to 20, 22 to 24, 30 to 36 and 41 to 55 of the amended statement of claim;

(ii)        those for unconscionable conduct the subject of paragraphs 21A, 21B, 23A, 24, 35A, 36 and 55 of the amended statement of claim;

save and except to the extent the conduct of the Respondents or either of them was constituted by communications involving the use of postal, telegraphic or telephonic services.

2.         The proceedings the subject of the amended statement of claim filed herein on 14 February 2002 be in any event dismissed, in so far as the same relate to motor vehicle accident proceedings in the Local Court brought by a participant in the first respondent’s Courtesy Car Programme as plaintiff against a person holding a motor vehicle insurance policy issued by the Applicant, as defendant, in the circumstances where the proceedings have been concluded by entry of judgment in the Local Court.

3.         Subject to orders 1 and 2, that the proceedings the subject of the amended statement of claim be stayed.

4.         The respective parties have liberty to apply on 14 days’ notice, in relation to the precise terms of order 3 above.

5.         The applicant pay the respondents’ costs of the proceedings constituted by the respondent’s notice of motion filed on 6 March 2002.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1604 OF 2001

 

BETWEEN:	AUSTRALIAN ASSOCIATED MOTOR INSURERS LIMITED APPLICANT
AND:	NRMA INSURANCE LIMITED (ACN 000 016 722) FIRST RESPONDENT   BRONWYN SMITH SECOND RESPONDENT

 

JUDGE:	CONTI J
DATE:	28 AUGUST 2002
PLACE:	SYDNEY

REASONS FOR JUDGMENT

Background

1                     The first respondent NRMA Insurance Limited (“NRMA”) is a well-known insurer of motor vehicles, as is also the applicant Australian Associated Motor Insurers Limited (“AAMI”). NRMA and AAMI are major competitors in that field of insurance. The second respondent (“Ms Smith”) is a solicitor who has been retained by NRMA to recover moneys in the Local Courts from the owners of motor vehicles involved in accidents involving NRMA insured motor vehicles. NRMA and Ms Smith are hereafter referred to together as the “NRMA Parties”.

2                     A comprehensive motor vehicle insurance policy was issued by NRMA in August 1998, in which a number of general exclusions from entitlement to claim, including the cost of hiring a vehicle (ie demurrage), were inserted. Subsequently in November 2001, it appears that NRMA issued a replacement motor vehicle insurance policy, which provided for “optional cover” for the cost of hiring a vehicle, during the time when the damaged vehicle was not available to the insured whilst being repaired, in return for payment of an additional premium. That optional indemnity in relation to motor vehicle hiring costs was repeated in the subsequent NRMA motor vehicle insurance policy issued as from March 2002.

3                     Notwithstanding the concurrence of that cover for demurrage claims, NRMA introduced a scheme in conjunction with Hertz Australia Pty Ltd (“Hertz”), having apparently unique features of demurrage indemnity, to operate collaterally to its standard form of motor vehicle insurance policy, called the Courtesy Car Programme. The operation of this collateral scheme is conveniently described in the reasons for judgment of Beazley JA of the Court of Appeal of New South Wales in Anthanasopoulos & Ors v Moseley & Ors (2001) 52 NSWLR 262 (delivered 27 August 2001) as follows (at 264):

“There were a number of exclusions from the cover provided by the policy, including the cost of hiring a vehicle whilst the insured’s damaged vehicle was being repaired. Notwithstanding this exclusion, the NRMA had in place a Courtesy Car Programme. Under this scheme, an insured was entitled to a courtesy car either at no cost to the insured up to fourteen days if the insured was not at fault, or at a preferential rate if the insured was at fault. Where the insured was not at fault the NRMA bore the cost of the hire for the fourteen day ‘courtesy’ period. In either case, the scheme required the insured to have the damaged vehicle repaired by an ‘NRMA approved’ repairer.

The ‘courtesy car’ was a car hired from Hertz Australia Pty Ltd. The insured entered into the Hertz Rental Agreement directly with Hertz but the NRMA was billed for the hire for the first fourteen day period.”

4                     There have been a very large number of proceedings commenced in the Local Court in Sydney at the direction of NRMA since about 1 September 1999, in the respective names of its motor vehicle owners/policyholders as plaintiffs (“the NRMA Insured”), against the owners of motor vehicles insured by AAMI (“the AAMI Insured”), for the recovery of hiring costs outlaid by NRMA pursuant to its Courtesy Car Programme. It was a feature of the Courtesy Car Programme that Hertz would invoice NRMA direct for vehicle hire pursuant to the Programme. In apparently all of those cases thus far, judgment has been entered for damages equivalent to such hiring costs, and an order for costs has been made in favour of the named plaintiff motor vehicle owner (ie the NRMA Insured) against the named defendant motor vehicle owner (ie the AAMI Insured). In a large number of instances, apparently the majority, proceedings are still awaiting assessment of damages hearing in the Local Court. The existence of negligence has not been an issue, and perhaps understandably so, since claims can only be made under the Courtesy Car Programme where the NRMA Insured was not at fault. In some instances, the Local Court award of damages, and consequential legal costs, has already been satisfied by payment. Four Local Court proceedings have been the subject of the Court of Appeal proceedings in Anthanasopoulos, which was in the nature of a test case.

5                     The following conclusions were unanimously reached in Anthanasopoulos, as set out in the reasons for judgment of Beazley JA with whom Handley JA and Ipp AJA agreed (Ipp AJA adding further reasons of his own with which Handley JA also agreed):

(i)         Pursuant to a long line of authority commencing with “The Greta Holme” [1897] AC 596, injury to property which deprives a party of the use of a non-income earning chattel is compensable.

(ii)        It was irrelevant that a third party (being in that context Hertz) provided a substitute for the chattel, the principle res inter alios acta duly applying in those circumstances.

(iii)       Because the Courtesy Car Programme was not part of the indemnity provided by the NRMA motor vehicle insurance policy for the time being in force, NRMA was not entitled to be subrogated to the rights of the NRMA Insured in relation to the recovery from the AAMI Insured involved in the proceedings of payments made by NRMA to Hertz for the benefit of the NRMA Insured.

(iv)       The issue of subrogation not having been pleaded however by any of the four appellants (ie AAMI Insured) in the Local Court, the magistrate had been correct in determining that the issue concerning subrogation was “outside the scope of the case”.

6                     In relation to that element of the reasons for judgment of Beazley JA set out in [5(iii)] above, Ipp AJA made important observations arising from his earlier dictum in Woodside Petroleum Development Pty Ltd v H & R – E & W Pty Ltd (1999) 20 WAR 380 at 387 (with which Malcolm CJ and Pidgeon J agreed), as follows:

“Although no allegation as to the right of subrogation has to be made in the statement of claim, the defendant may raise the absence or inadequacy of that right in its defence; it is then for the insurer to justify its right to proceed in the name of the assured.”

At 277-278 in Anthanasopoulos, Ipp AJA said as follows:

“Finally, I turn to the question of subrogation. I agree that, as the courtesy car programme was not part of the cover provided by the insurance policies in question, NRMA was not entitled to be subrogated to the rights of its insured. The magistrate held that as there was no right of subrogation on the part of NRMA, the subrogation issue was ‘outside the scope of the case’.

I agree with Beazley JA that his Worship was correct in this respect. I would add however, that this consequence follows largely by reason of the omission on the part of the appellants in each case to raise subrogation as an issue at the trials of the four actions, the subject of this appeal.

Beazley JA has pointed out that, although the parties to each proceeding were the owners of the vehicles involved in the collisions, the cases were being prosecuted by NRMA, their insurer. NRMA was asserting that, pursuant to the doctrine of subrogation, it was entitled to recover the costs incurred in respect of the courtesy cars supplied by it. The involvement of NRMA in this way was not an issue that was raised, as an arguable defence, for consideration by the magistrate.

…

At the trial, it was perhaps open to the respondents to assert that, in reality, the cases were being brought by NRMA, and not the respondents themselves, and NRMA was not entitled to so prosecute the actions. I make no comment on the merits of such an argument, but merely point out that the issue, not having been raised at the trial, was an issue properly regarded by the Magistrate as falling outside the scope of the case.”

That observation has critical implication to issues arising on the present application to this Court. As I have already recorded, Handley JA agreed with the reasons for judgment of Ipp AJA as well as those of Beazley JA.

7                     In an apparent endeavour to recover money already paid out in satisfaction of Local Court judgments, and to defeat or neutralise all subsequent Local Court proceedings as well, AAMI commenced the present proceedings in this Court by application and statement of claim filed on 7 December 2001, and subsequently filed an amended statement of claim on 14 February 2002. Relief was thereby sought not only against NRMA as first respondent in the present proceedings, but also against Ms Smith as second respondent, who had represented NRMA as solicitor in its numerous recovery proceedings brought in the Local Courts in the name of the NRMA motor vehicle policyholders involved in the Courtesy Car Programme. The essence of the numerous causes of action the subject of the amended statement of claim is the absence of a right of subrogation held by NRMA in respect of damages and costs sustained in consequence of claims made under the Courtesy Car Programme. By the present interlocutory application in this Court, NRMA and Ms Smith (“the NRMA Parties”) seek to have these proceedings summarily dismissed pursuant to Order 20 rule 2, or in the alternative have the subject proceedings stayed, or alternatively have these proceedings struck out in whole or in part, pursuant to Order 11 rule 16 of the Federal Court Rules, or in any event made the subject of more particularity, pursuant to Order 12 rule 5. It became open to AAMI, in the wake of the Court of Appeal’s obiter observations referred to in [5(iii)-(iv)] and [6] above, and the approval accorded to the principle in Woodside, to have thenceforth raised a defence in each uncompleted Local Court proceeding of absence of NRMA’s right of subrogation, but AAMI has taken the course of endeavouring to accomplish the same result by the proceedings for damages commenced in this Court, and to claw back in this context the monetary equivalent of Local Court judgments already satisfied. In the meantime, NRMA has sought to counter AAMI’s strategy by obtaining individual retainers, in the form extracted in [11] below, from the NRMA Insured in favour of Ms Smith in relation to all uncompleted Local Court proceedings, which document also purports to confer the equivalent of rights of subrogation arising out of NRMA’s payment of claims pursuant to the Courtesy Car Programme.

8                     A sample of the ordinary statements of claim filed in the Local Court at the instance of NRMA in the name of its individual policyholders, relating to recovery of the cost of hiring incurred under the Courtesy Car Programme, to which I shall hereafter describe for convenience as demurrage claims notwithstanding the technical misdescription thereby involved, has been tendered in the present strike-out proceedings. The amount claimed is $276.50, together with interest pursuant to s 39A of the Local Courts (Civil Claims) Act 1970 (NSW) commencing from 9 July 1999, and a so-called “issue and service fee” of $95.00. The purported cause of action is pleaded as follows:

1.         At all material times the Plaintiff was the owner and driver of motor vehicle registration number PKA085.

2.         At all material times the Defendant was the owner and driver of motor vehicle registration number QXB640.

3.         On or about 9 July 1999 the Plaintiff’s vehicle was being driven at Frenchs Forest.

4.         The Defendant was driving motor vehicle registration number QXB640 when the Defendant collided with and damaged the Plaintiff’s vehicle.

PARTICULARS OF NEGLIGENCE

5.         The Defendant was negligent in that whilst driving motor vehicle registration number QXB640 at Frenchs Forest, he:

            (a)        Failed to keep a proper outlook whilst reversing colliding with the Plaintiff’s vehicle;

(b)               failed to give way;

(c)                failed to stop;

(d)               failed to keep a proper lookout;

(e)                failed to brake, veer, slow down or otherwise control the vehicle to avoid the collision; and/or

(f)                 was driving too fast in the circumstances.

6.         As a result of the Defendant’s negligence the Plaintiff suffered loss and damage.

PARTICULARS OF LOSS AND DAMAGE

7.                  The Plaintiff has suffered losses as follows:

            (a)        The cost of renting an alternative vehicle whilst the Plaintiff’s vehicle was being assessed and repaired and unavailable for the Plaintiff’s use, calculated as follows:

                        Hertz Replacement Vehicle Charge for 7 days           $241.50

                        Administration/Insurance Fee                                      $35.00

                        Total                                                                           $276.50

8.         The Plaintiff has demanded that the Defendant pay the sum of $276.50 and the Defendant has neglected or refused to do so.”

The name of the solicitor acting for the plaintiff is thereafter disclosed as Ms Smith. As already indicated, it appears that this Local Court statement of claim exemplifies that which NRMA has caused to be adopted by each of its numerous policyholders whose damaged vehicles were the subject of the Courtesy Car Programme, and in relation to which vehicle hiring NRMA bore the entire cost because of the absence of negligence on the part of the NRMA Insured occasioning the damage.

The relief sought and causes of action framed by AAMI against NRMA and Ms Smith in the present proceedings

9                     The principal relief sought by AAMI’s application, which initiated the present proceedings in this Court, against the NRMA Parties is as follows:

“1.    An order and injunction restraining the First Respondent (“NRMA Insurance”) by itself, its servants or agents and the Second Respondent (“Smith”) herself or by her servants or agents or otherwise from doing or attempting to do any of the following:

          (a)       commencing or conducting any proceedings in any Court or Tribunal to recover moneys or damages in the name of an NRMA Insured (as defined in the Statement of Claim) in respect of expenditure incurred by NRMA Insurance as a result of the provision by NRMA Insurance to the NRMA Insured of a courtesy car under the “NRMA Courtesy Car Scheme” being that scheme identified in paragraph 6 of the Statement of Claim herein.

          (b)       making any representation to the effect that expenditure or damage associated with the “NRMA Courtesy Car Scheme” is:

(i)                 recoverable by the NRMA Insurance in the name of an NRMA Insured; or

(ii)               is payable by an NRMA Insured to NRMA Insurance from moneys to which the NRMA Insured is entitled pursuant to a Demurrage Claim (as defined in the Statement of Claim).

         (c)        making any representation to the effect that any NRMA Insured is in any way obliged to assist NRMA Insurance in recovering from third parties expenditure or damage associated with the “NRMA Courtesy Car Scheme”.

2.      An order that NRMA Insurance and Smith account to any NRMA Insured in whose name NRMA Insurance and/or Smith have pressed claims and recovered moneys or damages in respect of the loss of use by the NRMA Insured of his or her vehicle.

3.      A declaration that NRMA Insurance and Smith have in trade or commence in Australia engaged in conduct in contravention of:

         (a)       section 52 of the Trade Practices Act 1974 (Cth) and section 42 of the Fair Trading Act 1987 (NSW); and

         (b)       section 51AB or 51AA of the Trade Practices Act 1974 (Cth).

4.      A declaration that Smith has, within the meaning of section 75B and section 80(1)(c) and (e) of the Trade Practices Act 1974 (Cth), aided, abetted, counselled or procured the contraventions, or been knowingly concerned in the contraventions by the NRMA Insurance of:

         (a)       section 52 of the Trade Practices Act 1974 (Cth) and section 42 of the Fair Trading Act (NSW); and

         (b)       section 51AB or 51AA of the Trade Practices Act 1974 (Cth).

5.      An order for injunctive relief including corrective advertising under section 80 of the Trade Practices Act 1974 (Cth) requiring NRMA Insurance and Smith to notify those NRMA Insureds who have been provided with a Courtesy Car that:

         (a)       the NRMA Insured is not obliged to assist NRMA Insurance or Smith in and about bringing or maintaining a Demurrage Claim;

         (b)       NRMA Insurance and/or Smith is not entitled to receive for its own use and benefit the Judgment Moneys;

         (c)        NRMA Insurance has no right to commence or maintain, in the name of an NRMA Insured, proceedings to recover the cost to NRMA of providing the NRMA Insured a Courtesy Car;

         (d)       NRMA Insured has no lawful entitlement to take the proceeds of any proceedings brought in the name of the NRMA Insured for loss of use by that NRMA Insured of his or her vehicle;

         (e)        the NRMA Insured may be able to recover an amount for himself or herself and retain that money for his or her own use; and

(f)                Judgment Moneys (as defined in the Statement of Claim) already received were received pursuant to a purported right of subrogation which did not exist and are moneys to which the named Plaintiff in the relevant proceedings are entitled to their own use.

6.      Damages.”

10                  The amended statement of claim is very lengthy, and I have taken the course of annexing a complete copy thereof to these reasons for judgment, for more convenient use of reference. The lay-out of the amended statement of claim, broadly speaking, is firstly a segment of prefatory averments contained in paragraphs 1 to 15, followed by the causes of action against NRMA, “its servants and agents including Ms Smith” contained in paragraphs 16 to 29, thereafter causes of action pleaded against Ms Smith as a person involved in the circumstances giving rise to those causes of action contained in paragraphs 30 to 40, and concluding with causes of action against both NRMA and Ms Smith individually in paragraphs 41 to 58 in relation to the obtaining of retainer agreements from NRMA Insured concerning those Local Court proceedings at least where judgment has not yet been entered in favour of NRMA Insured against the AAMI Insured.

11                  The “Retainer Agreement” referred to in the amended statement of claim is reproduced below:

“SMITH PARTNERS

            LAWYERS

[Date]

Dear [NRMA Insured]

            RE       You v [AAMI Insured]

                        RETAINER AGREEMENT

We confirm that we are acting for you on the following basis:

1.         You hereby authorise and instruct us to act on your behalf in the proper conduct of the proceedings which are against [here was inserted the defendant] for the recovery of damages arising out of the loss of use of your vehicle as it was deemed a total loss during which time you were provided with the use of a Hertz hire car (“the car”) by your insurer, NRMA Insurance Limited (‘NRMA”), such damages being limited to recovery of the cost of the hire car and administration fee.

2.         This authority is to be retrospective to 8 August 2000. You hereby ratify and confirm all acts, deeds, matters and things whatsoever, which may have been done or executed in and concerning the proceedings either before or after this retainer is signed.

3.         You are the Plaintiff named in these proceedings and do hereby authorise and instruct Smith Partners, Lawyers of 311 Castlereagh Street Sydney in the State of New South Wales to act on your behalf in the proper conduct of the proceedings [here was inserted the title to any existing proceeding] in the Local Court Downing Centre, 143-147 Liverpool Street Sydney.

4.         You instruct Smith Partners to forward to NRMA such sums as may be recovered in the proceedings to defray NRMA’s costs of providing the car at… per day for… days plus… per day administration/ insurance fee, totalling…, and confirm that you will execute any further document necessary to confirm NRMA’s entitlement to that amount. Any other sums of damages recovered over and above this amount will be remitted directly to you.

5.         You instruct Smith Partners to remit to NRMA any sums of money recovered by way of legal costs and disbursements of these proceedings. On this basis, you will not have to pay any legal costs of either the defendant or you or NRMA or its solicitors who may from time to time act in these proceedings. NRMA will be responsible for those costs.

6.         Bronwyn Smith will be responsible for the work. Any enquiries should be addressed to the Solicitor or Paralegal responsible for the matter unless there is a specific legal question which you need answered by Bronwyn Smith.

7.         You acknowledge that you are entitled to obtain independent legal advice regarding the retainer agreement and the proceedings.

8.                  You acknowledge receipt of this retainer and accept the terms herein.

                                                            [Signature of Smith Partners]

                                                                        Smith Partners, Lawyers

I acknowledge that these are the terms on which your firm has been engaged.

[Signature of NRMA Insured]”

12                  There is no evidence before me, in the context of the present strike-out/stay application, of defences filed as to the absence of NRMA’s right of subrogation in relation to the choses in action of the NRMA Insured against the respective AAMI Insured, or of challenges having formally been made by the AAMI Insured to the retainer of Ms Smith, in either case in the Local Court, except for in those matters where defences were filed after the decision in Anthanasopoulos was handed down on 7 August 2001. In any event, interlocutory relief has not as yet been sought or threatened by or on behalf of AAMI, against either of the NRMA Parties.

The strike-out and stay application of the NRMA Parties in broad outline

13                  NRMA’s strike-out/stay application to this Court, by notice of motion filed on 6 March 2002, seeks the following relief specifically which I am required to address:

(i)         dismissal of each of the claims for relief set out in AAMI’s application, which have been set out in [9] above.

(ii)        alternatively, stay of the subject proceedings in this Court in whole or in part, either permanently or pending the disposal of all of the proceedings in the Local Court between the NRMA Insureds as plaintiffs and the AAMI Insureds as defendants, which have been referred to in AAMI’s amended Statement of Claim as “the Demurrage Claims”.

(iii)       further or in the alternative, that AAMI’s amended statement of claim be struck out.

(iv)       further or in the alternative, that the following paragraphs of the amended statement of claim be struck out:

                        Paragraphs 16 to 29, representing AAMI’s claims against NRMA;

                        Paragraphs 30 to 40, representing AAMI’s claims against Ms Smith;

                        Paragraphs 43 to 58, representing the alleged significance of and consequences to AAMI’s claims against NRMA and Ms Smith.

14                  Order 20 r 2(1) of the Federal Court Rules, primarily invoked by the NRMA Parties, provides as follows:

“Where in any proceedings it appears to the Court that in relation to the proceeding generally or in relation to any claim for relief in the proceeding –

(a)               no reasonable cause of action is disclosed;

(b)               the proceeding is frivolous or vexatious; or

(c)               the proceeding is an abuse of the process of the Court,

the Court may order the proceeding to be stayed or dismissed generally or in relation to any claim for relief in the proceeding.”

The general principles governing summary strike out applications, such as the present, are well established and have been expressed in a variety of ways, as follows:

(i)         relief by way of strike out should only be sought in very clear cases;

(ii)        the Court’s power to strike out should only be exercised in a clear case and with exceptional caution;

(iii)       the case must be clearly untenable or else hopeless, and without possible prospects of success;

(iv)       it must be plain and obvious that the impugned portions of the statement of claim are unarguable; and

(v)        it must be very clear in the face of judicial caution that there is no issue deserving of a hearing.

The principles governing the stay of proceedings are more complex, but it suffices to cite the dictum of French J in Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275 at 279 to the effect that the power to stay or dismiss a proceeding for abuse of process “… ought to be very sparingly exercised and only in exceptional cases”, and further that “[t]he possible varieties of abuse of process are only limited by human ingenuity and the categories are not closed”. More recently in Australian Building Industries Pty Ltd v Stramit Corporation Limited [1997] FCA 1318, a Full Federal Court (Northrop, Lindgren and Lehane JJ) reviewed a number of High Court and United Kingdom authorities and summarised the same in the following terms:

“A proceeding should not be dismissed summarily merely on the ground that it appears at the early stage of the hearing of the motion brought for that purpose, to advance a highly implausible claim which will very probably fail.”

Or as stated by the High Court in the joint judgment of Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ in Fejo v Northern Territory of Australia and Another (1998) 195 CLR 96 at [26], “Should the proceeding be dismissed because it was doomed to fail?”

15                  The NRMA Parties have also invoked Order 11 rule 16, which is as follows:

“Where a pleading –

(a)       discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading;

(b)       has a tendency to cause prejudice, embarrassment or delay in the proceeding; or

(c)        is otherwise an abuse of the process of the Court,

the Court may at any stage of the proceeding order that the whole or any part of the pleading be struck out.”

The rule has been described as “slightly wider” than Order 20 rule 2 (Practice and Procedure: High Court and Federal Court of Australia 2000). The expression “embarrassment” in the context of the above rule was said by Carr J in Bartlett v Swan Television & Radio Broadcasters Pty Ltd (1995) 17 ATPR 41-434 at 40,889 to “carr[y] the connotation of a pleading which is susceptible to various meanings, or contains inconsistent allegations or in which alternatives are confusingly intermixed or in which irrelevant allegations are made tending to increase expense. The list is not intended to be exhaustive”.

16                  Alternatively, the NRMA Parties seek orders for the provision of particulars in respect of AAMI’s amended statement of claim, pursuant to Order 12 rule 5 of the Federal Court Rules, and/or for AAMI to provide an affidavit demonstrating a reasonable evidentiary basis for the allegations made, failing which they seek an order that the Federal Court proceedings be stayed or dismissed. Order 12 rule 5 reads as follows:

“(1)     The Court may order a party to file and serve on any other party –

            (a)        particulars of any claim, defence or other matter stated in his pleading, or in any affidavit ordered to stand as his pleading; or

            (b)        a statement of the nature of the case on which he relies; or

            (c)        where he claims damages, particulars relating to general or other damages.

(2)       Without limiting the generality of sub-rule (1), where a party alleges as a fact that a person had knowledge or notice of some fact, matter or thing, the Court may order that party to file and serve on any other party -

            (a)        where he alleges knowledge, particulars of the facts on which he relies; and

            (b)        where he alleges notice, particulars of the notice.

(3)       The Court shall not make an order under this rule before the filing of the defence unless, in the opinion of the Court, the order is necessary or desirable to enable the respondent to plead or for some other special reason.”

17                  The parties have provided comprehensive written submissions, upon which senior counsel orally addressed. The appropriate course is to set out or summarise, the submissions of the NRMA Parties in the sequence in which the same have been presented, and thereafter the responses of AAMI interposed with my rulings and conclusions. Before doing so, I should record for completeness certain events, following upon the Court of Appeal’s judgment in Anthanasopoulos on 27 August 2001. Contemporaneously with the filing of AAMI’s amended statement of claim on 14 February 2002, an application was made by AAMI to the Local Court, Small Claims Division, to stay all Local Court proceedings the subject of the demurrage claims at issue in the Federal Court proceedings. Thereafter on 27 February 2002, according to NRMA, the Local Court invited the parties to consider applying to have the proceedings referred to and heard in the General Division of the Local Court, where apparently the jurisdictional authority of the Local Court is more comprehensive, though AAMI denies the extension of any such invitation. Nothing further appears to have taken place, at any rate of significance, in the Local Court since that time, pending doubtless the outcome of the present strike-out/stay application.

Submissions made on behalf of the NRMA Parties for the strike out or stay of the Federal Court proceedings

 

Introduction

18                  The NRMA Parties informed the Court, that in the case of each judgment that has thus far been entered in the Local Court in favour of NRMA, payment has been subsequently received by Ms Smith on behalf of the AAMI Insured from AAMI and disbursed to NRMA, after deduction of her professional fees and expenses. The submissions advanced on behalf of the NRMA Parties were outlined in general summary as follows:

(i)         AAMI is estopped from further litigating in the Federal Court issues which have been or should have been litigated in the context of the demurrage claims brought in the Local Court, and which have been concluded by the entry of judgment in favour of the NRMA Insured.

(ii)        In respect of the demurrage claims which are still pending in the Local Court, it is vexatious and an abuse of process for AAMI to institute and maintain parallel proceedings in the Federal Court dealing with the subject matter of, and issues raised in, the pending claims in the Local Court.

(iii)       The Federal Court proceedings are in any event defective for want of parties, namely the NRMA Insured.

(iv)       The proceedings for relief comprise in reality a so-called “Claytons” representative action, without complying with the provisions of Part IVA of the Federal Court Act 1976 (Cth) or Order 6 rule 13 of the Federal Court Rules.

19                  Before presenting the detail of the submissions advanced by the NRMA Parties, I would observe that it had always been open to AAMI, as motor vehicle insurer of many defendants in the numerous Local Court proceedings, to have caused challenges to be made in the context of those proceedings (ie the AAMI Insured) to Ms Smith’s retainer purportedly by each of the plaintiffs for the time being involved in those proceedings (ie the NRMA Insured), and to have defended the proceedings in any event upon the basis of what the Court of Appeal has subsequently found in Anthanasopoulos to be an absence of an entitlement of NRMA to subrogation in respect of the causes of action of those plaintiffs for recovery, from those defendant vehicle owners, of the payments in the nature of demurrage made by NRMA to Hertz pursuant to the Courtesy Car Programme (see again [5(iii)] above). Any such defence would however have been required to be pleaded (see again the passage from Woodside extracted in [6] above). Of course, in those cases where judgment has been entered by the Local Court, it would be presumably too late for AAMI to cause those steps to be taken. There remains however numerous proceedings in the Local Court which are uncompleted, and I observe that defences of absence of subrogation have been raised in at least some of those pending proceedings. The claims formulated in the multitude of Local Court summonses which NRMA caused to be issued by its solicitor Ms Smith, whereof that extracted in [8] above is an example, were explicitly confined in scope to “[t]he cost of renting an alternative vehicle whilst the Plaintiff’s vehicle was being assessed and repaired and unavailable for the Plaintiff’s use…”, being the cost of “Hertz Replacement Vehicle Charge”. As NRMA’s main competitor in the field of motor vehicle insurance at least in this State, AAMI was presumably aware of the Courtesy Car Programme from the time it was first promoted to the NRMA Insured, and the contrary has not been suggested. Another feature of AAMI’s case is that the amended statement of claim does not purport to plead reliance on AAMI’s part on the representations and continuing representations said to have been made by the NRMA Parties, the only persons to whom reliance is attributed being the NRMA Insured. Perhaps at least one of the reasons why AAMI has chosen to open this “second front” in the Federal Court is its appreciation that in the case of the large number of Local Court cases already concluded by entry of judgment, it would be too late to re-open the same in order to raise defences based on the absence of rights of subrogation in respect of the causes of action for negligence held by the NRMA Insured.

20                  The NRMA Parties have submitted, by way of opening of their attack upon AAMI’s amended statement of claim filed in the Federal Court, that if not struck out, or the proceedings the subject thereof stayed, both the Federal Court and the NRMA Parties will be vexed with addressing circumstances concerning purported challenges to the rights of subrogation of NRMA, and the retainer of Ms Smith, in literally the thousands of cases awaiting hearing in the Local Court, each involving different plaintiffs and defendants respectively insured by NRMA and AAMI respectively, yet each involving relatively small amounts of Hertz hiring fees of approximately $100 to $300. It was further said by the NRMA Parties that “[d]espite the elliptical pleading, there is no basis for supposing that the circumstances of each such claim are the same or for example, that the matters pleaded in para 50 of the amended statement of claim applied or had the same effect upon each NRMA insured”. Since AAMI has pleaded that representations have been wrongfully made by the NRMA Parties in effect to each NRMA Insured, there may well be substance in that contention. A number of grounds of forensic attack have been made by the NRMA Parties upon the amended statement of claim of AAMI, which I will now summarise below in the sequence presented to the Court, together with the main thrust of the submissions of the NRMA Parties made in relation thereto. I will thereafter together summarise AAMI’s responses, and provide my conclusions seriatim.

Issue estoppel and res judicata

21                  As to issue estoppel and res judicata (the latter otherwise known as estoppel by judicial decision), the NRMA Parties placed reliance upon the dictum of Dixon J (as he then was) in Blair v Curran (1939) 62 CLR 464 at 531-2 as follows:

“A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared. The distinction between res judicata and issue-estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.

Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue-estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established. Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground upon which the existence of the right was negatived. But in neither case is the estoppel confined to the final legal conclusion expressed in the judgment, decision or order… the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point at issue. Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous…

But matters of law and fact which are subsidiary or collateral are not covered by the estoppel. Findings, however deliberate and formal, which concern only evidentiary facts and not ultimate facts forming the very title to rights give rise to no preclusion.”

22                  The NRMA Parties thereafter referred to authority to the effect that the judgment or decision or order of an inferior court given or made within jurisdiction can create an issue estoppel or res judicata binding on a superior court, citing Ex parte The Amalgamated Engineering Union (Australian Section); Re Jackson (1937) 38 SR (NSW) 13 at 16-17, where Jordan CJ described the implications of the estoppel (and res judicata)as follows:

“This makes it necessary to consider the extent to which a decision of a Court of Petty Sessions in a proceeding under s 68 (ie of the Commonwealth Conciliation and Arbitration Act 1904-1934) is capable of operating as res judicata. The law of res judicata comes into operation whenever a judicial tribunal has given a judicial decision of a final nature upon a matter which it has jurisdiction to decide. Such a decision may have a twofold operation. It operates as an estoppel. Further, if it amounts to a judgment for the recovery of a remedy, it creates a merger of the cause of action as regards any Court within the same system of law, and may be pleaded in any such Court as a bar to any subsequent action to obtain a remedy in respect of the same subject matter…

The estoppel created by res judicata is a rule of evidence… that every party to the litigation in which the decision was given is entitled, by proof of the decision, to prevent any other party to the litigation from asserting the contrary of the decision or from questioning it in any way, in any subsequent litigation between the parties. In order that proof of the decision should give rise to an estoppel, ie, should be conclusive evidence instead of being merely evidentiary, it must be pleaded where there is an opportunity of pleading it…

Further, the estoppel is not restricted to judicial decisions appearing on the face of any formal record of the order of the tribunal. It extends to any matters in fact raised and judicially decided for the purpose of arriving at the decision… and also to any matters necessary to be determined in order to found the decision, provided always that the tribunal has jurisdiction to determine these matters for all purposes between the parties, i.e., jurisdiction to determine them directly and immediately as well as merely incidentally… And it extends to any unqualified admissions by the parties upon which the decision is based.”

Other authorities concerning the judgment or orders of an inferior court within jurisdiction creating binding estoppels upon a superior court are referred to in Spencer Bower, Turner and Handley, The Doctrine of Res Judicata 3^rd ed. 1996 at [21], [23] and [26].

23                  As I have already observed, the NRMA Parties have contended that during those numerous proceedings in the Local Court which have been already litigated to finality, AAMI had never raised on behalf of the AAMI Insured defences as of absence of subrogation of NRMA as the purported motor vehicle insurer of the motor vehicles of the NRMA Insured to the rights or choses of the NRMA Insured against the AAMI Insured, in relation to damages by way of demurrage claims arising out of the Courtesy Car Programme, and the consequential absence of Ms Smith’s retainer by the NRMA Insured as their solicitor, Ms Smith having been retained solely by NRMA. The significance of that omission has already been discussed. Had AAMI not neglected to do so, NRMA would have been obliged to justify, in the context of those proceedings already finalised in the Local Court, the existence of NRMA’s right to proceed in the Local Court in the name of the NRMA Insured, and to do so by the retainer of Ms Smith. Those shortcomings need not of course apply in relation to the numerous Local Court proceedings not yet finalised.

24                  The NRMA Parties therefore submitted that purportedly in line with principles explained in the passages from Blair v Curran and Re Jackson, it is no longer open to AAMI to advance in the Federal Court the issue that AAMI has suffered loss and damage, on account of its subjection as insurer to the judgments already entered in the Local Court, for the amounts the subject of the demurrage claims brought by NRMA in the name of the NRMA Insured against the AAMI Insured, by reason of the absence of rights of subrogation held by NRMA in the first place, that issue having been in effect already determined in the Local Court in each concluded proceeding by AAMI’s failure to raise those issues by way of defence to those claims in the Local Court prior to entry of judgment. Therefore, so the submission of the NRMA Parties continued, AAMI’s alleged entitlement to bring the present Federal Court proceedings is said by the NRMA Parties to stand in contradiction to “the factual and legal foundation for each of the judgments in the Demurrage Claims”.

Anshun estoppel and/or abuse of process

25                  The submissions here of the NRMA Parties were similar to those advanced on the basis of issue estoppel and res judicata, but may be repeated for ease of reference. It was contended that “stripped of its essentials”, AAMI is seeking to litigate in this Court, pursuant to its amended statement of claim, the issues whether NRMA was subrogated to the rights of action of the NRMA Insured comprising their demurrage claims against the AAMI Insured based on the Courtesy Car Programme, and whether as a consequence of that being the case, Ms Smith was not lawfully retained by the NRMA Insured to institute and prosecute in the Local Court those demurrage claims, AAMI having failed to raise in the Local Court prior to entry of judgment the issue as to absence of right of subrogation. In that regard, it is the submission of AAMI advanced in the present Federal Court proceedings, as has already been mentioned, that because NRMA was not subrogated to those rights of action of the NRMA Insured in relation to the AAMI Insured, the Local Court proceedings were never lawfully conceived, nor were subsequently maintained by Ms Smith as the solicitor on the record for each of the NRMA Insured, her retainer having emanated from NRMA and not from the NRMA Insured. The NRMA Parties further contended that in order to frame those issues in terms purporting to attract the jurisdiction of the Federal Court, AAMI has further pleaded by the amended statement of claim that to the extent that proceedings may have been properly instituted and maintained in the Local Court by the NRMA Insured as plaintiffs, the NRMA Insured were induced to consent to the institution of those proceedings, both concluded and pending, and to retain Ms Smith as their solicitor, by misleading and deceptive conduct and/or unconscionable conduct on the part of NRMA and/or Ms Smith, and further that by reason of that conduct, AAMI has suffered loss and damage because, but for that conduct, AAMI would not have been required or obliged to pay the amount for which judgment has been obtained in the name of each NRMA Insured in the Local Court against the AAMI Insured, and to incur the legal costs of involvement in each claim which has led to the entry of judgment in favour of the NRMA Insured. Moreover AAMI claims that it is continuing to sustain or be exposed to similar loss and damage by virtue of involvement in the pending proceedings in the Local Court or the numerous proceedings about to be launched. Thus AAMI seeks to recover from the NRMA Parties (ie NRMA and Ms Smith) the sums paid out by AAMI for which judgments for damages and costs have been entered in favour of the NRMA Insured against the AAMI Insured, and the legal costs incurred by AAMI for involvement on its part in both the concluded and the pending proceedings in the Local Court, and declaratory and/or injunctive relief.

26    The NRMA Parties have further contended that for the Federal Court to allow the causes of action the subject of the amended statement of claim to be litigated, in the face of the Local Court judgments regularly obtained against each of the AAMI Insured, would constitute abuse of the processes of the Court, whether by reason of the doctrine of Anshun estoppel or otherwise. Reliance was placed first upon dicta of the High Court in Walton v Gardiner (1992-1993) 177 CLR 378 (Mason CJ, Deane and Dawson JJ) at 392-393 concerning abuse of process, reading as follows:

“The inherent jurisdiction of a superior court to stay its proceedings on grounds of abuse of process extends to all those categories of cases in which the processes and procedures of the court, which exist to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness. Thus, it has long been established that, regardless of the propriety of the purpose of the person responsible for their institution and maintenance… proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings.”

27                  The doctrine of Anshun estoppel derives of course from the decision of the High Court in Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589, where at 598-599, the joint judgment of Gibbs CJ, Mason and Aickin JJ contained the following:

“The critical issue, then, is whether the case falls within the extended principle expressed by Sir James Wigram V.C. in Henderson v Henderson (1843) 3 Hare 100 at 115, [67] E.R. 313 at 319). The Vice-Chancellor expressed the principle in these terms:

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

            …’

Although it has been said that the principle operates so as to extend the doctrines of issue estoppel as well as res judicata, its application to cases of issue estoppel is to be treated with caution.”

28                  I should intrude to mention that what may be described as the main area of distinction between res judicata and Anshun estoppel is that in the case of the former doctrine, proof that a party was seeking further to litigate a cause of action, which had previously been taken to judgment, operates as a complete bar to the later action, whereas in the latter, the estoppel operates only where the new litigation involves a point which “properly belonged” to the first proceeding or was unreasonably not included in it (Macquarie Bank Ltd v National Mutual Life Association of Australasia Ltd (1996) 40 NSWLR 543 (CA) at 558). Subsequently in Anshun at 602-603 the following further passage appears in the joint judgment:

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

29                  In finding in Anshun that there had crystallised an estoppel, the reasons of Gibbs CJ, Mason and Aickin JJ at 604 included further the following:

“… The matter now sought to be raised by the Authority was a defence to Anshun’s claim in the first action. It was so closely connected with the subject matter of that action that it was to be expected that it would be relied upon as a defence to that claim and as a basis for recovery by the Authority from Anshun. The third party procedures were introduced to enable this to be done. If successful, the indemnity case would have obviated an inquiry into contribution. If reserved for assertion in a later action, it would increase costs and give rise to a conflicting judgment.

The Authority did not adduce evidence at the trial to show why it failed to raise the indemnity issue in the first action…”

In concurring judgments in Anshun, Murphy J said at 605 that he preferred not to attempt to formulate an exhaustive theory of res judicata or issue estoppel in order to determine the appeal by the application of either theory, and Brennan J said at 613 as follows:

“The Authority had an opportunity in its proceedings against Anshun in the first action to seek an order that Anshun indemnify it against its liability to [the injured plaintiff]… The Authority did not take that opportunity, and now it cannot pursue the remedy of full indemnity so long as the contribution orders stand. The right of indemnity arises upon the same facts as those which founded the contribution orders, and the cause of action upon which the Authority relies to maintain the second action merged in the contribution orders. No doubt it would be necessary in the second action to prove the hiring agreement, a fact additional to the facts upon which the contribution orders were founded. But the agreement is solely the source of the legal right; it is not one of the facts which, fulfilling the conditions of the indemnity clause, support the right of indemnity in the relevant sense. The facts which support the right of indemnity are the facts on which the contribution orders were founded.

As the Authority’s right of indemnity merged in the contribution orders, the second action is barred. There is no discretion to be exercised…”

30                  In Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287 at 295, a Full Federal Court (Beaumont, Wilcox and Moore JJ) described the principles in Anshun as “… allied to, but not co-extensive with, the principles of res judicata and issue estoppel, as traditionally understood”, and the application of the principle of Anshun estoppel as not confined to circumstances where the former principles operate. In that regard, I would refer again to the dicta in Anshun cited above that “… its application to cases of issue estoppel is to be treated with caution”. I should interpose to add that subsequently to Bryant, a Full Federal Court again considered the application of the Anshun principle in Ling v Commonwealth (1996) 68 FCR 180. In his reasons for judgment with which the other members of the Court concurred, Sundberg J at 194-195 referred to the approach of the Privy Council in Yat Tung Investment Co Ltd v Dao Heng Bank Ltd [1975] AC 581 at 590, where “special circumstances” appear to have been considered as an issue separately from “unreasonableness”, but preferred the High Court’s approach in Anshun, that is to say, to ask whether the failure to raise a grievance was reasonable. In his concurring judgment, Wilcox J stated that the Anshun principle was designed to minimise the burden of litigation.

31                  The next authority cited by the NRMA parties in the present context, though more specifically related to abuse of process generally, was Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404, where in proceedings for defamation, the Supreme Court had already held, after a separate trial, that the pleaded imputation was incapable of being conveyed by the matter complained of, and the plaintiff sought to amend the statement of claim so that his action continued against an unserved defendant and a new party, and where that plaintiff no longer pleaded his claim in defamation, and in lieu thereof, pleaded claims for injurious falsehood and for misleading or deceptive conduct. The representation propounded as the basis for those later causes of action was in fact however no different in substance from the defamatory imputation which had been rejected at the earlier separate trial. Hunt CJ at CL said at 410 that notwithstanding the absence of an issue estoppel, there was nevertheless a line of authority which demonstrated that a party’s attempt to re-litigate against another party an issue which he had already lost may amount to an abuse of process, and at 414, his Honour continued as follows:

“There are obviously limitations to striking out pleadings or causes of action as an abuse of process upon the basis stated in Reichel v Magrath (1989) 14 App Cas 259 and elaborated in the cases to which I have referred. The issue determined in the earlier case which is sought to be litigated in the later case must be one which the party propounding it in the latter lost in the former. The principle does not work in reverse to enable the party who won the issue in the earlier case to prevent it being litigated in the later proceedings by someone who was not a party in the former. It must be an issue which was necessarily determined in the earlier case, and one of importance to the final result. It must have been properly argued – by which I mean that it is readily apparent from whatever records there are of the earlier case that the tribunal which decided it was an appropriate one to do so, that the parties were appropriate contradictors and that the issue was regarded by them as one of importance in that case. In normal circumstances, the decision disposing of the issue must have been a final one – by which I mean that it is not subject to appeal. (The filing of a notice of appeal may clearly be seen in some circumstances as merely seeking to delay the inevitable). There may also be circumstances in which, notwithstanding the absence of an appeal, it is clear that the earlier decision has overlooked some binding authority, or that it has caused the unsuccessful party a manifest injustice. As most of the cases have emphasised, all the circumstances of the determination in the earlier case may be considered, and there can be no definitive statement of the circumstances which will inevitably lead to a finding of abuse of process.”

In relation to the Local Court proceedings, it has not been however a case of AAMI losing an issue in any of the proceedings against the NRMA Insured, but rather failing to raise an issue, as I have already mentioned.

32                  A further authority cited by the NRMA Parties in this doctrinal area, but of more direct significance for present purposes, is Tiufino v Warland (2000) 50 NSWLR 104, a decision of the Court of Appeal of the Supreme Court of New South Wales (Mason P, Handley and Powell JJA). The context to the appeal was a property damage claim previously conducted before a magistrate, which arose out of a motor vehicle collision, and the subsequent bringing of proceedings in the Supreme Court for damages for personal injury. The magistrate had held in effect that the plaintiff in the later personal injury proceedings in the Supreme Court had been responsible for the collision, and that the defendant in those later proceedings had not been guilty of contributory negligence. What was seen as an attempt to re-litigate in the Supreme Court that which was described at 114 as “these simple issues of fact” was disallowed by the Court of Appeal in Tiufino. Relevantly to matters arising in the present proceedings, Handley JA (with whose reasons for judgment Mason P and Powell JA agreed) pointed out (at 111), that “[r]es judicata estoppels must be mutual… but there is no authority that a compulsory third-party insurer cannot take advantage of issue estoppels available to its insured and there is authority that it can”. His Honour added (at 111) that “[t]he causes of action were different… but this does not exclude an issue estoppel”. Though cited by NRMA in the context of its submissions concerning Anshun estoppel, this authority would appear to apply equally appropriately to doctrines of issue estoppel and res judicata. I should add that in his journal article “Res Judicata in the European Court” published in the Law Quarterly Review (Vol 116, April 2000) at 191-192, Handley JA referred to Drouot Assurances S.A. v Consolidated Metallurgical Industries [1999] QB 497, being proceedings based on Article 21 of the Brussels Convention, where it was said that if the interests of the insurer are “identical to and indissociable from those of its insured”, the parties will be the same for the purpose of res judicata estoppels, but not where the interests of the insurer and insured “diverge”. Handley JA at 193 indicated his implicit concern that “[t]his means that identity will not exist where one suit was brought by an insurer in the name of the insured for damage to the insured’s vehicle, and the other was brought by the insured for his personal injuries”. Consistently with that expression of concern, and what his Honour observed in Tiufino in the passage extracted above, his Honour at 110 in Tiufino said that there was no occasion to consider whether the qualification to the general rule of issue estoppel established in Arnold v National Westminster Bank Plc [1991] 2 AC 93 should be accepted in Australia, and in so doing, he cited the observation of Brennan J (as he then was) in O’Toole v Charles David Pty Ltd (1991) 171 CLR 232 at 258 as to the “uncertain foundation” on which Arnold rested, and observations also expressed in Linsley v Petrie [1998] 1 VR 427 at 441 (per Hayne JA) and 449 (per Calloway JA).

33                  The most recent of the authorities cited by the NRMA Parties in relation to the doctrine of abuse of process was that of the decision of the Court of Appeal of the Supreme Court of New South Wales in Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198, which related to circumstances, first, where the purchasers of a business had successfully sued in the Supreme Court for damages against the vendor on one count for breach of warranty as to the net profits of the business, but had unsuccessfully sued on a second count for damages for misleading and deceptive conduct, and secondly, where the purchasers had subsequently sued the vendor’s accountants in the District Court for negligent misrepresentation, they having prepared the financial statements upon which the purchasers claimed to have relied in purchasing the business. The reason for the purchasers bringing the second action was their dissatisfaction with the level of damages which had been awarded against the vendor in the prior proceedings in the Supreme Court. In allowing an appeal against the District Court judge’s dismissal of the accountants’ motions for the stay of proceedings or the summary dismissal thereof, the Court of Appeal held that the later proceedings against the accountants were an abuse of process, the claims against the accountants being said by the Court of Appeal to have been so relevant to the subject matter of the first proceedings in the Supreme Court that it was unreasonable for the purchasers not to have relied upon the same in that action. At [28] and [30], Handley JA said as follows:

“The present proceedings are an attempt to litigate or re-litigate issues which were either decided in or are barred by the earlier proceedings. In substance, ignoring the camouflage, the purchasers are attempting to re-litigate the issue of reliance on the 1991 figures which they lost.

…

The substance of the matter therefore is clear. The purchasers, disappointed with their bargain, sued their vendor in contract and in misrepresentation. They lost their case in misrepresentation and were disappointed with their modest recovery in contract. A few weeks before the expiration of the limitation period they sued the accountants for what is in substance the same misrepresentations. In the first proceedings they had to prove that they relied upon those misrepresentations. This turned on the evidence of Mr Hoefl, the contemporary documents, and the surrounding circumstances. The purchasers lost that issue and seek to re-litigate it against the accountants on substantially the same evidence in the hope that this time Mr Hoefl will be believed.”

As in the case of Tiufino, the passage extracted above adopts language perhaps more in the category of issue estoppel than Anshun estoppel.

34                  The NRMA Parties made the following submissions by way of application of the principles concerning Anshun estoppel and abuse of process:

(i)         By the proceedings which AAMI has now brought against the NRMA Parties in this Court, AAMI is seeking to contradict the result of the multitude of judgments already obtained in the name of the NRMA Insured in the Local Court against the AAMI Insured, because AAMI pleads that those judgments were irregularly obtained upon the non-existent foundation of NRMA’s supposed rights of subrogation in respect of the entitlement of the NRMA Insured to pursue their respective demurrage claims against the AAMI Insured, and Ms Smith’s consequential absence of authority and retainer to commence and pursue those claims on the instructions of NRMA.

(ii)        The issue of Ms Smith’s retainer or otherwise by the NRMA Insured was a matter which could and should have been litigated in each of the concluded Local Court proceedings by an application for a stay of proceedings, or for the proceedings to be dismissed, and for an order that Ms Smith pay the costs of the AAMI Insured by reason of an absence of retainer, that issue being said to be intimately connected with the subject matter of the Local Court proceedings; it was further contended that AAMI must be taken to have known of the shortcomings relevantly of NRMA’s Courtesy Car Programme.

(iii)       The issues now sought to be raised by AAMI’s amended statement of claim as to the NRMA Insured being induced to authorise their respective Local Court proceedings, by misleading and deceptive or unconscionable conduct on the part of the NRMA Parties, could have been raised by AAMI by way of third party claims for damages brought by the AAMI Insured against the NRMA Parties, being a course whereby “[AAMI] would have been compelled to focus, with precision, upon the conduct of [the NRMA Parties] in respect of the NRMA Insured”.

(iv)       The issues arising in any such hypothetical third party claims would, moreover, have been closely intertwined with the issue that could and should have been raised by the AAMI Insured as a defence in the Local Court proceedings, namely whether NRMA was subrogated to the rights of the NRMA Insured to pursue their respective demurrage claims against the AAMI Insured, and with the further issue as to whether Ms Smith was in truth retained as the solicitor for the NRMA Insured in those proceedings; furthermore, so the NRMA Parties’ contentions continued, “although the third party procedure would be necessary because, nominally, NRMA and Smith were parties separate from the plaintiff in each of the Demurrage claims, substantially there was an identity of parties since, on AAMI’s case, NRMA was effectively the plaintiff in each of the proceedings, and Smith was its solicitor… NRMA and each of its insureds were privies, as were AAMI and each of its insured; relevantly they had an identity of interest”.

(v)        In any event, the AAMI claims of misleading and deceptive conduct and unconscionable conduct now being advanced were said by the NRMA Parties to have been so relevant to the subject matter of the proceedings in the Local Court that it was unreasonable for the AAMI Insured not to have raised those claims and relied on them, referring in that context specifically to dicta in Anshun at 602 which I have already cited.

35                  The NRMA Parties concluded this segment of their submissions with the following observation:

“… AAMI cannot reasonably contend it did not know of the basis upon which the claims were being pursued by NRMA as subrogated by the rights of its insureds.”

In that context, the NRMA Parties further submitted that AAMI has not proffered any evidence thus far as to when and in what circumstances AAMI first became aware of facts bearing relevantly upon the viability of NRMA’s retainer of Ms Smith, particularly given that such facts were germane to the findings made by the Court of Appeal in Anthanasopoulos summarised in [5(iii) and (iv)] above, being findings doubtless made as a consequence of submissions of the four appellants to the Court of Appeal, each of whom fall within the description of an AAMI Insured.

Vexatious nature of the proceedings

36                  This third segment of the submissions of the NRMA Parties commenced with the background circumstance that an application, which had been made to the Local Court by AAMI in the name of the AAMI Insured for a stay of the pending Local Court proceedings, had not been granted by the Local Court, and that instead, the parties to the proceedings were invited by the Local Court to have the assessment of the pending demurrage claims transferred to the General Division of the Local Court (see again [17] above). The NRMA Parties contended that the Local Court has jurisdiction to deal with issues as to the entitlement of NRMA to be subrogated to the rights of its insured engaged in the pursuit of the demurrage claims, and as to the retainer of Ms Smith to represent the NRMA Insured in relation to those claims, and as to whether the institution of the proceedings was procured by the misleading and deceptive conduct and unconscionable conduct the subject of AAMI’s amended statement of claim. The NRMA Parties contended that the present Federal Court proceedings should be stayed as vexatious for those reasons, or stayed “pending the determination of each of the Demurrage Claims now before the Court”.

37                  The NRMA Parties have placed reliance upon the following passage in Henry v Henry (1995-1996) 185 CLR 571 at 590 (Dawson, Gaudron, McHugh and Gummow JJ):

“Parallel proceedings in another country with respect to the same issue may be compared with multiple proceedings with respect to the same subject matter in different courts in Australia. In Union Steamship Co of New Zealand Ltd v The Caradale (1937) 56 CLR 277 at 281, Dixon J observed of that latter situation that ‘[t]he inconvenience and embarrassment of allowing two independent actions involving the same question of liability to proceed contemporaneously in different courts needs no elaboration’. From the parties’ point of view there is no less – perhaps, considerably more – inconvenience and embarrassment if the same issue is to be fought in the courts of different countries according to different regimes, very likely permitting of entirely different outcomes.”

A further authority cited in the present context by the NRMA Parties was that of Royal Bank of Scotland Ltd v Citrusdal Investments Ltd [1971] 1 WLR 1469, where the issue was whether the defendants’ tenancy was a business or non-business tenancy. The resolution of that issue had been initiated by the tenants in pending county court proceedings, and about three weeks later, the landlord sought declaratory relief relating to the same issue in the Chancery Division of the High Court. A stay of the High Court proceedings was granted on the ground that “… the matter raised by the originating summons substantially duplicates the application to the Barnet county court… the parties are precisely the same, the subject matter of both proceedings is the same, the issue in each is substantially the same, namely business tenancy or no business tenancy, and… there is no real issue as regards the claims for possession and mesne profits because the result must follow automatically from the decision on the business tenancy point”. Reliance was also placed by the NRMA Parties upon Johnson Tiles Pty Ltd v Esso Australia Limited (1999) ATPR 41-679, where Merkel J observed at 42,677 as follows (under the heading “Multiplicity of Proceedings”):

“It is well established that, prima facie, it is vexatious and oppressive for a second or subsequent action to be commenced in a court in Australia if an action between the same parties is already pending with respect to the same subject matter in an Australian court. In such circumstances it would lie on the party who brings the second action to show that it was not so.”

38                  In order to exemplify the extent of the alleged abuse of process asserted by the NRMA Parties to be constituted by AAMI’s pursuit of the Federal Court proceedings, there has been tendered by the NRMA Parties an affidavit of 14 February 2002 made by AAMI’s solicitor Mr Courtenay, which was originally filed in the Local Court, and which disclosed the following details:

(i)         The firm of solicitors retained by AAMI to defend the Local Court demurrage claims of the NRMA Insured had filed defences in 1307 of such cases, whereof approximately 1157 were pending for resolution, and apparently the remainder had been finalised by entry of judgment.

(ii)        Instructions had been received as to a further 1000 matters (approximately), in relation to which certain AAMI insured vehicle owners had received letters of demand from Ms Smith, but no proceedings in the Local Court had been actually commenced.

(iii)       AAMI provided policies of motor vehicle insurance to approximately 25 per cent of the insurance market in New South Wales, and NRMA provided policies of motor vehicle insurance to approximately 57 per cent of the same market.

(iv)       There is a likelihood that approximately 5000 claims will arise out of NRMA’s “Courtesy Car Programme”, including those already pending or finalised.

(v)        A challenge to Ms Smith’s retainer on the part of AAMI Insured appeared to have first occurred in relation to 112 NRMA demurrage claims listed for hearing before Assessor Roberts in the Local Court on 12 December 2001; shortly prior thereto on 7 December 2001, the present proceedings were commenced by AAMI by application and statement of claim in this Court.

(vi)       At the hearing before Assessor Roberts on 12 December 2001, Ms Smith’s retainer was challenged on behalf of the AAMI Insured involved in that hearing, and in response to the challenge, counsel briefed by Ms Smith on behalf of the NRMA Insured tendered in evidence 99 purported retainer agreements made between NRMA Insured and Ms Smith, each bearing a date subsequent to the date of communication of Ms Smith’s retainer to AAMI.

(vii)      Assessor Roberts announced that he was of the opinion that those documents so tendered constituted prima facie evidence of a valid retainer in each of the 99 instances, and he stood over all of the 112 matters until 20 February 2002 for the purpose of entry of judgment and argument as to costs; Ms Smith stated to Assessor Roberts that at the adjourned hearing, she would be in a position to tender a retainer agreement in respect of each of the remaining 13 matters.

(viii)      Subsequently on 30 January 2002, Assessor Roberts stated that at the pending adjourned hearing on 20 February 2002, there would be listed before him, not only the 112 matters abovementioned, but also the other demurrage claims which had reached the stage of being listed for pre-trial review, and further that he would be willing to consider entering judgment in favour of each of the named plaintiffs (ie the NRMA Insured) in every one of the demurrage claims listed before him, unless named the defendant involved could satisfy him that there was a live issue in dispute between the parties.

It was in relation to the foregoing material that the purpose of Mr Courtenay’s affidavit was submitted by the NRMA Parties to support the grant of a stay of proceedings in the Local Court made by AAMI’s legal representative in relation to each of the pending demurrage claims, the NRMA Parties contending in summary that the whole dispute between AAMI, NRMA and Ms Smith should be heard in the one place at the one time, and further that AAMI’s resort to the Federal Court proceedings represented, in effect, a contradiction of the course which AAMI had previously urged upon the Local Court.

39                  The NRMA Parties contended that AAMI would not be prejudiced by the existing and prospective Local Court proceedings continuing at the initiative of NRMA for the following reasons:

(i)         If the defence of absence of retainer propounded by the AAMI Insured at the instance of AAMI is to succeed in the context of subsisting Local Court proceedings, (each of which proceeding presumably has been stood over generally pending the outcome of the Federal Court proceedings), the declaratory and damages claims advanced by AAMI in this Court based on AAMI’s amended statement of claim would be rendered otiose or moot, and the AAMI Insured would be entitled to judgment and an order for costs in the Local Court, whereof “AAMI will reap the benefit”, and the Federal Court would probably upon that hypothesis regard the order for corrective advertising presently sought by AAMI in the present Federal Court proceedings as unnecessary.

(ii)        The AAMI Insured may seek to apply for a stay or dismissal of the Local Court proceedings individually on the ground of an alleged absence of retainer of Ms Smith, whether for the reasons pleaded in the amended statement of claim or otherwise; if that application to the Local Court was to succeed, AAMI would achieve what it seeks by the Federal Court proceedings, namely the termination of the demurrage claims and an order that Ms Smith pay the costs of each of the Local Court proceedings on the ground of absence of a retainer.

(iii)       The issue as to whether the NRMA Parties procured the retainer of any of the NRMA Insureds in the pending demurrage claims by misleading and deceptive or unconscionable conduct, thereby occasioning damage to AAMI, may therefore be fully litigated in the Local Court, which has the necessary procedures which would permit a full and fair determination of the issues raised by the present dispute between the parties; in that regard I was referred to s 13 of the Local Court (Civil Claims) Act 1970 (NSW) headed “Actions not to be split or divided”, to be read with Part 19 of the Local Courts (Civil Claims) Rules 1988 (NSW) dealing with third party procedures.

Want of parties

40                  The NRMA Parties submitted that the Federal Court proceedings are in any event defective for want of parties, namely the numerous NRMA Insured, for the following reasons:

(i)         AAMI has sought the finding of the Federal Court that the retainer by each of the NRMA Insured of Ms Smith is “invalid and ineffective”, at least in part, either upon the proper construction thereof or by reason of contraventions of the TP Act and/or breach of fiduciary duty and/or negligent representation on the part of NRMA and Ms Smith (amended statement of claim paras 56-58).

(ii)        AAMI has further sought “in substance” declarations by the Federal Court that each of the NRMA Insured was not and is not entitled to commence or prosecute his or her claims in the Local Court using the legal services of Ms Smith, and injunctions from the Federal Court restraining each of them from so doing; accordingly the rights of the NRMA Insured, as well as the other unnamed parties (the so-called “Otherwise Insured”) and their unnamed insurers, would be affected by the Federal Court’s findings, yet they have not been joined in the proceedings.

(iii)       Reliance was placed upon what was said by a Full Federal Court (Lockhart, von Doussa and Sackville JJ) in News Limited and Others v Australian Rugby Football League Limited and Others (1996) 64 FCR 410 at 523-527, where the following observation in particular appears at 524:

            “An order which directly affects a third person’s rights against or liabilities to a party should not be made unless the person is also joined as a party. If made, the order will be set aside.”

(iv)       The injunctions sought in paragraphs 1(a) and 5 of the AAMI application filed in the Federal Court seek the restraint of the further conduct of existing demurrage claims by Ms Smith in the name of the NRMA Insured as plaintiffs pending in any court (including the Local Court), and thus directly affect the so-called right of each NRMA Insured to continue with his or her proceedings in the Local Court utilising Ms Smith as his or her solicitor, and would thus prevent the recovery by each NRMA Insured of the amount of the demurrage outlays made in favour of Hertz; moreover the allegations made in para 41 and following of the amended statement of claim bear directly upon the legal effect of the retainer agreements to which each NRMA Insured is a party; therefore, so the contention of the NRMA Parties continued, unless and until each of the NRMA Insured was to be joined in the Federal Court proceedings, those proceedings should be regarded as vexatious or an abuse of the Court’s process.

(v)        Once each of the NRMA Insured would be joined in the Federal Court proceedings, then for the reasons already developed by the NRMA Parties, the case for the Federal Court to thereafter stay the Federal Court proceedings becomes manifest, since the Federal Court as a superior court of record should not be required to adjudicate upon a multiplicity of “tiny claims”, in circumstances where the Local Court is able and equipped to continue to undertake that function.

Representative proceedings and absence of interest in subject matter of claims

41                  Under this further head of attack, the NRMA Parties focused in particular on the orders the subject of paragraphs 2 and 5(f) of the AAMI application, and perhaps also paragraph 5(c) thereof, whereby AAMI was said by the NRMA Parties to be seeking relief which would in effect direct the NRMA Parties to repay, to each of the NRMA Insured in whose favour judgments had already been respectively entered against an AAMI Insured on a Local Court demurrage claim, that amount of the judgment sum already awarded against the AAMI Insured which may have been subsequently paid to NRMA, upon the basis that because NRMA was not subrogated to the rights of the NRMA Insured in relation to claims paid out by NRMA pursuant to the Courtesy Car Programme, the NRMA Insured were entitled to have those sums in their own right respectively. These orders were considered by NRMA to be perhaps based by AAMI on its unjust enrichment cause of action the subject of para 25 of the amended statement of claim. To cite the text of the NRMA submission, “[t]his is to invite the Court to make a final and binding adjudication with respect to private rights otherwise than at the suit of a person (in this case each NRMA Insured) claiming his or her rights were infringed, [though] none of the NRMA Insureds is even a party to the proceedings. The Court should not countenance such a claim, absent a properly constituted group or representative proceedings…”.

42                  The NRMA Parties further contended that AAMI did not have an interest in the subject matter of the claims in question, such as to warrant the relief which is sought by the AAMI application filed in the present proceedings. Reliance was placed by the NRMA Parties upon the principle of locus standi enunciated in Australian Conservation Foundation Incorporated v The Commonwealth (1978-1980) 146 CLR 493, where Aickin J, sitting as a single justice of the High Court, said as follows (at 511):

“In my view the authorities to which I have referred above establish that it is an essential requirement for locus standi that it must be related to the relief claimed. The ‘interest’ of a plaintiff in the subject matter of an action must be such as to warrant the grant of the relief claimed… in the statement of claim.”

The application of the locus standi principle in the circumstances of that litigation was upheld by the Full High Court (Gibbs, Stephen and Mason JJ, Murphy J dissenting), the report of which immediately followed the report of the first instance hearing. Gibbs J (as he then was) at 530 stated the applicable principle as follows:

“I would not deny that a person might have a special interest in the preservation of a particular environment. However, an interest, for present purposes, does not mean a mere intellectual or emotional concern. A person is not interested within the meaning of the rule, unless he is likely to gain some advantage, other than the satisfaction of righting a wrong, upholding a principle or winning a contest, if his action succeeds or to suffer some disadvantage, other than a sense of grievance or a debt for costs, if his action fails.”

That statement of the principle in Australian Conservation Foundation was applied in Bateman’s Bay Local Aboriginal Land Council and Another v The Aboriginal Community Benefit Fund Pty Limited and Another (1998) 194 CLR 247, in circumstances however where a different outcome was found to be required, because it was highly probable, if not restrained from commencing and conducting their funeral benefit funding activities, that the appellants would cause severe detriment to the respondents’ contributory life insurance business, that business constituting a sufficient special interest upon which to seek relief based upon conduct undertaken purportedly in exercise of statutory power. More recently in Re McBain; Ex parte Australian Catholic Bishops Conference [2002] HCA 16, Hayne J at [244] cited the locus standi principle, and in that context observed as follows:

“Thus, if relief is not available that will relate to the wrong which the applicant for relief alleges, there is no immediate right, duty or liability which will be established by the court’s determination. As Gleeson CJ and McHugh J pointed out in [Abebe v The Commonwealth of Australia (1999) 197 CLR 510 at 527], “If there is no legal remedy for a ‘wrong’, there can be no ‘matter’.”

43                  The NRMA Parties submitted that the only parties with any relevant interest in the “claim” of AAMI the subject of the present controversy are each of the NRMA Insureds, and also the NRMA Parties (ie NRMA and Smith), and that “[i]n truth, AAMI is an intermeddling busybody seeking to litigate an abstract question of law as to which there is no controversy to be quelled between the parties who have any real interest in the claim”, and that “[p]robably there is no ‘matter’ before the Court within s 22 of the Federal Court Act”. Moreover, it was contended by the NRMA Parties that the proceedings were not purportedly constituted, as the same should be, as a representative action under Part IVA of the Federal Court Act or under Order 6 rule 13 of the Federal Court Rules, and in any event, AAMI is not a member of the relevant group comprising the NRMA Insured persons, nor does it have the same interest as the NRMA Insured. The NRMA Parties further submitted in this context that it is vexatious and an abuse of process for AAMI to make rolled up allegations of misleading and/or unconscionable conduct and/or negligent misrepresentation and/or breach of fiduciary duty on the part of the NRMA Parties vis a vis hundreds of different NRMA Insureds, being conduct which must have occurred on different occasions in circumstances where the allegations would have to be separately considered in respect of each NRMA Insured individually, and that the abuse of process is compounded by the very generality of the declarations of wrongdoing and consequential orders for injunctive relief which are sought by AAMI from the NRMA Parties in the amended statement of claim presented to the Federal Court. Thus, so the NRMA parties’ submissions continued, the Federal Court should not countenance any such AAMI claims for resolution in the Federal Court, absent a properly constituted group or representative action under Part IVA of the Federal Court Act 1976 (Cth) or Order 6 rule 13 of the Federal Court Rules, or a separate pleading of the cause of action made in respect of each NRMA Insured, which of course would render the proceedings unworkable and uncontrollable in any event.

No reasonable cause of action in relation to the conduct of Ms Smith because no conduct relevantly in trade or commerce

44                  Whilst recognising the stringency of the threshold requirements of the General Steel test, which were subsequently restated in the following dicta of the High Court (Mason CJ, Deane and Dawson JJ) in Webster v Lampard (1993) 177 CLR 598 at 602-603 as follows:

“It is important to note at the outset that the issue before the learned Master on the application for summary judgment was not whether Mr and Mrs Webster would probably succeed in their action against Sergeant Lampard. It was whether the material before the Master demonstrated that that action should not be permitted to go to trial in the ordinary way because it was apparent it must fail. The power to order summary judgment must be exercised with ‘exceptional caution’ and ‘should never be exercised unless it is clear that there is no real question to be tried’… Nowhere is that need for exceptional caution more important than in a case where the ultimate outcome turns upon the resolution of some disputed issue or issues of fact.”

the NRMA Parties submitted that it was not reasonably arguable that the conduct undertaken and/or representations made by Ms Smith to AAMI and its lawyers, in the course of prosecuting the demurrage claims in the Local Court, and in obtaining the retainer agreements, occurred in trade and commerce within the requirements of the TP Act (and FT Act), for the reason that for a lawyer to conduct litigation in court on behalf of a client is not to engage in an activity having a trading or commercial character. Significance was subsequently assigned by the amended statement of claim to those representations in paras 23, 23A (in the context of the FT Act) and 24 thereof. It is unclear from the submissions of the NRMA Parties as to whether a similar application is made in relation to paras 30 to 34 of the amended statement of claim, and no submission appears to have been made in relation to para 35A thereof. I should add for completeness that I have referred to more recent authorities of this Court on the subject of strike-out applications in [14-15] above.

45                  In support of the submissions of the NRMA Parties which I have sought to summarise above, I was referred to the well known dicta of the High Court (Mason CJ, Deane, Dawson and Gaudron JJ) in Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594 at 603-604, which included the following:

“…Alternatively, the reference to conduct “in trade or commerce” in s 52 can be construed as referring only to conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character. So construed, to borrow and adapt words used by Dixon J in a different context in Bank of NSW v The Commonwealth, the words “in trade or commerce” refer to “the central conception” of trade or commerce and not to the “immense field of activities” in which corporations may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business.

…

Indeed, in the context of Pt V of the Act with its heading ‘Consumer Protection’, it is plain that s 52 was not intended to extend to all conduct, regardless of its nature, in which a corporation might engage in the course of, or for the purpose of, its overall trading or commercial business. Put differently, the section was not intended to impose, by a side-wind, an overlay of Commonwealth law upon every field of legislative control into which a corporation might stray for the purposes of, or in connection with, carrying on its trading or commercial activities. What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character…”

I would add that at 614, Toohey J said as follows:

“…The question is not whether the conduct engaged in was in connexion with trade or commerce or in relation to trade or commerce. It must have been in trade or commerce.”

I was thereafter referred to the subsequent decision of Santow J in Prestia v Aknar (1996) 40 NSWLR 165, especially at 187-191, where his Honour explained that the Trade Practices Act governs dealings, including professional activities, undertaken in the course of both commercial and consumer transactions, but nevertheless only those transactions which bear a trading or commercial nature or character (an application for special leave to appeal to the High Court from his Honour’s decision was dismissed). I was additionally referred by the NRMA Parties to Little v Law Institute of Victoria (1990) VR 257, where in the joint judgment of Kaye and Beach JJ at 273, and in the context of proceedings in tort for malicious abuse of civil proceedings, misfeasance in public office and civil conspiracy, the following was said upon an issue whether a statement made by a solicitor had been so made in trade and commerce for the purpose of constituting a representation under the FT Act (of Victoria):

“In our opinion, this aspect of the appellant’s claim is quite untenable. For the appellant to succeed he must first establish that the statement upon which he relies was a statement made in trade and commerce. The statement relied upon was made to Southwell J during the course of the proceedings brought by the second-named respondent against the appellant seeking to restrain the appellant from acting or practising as a solicitor. In our opinion, statements made during the course of litigation cannot be categorised as statements made in trade or commerce nor can they be categorised as representations.”

Ormiston J at 292 found to similar effect as follows:

“Notwithstanding the broad interpretation which has been properly afforded to the expression ‘in trade or commerce’, I agree that it cannot include the present circumstances, that is where the allegedly misleading and deceptive statements are made in the course of evidence, whether on affidavit or otherwise, for the purpose of persuading a judge of this or any other superior court to exercise his judicial functions in making an order in favour of a litigant.”

46                  In line with those authorities, the NRMA Parties submitted that to conduct litigation in court on behalf of a client is not to engage in an activity having a trading or commercial character, and moreover that the further conduct on their part involved in the obtaining of retainer agreements from the NRMA Insured for the purposes of pursuing the demurrage claims lacked the necessary or relevant trading or commercial character required to constitute conduct in trade or commerce for the purposes of the TP Act(and additionally of course the FT Act). The NRMA Parties sought further support from the reasons for judgment of von Doussa J in Chapman v Luminis Pty Ltd [2001] FCA 1106, where at [187-188], his Honour applied the distinction formulated by Santow J in Prestia in relation to representations conveyed by an anthropological report prepared for use in connection with an application to a Commonwealth Government Minister, albeit in the context of proceedings to recover losses sustained by the developers of a marina complex, following upon action undertaken by the then Federal Minister for Aboriginal and Torres Strait Islander Affairs said to have the effect of banning the construction of a bridge which would have commercially benefited that complex.

47                  In reliance upon those authorities, the NRMA Parties therefore submitted that communications between each of the NRMA Insured and Ms Smith concerning recovery proceedings commenced in the names of the NRMA Insured purportedly pursuant to NRMA’s rights of subrogation as a motor vehicle insurer, though calculated to facilitate the successful prosecution of the proceedings, and irrespective of those proceedings being in fact conducted by NRMA pursuant to its misconceived right of subrogation (ie misconceived in the light of the Court of Appeal’s decision in Anthanasopoulos), could not have been undertaken in trade and commerce, but had been undertaken instead in the course, and for the purpose, of the administration of justice. Those communications were not made by Ms Smith, the submission continued, in order to solicit retainers from any of the NRMA Insured, and were not made in order to derive fees, or to promote or enhance her professional services as a solicitor, NRMA alone being liable for payment of her fees (AAMI did not suggest, I should add in that context, that the individual NRMA Insured persons would be responsible for Ms Smith’s fees).

Generally as to pleadings and particulars

48                  The NRMA Parties presented incidental or ancillary submissions, in support of their strike-out or stay motion to the Court, as summarised below:

(i)         Para 2 of AAMI’s application to the Federal Court and para 25 of its amended statement of claim constituted the assertion of a cause of action for unjust enrichment which was not actionable at the instance of AAMI.

(ii)        The allegations in paras 16 and 18 of the amended statement of claim are meaningless and in any event devoid of material facts and particularity. Furthermore, it was said that there has not been pleaded the conduct complained of by AAMI, or when, where, and in what manner the representations were said to have been made by the NRMA Parties to the NRMA Insured, nor the basis for what the NRMA Parties described as the “crucial allegations”, being so characterised having regard to certain particulars contained in paras 6 to 10 of the letter of AAMI’s solicitors of 12 March 2002 addressed to the NRMA Parties’ solicitors.

(iii)       The representations pleaded in para 42 of the amended statement of claim are particularised in para 15.2 of AAMI’s solicitors’ letter of 12 March 2002, which reads as follows:

            “Each of the representations are to be implied from the forwarding of the Retainer Agreement to the named plaintiff for his or her signature and from the terms of the Retainer Agreement and from the following circumstances:

            (a)        the named plaintiff’s vehicle was insured by NRMA Insurance;

            (b)       that vehicle had been damaged in a collision caused by the negligence of the other driver;

            (c)        the named plaintiff had made a claim on NRMA Insurance under the insurance policy in respect of that damage and whilst that vehicle was being repaired, NRMA Insurance had arranged for a replacement vehicle to be made available to the named plaintiff pursuant to the NRMA Courtesy Car Scheme at the expense of NRMA Insurance and at no expense to the named plaintiff;

            (d)       Ms Smith was a solicitor carrying on practice as such and was the solicitor engaged by NRMA Insurance in relation to proceedings in which the cost to NRMA of the courtesy car was claimed;

            (e)        in some cases, Ms Smith had communicated with the named plaintiff, on NRMA Insurance’s instructions and for NRMA Insurance’s purposes, to obtain a statement from the named plaintiff for use in the proceedings;

            (f)        at the time of forwarding the Retainer Agreements, Ms Smith had already commenced proceedings in the name of the named plaintiff against the negligent driver to recover the cost of the replacement vehicle on the instructions of NRMA Insurance.”

Those representations, said to be implied, are asserted by the NRMA Parties to be contradicted by the express terms of each retainer agreement alleged to give rise to the implication, and are not reasonably maintainable (a pro forma retainer agreement is extracted in [11] above).

(iv)       Para 50 of the amended statement of claim contains allegations that are said by the NRMA Parties not to be arguable, but instead mischievous and frivolous.

Alternatively to strike-out, the Federal Court proceedings should be stayed pending the outcome of the claims in the Local Court

49                  The NRMA Parties submitted that if the AAMI application and amended statement of claim do not evince a vexatious process or abuse of process, or are otherwise to be vitiated, the Court should nevertheless order a temporary stay of the proceedings for the reason that the issues the subject of the Federal Court proceedings already arise in the context of the numerous proceedings of the individual NRMA Insured against the individual AAMI Insured currently being undertaken in the Local Court, quite apart from those intended to be, but not yet commenced, in the Local Court. I was referred to Sterling Pharmaceuticals Pty Ltd v The Boots Company (Australia) Pty Ltd (1992) 34 FCR 287 at 291, where Lockhart J listed the following considerations of relevance to the exercise of power to order a stay of proceedings, whether pursuant to Order 20 rule 2 (extracted in [14] above), or the implied power of a superior court to control its own proceedings:

“·        Which proceeding was commenced first.

  ·        Whether the termination of one proceeding is likely to have a material effect on the other.

  ·        The public interest.

  ·        The undesirability of two courts competing to see which of them determines common facts first.

  ·        Consideration of circumstances relating to witnesses.

  ·        Whether work done on pleadings, particulars, discovery, interrogatories and preparation might be wasted.

  ·        The undesirability of substantial waste of time and effort if it becomes a common practice to bring actions in two courts involving substantially the same issues.

  ·        How far advanced the proceedings are in each court.

  ·        The law should strive against permitting multiplicity of proceedings in relation to similar issues.

  ·        Generally balancing the advantages and disadvantages to each party.”

50                  In support of this submission, the NRMA Parties contended as follows:

(i)         The proceedings in this Court were commenced after the demurrage claims had been already brought in the Local Court; moreover in many instances, judgment has been entered in the Local Court, and in some instances already satisfied.

(ii)        The conclusion of the presently incomplete proceedings in the Local Court would have a material effect or impact upon many of the issues arising in the proceedings which have been commenced by AAMI in the Federal Court, by rendering the same otiose or moot, or potentially so. To the extent that the AAMI Insured were to succeed in the Local Court upon challenges to Ms Smith’s retainer, or upon defences of absence of a right of subrogation, or third party claims for damages, the extent of significance of resolution of the issues placed before this Court by the amended statement of claim would largely disappear. Conversely, if AAMI was to fail in this Court, the outstanding demurrage claims of the NRMA Insured in the Local Court would have remained outstanding and denied finalisation for a long time.

(iii)       So far as the public interest is concerned, notwithstanding that claims of contravention of the TP Act have been advanced by AAMI against the NRMA Parties, the reality is that the Federal Court proceedings involve disputes between substantial commercial insurers engaged in the pursuit of their respective private interests. It is not in the public interest concerning the administration of justice that the time and resources of the Federal Court be utilised in adjudicating upon issues of fact, or of mixed fact and law, in hundreds if not thousands of claims, each involving relatively miniscule amounts, which properly belong for individual resolution in the Local Court. The significance of that factor is said to be not lessened by what has been described by NRMA as AAMI’s device of seeking in the Federal Court unspecific declaratory and/or injunctive relief involving, for example, corrective advertising, when the issues about which such advertising is sought are the very issues which the Local Court would need to determine individually in the case of each one of the demurrage claims.

(iv)       Given that in the normal course, a multiplicity of discrete disputes having common elements should desirably be heard in the one forum, that place should be the Local Court, not only because of the very large number of parties individually involved at least potentially as witnesses in each instance, but also because of the relatively small amounts involved in each instance. It was unnecessary on true and complete analysis for AAMI to have commenced the proceedings in this Court, and it should not be rewarded for doing so. Particularly was that said by the NRMA Parties to be so, in the light of the extent to which the Local Court is already properly seized of the issues in the Local Court proceedings.

51                  The NRMA Parties characterised AAMI’s resort to the Federal Court proceedings, against the context of the Local Court proceedings being already in train, by analogy to what was observed criticallyby Ormrod J (with whom Cumming-Bruce J agreed), sitting in the Probate Division, in Lanitis v Lanitis (1970) 1 WLR 503 at 510-511 as follows:

“In my judgment, the magistrates in this class of case should be wary and on the lookout for this tactical manoeuvring which I have mentioned before; and they should be alert to see that they are not used, and do not permit themselves to be used in this fashion by parties filing petitions in the High Court at the last minute with the major object of frustrating the magistrates’ jurisdiction. For the reasons which I have given, in my judgment they failed to frustrate the magistrates’ jurisdiction, and in these cases the magistrates should (as I have already said) consider whether in public policy, the interests of justice and of both parties requires them to proceed with the case.”

The immediate context of that litigation were matrimonial disputes, and earlier in his judgment, Ormrod J had observed at 505 that “[i]t is my experience… that this sort of thing is going on, and that it is recognised as good tactics on the part of husbands who are summoned to appear before magistrates in matrimonial matters to file a petition at the last minute… with the prime object of blocking the hearing in the magistrate’s court…”, where that hearing relates to maintenance of deserted married women.

52                  The approach adopted in the context of the circumstances described in Lanitis was cited with approval in Boyd v Halstead; Ex parte Halstead [1985] 2 Qd R 249 at 252, a case referred to in turn with approval by Handley JA in Tiufino at 107, in the following terms:

“In Boyd v Halstead; Ex parte Halstead [1985] 2 Qd R 249, McPherson J declined to order a stay of ejectment proceedings in the Magistrates court at Cairns because proceedings for a declaration had been commenced by the tenant in the Supreme Court. His judgment contains a careful review of the relevant authorities here and in England. He concluded (at 252):

            “…it is, however, now quite clear that the existence of such concurrent proceedings in a superior and inferior court does not itself operate to “oust” or to deprive the inferior court of jurisdiction in a matter in which, apart from the pendency of the concurrent proceeding in the [superior] court, the inferior court would certainly have jurisdiction to determine the matter before it. That appears from the decision in Kaye v Kaye [1965] P 100 and in Lanitis v Lanitis [supra] where, after an extensive review of the authorities, Ormrod J held that the magistrates had, in the case where proceedings are pending in the divorce court, a discretion whether to proceed with the case before them or to refuse to hear it; and that they had to decide which course to take as a matter of public policy and general convenience, paying due regard to the interests of the applicant before them in having a speedy hearing of the application.” (emphasis added by the NRMA Parties)

53                  The NRMA Parties further submitted that while the Local Court may not have the breadth of the interlocutory powers of a superior court such as the Federal Court of Australia, the Local Court is nevertheless clothed with jurisdiction to determine finally the rights and obligations of the numerous parties involved in the present disputes. For example, as the NRMA Parties particularised, notices to produce requiring the production of documents may be given (Local Courts (Civil Claims) Rules 1988 (NSW) (Part 23 rr 9 and 10); the Local Court has the power to issue subpoenas (LCR Part 24), and can order the making of admissions (LCR Part 14 r 4); the Local Court takes evidence orally and by affidavit, which may involve cross examination (LCR Parts 23 and 25). Moreover an appeal lies to the Supreme Court for errors of law (section 69 of the Local Courts (Civil Claims) Act 1970 (NSW)). The submission in summary made by the NRMA Parties in this context is that in practical reality, AAMI would not be materially disadvantaged by being required to litigate in the Local Court the issues it would seek to agitate in the Federal Court, thereby avoiding the need for a multiplicity of proceedings upon the same or similar issues to be litigated in the Federal Court.

54                  The NRMA Parties next submitted that the Federal Court does not have jurisdiction to deal with actual disputes between the respectively insured parties involved in the demurrage claims, at least for the reason that they are not parties to the Federal Court proceedings. The NRMA Parties submitted however that the likelihood is that if the Federal Court proceedings are permitted to effectively put the Local Court proceedings “on hold”, which is what AAMI necessarily seeks to achieve, that situation may well remain in force for a substantial period of time, possibly many years. Moreover, as the NRMA Parties further pointed out, many of the demurrage claims have already been deferred for a not insubstantial period of time, pending the resolution of the four test cases involved in the Anthanasopoulos proceedings in the Supreme Court of New South Wales Court of Appeal.

55                  It was therefore contended in summary by the NRMA Parties that there is a substantial disadvantage to each of the NRMA Insured (and of course to NRMA itself) if the Local Court claims do not proceed to early determination because of any preference for the prior finalisation of the Federal Court proceedings. Each of the Local Court claims is for a sum of less than $1000. Part 13 rule 1 of the Local Court Rules provides that subss 39A(1) and (2) of the Local Court Act, which empower the award of interest on verdicts, do not apply to an action in which the amount claimed is less than $1000. The large number of existing and potential Local Court actions has already been estimated in [38] above.

56                  It was lastly pointed out on behalf of the NRMA Parties that so far as AAMI’s claim in this Court for injunctive relief is concerned, despite the allegation in the amended statement of claim as to continuing contraventions on the part of the NRMA Parties since November 2001, NRMA has offered to its motor vehicle policyholders and prospective motor vehicle policyholders in the meantime, upon payment of an additional premium, to insure in the traditional sense the cost of hiring a replacement vehicle in accordance with the terms of the NRMA insurance policies for motor vehicles in force since November 2001 (as to which see again the policy provisions extracted in [2] above). In other words, the vitiating element identified by the New South Wales Court of Appeal in Anthanasopoulos in relation to the Courtesy Car Programme has been removed, so far as NRMA’s ongoing insurance transactions are concerned.

Tendency to cause prejudice, embarrassment or delay

57                  The NRMA Parties lastly submitted that the amended statement of claim should be struck out for the reason that it tends to cause prejudice, embarrassment or delay, and because of shortcomings in any event in compliance with the fundamental rules of pleading designed to ensure procedural fairness and an efficient trial.

58                  The starting point for this head of submissions is the well known dicta of the High Courtin Banque Commerciale SA (in Liquidation) v Akhil Holdings Ltd (1989-1990) 169 CLR 279 at 286 (Mason CJ and Gaudron J) as follows:

“The function of pleadings is to state with sufficient clarity the case that must be met… In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision.”

59                  Allied to that principle is the requirement that the definition of the issues in a proceeding be pleaded with appropriate particularity, so that the parties may know in advance the case they have to meet; as was further said by the High Court in Dare v Pulham (1982) 148 CLR 658 at 664 (Murphy, Wilson, Brennan, Deane and Dawson JJ):

“Pleadings and particulars have a number of functions: they furnish a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it… they define the issues for decision in the litigation and thereby enable the relevance and admissibility of evidence to be determined at the trial… and they give a defendant an understanding of a plaintiff’s claim in aid of the defendant’s right to make a payment into court.”

60                  The NRMA Parties submitted that the amended statement of claim contains many instances of general conclusions or rolled up allegations, where material facts have not been pleaded. The NRMA contend, for example, that the material facts, upon the basis of which the representations alleged in each of paragraphs 16 and 42 are said to have been made to the NRMA Insureds, have not been pleaded, and accordingly it is not possible for the NRMA Parties to know when or by what means each of the alleged representations were made in relation to any of the NRMA Insured. In short, it was said by the NRMA Parties that there has been an omission to plead, in addition to the content of each alleged representation, the material facts relating to the making thereof in respect of each NRMA Insured person, being an omission which is not capable of being cured by the so-called “mantra of letters” written by the Solicitors for AAMI in response to requests for particulars to the effect that prior to discovery and interrogatories, AAMI has no other detail presently to provide. It is therefore said by the NRMA Parties that there exists a fundamental failure to comply with Order 11 rule 2(a) of the Federal Court Rules, as well as with Order 12 rule 2 thereof, and reference was made by the NRMA Insured to the unreported decision of Lindgren J in Allstate Life Insurance Co v ANZ Banking Group Limited (18 August 1995), where at [19] his Honour said as follows:

“It is obviously inappropriate and unfair that a respondent should be required to divine, from a study of an applicant’s witness statements and affidavits (not all of which may be relied upon at the hearing) which, out of possibly the numerous facts referred to in them, are the material ones relied on by an applicant as constituting such cause or causes of action or other ground or grounds of relief. Moreover, the “material facts” may not be formulated in the witness statements or affidavits in a manner conforming to the law’s definition of the necessary elements of a cause of action, and may even arise by way of inference from the primary facts which appear in those documents. It is necessary that the material facts be pleaded in a statement of claim so that the other party can understand the case made against him, and decide whether to apply for a striking out or summary dismissal or to plead to the statement of claim in a way which will appropriately define the issues for ultimate decision. It is an applicant which is obliged, in its pleading, to identify the material facts on which it relies.”

61                  It was thereafter contended by the NRMA that the material facts, upon the basis of which it is pleaded that the conduct of the NRMA Parties was undertaken “in trade or commerce” (for instance paras 4 to 20, 21A, 44 and 52 of the amended statement of claim), have not been disclosed by AAMI. Reference was also made by the NRMA Parties to Giraffe World Australia Pty Limited v Australian Competition and Consumer Commission (1999) ATPR 41-669 at 42,527, where Lindgren J said as follows (at 42,540):

“Even if there should be some respect in which the ACCC engages in trade or commerce, it is inadequate for Giraffe World simply to plead that the ACCC published the words in Schedules A and B “in trade or commerce”. It must identify the “material facts” constituting the particular trade or commerce in question and the connection (said to satisfy the word “in”) between the publishing of the words in Schedules A and B and that trade or commerce (see O 11 r 2).

If this cause of action is to be pressed, Giraffe World would also need to particularise the statements which it alleges are misleading and deceptive and the respects in which they are so. Finally, it would be necessary for Giraffe World to plead and particularise loss or damage caused by the allegedly misleading or deceptive conduct. The current pleading is wholly inadequate to put the ACCC on notice of the case which Giraffe World seeks to make.”

The allegations of AAMI as to the conduct of the NRMA Parties complained of having occurred in trade or commerce are to be found in paras 20, 21A, 21B, 33, 44 and 52 of the amended statement of claim.

62                  The “conduct” by way of misleading and deceptive representations alleged in paras 16 and 18 of the amended statement of claim is said by the NRMA Parties to be devoid of pleading of appropriate material facts. Appropriate particulars are claimed by the NRMA Parties not to have been provided in respect thereof, though repeatedly requested. There has been tendered in evidence a comprehensive bundle of correspondence in that regard. It was further submitted by the NRMA Parties that Order 12 rules 1 and 2 require those particulars to be included in the amended statement of claim, and not something to be haphazardly gleaned from the course of correspondence between the parties, even if provided thereby at all, which is not accepted. It is further asserted by the NRMA Parties that misleading and deceptive or unconscionable conduct should not be pleaded without full particulars of the components of that cause of action, and that it is not sufficient for AAMI to assert merely that it was not privy to relevant communications, and therefore cannot provide the same prior to discovery. It is additionally contended by the NRMA Parties that the Court should require AAMI to demonstrate that it has a reasonable basis for the pleaded allegations by filing an appropriate affidavit, or otherwise to furnish proper and adequate particulars, failing which the proceedings upon the causes of action in particular for misleading and deceptive and unconscionable conduct, should be stayed.

63                  It was further submitted by the NRMA Parties that the issues and matters raised in these proceedings by AAMI by its amended statement of claim include issues and matters previously raised by AAMI in the Local Court, or in any event which could have been raised by AAMI in the Local Court for some considerable time. The NRMA Parties therefore submitted that if AAMI is not presently in a position to properly articulate or particularise its case, AAMI should not be allowed to engage in a ‘fishing expedition’ in order to determine whether it has a viable case to go to trial in the Federal Court. In any event, so the submissions of the NRMA Parties continued, communications to and from the individual plaintiffs and their solicitor on the record for those plaintiffs (ie Ms Smith) in the demurrage claims, referable to the proceedings in the Local Court, albeit that she was appointed by the NRMA Parties, were privileged from production upon the grounds of legal professional privilege, the same as having been made for the dominant (if not sole) purpose of the Local Court proceedings. It was therefore unrealistic for AAMI to postulate, so the submission continued, merely that it would be in a position in due course to particularise its case in response to the legitimate requests of the NRMA Parties.

64                  The NRMA Parties have therefore submitted that the consequences of continuation of the Federal Court proceedings would be both to increase costs and delays, and to result in irreparable prejudice to the NRMA Insured as persons entitled to bring demurrage claims in the Local Court, and thus of course damage to NRMA, yet by way of contrast, putting an end to the Federal Court proceedings, pursuant to the present strike-out proceedings brought by the NRMA Parties, would not deny either AAMI or the AAMI Insured the opportunity to agitate in the Local Court the same issues of substance which they would seek to agitate in this Court. I observe that such reference to “irreparable prejudice to the NRMA Insured” must be in reality, I would imagine, to NRMA alone, since NRMA’s practice has been to meet Hertz’s invoices for vehicle hiring by NRMA Insured promptly, those invoices apparently having been “billed” to NRMA direct by prior arrangement.

Submissions made on behalf of AAMI in response to the submissions of the NRMA Parties for the strike out or stay of the Federal Court proceedings, and my conclusions upon the submissions of both parties

 

Observations upon AAMI’s causes of action

65                  AAMI advanced the threshold submission that the issues which have thus far been determined by the Local Court in the concluded demurrage claims had “nothing to do” with the conduct of NRMA and/or Ms Smith (ie the NRMA Parties) the subject of the causes of action pleaded by AAMI in the present Federal Court proceedings, those issues as so determined thus far by the Local Court being whether the named plaintiff (the emphasis of AAMI), being of course an NRMA Insured in each instance, was entitled to the sum claimed for demurrage in each of the Local Court proceedings, whereas the issues raised in the Federal Court proceedings in relation to the demurrage claims were said to be different, namely:

(i)         whether NRMA and Smith engaged in conduct in contravention of the TP Act (and correspondingly the FT Act) in and about the commencement and conduct of those demurrage claims in the Local Court;

(ii)        whether AAMI sustained or is likely to sustain loss or damage as a result of those contraventions.

Upon that basis, AAMI contended that no issue estoppel or res judicata arose in relation to its pursuit of the Federal Court proceedings, and that those proceedings do not relate to matters of fact or law which were fundamental or “legally indispensable” (to cite the expression used in Blair v Curran appearing in [21] above)to the Local Court’s resolution of the numerous demurrage claims brought by the NRMA Insured against the AAMI Insured.

66                  The causes of action pleaded by the amended statement of claim are not confined to misleading and deceptive conduct and unconscionable conduct, although those causes of action represent the dominant or principal themes of the pleading. The contraventions of the TP Act by way of misleading and deceptive conduct on the part of NRMA are pleaded principally in paras 16 to 20, 22, 23, 23A and 24 of the amended statement of claim, and by way of unconscionable conduct on the part of NRMA principally in paras 21A and 21B thereof, and thereafter also in paras 23A, 24, 35A and 36 thereof. Ms Smith’s involvement in that misleading and deceptive and unconscionable conduct, and the consequences thereof, are pleaded in paras 30 to 36 of the amended statement of claim. Allied to those principal causes of action are claims for unjust enrichment pleaded in para 25, breach of warranty by NRMA of Ms Smith’s authority pleaded in paras 26 to 29 of the amended statement of claim, and claims for false and untrue and misleading and inaccurate representations on the part of NRMA and Ms Smith concerning the retainer agreements entered into between Ms Smith and numerous of the NRMA Insured, pleaded in paras 41 to 45 and 55 of the amended statement of claim. Additional causes of action are pleaded in the sequence of breach of the duty of care on the part of the NRMA Parties said to be owed by the NRMA Parties to the NRMA Insured in and about informing the NRMA Insured of matters relevant to their decision to enter into the retainer agreements (paras 46 to 48), misleading and deceptive conduct on the part of the NRMA Parties relating to the formation of the retainer agreements in circumstances of conflict of the interests of the NRMA Parties with those of the NRMA Insured not disclosed to the NRMA Insured (paras 49 to 53), aiding and abetting by Ms Smith of the conduct of NRMA complained of (para 54), and invalidity of the retainer agreements in so far as the same purport to constitute ratification by the NRMA Insured of conduct of the NRMA Parties previously undertaken in the name of the NRMA Insured but without the authority of the NRMA Insured (paras 56 to 58). Claims of loss and damage in relation to all causes of action are pleaded in para 55. In so far as I have referred and will continue to refer to the TP Act in isolation, it may be assumed that reference to the corresponding provisions of the FT Act is also included.

67                  I would make the preliminary observation that although the NRMA Parties have not submitted that no causes of action are disclosed for misleading and deceptive conduct or unconscionable conduct in contravention of the TP Act, otherwise than on the basis that the conduct complained of did not occur in trade or commerce, there are certain unusual features apparent in the pleading of those causes of action, to which it is first appropriate to refer. The NRMA Parties have acknowledged the stringency of the principles governing summary strike-out applications which have been earlier summarised in [14] of these reasons.

68                  As to the causes of action for misleading and deceptive conduct pleaded principally in paras 16 to 20 and 22 to 24 of the amended statement of claim, whilst it has been established that s 52 of the TP Act applies across the spectrum of the public conduct of competing traders (for example as in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1981-1982) 149 CLR 191) to that of the conduct of private negotiations between individuals, the circumstances pleaded by AAMI to constitute misleading and deceptive conduct are not readily comparable to what has been the subject of reported authority. Although NRMA and AAMI are major competitors in the field of motor vehicle insurance, particularly in relation to vehicles used for private or domestic purposes (see in particular the respective market shares set out in [38(iii)] above), the principal causes of action propounded by AAMI do not purportedly bear upon AAMI’s capacity to gain new motor vehicle insurance business, or to retain existing motor vehicle business, in competition with NRMA (or with any other insurer for that matter), but upon AAMI’s exposure to indemnity in respect of its insured motor vehicle owners to the demurrage claims of other motor vehicle owners (ie motor vehicle owners insured by NRMA who participated in the Courtesy Car Programme, such as the four persons the subject of the Court of Appeal’s judgment in Anthanasopoulos), being an exposure which AAMI would seek to avoid indirectly by the causes of action propounded by the amended statement of claim. The conduct of NRMA complained of is different in nature to the circumstances of unfair competition between trade rivals, such as was involved for instance in Puxu, where the misleading and deceptive conduct was claimed to be causative or capable of being causative of damage by way of business opportunities lost to the offending competitor engaged in similar business activity. The conduct of NRMA complained of by AAMI is related to NRMA’s pursuit in the Local Court of proceedings in tort in the name of the NRMA Insured as plaintiffs against the AAMI Insured as defendants being conduct involving the obtaining from the NRMA Insured of retainer agreements in the form set out in [11] above.

69                  There is also a measure of novelty involved in AAMI’s principal causes of action for unconscionable conduct as pleaded in paras 21A, 21B, 24 and 35A of the amended statement of claim. The meaning of unconscionable conduct proscribed by s 51AA of Part IVA of the TP Act, upon which both paras 21A and 21B are founded (though para 21A is also said to be founded upon s 51AB) derives from the unwritten notion of unconscionability at common law and in equity, being a notion which presents substantial difficulty for AAMI to demonstrate from the circumstances raised by AAMI. In Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 461, Mason J (as he then was) described unconscionable conduct actionable at common law as follows:

“Relief on the ground of unconscionable conduct will be granted when unconscientious advantage is taken of an innocent party whose will is overborne so that it is not independent and voluntary, just as it will be granted when such advantage is taken of an innocent party who, though not deprived of an independent and voluntary will, is unable to make a worthwhile judgment as to which is in his best interest.”

I refer also to dictum of Deane J in Amadio at 474, in particular where his Honour referred to a “special disability” which “was sufficiently evident to the stronger party to make it prima facie unfair or ‘unconscientious’ that he procure, or accept, the weaker party’s assent to the impugned transaction in the circumstances in which he procured or accepted it”. More recently in Hurley v McDonald’s Australia Ltd (2000) 22 ATPR 41-741, a Full Federal Court (Heerey, Drummond and Emmett JJ) observed that it was undesirable to attempt an exhaustive definition of the statutory concept of “unconscionable conduct”, as used in ss 51AB (and 51AC) of the TP Act, and added as follows (at 40,585):

“For conduct to be regarded as unconscionable, serious misconduct or something clearly unfair or unreasonable must be demonstrated… Whatever ‘unconscionable’ means in sections 51AB and 51AC, the term carries the meaning given by the Shorter Oxford England Dictionary, namely, actions showing no regard for conscience, or that are irreconcilable with what is right or reasonable… The various synonyms used in relation to the term ‘unconscionable’ import a pejorative moral judgment.”

70                  As may be seen from my brief overview of the amended statement of claim undertaken in [66] above, there are a number of additional causes of action pleaded by AAMI relating to the conduct of the NRMA Parties, which are allied to the principal causes of action for misleading and deceptive conduct and unconscionable conduct. Those additional causes of action encounter their own respective conceptual difficulties, arising as they purport to do out of essentially the same or similar factual matrices to those of the two principal causes of action I have just outlined. The causes of action pleaded by AAMI, generally speaking, seek to address NRMA’s endeavours to redress the implications of NRMA’s lack of rights of subrogation, and Ms Smith’s consequential absence of retainers, relating to the demurrage claims of the NRMA Insured arising out of the Courtesy Car Programme, as found in Anthanasopoulos, and to circumvent AAMI’s omission to plead such lack of rights of subrogation as defences to those Local Court proceedings in relation to which judgments have been already entered in favour of NRMA Insured individually against AAMI Insured individually. The amended statement of claim is not readily comprehensible nor easy to summarise, largely because of so many additional or alternative causes of action which incorporate earlier paragraphs forming part of preceding causes of action.

Issue estoppel and res judicata

71                  As foreshadowed in [65] above, AAMI has contended that no issue estoppel or res judicata has crystallised in relation to any of the causes of action the subject of the amended statement of claim, for the reason that the issues raised thereby are different to those the subject of the Local Court proceedings, and do not relate to matters of fact or law which are fundamental or legally indispensable to the Local Court’s resolution of what I have described for convenience as the demurrage claims. For present purposes, issue estoppel and res judicata may be treated as the same, since res judicata also creates an estoppel, being constituted by “a judicial decision of a final nature upon a matter which [a court] has jurisdiction to decide” (re Jackson cited in [22] above). As already recorded, in virtually all of the cases thus far concluded in the Local Court by the entry of judgment for damages for demurrage, negligence on the part of the defendant (ie the AAMI Insured) in the care and control of his or her motor vehicle has been conceded or not denied, and the quantification of damage has been mutually agreed. However there was available to each of the AAMI Insured a ground of defence, which has not thus far apparently been pleaded in any of the finalised Local Court proceedings, namely the defence as to the absence of the right of subrogation vested in NRMA as insurer, being a defence required to be pleaded if the issue is to be raised by a defendant (as held in Woodside and subsequently in Anthanasopoulos). At least whether judgment entered in the Local Court in circumstances of a failure to plead that defence gives rise to issue estoppel or res judicata upon the issue which would have arisen, if the defence has been pleaded, presently falls for determination, though NRMA seemingly sought as well to raise the question in the wider context of pending as well as finalised Local Court proceedings.

72                  In support of the foregoing contention, AAMI advanced the following references to Tiufino in particular:

“31.     Dr Morrison did not argue that the parties in the two proceedings were different. The parties were nominally the same, but identity of parties is arguably to be decided as a matter of substance, rather than form : see K.R. Handley, ‘Note: Res Judicata in the European Court’ (2000) 116 Law Quarterly Review 191. As Barwick CJ said in Ramsay v Pigram (at 276) the parties in the two proceedings must litigate ‘in the same interest or capacity’. This Court may be taken to know that the defence of the Supreme Court action is being conducted by Miss Warland’s compulsory third-party insurer and that she has no financial interest in the result.

…

33.       …Res judicata estoppels must be mutual (Ramsay v Pigram (at 276, 282); Hunter v Chief Constable of the West Midlands Police [1982] AC 429 at 540-541) but there is no authority that a compulsory third-party insurer cannot take advantage of issue estoppels available to its insured and there is authority that it can: see Wall v Radford [1991] 2 All ER 741 at 750, Craddock’s Transport Ltd v Stuart [1970] NZLR 499 at 524, Talbot v Berkshire County Council [1994] QB 290, Bollen v Hickson [1981] Qd R 249and Webb v Darcy [1982] Qd R 356. This Court should follow these decisions in the absence of argument to the contrary.”

73                  Largely upon the basis of those authorities, AAMI submitted, in the context of the resort by the NRMA Parties to the doctrines of issue estoppel and res judicata, that (to adopt the precise words of the submission) “[t]he issues determined in the concluded Demurrage Claims had nothing to do with the conduct of NRMA and/or Ms Smith, which is the subject of these proceedings. The issue determined in those matters was whether the named plaintiff was entitled to the sum claimed. The issues raised in these proceedings in relation to the concluded Demurrage Claims are different, namely:

(a)        whether NRMA and Ms Smith engaged in conduct in contravention of the Trade Practices Act in and about the commencement and conduct of the Demurrage Claims;

(b)        whether AAMI has sustained or is likely to sustain loss or damage as a result of the contraventions.”

AAMI further submitted, again to adopt the precise words used, that “[t]here is no relevant issue estoppel because the issues are different. The matters being litigated here are not matters of fact or law which were fundamental or legally indispensable to the judicial decisions made in relation to the issues raised in the concluded Demurrage Claims…”.

74                  The circumstances that NRMA has not been the “named” plaintiff, and AAMI has not been the “named” defendant, in any of the Local Court proceedings would not necessarily render inapplicable the principles of issue estoppel or res judicata, given the status of NRMA and AAMI respectively as insurers of the vehicles of the named plaintiff and of the named defendant to those proceedings. An imputation of issue estoppel or res judicata in favour, or to the detriment, of an insured entity may equally apply in principle in relation to that entity’s insurer of the risk involved in a litigious dispute, as an incident to the operation of the doctrine of subrogation. The expression “privy”, where used in Blair v Curran in the passage extracted in [21], has been said to engage three classifications of persons or entities, namely those of “blood, of title and of interest” (Ramsay v Pigram (1967-1968) 118 CLR 271 at 279 per Barwick CJ), and accordingly, in the light of the inclusion of the classification of “interest”, there would normally be imputed, for the purpose of the doctrines of issue estoppel and res judicata, a privity of interest between an insurer and the insured in relation to the risk the subject of the policy of insurance, as demonstrated from what has been cited from Tiufino in [32] above). The circumstance that the Courtesy Car Programme did not create rights of subrogation would not in my opinion operate to deny privity to the relationship between the NRMA and the NRMA Insured, because of the degree of analogy between the Courtesy Car Programme and a contract of insurance. Moreover AAMI’s purported reliance upon Ramsay v Pigram is misplaced. In that case, the Government which owned a motor vehicle involved in a collision with another vehicle, and the driver of the Government owned vehicle, were held by the High Court not to be privies for the purposes of the doctrine of issue estoppel, because each owed a discrete duty of care to the driver of the privately owned vehicle. Barwick CJ observed in Ramsay at 279 that “[t]he basic requirement of a privy in interest is that the privy must claim under or through the person of whom he is said to be a privy”, being a requirement found not to have been satisfied in Ramsay. An insurer and the entity insured per se is on the other hand perhaps the most common example of a privy, and may be further contrasted with the principle that a surety is not a privy of either the principal creditor or the principal debtor (Lloyds Bank Plc v Independent Insurance Co Ltd [1999] 2 WLR 986), where the respective interests involved do not sufficiently coincide.

75                  As the reasons for judgment in Tiufino further indicated (at 111), the fact that causes of action are different does not exclude the imputation of an issue estoppel. As Barwick CJ also pointed out in Ramsay at 276, an issue is to be distinguished from the cause of action in relation to which the issue arises. The causes of action of AAMI for misleading and deceptive conduct on the part of NRMA, as pleaded by paras 16 to 20 of the amended statement of claim, are predicated wholly upon representations made by NRMA, its servants and agents including Ms Smith, first to the NRMA Insured, to the effect in substance that NRMA had rights of subrogation as an insurer in respect of the demurrage claims of the NRMA Insured (para 16), and secondly to AAMI and “to each of the Other Insurers”, to the effect in substance that Ms Smith was authorised by the NRMA Insured to act as solicitor for them as plaintiffs in the Local Court proceedings, and as a consequence to receive and disburse the Local Court judgment moneys at their direction (para 18). That second representation inherently embodies or reflects the assertion of AAMI that NRMA misrepresented the existence of any right of subrogation in relation to the causes of action of the NRMA Insured, and that as a consequence, the disposal of the judgment moneys was outside the scope of the retainer of Ms Smith as solicitor for the NRMA Insured. In the events which have thus far happened, namely the entry of a significant number of judgments in the Local Court in favour of the NRMA Insured against the AAMI Insured upon causes of action for damages for negligence, and in the light of the likely “privity” existing between NRMA and the NRMA Insured on the one hand and AAMI and the AAMI Insured on the other hand, there are not insignificant obstacles confronting AAMI’s broadly framed contention that “[t]here is no relevant estoppel because the issues are different”, and also its earlier contention set out in [65] above.

76                  The immediate context to the commencement of the present proceedings in the Federal Court were the findings by the Court of Appeal of the Supreme Court of New South Wales in Anthanasopoulos, on the one hand in favour of the four NRMA Insured as to their entitlement to judgment upon their demurrage claims based upon “The Greta Holme” tortious principle, and on the other hand in favour of the four AAMI Insured as to the absence of rights of subrogation held by NRMA in relation to those claims. The latter finding in favour of the AAMI Insured was pyrrhic in the context of those four claims, so far as AAMI and the AAMI Insured were concerned, because it was further found by the Court of Appeal that a defence as to the absence of rights of subrogation of an insurer is required to be pleaded, being a requirement which had not been implemented by the AAMI Insured in those four proceedings in the Local Court (see again the summary of the reasons for judgment in Anthanasopoulos, including the citation from Woodside, in [5-6] above).

77                  The issue therefore arises, in relation to NRMA’s contentions as to issue estoppel and res judicata, as to whether in each of the concluded proceedings in the Local Court where judgment has been entered in favour of the NRMA Insured, the very right put in suit in the Local Court proceedings has passed into judgment, so that it is merged and no longer has an independent existence, or as to whether for the purpose of some other claim or cause of action, the existence of a state of fact or law alleged or denied in the pending Local Court proceedings has been necessarily decided by the prior judgments, decrees or orders of the Local Court pronounced or given in the numerous cases thus far concluded (adopting thereby phraseologies used in the passages in Blair v Curran extracted in [21] above).

78                  Alternatively, in line with further dictum in Blair v Curran (extracted in [21] above),the issue may be framed as to whether NRMA may rightly contend that one matter which was legally indispensable to the resolution of each of the now concluded proceedings in the Local Court was the existence or otherwise of rights of subrogation in favour of NRMA in relation to the demurrage claims of each of the NRMA Insured respectively against the AAMI Insured, with the consequence that such matter, being “cardinal” to the claim or contention in the Local Court proceedings, cannot now be raised in the Federal Court proceedings, since to raise it is necessarily to assert that the former decisions of the Local Court were erroneous. Or as postulatedin Re Jackson (cited in [22] above), was the subject as to the existence of rights of subrogation necessary to be determined in order to found the decisions in each of the Local Court cases which have been thus far the subject of entry of judgment?

79                  In any examination of the ingredients of the multiplicity of causes of action pleaded by the amended statement of claim, for the purpose of determining whether AAMI is estopped or barred from pursuing the same upon grounds of issue estoppel or res judicata, the task is complicated by four factors. The first is that the NRMA Insured (as plaintiffs) and AAMI Insured (as defendants) have been the only parties to the Local Court proceedings, whereas the NRMA Parties (as respondents) and AAMI (as applicant) are the only parties to the present Federal Court proceedings; nevertheless for the purposes of estoppel doctrines, the NRMA Insured and the NRMA Parties are in my opinion sufficiently in the same interest as to be ‘privies’, and the AAMI Insured and AAMI are in any event in the same interest as “privies”. The second is the status of Ms Smith as NRMA’s solicitor on the record for the NRMA Insured in the Local Court proceedings. Though Ms Smith’s retainer had originally emanated solely from NRMA, and she may also be described in a general sense as an agent of NRMA, it is a moot point as to whether she may correctly be described as a privy of NRMA for the purpose of estoppel doctrines, at least in relation to the circumstances where she has been sued in her own right. The third is the unique principle of pleading to the effect that although NRMA has been found by the New South Wales Court of Appeal to have had no right of subrogation in relation to the causes of action brought in the Local Court in the name of the NRMA Insured as plaintiffs, the Court of Appeal has also determined in the same curial context that if the right of subrogation of an insurer of a claimant is to be put in issue in legal proceedings, a defence to that effect must be pleaded. That principle seemingly applies, even though by virtue of pleading any such defence, the insurer against whom that defence is for practical purposes directed does not, without fulfilment of that insurer’s obligations to the insured (Page v Scottish Insurance Corporation (1929) 140 Law Times (CA) 571 at 577 (2^nd column)), thereby become an actual party to the proceedings, in which case the issue as to the existence or otherwise of the right of subrogation remains to be resolved between the controversially insured plaintiff and the defendant who has raised the plea of absence of the right of subrogation. The circumstances in which an insurer may become a party to proceedings, and related complexities, are conveniently digested in Mitchell, Dr C.M., “Defences to an insurer’s subrogated action” (1996) Lloyd’s Maritime and Commercial Law Quarterly 343. Incidentally, a challenge on the part of the defendant to the retainer of the solicitor for the plaintiff may well follow in the context of any such defence being raised, since logically that solicitor would not be retained by the plaintiff on the record but by the plaintiff’s insurer. The fourth is the circumstance that although judgment has been entered in many of the Local Court proceedings, there are more numerous prospective Local Court proceedings, either awaiting a hearing or yet to be commenced, in relation to which it is presumably not too late for AAMI to cause the AAMI Insured to plead the absence of rights of subrogation in those proceedings, and also to challenge Ms Smith’s right of retainer, though in the latter instance, there is long established authority to say that any challenge to a retainer must be undertaken by a substantive application, and not merely by way of defence (Richmond v Branson (1914) 1 Ch 968 at 974). It is for that reason of course that NRMA has sought to counter AAMI’s prospective challenge to the retainer of Ms Smith in relation to pending Local Court proceedings by the mechanism of retainers obtained from the NRMA Insured directly in favour of Ms Smith, which also purport to confer rights somewhat similar to rights of subrogation. In that regard, it is well established that at least a right of retainer can be ratified retroactively (Adams v London Improved Motor Coach Builders Limited [1921] 1 KB 495 at 502).

80                  Added to the complications of those four matters are the multiplicity of causes of action pleaded by AAMI in the amended statement of claim, being causes of action boiling down to two broad categories, the first being conduct proscribed by legislation (ie the TP Act and the corresponding provisions of the FT Act), and the second being causes of action in tort or for equitable relief. The remedies sought in AAMI’s application, earlier extracted in full at [9] of these reasons, are partly declaratory and partly injunctive in nature, and in addition there has been sought by that application orders to account and damages. AAMI appears to have structured the amended statement of claim with at least two forensic objectives in mind. The first is to endeavour to obviate the principle enunciated in Anthanasopoulos, in line with that previously expressed in Woodside, that any challenge to an insurer’s right of subrogation must be undertaken by way of defence filed in the action brought in the name of the purported insured as plaintiff (in that regard, although judgment has been entered in the Local Court in relation to significantly lesser numbers of claims than NRMA has since filed and still proposes to file, AAMI would wish to claw back the moneys already outlaid in satisfaction of the Local Court judgments which have been already entered). The second is to neutralise any commercial advantage to NRMA in pursuing all outstanding or remaining claims originating from its Courtesy Car Programme by obtaining authorities and ratifications from the NRMA Insured, whose Local Court proceedings have not been finalised by entry of judgment, in circumstances where NRMA has nevertheless fulfilled already its obligations to the NRMA Insured under the Courtesy Car Programme.

81                  There are difficulties of a conceptual kind, apart from estoppel, in the path of AAMI ultimately making good its principal causes of action for misleading and deceptive conduct and unconscionable conduct on the part of NRMA. For instance, the alleged deception by NRMA the subject of paras 16, 17, 20, 22, 23A and 24 of the amended statement of claim is said to have been not of AAMI, or of the AAMI Insured, but of the NRMA Insured, and as a consequence, the reliance pleaded by para 22 is attributed not to AAMI but to the NRMA Insured. Moreover as I have earlier pointed out in [68] above, the present proceedings are not comparable to the usual dispute between business rivals directed to the gaining of new business by one at the expense of the other, even though the origin of the present disputes was doubtless NRMA’s promotion of the Courtesy Car Programme in order to gain or retain motor vehicle insurance business, being a business field in which of course NRMA and AAMI compete. Those difficulties do not directly arise for consideration in the present strike-out/stay application, except as to the issue whether the conduct complained of occurred in trade and commerce (post).

82                  The first question therefore presently arising for consideration is whether, in the case of the Local Court proceedings which have already crystallised in the entry of judgments in favour of the NRMA Insured, an issue estoppel or res judicata has arisen, such as to prevent AAMI from pursuing the two principal causes of action for misleading and deceptive conduct pleaded in paras 16 to 20, 22, 23, 23A and 24 of the amended statement of claim. Those two causes of action need not be separately considered for present purposes. Although in the case of the first, it is pleaded by para 22 that the NRMA Insured were misled into assisting NRMA’s pursuit of the demurrage proceedings, whereas in the case of the second, it is pleaded by para 23 that AAMI was misled into retaining its own solicitors and paying the moneys the subject of the Local Court judgments to Ms Smith, the basis or foundation of each cause of action propounded by AAMI is NRMA’s absence of rights of subrogation emanating from the NRMA Insured, as found by the New South Wales Court of Appeal in Anthanasopoulos.

83                  The thrust of NRMA’s case in response is that the entry of judgments in the Local Court in favour of the NRMA Insured, to the extent which has thus far occurred, disposed “once and for all” (to adopt one description earlier cited from Blair v Curran) of the issue whether NRMA, as a privy of the NRMA Insured, had a right of subrogation in respect of the causes of action for demurrage which have merged or crystallised in those judgments. That result is said by NRMA to follow because it was incumbent upon AAMI to have caused the AAMI Insured (being AAMI’s privies) to have raised in those Local Court proceedings now concluded by judgment a defence of absence of that right of subrogation, but since AAMI did not do so, the consequence must be that such issue was disposed of in favour of each NRMA Insured by default on AAMI’s part of pleading that defence, in accordance with Woodside and Anthanasopoulos. AAMI is therefore said to be faced with an issue estoppel or res judicata (sometimes referred to as res judicata estoppel), more precisely in my view the latter if a choice is required to be made, from raising in the Federal Court proceedings the issue as to NRMA’s absence of entitlement to the right of subrogation, in so far as those proceedings purport to extend to the concluded Local Court proceedings.

84                  Subject to the question as to whether an issue estoppel or res judicata estoppel can be imputed in circumstances where judgment has been entered in favour of a plaintiff by reason of a defendant’s failure to plead a particular defence which would have answered the plaintiff’s cause of action, I think that the contention of NRMA is correct. If NRMA had held rights of subrogation in consequence of payments made pursuant to the Courtesy Car Programme, the representations pleaded in pars 16 and 18 of the amended statement of claim would have been true, and not misleading or deceptive.

85                  Other phraseologies earlier cited from Blair v Curran provide a degree of support for the position tentatively reached in the previous paragraph. Thus it may be postulated that the entry of each Local Court judgment to date in favour of an NRMA Insured as plaintiff against an AAMI Insured as defendant “necessarily established, as the legal foundation or justification of its conclusion” that NRMA held rights of subrogation effective in law, to the extent of each of the claims which crystallised in those judgments, and that the presence or otherwise of a right of subrogation vested relevantly in NRMA was a matter “cardinal… to the claim or contention” of the NRMA Insured the subject of each of those finalised Local Court proceedings, and that therefore to raise in the Federal Court proceedings causes of action based upon the absence of NRMA’s right of subrogation “is necessarily to assert that the former [decisions were] erroneous”. Moreover the references in the amended statement of claim to NRMA’s “servants and agents including Smith” is in my opinion to privies of NRMA for the purposes of estoppel doctrines.

86                  It is next appropriate that I address the remaining causes of action the subject of the amended statement of claim, following upon those for misleading and deceptive conduct primarily pleaded in paras 16 to 20, 22, 23, 23A and 24 of the amended statement of claim, in order to determine whether the same, or some different result, should follow from that which I have reached in relation to the two primary causes of action.

87                  The two counts of unconscionable conduct (pleaded in paras 21A, 21B, 23A and 24 of the amended statement of claim) may be addressed together, given their similarity of expression, except for the omission of reference in the second count to s 51AB of the TP Act. I have referred in [69] above to authority on the notion of unconscionable conduct at common law, and what has been said by a Full Federal Court in Hurley by way of supplement or qualification to that meaning created by ss 51AB and 51AC, though neither para 21A nor para 21B of the amended statement of claim is purportedly extended in scope to s 51AC in any event. Paras 21A and 21B are respectively framed partly on he basis of the representations of NRMA which I have already addressed, namely those the subject of the preceding paras 16 and 18 respectively concerning misleading and deceptive conduct, and partly on the basis of the obtaining by the NRMA Parties of the retainer agreements from the NRMA Insured (taking the form set out in [11] above) in the circumstances set out in paras 41 to 58 of the amended statement of claim. Entry into the retainer agreements purportedly created the relationship of solicitor and client between Ms Smith and each of the NRMA Insured, and conferred comprehensive authority upon her having consequences akin to the creation of rights of subrogation, namely authority to pay Local Court judgment proceeds to NRMA. Prior to those retainer agreements being procured, the only existing solicitor and client relationship relevantly was that formed between NRMA and Ms Smith, which was predicated implicitly upon the basis of NRMA’s rights of subrogation erroneously thought to be held by NRMA derivatively from the NRMA Insured.

88                  In my opinion, both of those causes of action for unconscionable conduct are similarly potentially vulnerable to an application of the principles of issue estoppel and res judicata, though again to the potential extent only of the subject matter of the Local Court proceedings which have crystallised by entry of judgment in favour of the NRMA Insured against the AAMI Insured, predicated as those causes of action for unconscionable conduct are in part upon the representations the subject of paras 16 and 18 of the amended statement of claim which I have just addressed. The circumstance that the unconscionable conduct the subject of paras 21A and 21B is said to relate to the representations, not just the subject of the preceding causes of action, but also to the conduct the subject of paras 41 to 58 of the amended statement of claim (being conduct concerning the obtaining by the NRMA Parties of the retainer agreements from the NRMA Insured), does not require any different conclusion. The implications relevantly of paras 41 to 58 will in any event be shortly addressed.

89                  The causes of action the subject of paras 25 to 40 the amended statement of claim are vulnerable to a similar extent and for similar reasons as those of the causes of action for misleading and deceptive conduct and unconscionable conduct which I have already identified. Thus the cause of action for unjust enrichment contained in para 25 is implicitly predicated upon the circumstances the subject of the immediately preceding causes of action for unconscionable conduct, though the reason why in any event, the NRMA Insured should be entitled to restitionary relief presently escapes me (see also in that regard para 2 of the application extracted in [9] above). Moreover NRMA has been scarcely unjustly enriched in circumstances where NRMA, and not of course the NRMA Insured, had already paid the car rentals to Hertz in response to the claims of the NRMA Insured. On the contrary, if AAMI was to pay the car rental damages direct to the NRMA Insured, in circumstances where NRMA had already paid out the same to Hertz, the NRMA Insured would be vulnerable to NRMA upon the cause of action for moneys had and received. Obviously the NRMA Insured could not be entitled to duplicate demurrage pay-outs.

90                  Moreover the circumstances said to give rise to the cause of action for breach of warranty contained in paras 26 to 29 of the amended statement of claim are essentially similar to those the subject of the causes of actions for misleading and deceptive conduct, albeit omitting of course allegations as to conduct occurring relevantly in trade and commerce. Thereafter in paras 30 to 40 of the amended statement of claim, AAMI has framed various causes of action against Ms Smith as second respondent to the Federal Court proceedings. Until that stage of the pleading, the references to Ms Smith had been confined to her conduct as a “servant or agent” of NRMA. Those paras 30 to 40 relate to Ms Smith’s involvement in the conduct the subject of the preceding causes of action, in particular for misleading and deceptive conduct and unconscionable conduct, pleaded against NRMA, being an involvement allegedly by way of aiding, abetting etc NRMA, or being conduct as a principal in her own right, in the circumstances of the misleading and deceptive representations identified principally in the preceding paras 16 and 18, and additionally in the circumstances of unconscionable conduct identified principally in the preceding paras 21A and 21B. In relation therefore to each of the causes pleaded against Ms Smith personally, there is involved the element of NRMA’s absence of rights of subrogation in relation to the causes of action the subject of the proceedings brought by the NRMA Insured in the Local Court against the AAMI Insured, being an absence which, as has been earlier indicated, should not in principle prevail to the extent that judgments have been already entered in favour of the NRMA Insured against the AAMI Insured in the Local Court, and moreover should not henceforth prevail in relation to presently uncompleted or future Local Court proceedings, at least in the absence of the right of subrogation being specifically pleaded as a defence.

91                  The remaining paras 41 to 58 of the amended statement of claim, appearing therein under the heading “Claim relating to Retainer Agreements”, have already been referred to in the context of the causes of action for unconscionable conduct, in relation to which those paras 41 to 58 have been incorporated as a component or aspect thereof (see again the text of paras 21A and 21B). Those paragraphs comprise the majority of the additions made by way of amendments to the original statement of claim filed by AAMI. Paras 41 to 58 contain numerous matters which, by para 52, are said to constitute misleading and deceptive conduct in trade or commerce in contravention of the TP Act. Within the scope of paras 41 to 58 are contained several causes of action, each of which is apparently intended to form the basis for the claim for loss and damage, stipulated in para 55 to be equal to the Local Court judgment sums (including costs) which AAMI has paid or is liable to pay to the NRMA Insured, and the legal costs which AAMI has paid or is liable to pay to its own lawyers. Thus para 44 reflects a discrete pleading, or the foundation of a discrete claim, of misleading and deceptive conduct, para 48 a discrete pleading of an economic tort, and para 49 a discrete pleading of breach of fiduciary duty. Para 50 introduces further causes of action into the amended statement of claim by pleading some twenty circumstances appertaining to the obtaining by the NRMA Parties from the NRMA Insured of the retainer agreements. Many of such circumstances are asserted by para 51 to have been withheld by the NRMA Parties from disclosure to the NRMA Insured. The significance assigned to those circumstances is pleaded by paras 52, 53 and 55 to constitute further misleading and deceptive conduct, on the faith of which the NRMA Insured entered into retainer agreements in favour of Ms Smith, thereby allegedly occasioning loss and damage to AAMI, being loss and damage which presumably flowed from the Local Court judgments entered in default of any defence by AAMI as to absence of the right of subrogation. Ms Smith is alternatively pleaded to have been involved in the conduct of the NRMA complained of in paras 42 and 52, being conduct proscribed by provisions of the TP Act. Alternatively or further, it is pleaded by paras 56 to 58 that the retainer agreements are invalid and ineffective, to the extent that the retainer agreements purported to ratify unauthorised conduct of the NRMA Parties elsewhere pleaded, whereof the NRMA Insured are said not to have knowledge. In relation to all causes of action for misleading and deceptive conduct framed under the TP Act, there are repeated identical causes of action framed under the FT Act. In the result, material to each of the plethora of causes of action pleaded, directly or indirectly, are the representations allegedly made by and on behalf of the NRMA Parties to the NRMA Insured that NRMA is entitled to exercise rights of subrogation appertaining to the causes of action of NRMA for the recovery of payments made by NRMA to Hertz for car rentals for the benefit of course of the NRMA Insured. As I have mentioned earlier, the retainer agreements stipulate for the provision by the NRMA Insured to NRMA per medium of Ms Smith of rights or entitlements similar in effect or operation (see clauses 4 and 5 thereof in particular in [11] above).

92                  By way of summary therefore of my findings to date in relation to the present segment of my reasons for judgment relating to issue estoppel and/or res judicata, there is an arguable case in favour of the NRMA Parties for a prevailing issue estoppel or res judicata, in relation to the causes of action pleaded by the amended statement of claim, to the extent of those circumstances said to be productive of alleged loss and damage to AAMI at the instance of each of the NRMA Parties, and being referrable to those Local Court proceedings which have resulted already in the entry of judgment in the Local Court. As I have already foreshadowed however, in the light of the dicta in Blair v Curran and Re Jackson to which I have referred, I am hesitant to hold that the doctrines of issue estoppel and/or res judicata apply to circumstances where an issue, potentially material to the viability of a cause of action raised by way of a defence in the preceding litigation, but not otherwise, has not been in fact raised by the defendant by way of defence, prior to the conclusion of the earlier proceedings. It therefore becomes necessary to address the implications of the related, but more widely framed, doctrines of Anshun estoppel, and abuse of process generally to the circumstances pleaded by the amended statement of claim.

Anshun estoppel and/or abuse of process

93                       As already indicated in [30] above, the principles of Anshun estoppel have been described in Bryant as allied to, but not co-existence with, the principles of issue estoppel and res judicata. Moreover as appears from the reasons for judgment in Anshun, that estoppel may apply where although the circumstances do not give rise to an issue estoppel, “their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has been already disposed of by earlier proceedings”. Or as formulated by the High Court in Anshun at 602, “…it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff’s claim, and its subject matter, it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding”. In Walton, another description of the principle was “to litigate anew a case which has already been disposed of by earlier proceedings”. Those judicial pronouncements may be thought to advance the principles relating to issue estoppel and res judicata effectively into the realm of the related concept of abuse of process, and in any event to provide the remedy sought by the NRMA Parties which the authorities relating to issue estoppel and res judicata, do not sufficiently yield. AAMI has not submitted any reason by way of justification for the absence of a defence in each of the Local Court proceedings thus far resolved to the effect that NRMA did not have rights of subrogation in relation to the demurrage claims arising from the Courtesy Car Programme, except to the extent set out below.

94                       AAMI has submitted, in the context of estoppel, and in particular Anshun estoppel, that it would have been inappropriate for the AAMI Insured to have raised, and to hereafter raise, in the Local Court, the issues propounded in the Federal Court proceedings by the amended statement of claim, for the following reasons:

(i)         Certain of the relief now sought against the NRMA Parties was not available in the Local Court, namely injunctive relief and corrective advertising.

(ii)        The causes of action for misleading and deceptive conduct and unconscionable conduct, pleaded by AAMI’s amended statement of claim, were not complete prior to the filing thereof in the Federal Court, in the sense that some of the conduct complained of had not earlier arisen; in particular, it was said that the NRMA Parties did not procure the retainer agreements in favour of Ms Smith from the NRMA Insured the subject of the amended statement of claim until after the decision of the Court of Appeal in Anthanasopoulos.

(iii)       It would have been necessary for each of the plaintiffs in the Local Court proceedings (ie the NRMA Insured) to join AAMI to those proceedings as a defendant, and for AAMI to have thereafter joined NRMA and Ms Smith as third parties. For AAMI to have taken that course would have been obviously inappropriate, since the issues raised in the Federal Court proceedings never “properly belonged to the subject of [the Local Court] litigation”, the issues arising in the Local Court litigation being whether the NRMA Insured in each case had sustained a recoverable loss (ie pursuant to his or her “The Greta Holme” cause of action or so-called demurrage claim), whereas the principal issues raised in the Federal Court proceedings are whether NRMA and/or Smith engaged in misleading or deceptive conduct and unconscionable conduct, in contravention of the TP Act, being conduct which has caused or is likely to cause loss to AAMI.

(iv)       AAMI has not raised in the Federal Court proceedings an issue as to the effective subrogation or otherwise in favour of NRMA of the rights of recovery of the NRMA Insured against the AAMI Insured in relation to the tortious conduct of the AAMI Insured, “except to the extent that the question of a right of subrogation may arise when considering the [TP Act] claims, and AAMI is not challenging subrogation in the sense that AAMI [does not challenge] the validity of the judgments obtained in the concluded [d]emurrage [c]laims”.

(v)        There was no possibility of “conflicting judgments” in the sense envisaged in Anshun, because AAMI accepted the validity of the Local Court judgments in favour of the respective NRMA Insured in relation to the concluded demurrage claims, and does not seek to set those judgments aside; instead, not having been joined as a party to the Local Court proceedings, AAMI seeks relief against NRMA and Smith, who were also not parties to those proceedings, on causes of action which are “quite distinct”.

95                  Moreover as to the principle of abuse of process, to the extent that it contrasts with Anshun estoppel, AAMI submitted that there is no abuse of process involved on its part by way of “relitigating” issues raised by the amended statement of claim, in accordance with the principles enunciated in Haines (see [31] above), for the following reasons:

(i)         the issues sought to be litigated in the Federal Court proceedings were not litigated in the Local Court, nor in the New South Wales Court of Appeal in Anthanasopoulos;

(ii)        accordingly, unlike the circumstances involved in Haines, AAMI is not attempting to relitigate in the Federal Court against a new party an issue which AAMI has already lost against another party.

What AAMI contends that it is now seeking to do is to litigate the implications of the absence of subrogation in the Federal Court, in the broader context of NRMA’s endeavours to circumvent the consequences of that absence, in the context of the findings of the New South Wales Court of Appeal in Anthanasopoulos.

96                  I do not think that AAMI can avoid or circumvent the consequences of the non-existence of defences having been raised by the AAMI Insured in the Local Court as to the absence of the right of subrogation of NRMA, to the extent that judgments have been entered in the Local Court in favour of the NRMA Insured against the AAMI Insured. The submissions of AAMI which I have just recorded do not come to grips with the implications of that critical circumstance. Those consequences constitute the imputation of Anshun estoppel in favour of NRMA arising out of the privity of NRMA’s relationship with the NRMA Insured, in conformity with the authorities to which I have earlier referred. The absence of rights of subrogation was an important issue open to be raised by the AAMI Insured in the now concluded Local Court proceedings, and the opportunity was available to AAMI to cause that defence to be raised by the AAMI Insured in those proceedings. My identification of the issues raised by the amended statement of claim demonstrates in my opinion that an essential element in each of the causes of action, the subject of the amended statement of claim was that of absence of rights of subrogation held by NRMA. Whether the retainer agreements which have been obtained by NRMA from the NRMA Insured since Anthanasopoulos will answer any future challenges in the Local Court advanced on behalf of the AAMI Insured, particularly in the light of clauses 4 and 5 thereof, will be matters to be resolved by the Local Court at the hearing of each proceeding yet to be resolved in the Local Court.

97                  It follows that the analysis of the amended statement of claim, and the causes of action the subject thereof, which I have earlier examined in the foregoing segment as to issue estoppel and res judicata, though not attracting the application of those doctrines, directly applies in the context of the doctrine of Anshun estoppel, so as to estop AAMI from pursuing each and every one of those causes of action in the Federal Court to the extent that the same would purportedly apply or relate to the subject matter of proceedings already finalised by entry of judgment in the Local Court. I cannot accept that any of the matters advanced by AAMI, as summarised in [94-95] above, gainsay the effective application of Anshun estoppel to that limited extent. The same result may be alternatively or additionally founded upon the related doctrine of abuse of process, to which reference appears in the passage earlier cited from Haines; see also in that regard Rippon at 204.

98                  That is not to conclude of course that those matters so advanced by AAMI and recorded above are not potentially material to the numerous unresolved claims being still advanced or proposed to be advanced by the NRMA Insured in the Local Court. So much depends upon the resolution of the remaining grounds of attack advanced by NRMA in relation to the amended statement of claim which I will next address. It suffices to point out, in relation to each of the propositions advanced by AAMI as set out in [94] above, that even if valid, the same can have no bearing in relation to the operation of Anshun estoppel, to the limited extent which I have determined. That is the disadvantage which I think that AAMI must inevitably sustain for not having raised the defence of absence of the right of subrogation in the Local Court proceedings since concluded by judgment. Even then, as to those propositions advanced by AAMI, it may be said that the same tend to equate remedies with issues, or to confuse causes of action with the substance of the issues in relation to which causes of action may be framed.

Vexatious nature of the proceedings

99                  The thrust of this ground of complaint on the part of NRMA has been foreshadowed in [20] above. The statistical information to which the NRMA Parties point in [38] above has relevance to the question whether the numerous proposed and pending proceedings in the Local Court can be effectively overtaken by the single event of the proceedings initiated by AAMI’s opening of what may be described as a “second front” in the Federal Court. There is already jurisdiction vested in the Local Court to determine causes of action for misleading and deceptive conduct and unconscionable conduct conferred by subs 86(2) of the TP Act (and by subs 63(2) of the FT Act). Moreover by virtue of s 12 of the Local Courts (Civil Claims) Act 1970 (NSW), the Local Court has jurisdiction up to a statutory limit of $40,000 for any one action, which is more than adequate for each demurrage claim in contemplation. AAMI placed substantial emphasis on the absence of jurisdiction in the Local Court to grant injunctive relief, including in particular mandatory injunctions for corrective advertising of the kind sought by para 5 of AAMI’s application filed in the Federal Court. That submission is predicated implicitly upon the assumption that if AAMI establishes to the satisfaction of the Federal Court the existence of misleading and deceptive conduct etc in at least some instances, there would be constituted a sufficient basis for inference that the same conduct would have occurred in literally thousands of instances. I strongly doubt that inferences can be drawn from conduct surrounding or involved in a relatively small number of instances, such as to prevail in thousands of instances. The present proceedings do not to my understanding relate to representations made in writing, but oral or even representations implied from conduct. Alternatively, it may be that AAMI might seek to rely on the objective circumstances set out in its letter of 12 March 2002, which has been extracted in [48(iii)] above, for the purpose of establishing representations on the part of the NRMA Parties solely by implication, and thereby undertake the formidable risk that those alleged implied representations are contradicted in essence by the terms of the retainer agreements reproduced in [11] above.

100               AAMI’s further response to the attack of the NRMA Parties upon this vexation ground was stated in its written submissions which merit reproduction for convenience as follows:

“whether successful or unsuccessful in the Local Court proceedings, AAMI is entitled to pursue in the Federal Court proceedings its claim for damages caused by the misleading and deceptive or unconscionable conduct alleged on the part of NRMA and Smith. For example, even if successful on the issue of subrogation in the Local Court proceedings, AAMI is still entitled to make its claim for misleading and deceptive or unconscionable conduct. Damages in respect of such a claim would include legal costs and disbursements which would greatly exceed those recoverable in the Small Claims Division of the Local Court.

If the Local Court proceedings were resolved against AAMI on the issue of a right of subrogation, no doubt NRMA and Smith would argue in the Federal Court proceedings that there was an Anshun estoppel in relation to the other matters AAMI wishes to prosecute, because AAMI should have joined NRMA and Smith as third parties in the Local Court.”

101               That submission may be predicated implicitly upon the intention of AAMI to establish, in the context of the Federal Court proceedings, some instances of misleading and deceptive and/or unconscionable conduct etc, from which the inference might conceivably be drawn that such conduct would be likely to have occurred in the remaining thousands of cases, or at least the majority thereof, or else to establish the existence of such conduct by the implications set out in the abovementioned letter of particulars of 12 March 2002, or to rely on a combination of a small number of NRMA Insured as witnesses, in combination with the implications said to arise from the circumstances set out in that letter of particulars. The complaints which AAMI advance do not permit some form of sampling of testimonies, in manner akin to establishing manufactured product lability, because AAMI’s case is not that the retainer agreements embody misleading or deceptive material, but that the same have been procured by representations made by or on behalf of the NRMA Parties. The Local Court is better placed to resolve those kind of issues which AAMI would seek to pursue, given that the same would appear to need to be resolved in a multitude of individual instances, and not simply by some form of generally applicable implication.

102     It is not without a degree of relevance that although by sub-paragraph 1(a) of its application filed in this Court on 7 December 2001 extracted in [9] above, AAMI has foreshadowed an application for an injunction to restrain the NRMA Parties from commencing or conducting recovery proceedings “in any Court” in the name of any of the NRMA Insured, no interlocutory relief has yet been sought by AAMI, and hence no affidavit testimony in support of its causes of action has been revealed. In the meantime, NRMA has been pursuing the obtaining of retainer agreements from what appears to have been literally thousands of the NRMA Insured (see again the detailed evidence summarised in [38] above). As a consequence, there has already come into existence a large number of parallel proceedings, thereby creating the potential for inconvenience and embarrassment of the kind spoken of in Henry and Johnson Tiles. I think that the NRMA Parties are correct in their contention that AAMI would not be seriously prejudiced by the existing and prospective Local Court proceedings continuing at the initiative of NRMA for the several reasons already summarised in [39] above, and in any event, that seems to me to be the appropriate course in the light of all of the circumstances placed before me.

103               As I have already foreshadowed, I am unable to comprehend how inferences of knowledge, reliance etc on the part of all of the NRMA Insured could be imputed by the leading of testimony from a select number of the NRMA Insured in relation to each of those matters, yet that is what is perhaps envisaged by AAMI as at least one of several courses of action. I am conscious of the circumstance that AAMI seeks a mandatory injunction by para 5 of the application, and that it is not necessary for an applicant for an injunction that there be demonstrated the existence of a proprietary interest which will be adversely affected, particularly in relation to causes of action based upon the TP Act (Miller, R, Miller’s Annotated Trade Practices Act 23^rd ed. 2002, page 658, para 1.80.20). It is true that if matters proceed in the Local Court as presently intended by NRMA, AAMI will face prospective awards of damages for demurrage at the suit of numerous NRMA Insured, in conformity with the Greta Holme principle, and by reason of the negligence of the AAMI Insured. Such claims for damages would presumably occur however in the normal course of AAMI’s business as a substantial motor vehicle insurer, where “knock for knock” arrangements do not exist. Moreover given that in the events which may happen, the NRMA Insured may be cross-examined upon their knowledge of and reliance upon the matters pleaded by the amended statement of claim, it is plainly preferable for that potentially large body of individual testimonies to be given in the context of discrete Local Court proceedings, rather than in the context of Federal Court proceedings. The large number of existing and pending claims have been detailed and categorised in [38] above.

104               The Local Court has demonstrated, from the material in evidence before me, that it is more likely to be the appropriate forum to hear and determine the potentially thousands of instances of alleged misleading misrepresentations and deceptive conduct and unconscionable conduct, and the other complaints of AAMI the subject of the related causes of action, and the consequences of all such matters in terms of loss and damage sustained by AAMI. Conversely, it would be surely unthinkable for the Federal Court to become exposed to the potential circumstances of a myriad of small claims involving individual NRMA Parties, and the possibility of numbers of NRMA Insured giving viva voce testimony, whether called as witnesses by the NRMA Parties or by AAMI. In the result, there exists significant justification for the grant of a stay of the Federal Court proceedings, albeit with appropriate liberty to restore. In any event, it is necessary that I give consideration to the other grounds of attack advanced by the NRMA Parties in relation to the amended statement of claim, and to the stay of the Federal Court proceedings on any further available grounds.

Want of parties

105               AAMI have contended that the submissions of the NRMA Parties have failed to address the nature of the relief sought by AAMI’s application, as reproduced in [9] above, namely injunctive and declaratory relief against NRMA and Smith (ie the so-called NRMA Parties) alone, and that ‘[t]he injunctions sought would not prevent any NRMA insured from seeking damages for loss of use of his or her vehicle according to ordinary principles upon which damages for such loss of use can be awarded, nor would they prevent Smith acting in such a claim”. Obviously however, none of the NRMA Insured would initiate that course, since their respective demurrage claims have been met already by NRMA pursuant to the Courtesy Car Programme, and what remains is only NRMA’s attempts to recoup the monetary value of the demurrage claims, which it has paid out to the NRMA Insured, from the AAMI Insured who negligently caused the vehicle damage in the first place.

106               I do not think that NRMA Parties are correct in their contention that there is a want of parties involved in the Federal Court proceedings, by reason of the absence therefrom of the NRMA Insured. Given that the NRMA Insured have received payment of their respective entitlements under the Courtesy Car Programme, they have no further interest in the outcome of the Federal Court proceedings. In my opinion, contrary to NRMA’s submission, no rights or liabilities of the NRMA Insured are relevantly affected by the causes of action propounded by AAMI in the amended statement of claim, in the sense postulated in News, except to the extent of what I have earlier pointed out to be the misconceived notion implicitly inherent in AAMI’s submissions of some kind of actual or potential entitlement of the NRMA Insured in effect to double recovery of their respective demurrage claims (see also subparagraphs 5(e) and (f) of the application). Since the NRMA Insured have received the totality of their entitlements from NRMA under and pursuant to the Courtesy Car Programme, the NRMA Insured would necessarily hold any duplicated payment as moneys had and received to the use of NRMA according to applicable principles of equity. Unless and until any of the NRMA Insured might assert otherwise, none of them are in my opinion required or appropriate to be joined as parties to the Federal Court proceedings.

107               I am therefore of the opinion that NRMA has not established any compelling basis for relief upon the ground of want of parties to the Federal Court proceedings.

Representative proceedings and absence of interest in subject matter of claims

108               AAMI has responded to NRMA’s contentions advanced under this heading, namely that the Federal Court proceedings constitute a form of “Clayton’s” representative action, to the effect that it does not purport to bring representative proceedings by the application and amended statement of claim, and that what it has pleaded are causes of action of its own, and that it has brought the Federal Court proceedings, and has made its claims for relief, upon the basis only of those causes of actions. That may be partly true. On the one hand, NRMA can point to the injunctions sought in paragraph 1 of the AAMI application, and to the claim, albeit unspecified and not particularised, in paragraph 6 thereof for “Damages”. Yet at least certain claims for injunctive relief in paragraph 2 and 5 of the application are purportedly made in effect for the benefit of the NRMA Insured. For instance, order 2 seeks an order for accounting to “any NRMA Insured”. The reality is that by this unusual application for relief, AAMI seeks to shield itself from further exposure to claims advanced by the NRMA Insured against the AAMI Insured.

109               I repeat the observation I have previously made that since the NRMA Insured have presumably received already the benefit of their entitlements under the Courtesy Car Programme, any subsequent receipt again of the monetary equivalent of those entitlements by a NRMA Insured from an AAMI Insured would constitute moneys had and received by the NRMA Insured to the use of NRMA. Whilst it is the case that it is not essential in every case for an applicant for an injunction under s 80 of the TP Act to show that he or she has a proprietary interest which will be affected, or that he or she has suffered, or will suffer, damage, it is difficult to conceive how any matter of public interest can be conceivably involved in the proceedings and the relief sought by AAMI, such as to gain the advantage of that exceptional principle. The amended statement of claim and application, once unmasked in terms of nominal parties, demonstrate the reality that AAMI is seeking to shield itself from exposure to indemnify the AAMI Insured, upon the footing of supposed notions of public interest necessary to support the relief AAMI seeks under the TP Act (and of course the FT Act). For those reasons at least, I do not think that NRMA can correctly characterise the Federal Court proceedings as being in reality representative proceedings, or contend that AAMI does not have an interest relevantly in the proceedings.

No reasonable cause of action against Ms Smith because no conduct relevantly in trade or commerce

110               AAMI did not dispute the accuracy of presentation of the applicable legal principles outlined by the NRMA Parties in [44-47] above, but contended that the conduct of Ms Smith complained of “is not necessarily to be categorised as conduct in the course of prosecuting Demurrage Claims”, and that “[t]he supply of legal services can be a supply in trade or commerce, especially in the circumstances of this case”, and further that the conduct of Ms Smith the subject of AAMI’s submissions “also occurred in trade or commerce in that it occurred pursuant to the provision of insurance by NRMA to its insured”. The intangible nature of that contention is readily apparent. My references to the conduct of Ms Smith should not be taken as confined to the cause of action relating to the retainer agreements as pleaded from para 41 of the amended statement of claim. The amended statement of claim earlier pleaded that Ms Smith was an agent of NRMA (paras 16 and 18), and that she aided, abetted etc the misleading and deceptive conduct and unconscionable conduct complained of (paras 30 to 36), as well as being a representor in her own right (paras 31 and 35A).

111               In the course of oral address, Senior Counsel for AAMI submitted to the effect that it was particularly in relation to the procuring of the retainers from the NRMA Insured that Ms Smith thereby engaged in conduct in trade and commerce, a submission which purportedly referred for instance to para 21A of the amended statement of claim (see in particular (c) thereto), and also to para 21B thereof, being conduct which promoted her legal practice. In Prestia at 193, Santow J said as follows:

“The conclusion I reach is necessarily tentative and on the view I take of the facts of the present case not strictly necessary for the purposes of my decision. Nonetheless I would conclude that while a representation which promotes the professional’s practice is clearly caught, it is not possible safely to generalise as to whether all other representations about the advice given must likewise inevitably be caught, though it may be a plausible working hypothesis. The courts need to look at each case to see if a distinction can consistently be made.”

I do not think that Ms Smith’s involvement in obtaining retainer agreements from the NRMA Insured could be fairly described as an exercise in promoting her professional practice already established as solicitor for the NRMA engaged in motor vehicle insurance recovery matters; the status quo in terms of the size and scope of her practice was not altered merely by changing the primary identity of her clients from NRMA as insurer purporting to exercise rights of subrogation of the NRMA Insured to the NRMA Insured solely for the purpose of pursuing existing demurrage claims.

112               I have earlier found that the crux of the causes of action the subject of the amended statement of claim are alleged misrepresentations on the part of the NRMA Parties based upon the supposed rights of subrogation of NRMA in relation to the causes of action of the NRMA Insured against the AAMI Insured concerning demurrage claims which arose out of the Courtesy Car Programme. I have also earlier referred to the requirements of the majority of the High Court in Nelson to the effect that conduct in trade or commerce must be referrable to conduct that is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character, and to the instance there given of promotional activities in relation to, or for the purposes of, the supply of goods to actual or potential consumers. Subsequently in Fasold v Roberts (1997) 70 FCR 489 at 531, Sackville J included within the scope of that broad description conduct not just to advance, but also to protect, the commercial interests of a given entity.

113               The alleged misrepresentations and instances of unconscionable conduct of the NRMA Parties propounded by AAMI have their origin in trade or commerce, in the sense that they relate to the implementation of the Courtesy Car Programme, which, though not constituting a form of indemnity to the extent of giving rise to rights of subrogation in favour of NRMA, nevertheless possesses a degree of similarity to insurance cover. That facility provided a form of demurrage entitlement for a maximum of two weeks during the period of time when the owner’s damaged motor vehicle was being repaired, so long as the damage was occasioned by the negligence of the driver of the other vehicle involved in the collision. Any such connection to trade and commerce does not in my opinion satisfy the Nelson test. The alleged misrepresentations and unconscionable conduct are said by AAMI to have been made by the NRMA Parties for the purpose of enabling or assisting, in a curial context, the exploitation of controversial choses in action, based upon misconceived rights of subrogation. Those activities cannot be said to have been made, to adopt the dictum of Gyles J in Robin Pty Ltd v Canberra International Airport Pty Ltd (1999) 179 ALR 449 at [50], “…in relation to, or for the purposes of, the supply of goods or services to actual or potential customers”, or otherwise in trade or commerce. In his reasons for judgment, and in particular his examination of authority, it is readily apparent that his Honour considered that the majority of the High Court in Nelson chose to adopt a more confined view of the ambit of operation of the statutory expression “in trade and commerce”, in contrast to the minority approach of McHugh J, a conclusion which must be correct.

114               I would therefore reject the submissions of AAMI in response to the present ground of attack, and find that the conduct complained of by the amended statement of claim did not occur in trade or commerce. This ruling relates primarily to the causes of action for contravention of the TP Act. The definition of “trade and commerce” for the purpose of the FT Act is expressed in inclusive terms, namely “any business or professional activity”. Without the benefit of submissions on the significance, if any, of the difference between the two definitions, I would embrace the same conclusion in relation to the FT Act, given particularly that Prestia was decided in the context of the FT Act. As I have earlier pointed out in my summary of the amended statement of claim, AAMI has also pleaded causes of action for breach of warranty and enforcement of equitable rights albeit arising out of essentially the same factual circumstances. Nevertheless, perhaps in anticipation of the ground of challenge presently discussed, AAMI has also pleaded reliance upon the use of postal, telegraphic and telephonic services, by reference to s 6(3)(a) of the TP Act, in order to alternatively sustain the causes of action for misleading and deceptive conduct and unconscionable conduct. To that extent, those causes of action remain unaffected by my conclusion upon the conduct pleaded in trade or commerce. Whether reliance upon representations made by postal, telegraphic and telephone services will be feasible so far as AAMI is concerned is at best unclear, and in that regard I refer again to the particulars provided by AAMI as set out in [48(iii)] above.

Generally as to pleadings and particulars

115               I make the following findings upon the submissions made by the NRMA Parties which I have summarised in [48] above, and in the sequence therein appearing:

(i)         There is merit in the criticism made by the NRMA Parties of para 25 of the amended statement of claim. AAMI has failed to identify any facts and circumstances which would attract the concern of equity to intervene, and prevent the assertion or exercise of a legal right, in circumstances where to do so would constitute unconscientious conduct giving rise to unjust enrichment.

(ii)        I do not think that it can be rightly contended by the NRMA Parties, at this stage of the proceedings, that paras 16 and 18 of the amended statement of claim are meaningless, or devoid of material facts and particularity; nevertheless the NRMA Parties are entitled to have the best particulars of the allegations made in para 16 which AAMI can presently give of its knowledge as to the form and context in which the representations the subject of para 16 are said to have been communicated, and over what period of time the same are said to have been made; as to paragraph 18, I cannot identify the relevance of the reference by AAMI to unidentified “Other Insurers”; there is no reason why the NRMA Parties are not entitled to particulars as to the means whereby NRMA, its servants and agents including Ms Smith, are said to have made the representations, and over what period of time and in what circumstances.

(iii)       Particularly given that prior to the signing of the retainer form, NRMA duly satisfied the entitlement of the respective NRMA Insured under the Courtesy Car Programme, it is difficult to distil at least with precision what is the actionable falsity or untruth or misleading or inaccurate advice or information contained in the NRMA Retainer Agreement (extracted at [11] above), albeit that there is a degree of equivocation in the use of the words “act on your behalf” in para 1, in the light of the following paras 4 and 5, and in the words “On this basis” in para 5.

(iv)       I do not think that the twenty matters or factors listed in para 50 of the amended statement of claim can be characterised generally as not arguable, and mischievous and frivolous; I would however describe those factors that speak of what the NRMA Insured did not know at the times alleged as somewhat speculative; in any event, I would point out that the circumstances attributed in para 50 to the knowledge of the NRMA Insured tend to further illustrate the need for all controversial issues to be resolved in the context of individual hearings in the Local Court involving each of the affected NRMA Parties, irrespective of the absence of availability of the processes of discovery and interrogatories in the Local Court.

I do not think however that I need engage in further detail in relation to this segment of submissions of the NRMA Parties, in the light of the nature of the relief which I propose to order in favour of the NRMA Parties. If in the future, the stay which I am disposed to grant is revoked, the issue of further particulars would then become more appropriate to be addressed.

The Federal Court proceedings should be stayed pending the outcome of the claims in the Local Court

116               This segment of my reasons for judgment should be read in conjunction with what appears under the previous segment headed “Vexatious nature of the proceedings”. AAMI emphasised that it has sought injunctive relief and corrective advertising, and also declaratory relief, in respect of the misleading and deceptive conduct in which the NRMA Parties allegedly engaged for the purpose of procuring the retainer agreements, being relief which the Local Court could not grant, so that if AAMI is hereafter to be successful in the Federal Court proceedings, the NRMA Parties would be restrained from procuring further retainer agreements from the NRMA Insured, and may be ordered not to further prosecute those actions already in train n relation to which they have already secured retainer agreements from the NRMA Insured. AAMI supplemented that submission by reference to further orders that the NRMA Parties take steps necessary to correct any misleading or deceptive conduct on the part of the NRMA Parties, whether by way of advertising or otherwise, in relation to a variety of matters, being steps which may conceivably result in the NRMA Insured withdrawing their retainers of Ms Smith. However as I have earlier mentioned, the Local Court has jurisdiction to adjudicate upon issues of misleading and deceptive conduct and unconscionable conduct for the purpose of granting other forms of relief.

117               AAMI thereafter contended that there was a significant risk that the Local Court proceedings, if continued, would found an estoppel in relation to the further conduct of the Federal Court proceedings, and that to the extent that judgments have already been given or would hereafter be given in any of the Local Court proceedings, there would be a possibility of conflicting judgments in circumstances where the Local Court did not have the necessary jurisdiction to entertain the whole of AAMI’s case. That contention however further illustrates AAMI’s purported assimilation of remedies with issues. Moreover, as has been illustrated from authority already identified, it is an established principle that an issue estoppel may crystallise in the conduct of inferior court proceedings in relation to an issue or issues subsequently arising in superior court proceedings, and the Local Court is better placed to address the existence or otherwise of any misleading or unconscionable conduct in the myriad of individual circumstances than the Federal Court. AAMI nevertheless pursued that theme by emphasising that because the Local Court could not resolve all of the issues between the parties, and that the same issues would be litigated again in the Federal Court, or at least such issues as could not be litigated in the Local Court, the consequences would be a significant duplication of interlocutory procedures, evidence and submissions, and increased burdens on the courts and parties involved by way of costs and delays.

118               Emphasis was also placed by AAMI upon the interlocutory and trial procedures of the Federal Court, which are not available in the Small Claims Division of the Local Court, and which were said to permit a full and fair determination of all of the issues between the parties, including the power to order discovery, and if necessary, interrogatories, and further that while it was accepted that the Local Court might be able to mould its procedures to the particular case, it did not constitute a forum which typically heard and resolved cases of such magnitude and complexity. Nevertheless I would emphasise that there would be extraordinary and unprecedented difficulties in terms of time and expense involved in pursuing in the Federal Court the issues arising in relation to each of the multitude of the NRMA Insured, for the purposes of determining the grant of the broad sweep of the relief sought in particular in paragraphs 2 and 5 of the application.

119               There is a degree of ambiguity in AAMI’s submissions evident in its response to the present motion of the NRMA Parties (summarised earlier in [13] above). On the one hand, there has been foreshadowed by AAMI a case structured upon representations which have been foreshadowed at one point in time to be implied by conduct on the part of the NRMA Parties (see [48(iii)] above). Yet on the other hand, AAMI has emphasised the need for recourse to the Federal Court’s procedures of interrogatories and discovery, and the relief which the Federal Court is able to provide by way of injunctions and declarations. Yet the Federal Court proceedings would be conducted in the context of the NRMA Insured having no interest in or other concern with those proceedings, all of the NRMA Insured having apparently received their entitlements under the Courtesy Car Programme. What the present litigation in this Court is all about boils down to NRMA’s endeavours to recover the monetary equivalent of those entitlements from each of the individual AAMI Insured, and thus indirectly from AAMI.

120               A defence of absence of subrogation of an insurer, which as has been earlier recorded, is required to be specifically pleaded in the context of a recovery action brought at the instance of that insurer, whether in its own name or in that of the insured, appears to have been designed to address the mischief whereby an insurer, which has assumed the conduct of recovery litigation, has not satisfied its obligations to its own insured under the insurer’s policy of insurance. That mischief was apparently perceived to present certain difficulty or prejudice to a defendant to the recovery action. Yet it is the absence of NRMA’s rights of subrogation, as found by the New South Wales Court of Appeal in Anthanasopoulos, which has provided the basis for this substantial litigation being propounded by AAMI in the Federal Court with the objective of shielding AAMI from exposure to NRMA’s attempted recoupment of its payments made to the NRMA Insured pursuant to the Courtesy Car Programme.

121               AAMI has not committed itself, to my understanding, to the means by which it will seek to establish the misconduct of the NRMA Parties complained of, detailed in the amended statement of claim. To imply such conduct, for instance, in the circumstance described in [48(iii)] above, would be a formidable task, and to rely upon the testimony of a small number of NRMA Insured as evidence of the conduct of the NRMA Parties in respect of the literally thousands of circumstances involving the NRMA Insured, most of which have not yet been the subject of commencement of proceedings (see [38(ii)] and [38(iv)] above) would be also a formidable task. To establish the existence of that conduct in several test cases, by arrangement with the NRMA Parties, along the lines which occurred in the Anthanasopoulos litigation, might be a viable option which has not yet apparently been explored. In the meantime justice will be in my opinion most expediently served by the continuation, or institution, of individual proceedings at the instance of each NRMA Insured individually in the Local Court.

122               It should therefore be concluded that the NRMA Parties have made out a sufficient case for the exercise of the Court’s discretion to the grant of a stay of the Federal Court proceedings, to the extent that I have not ruled that certain causes of action are not in any event maintainable. However I think that there should be liberty to apply on 14 days’ notice in relation to the orders which I propose to make. The complexity of the circumstances pleaded by the amended statement of claim, and of the other events which have happened, render that further optional course appropriate, at least for the time being.

Tendency to cause prejudice, embarrassment or delay

123               I would not accede to the request of the NRMA Parties for the strike-out of the amended statement of claim on the ground of lack of or shortfall in particularity. There is a significant lack of specificity or particularity evident in the framework of the amended statement of claim. If or when AAMI moves for removal of the stay would be the expedient occasion to consider controversial issues as to particulars, and as to alterations to be made to the amended statement of claim, whether by reason of rulings made or views expressed in these reasons for judgment, or otherwise.

I certify that the preceding one hundred and twenty-three (123) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti.

Associate:

Dated:              28 August 2002

Counsel for the applicant:	M Cashion SC and T M Thawley
Solicitor for the applicant:	Shaw McDonald
Counsel for the respondents:	J S Hilton SC and D Sibtain
Solicitor for the respondents:	Blake Dawson Waldron
Date of Hearing:	16 May 2002
Date of Judgment:	28 August 2002

Schedule to Reasons for Judgment of Conti J delivered 28 August 2002

 

 

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1604 OF 2001

 

BETWEEN:	AUSTRALIAN ASSOCIATED MOTOR INSURERS LIMITED (ACN 004 791 744) APPLICANT
AND:	NRMA INSURANCE LIMITED (ACN 000 016 722) FIRST RESPONDENT   BRONWYN SMITH SECOND RESPONDENT

 

AMENDED STATEMENT OF CLAIM

The Parties

124               The Applicant (“AAMI”) is and at al material times was:

(a)        a company duly incorporated able to sue in its corporate name and style; and

(b)        carrying on the business of, inter alia, providing comprehensive motor vehicle insurance pursuant to policies of comprehensive motor vehicle insurance.

125               The First Respondent (“NRMA Insurance”) is and at all material times was:

(a)        a company duly incorporated liable to be sued in its corporate name and style;

(b)        a corporation within the meaning of the Trade Practices Act, 1974 (“the TP Act”);

(c)        a person within the meaning of the Fair Trading Act 1987 (“the FT Act”);

(d)        carrying on business as, inter alia, an insurer; and

(e)        engaged in trade or commerce within the meaning of each of the TP Act and the FT Act.

126               The Second Respondent (“Smith”) is and at all material times was:

(a)        a solicitor of the Supreme Court of New South Wales carrying on practice as such as principal of the firm of solicitors known as “Smith Partners”;

(b)        a person within the meaning of the FT Act; and

(c)        engaged in trade or commerce within the meaning of the FT Act.

The Conduct of the Parties

127               In the course of carrying on its business as, inter alia, an insurer, NRMA Insurance on numerous occasions entered into a policy of comprehensive motor vehicle insurance (“the NRMA Policy”) with a person who thus became its insured (“the NRMA Insured”).

Particulars

The NRMA policy was in writing and comprised pages 5 to 30 of the NRMA Insurance Comprehensive Insurance booklet Edition NAT P 148901 8/98 and a current Certificate of Insurance.

128               It was an express term and condition of the NRMA Policy that it did not cover, inter alia, the cost of hiring a vehicle.

Particulars

General exclusion 2 on page 17 of the booklet referred to in the particulars to paragraph 4 above.

129               At all material times NRMA insurance operated the “NRMA Courtesy Car Scheme” pursuant to which on numerous occasions a motor vehicle (“the Courtesy Car”) was made available to the NRMA Insured:

(a)        by Hertz Australia Pty Limited (“Hertz”);

(b)        at the direction or request of NRMA Insurance;

(c)        at the expense of NRMA Insurance and at no expense to the NRMA Insured (to a maximum of 14 days);

(d)        whilst the motor vehicle the subject of the NRMA Policy was unavailable to the NRMA Insured;

(e)        by reason that it was being repaired following a motor vehicle collision which had been caused by the negligence of a third party.

130               On numerous of those occasions, the third party referred to in paragraph 6(e) above (“the AAMI Insured”) was the insured under a policy of comprehensive motor vehicle insurance issued by AAMI.

131               On numerous other occasions, the third party referred to in paragraph 6(e) above (“the Otherwise Insured”) was insured under a policy of comprehensive motor vehicle insurance issued by an insurer (“the Other Insurer”) other than NRMA Insurance or AAMI.

132               Since about 1/9/99 there have been brought in the Small Claims Division of the Local Court at the Downing Centre in Sydney (“the Local Court”) numerous claims (“the Demurrage Claims”) in which:

(a)        the NRMA Insured is the named Plaintiff;

(b)        Smith is on the record as the solicitor for the named Plaintiff;

(c)        the AAMI Insured or the Otherwise Insured is the named Defendant;

(d)        the claim is to recover by way of damages an amount equal to the amount paid by NRMA Insurance to Hertz in respect of the Courtesy Car; and

(e)        the named Plaintiff is lawfully entitled to recover that sum.

Particulars of (e)

Anthanasopoulos v Moseley [2001] NSWCA 266.

133               In each of the Demurrage Claims either:

(a)        judgment has been entered and an order for costs has been made in favour of the names Plaintiff against the AAMI Insured or the Otherwise Insured as the case may be; or

(b)        the matter is awaiting an assessment hearing before an Assessor in the Local Court.

134               In numerous of the Demurrage claims referred to in paragraph 10(a) above, AAMI or the Other Insurer as the case may be has paid the amount of the judgment debt and the amount the subject of the costs order (“the Judgment Moneys”) to Smith as the solicitor on the record for the named Plaintiff.

135               In each instance Smith has disbursed or proposes to disburse the Judgment Moneys, or alternatively the Judgment Moneys less her professional fees and expenses for acting in the relevant Demurrage Claim, not to the named Plaintiff, but to NRMA Insurance for its own use and benefit and NRMA Insurance has received or proposes to receive the same upon that basis.

136               Each of the Demurrage Claims were commenced and maintained by Smith and the Judgment Moneys were received by Smith and have been or will be disbursed by her in the manner set forth in paragraph 12 above:

(a)        on the instructions of NRMA Insurance;

(b)        as agent for NRMA Insurance;

(c)        in circumstances where NRMA Insurance had no authority to give to Smith instructions on behalf of the named Plaintiff;

(d)        without the instructions from the named Plaintiff; and

(e)        without the authority of the named Plaintiff.

137               In the premises, Smith had and has no authority to commence or maintain the Demurrage Claims or to receive or disburse the Judgment Moneys in the manner set forth in paragraph 12 above or at all.

138               Further, in the premises, NRMA Insurance had and has no entitlement to receive the Judgment Moneys or any part thereof for its own use or benefit or at all.

Claim Against NRMA Insurance

139               By the conduct of itself, its servants and agents including Smith, NRMA Insurance has represented and continues to represent to NRMA Insureds:

(a)        that the NRMA Insured is obliged to assist NRMA Insurance and Smith in and about bringing and maintaining the relevant Demurrage Claim, including the obtaining of a judgment and an order for costs in that claim;

(b)        that NRMA Insurance and/or Smith is entitled to receive for its own use and benefit the Judgment Moneys; and

(c)        that the NRMA Insured is not entitled to receive for his or her own use and benefit the Judgment Moneys or any part thereof.

140               In truth and in fact the said representations and each of them were and are false and untrue and misleading and inaccurate.

Particulars

(a)        The NRMA Insured was not and is not obliged to assist NRMA Insurance or Smith in and about the bring and maintaining of relevant Demurrage Claim.

(b)        Neither NRMA Insurance nor Smith was or is entitled to receive for its or her own use and benefit the Judgment Moneys or any part thereof.

(c)        The NRMA Insured was or is entitled to receive the Judgment Moneys.

141               Further, or in the alternative, by the conduct of itself, it servants and agents including Smith, NRMA Insurance has represented and continues to represent to AAMI and to each of the Other Insurers that:

(a)        Smith was and is authorised to commence and maintain the Demurrage Claims on behalf of the named Plaintiffs;

(b)        Smith was and is authorised to receive the Judgment Moneys on behalf of the named Plaintiffs;

(c)        Smith has been disbursing the Judgment Moneys to or at the direction of the named Plaintiffs; and

(d)        Smith would in the future distribute the Judgment Moneys to or at the direction of the named Plaintiffs.

142               In truth and in fact the said representations and each of them were and are false and untrue and misleading and inaccurate.

Particulars

(a)        Smith is not and never was authorised to commence and maintain the Demurrage Claims on behalf of the named Plaintiffs.

(b)        Smith is not and never was authorised to receive the Judgment moneys on behalf of the named Plaintiffs.

(c)        Smith has not been disbursing the Judgment Moneys to or at the direction of the named Plaintiffs.

(d)        Smith would not in the future distribute the Judgment moneys to or at the direction of the named Plaintiffs.

143               The making of the representations set forth in paragraphs 16 and 18 above and each of them constitute conduct by NRMA Insurance in trade or commerce that was and is misleading or deceptive or likely to mislead or deceive in contravention of section 52 of the TP Act and/or section 42 of the FT Act.

Particulars

AAMI repeats the particulars set out in paragraphs 17 and 19 above. Insofar as those representations are with respect to any future matter, NRMA Insurance did not and does not have reasonable grounds for making the representation and AAMI relies upon section 51A of the TP Act and section 41 of the FT Act.

21A                   Further, or in the alternative, the making of the representations set forth in paragraph 16 above and each of them and the procuring of each of the Retainer Agreements in the circumstances set forth in paragraphs 41 to 58 below and each of them constitute conduct in trade or commence which was and is unconscionable within the meaning of section 51AA and/or section 51AB of the TP Act and/or section 43 of the FT Act.

Particulars

(a)        The NRMA Insured was in a position of special disadvantage in the circumstances, by reason of the matters set forth in paragraphs 42 to 50 below.

(b)        In so far as NRMA Insurance is concerned, the supply of services relied upon in relation to section 51AB is the supply of motor vehicle insurance.

(c)        In so far as Smith is concerned, the supply of services relied upon in relation to section 51AB is the supply of legal services.

21B                   Further, or in the alternative, the making of the representations set forth in paragraph 18 above and each of them and the procuring of each of the Retainer Agreements in the circumstances set forth in paragraphs 41 to 58 below and each of them constitute conduct in trade or commerce which was and is unconscionable within the meaning of section 51AA of the TP Act and/or section 43 of the FT Act.

Particulars

AAMI and the Other Insurers were in a position of special disadvantage in the circumstances, in that:

(i)         AAMI and the Other Insurers did not know that Smith did not act for, nor have instructions from, each of the named plaintiffs.

(ii)        The representations were made by and each of the Retainer Agreements were procured by a Solicitor of the Supreme Court of New South Wales and AAMI and the Other Insurers were entitled to, and did, assume that the representations were correct and each of the Retainer Agreements were properly obtained after being provided with all information necessary to make an informed decision.

(iii)       Neither AAMI nor the Other Insurers were in a position to correct or intervene in any of the circumstances set forth in paragraphs 42 to 50 below.

144               Acting on the faith of the representations set forth in paragraph 16 above and induced thereby, the NRMA Insureds have assisted and continue to assist NRMA Insurance in and about bringing and maintaining the Demurrage Claims, including the obtaining of judgment and an order for costs in those claims.

145               Further, or in the alternative, acting on the faith of the representations set forth in paragraph 18 above and induced thereby, AAMI retained and paid solicitors to act on its behalf in relation to the Demurrage Claims and paid the Judgment Moneys to Smith.

23A                   Further, or in the alternative, NRMA Insurance is within the meaning of section of the 68 FT Act a person involved in the contraventions of Smith set forth in paragraphs 21A, 21B, 33, 35A, 42 and 52.

24                     By reason of the contraventions set forth in paragraph 20, 21A, 21B and 23A above, AAMI has suffered loss and damage.

Particulars

The Judgment Moneys paid by AAMI to Smith and the legal fees and expenses paid by AAMI to its own solicitors.

25                  Further, or in the alternative, NRMA Insurance has been unjustly enriched and has had and received the Judgment Moneys paid by AAMI for the use of NRMA Insureds and/or AAMI.

26                              Further, or in the alternative, at all material times, NRMA by itself, its servants and agents, including Smith, warranted and continues to warrant it was and is authorised to bring and maintain the Demurrage Claims on behalf of the named Plaintiffs and to receive the Judgment Moneys on behalf of the named Plaintiffs.

27                              Acting on the faith of the warranty and induced thereby, AAMI retained and paid solicitors to act on its behalf in relation to the Demurrage Claims and paid the Judgment Moneys to Smith.

28                              In breach of the warranty, NRMA:

(a)        was not authorised to bring and maintain the Demurrage Claims on behalf of the named Plaintiffs; and

(b)        did not have authority to receive the Judgment Moneys on behalf of the named Plaintiffs.

29                  By reason of the said breach, AAMI suffered loss and damage.

Particulars

The Judgment Moneys paid by AAMI to Smith and the legal fees and expenses paid by AAMI to its own solicitors.

Claims Against Smith

30                  Further, or in the alternative, Smith is, within the meaning of section 75B and section 80(1)(c) and (e) of the TP Act, a person involved in the conduct pleaded above in that she aided, abetted, counselled and/or procured the said conduct and/or was knowingly concerned in and/or a party to the said conduct.

31                  Further, or in the alternative, Smith has made and continues to make each of the representations set forth in paragraphs 16 and 18 above.

32                  In truth and in fact the said representations and each of them were and are false and untrue and misleading and inaccurate.

Particulars

AAMI repeats particulars set forth in paragraph (sic) 17 and 19 above.

33                     The making of the said representations and each of them constitute conduct by Smith in trade or commerce that was and is misleading or deceptive or likely to mislead or deceive in contravention of section 52 of the TP Act and/or section 42 of the FT Act.

Particulars

AAMI repeats the particulars set forth in paragraph 17 and 19 above. In so far as those representations are with respect to any future matter, Smith did not and does not have reasonable grounds for making the representation and AAMI relies upon section 41 of the FT Act and section 51A of the TP Act.

The Applicant relies upon section 52 and 6(3) of the TP Act in so far as the conduct of Smith involves the use of postal, telegraphic or telephonic services.

34                            Acting on the faith of the representations made by Smith as set forth in paragraph 16 above and induced thereby, the NRMA Insureds have assisted and continue to assist NRMA Insurance in and about bringing and maintaining the Demurrage Claims, including the obtaining of judgment and an order for costs in those claims.

35                  Further, or in the alternative, acting on the faith of the representations made by Smith as set forth in paragraph 18 above and induced thereby, AAMI retained and paid solicitors to act on its behalf in relation to the Demurrage Claims and paid the Judgment Moneys to Smith.

35A                   Further, or in the alternative, Smith has engaged and continues to engage in the conduct set forth in paragraphs 21A and/or 21B above.

Particulars

 

The Applicant relies on sections 51AA, 51AB and 6(3) of the TP Act in so far as the conduct of Smith involved the use of postal, telegraphic or telephonic services.

36                     By reason of the conduct referred to in paragraphs 30, 31 and 35A above, AAMI has suffered loss and damage.

Particulars

The Judgment Moneys paid by AAMI to Smith and the legal fees and expenses paid by AAMI to its own solicitors.

37                     Further, or in the alternative, at all material times Smith warranted and continues to warrant to AAMI that she was and is authorised to bring and maintain the Demurrage Claims on behalf of the named Plaintiffs and to receive the Judgment Moneys on behalf of the named Plaintiffs.

38                  Acting on the faith of the warranty and induced thereby, AAMI retained and paid solicitors to act on its behalf in relation to the Demurrage Claims and paid the Judgment Moneys to Smith.

39                  In breach of the warranty Smith:

(a)        was not authorised to bring and maintain the Demurrage Claims on behalf of the named Plaintiffs; and

 

(b)        did not have authority to receive the Judgment Moneys on behalf of the named Plaintiffs.

 

40                     By reason of the said breach, AAMI suffered loss and damage.

Particulars

The Judgment Moneys paid by AAMI to Smith and the legal fees and expenses paid by AAMI to its own solicitors.

Claim relating to retainer Agreements

41                     Further, or in the alternative, in some instances Smith has entered into an agreement (“the Retainer Agreement”) with the NRMA Insured in respect of the Demurrage Claim in which that NRMA Insured is the named plaintiff.

Particulars

 

Each Retainer Agreement is in writing.

42                     Prior to and at the time of making each Retainer Agreement, NRMA Insurance and/or Smith represented to the NRMA Insured:

(a)        that the NRMA Insured was obliged to assist NRMA Insurance and Smith in and about bringing and maintaining the relevant Demurrage Claim, including the obtaining of a judgment and an order for costs in that claim;

 

(b)        that the NRMA Insured was obliged to execute the Retainer Agreement and to give the authority and the instructions contained in it;

 

(c)        that it was in the interests of the NRMA Insured to execute the Retainer Agreement and to give the authority and instructions contained in it;

 

(d)       that the NRMA Insured might obtain some benefit if the NRMA Insured executed the Retainer Agreement;

 

(e)        that NRMA Insurance and/or Smith was entitled to receive for its or her own use and benefit, and/or to give directions in relation to the disbursement of the Judgment Moneys; and

 

(f)        that the NRMA Insured was not entitled to recover for his or her own use and benefit the Judgment Moneys or any part thereof.

43                            In truth and in fact the representations and each of them were false and untrue and misleading and inaccurate.

Particulars

(a)        The NRMA Insured was not obliged to assist NRMA Insurance or Smith in and about bringing and maintaining the relevant Demurrage Claim, including the obtaining of a judgment and an order for costs in that claim.

(b)        The NRMA Insured was not obliged to execute the Retainer Agreement or to give the authority or the instructions contained in it.

(c)        It was not in the interests of the NRMA Insured to execute the Retainer Agreement or to give the authority or instructions contained in it.

(d)        It was unlikely that the NRMA Insured would derive any benefit from the execution of the Retainer Agreement.

(e)        Neither NRMA Insurance nor Smith was entitled to receive for its or her own use and benefit, and/or to give directions in relation to the disbursement of the Judgment Moneys.

(f)         The NRMA Insured was entitled to recover for his or her own use and benefit the Judgment Moneys.

44                     The making of the representations set forth in paragraph 42 above and each of them constitute conduct by NRMA Insurance and/or Smith in trade or commerce that was misleading or deceptive or likely to mislead or deceive in contravention of section 52 of the TP Act and/or section 42 of the FT Act.

45                     Acting on the faith of the representations set forth in paragraph 42 above and induced thereby, the NRMA Insured entered into the Retainer Agreement with Smith.

46                     Further, or in the alternative, prior to and at the time of making each Retainer Agreement, NRMA Insurance and/or Smith knew or ought to have known that the NRMA Insured would rely upon NRMA Insurance and/or Smith to inform him or her of the matters relevant to his or her decision whether, and if so upon what terms and conditions, he or she would enter into such a Retainer Agreement.

47                  Further, or in the alternative, prior to and at the time of making each Retainer Agreement, NRMA Insurance and/or Smith assumed responsibility for informing the NRMA Insured of the matters relevant to that decision.

48                  By reason of the circumstances set forth in paragraphs 46 and/or 47 above, at all material times NRMA Insurance and/or Smith owed to NRMA Insured a duty to take reasonable care in and about informing the NRMA Insured of the matters relevant to that decision.

49                  Further, or in the alternative, prior to and at the time of making each Retainer Agreement, there existed between Smith and the NRMA Insured a prospective or actual relationship of solicitor and client such that Smith owed to the NRMA Insured certain duties of fiduciary nature which included:

(a)        a duty not to place herself in a position where her duty to the NRMA Insured conflicted with her duty to another client, namely NRMA Insurance;

(b)        a duty not to place herself in a position where her duty to the NRMA Insured conflicted with her personal interests; and

(c)        a duty to inform the NRMA Insured of all the matters relevant to his or her decision whether, and if so and on what terms and conditions, to enter into such a Retainer Agreement.

 

50                     Further, or in the alternative, prior to and at the time of entering into each Retainer Agreement:

(a)        the NRMA Insured was entitled to recover from the named defendant in the relevant Demurrage Claim by way of damages an amount equal to the amount paid by NRMA Insurance to Hertz in respect of the Courtesy Car;

(b)        the NRMA Insured was entitled to receive the Judgment Moneys for his or her own benefit;

(c)        the NRMA Insured was under no obligation to commence or maintain proceedings to enforce those entitlements;

(d)        neither NRMA Insurance nor Smith was entitled to commence or maintain the relevant Demurrage Claim in the name of the NRMA Insured;

(e)        neither NRMA Insurance nor Smith was entitled to the Judgment Moneys or any part thereof;

(f)         the NRMA Insured was not obliged to assist NRMA Insurance or Smith in or about commencing or maintaining the relevant Demurrage Claim;

(g)        the NRMA Insured did not know Smith acted for NRMA Insurance;

(h)        the NRMA Insured did not know that he or she was not obliged, or alternatively did not know whether he or she was obliged, to assist NRMA Insurance or Smith in or about commencing or maintaining the relevant Demurrage Claim;

(i)         there was no benefit to the NRMA Insured in entering into the Retainer Agreement;

(j)         the NRMA Insured did not know that the NRMA Insured was entitled to the Judgment Moneys or that NRMA Insurance was not so entitled;

(k)        the Retainer Agreement, if entered into, might give NRMA Insurance a benefit in that it might permit NRMA Insurance to receive and/or retain for its own benefit and use the Judgment Moneys, being moneys to which it was not otherwise entitled;

(l)         the NRMA Insured did not know that the Retainer Agreement, if entered into, might give NRMA Insurance a benefit to which it was not otherwise entitled, namely that it might permit NRMA Insurance to receive and/or retain for its own benefit and use the Judgment Moneys;

(m)       NRMA Insurance and/or Smith ought reasonably to have known or suspected that the NRMA Insured did not know that the Retainer Agreement, if entered into, might give NRMA Insurance a benefit to which it was not otherwise entitled, namely that it might permit NRMA Insurance to receive and/or retain for its own benefit and use the Judgment Moneys;

(n)        the Retainer Agreement, if entered into, might give Smith a benefit in that it might protect her from the Applicant’s claims against her herein and/or might permit her to receive and/or retain for her own use and benefit part of the Judgment Moneys, being moneys to which she was not otherwise entitled;

(o)        the NRMA Insured did not know that the Retainer Agreement, if entered into, might give Smith a benefit, in that it might protect her from the Applicant’s claims against her herein and/or might permit her to receive and/or retain for her own use and benefit part of the Judgment Moneys; and

(p)        NRMA Insurance and/or Smith ought reasonably to have known or suspected that the NRMA Insured did not know that the Retainer Agreement, if entered into, might give Smith a benefit, in that it might protect her from the Applicant’s claim against her herein and/or might permit her to receive and/or retain for her own use and benefit part of the Judgment Moneys;

(q)        NRMA Insurance and Smith well knew or ought to have known that they would be more likely to obtain a monetary benefit if the matters referred to in subparagraphs (a) to (k) and (n) were not disclosed to the NRMA Insured;

(r)        the NRMA Insured did not have legal representation;

(s)        neither NRMA Insurance nor Smith advised or suggested to the NRMA Insured that he or she obtain independent legal advice; and

(t)         Smith was (sic) a solicitor of the Supreme Court of New South Wales, with duties and obligations as such, represented to the NRMA Insured that she was a solicitor of the Supreme Court of New South Wales and ought reasonably to have known that the NRMA Insured would repose trust and confidence in her given her position.

 

51                     Prior to (and in particular at the time of presenting the draft Retainer Agreement to the NRMA Insured) and at the time of making each Retainer Agreement, NRMA Insurance and/or Smith refrained (otherwise than inadvertently) from informing the NRMA Insured of the matters referred to in paragraph 50(a) to (i), (h), (n) and (q).

52                  By reason of the matters referred to paragraphs 41 to 51 above, that failure to inform constituted conduct by NRMA Insurance and/or Smith in trade or commerce that was misleading or deceptive or likely to mislead or deceive in contravention of section 52 of the TP Act and/or section 42 of the FT Act.

53                  Acting on the faith of that conduct and induced thereby the NRMA Insured entered into the Retainer Agreement with Smith.

54                  Further, or in the alternative, Smith is, within the meaning of section 75B and section 80(1)(c) and (e) a person involved in the conduct of NRMA Insurance pleaded in paragraphs 42 and 52 above in that she aided, abetted, concerned (sic) and/or procured the same conduct and/or was knowingly concerned in and/or party to the said conduct.

55                  As a result of the contraventions referred to in paragraphs 21A, 21B, 23A, 35A, 44, 52 and/or 54 above, the Applicant has suffered loss and damage.

Particulars

In the absence of the contraventions, the NRMA Insured would not have entered into the Retainer Agreement. As a result either:

(a)        the relevant Demurrage Claim would not have been pursued and thus the Applicant would not have paid or be liable to pay the Judgment Moneys and would not have incurred the legal fees and expenses which it has paid or is liable to pay to its own solicitors in respect of that Demurrage Claim; or

(b)        the Applicant would be entitled to recover such sums from NRMA Insurance and/or Smith in these proceedings upon the bases set forth in paragraphs 1 to 40 above.

56                  Further, or in the alternative, in some instances, the Retainer Agreement purports to be or to include a ratification of acts which NRMA Insurance and/or Smith had previously done in the name of the NRMA Insured but without the authority of the NRMA Insured.

57                  At the time of making the Retainer Agreement, the NRMA Insured did not have full knowledge of all the material circumstances in which such acts were done.

Particulars

The NRMA Insured did not have full knowledge of any of the matters referred to in paragraph 50(a) to (t) above.

58                     In the premises, to the extent to which each Retainer Agreement purports to be or to include a ratification of such acts, it is invalid and ineffective.

            AND the Applicant claims relief, including injunctive relief, set forth in the Application filed herein.

 

                                                                                    …………………………………..

                                                                                    Solicitor for the Applicant