WEEK 3 Topic Pleading and Joinder of claims and parties, Representative and Class Actions 1) Res Judicata (Colbran 363-370) Res judicata is a type of plea made in court that precludes the relitgation of certain claims of actions between two parties on the same legal issue. This plea is also known as litigation estoppels, cause of action estoppels. The following case looks at this type of Estoppel Henderson v Henderson Wigram VC: Where a given matter becomes the subject matter of litigation in and of adjudication by a court of competent jurisdiction, the court requires that parties to that litigation 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 apart of their case. The plea of res judicata applies not only to points upon which the court was actually required by the parties to form an opinion on, but to every point which properly belonged in the subject of litigation. Port of Melbourne Authority v Anshun This British authority was cited with approval in the HCA case of: Here some worker injured himself on a crane operated by Anshun but hired from the Port Authority. At trial the worker successfully sued for damages and the supreme court of VIC ordered that Anshun and the PMA share burden for damages. After proceedings PMA commenced proceedings against Anshun, claiming an indemnity for payment of damages arising out of their hire purchase agreement. PMA failed in the supreme court and now appeals to the HCA. Gibbs CJ: [His honor cited with approval the passage from Henderson] In considering whether a failure to plead a defence available in an earlier action gives rise to an estoppels in subsequent litigation early authorities distinguished between failure to traverse an allegation made by the other side, and failure to plead affirmative matter which would not have conflicted with any traversable allegation[ In other words you must distinguish between defences to arguments made by the other side, and positive arguments you may have that do not conflict with arguments made by the other side. BTW traversable argument in a legal context means defendable argument.] 1
The general rule is that a defendant having a claim available by way of setoff, counterclaim, or cross petition, has an election to so plead it, or to reserve it for a future independent action, and a prior action in which a claim might have been asserted as a setoff, counterclaim, or cross petition is no bar to a subsequent independent action. [So any positive argument that does not conflict with an argument made by the other side may be argued in a new case, however if it was a possible defence to a claim made by the other side you re screwed. This is as the law applies to defendants. In the case of plaintiffs, res judicata applies when the cause of action is exactly the same as in the previous case.] Issue Estoppel There is a further subset of estoppels relating to re-litigation of claims called Issue Estoppel. The following case examines the difference between the two: Arnold v National Westminster Bank The appellant in this case had a negative ruling made on him by a high court judge. It was found on appeal that ruling was erroneous. He now brings proceedings in the house of lords to re-open proceedings. Lord Keith of Kinkel: It is appropriate to commence by noticing the distinction between cause of action estoppels (res judicata) and issue estoppels. Cause of action estoppels arises where the cause of action in the later proceedings is identical to that in earlier proceedings, the latter having been between the same parties or their privies and having involved the same subject matter. In such a case the rule is absolute in relation to all points decided unless fraud or collusion is alleged. [Issue estoppels involve the same parties but different causes of action, however they have a common element to them e.g the existence of a valid contract or a duty of care.] [His lordship then referred to the passage from Henderson] It will be seen that this passage appears to have opened the door towards the possibility that cause of action estoppels may not apply in its full rigour where the earlier decision did not in terms include, because they were not raised points which might have been vital to the existence or non existence in a cause of action. Issue estoppels may arise where a particular issue forming a necessary ingredient in a cause of action has been litigated and decided and in subsequent proceedings between the same parties involving a different cause of action to which the same issue is relevant one of the parties seeks to reopen that issue. Issue estoppels has been extended to cover not only the cases where a particular point has been raised and specifically determined in earlier proceedings, but also where in the subsequent proceedings it is sought to raise a point which might have been but not raised in the earlier. 2
It is important to note that res judicata will only apply if there has been an earlier concluded decision. A simple discontinuation of proceedings will not warrant the application of res judicata (Running Pygmy productions) A case may be re-opened if it would aid in the administration of justice (s56 CPA) 2) Joinder In the law, a cause of action is a set of facts sufficient to justify a right to sue to obtain money, property, or the enforcement of a right against another party. In English law the document containing such facts is called a statement of claim. Joinder: Joinder is a legal term, which refers to the process of joining two or more legal issues together to be heard in one hearing or trial. It is done when the issues or parties involved overlap sufficiently to make the process more efficient or more fair. It is important to note the difference between joinder of causes of action and joinder of parties. A joinder of a cause of action is dealt with under rule 6.18 of the UCPR. Under a joinder for a cause of action, multiple causes of action are levied against one defendant. Under a joinder for parties, the cause of action must be sufficiently common between multiple parties to necessitate a joinder. (UCPR 6.19) Generally speaking A plaintiff may join more than one cause of action when he or she sues in the same capacity and claims the defendant to be liable in the same capacity in respect of each cause of action (joinder of causes of action) An example might be where the plaintiff as employee sues the defendant as employer for unpaid wages and not providing a safe working environment. The two causes of action are completely separate, but both rely upon the plaintiff and the defendant in the same capacities. Rule 6.18 also provides for joining of causes of action where the defendant is the executor of the liable party s estate. Joinders may also be used in tort, whereby a prospective plaintiff will attempt to join as many possible defendants as possible to an action in order to gain maximum recovery of damages. (Joinder of parties) A party effecting a joinder must consider the costs in doing so. A party is not automatically entitled to a sanderson or bullock ruling where the costs of a party to a joinder who is not found liable are paid for by the liable party. The idea of joinders are dealt with in the UCPR 6.19 Under UCPR 6.19 two or more parties may be joined together as plaintiffs or defendants if: Allowing each to have separate trials would give rise to a common question of law or fact AND All rights to relief claimed in the originating process(proceedings) arise from a common transaction or a series of common transactions. 3
Or a court may grant leave for such a joinder. The second part of rule 6.19 means that if the relief that the plaintiff seeks arises out of a series of transactions (or events) then they may be joined with another plaintiff whose claim arises from the same series of transactions. What constitutes a common transaction is discussed in the following cases: Transaction is liberally construed and is not restricted to a breach of a contractual relationship. Bendir v Anson (1936) 3 All ER 326 Lord Wright considered the construction of a building which blocked the light to two buildings on the opposite side of the street was a transaction. Birtles v Commonwealth [1960] VR 247 A solicitors failure to issue a notice of the plaintiffs intention to sue within the time limit was a transaction allowing the joinder of the solicitor as a co-defendant in the plaintiff s personal injury action. The plaintiffs must show a causal act or breach by the defendant which damaged the plaintiffs. Payne v Young (1980)145 CLR 609 Seven plaintiffs joined in an action for the repayment of slaughter fees and for a declaration that the regulations under which the fees were levied were invalid as imposing an excise. The fees were levied for meat inspections. High Court upheld the defendants arguments against joinder. Each plaintiff had entered into a separate transaction with the inspection authorities. The transactions were not related. There was a common interest in the validity of the regulations but this was not enough to justify joinder. Barwick CJ Mason J there was no common participation by the plaintiffs in the inspection services each series of transactions was peculiar to each individual plaintiff Bishop v Bridgelands Securities A bunch of plaintiffs wished to join together to sue Bridgelands. The claim arose from a bunch of letters sent from the defendants to the plaintiffs, which caused them to invest in unsecured companies which eventually went bankrupt causing massive financial loss. The court felt obliged to use the precedent of Young, because each letter contained different circumstances and transactions. However the court still ordered a joinder to be used under UCPR 6.22 because it was felt that a joinder would lower the costs and time delay for the proceedings. 3) Representative and Class Actions (Colbran 406-436) Part A. The aim is to provide a broad overview of the law and practice relating to representative and class actions, and the origin of the law. It is important to recognize the factual situations when a class action might apply so please ensure that your reading explores the relevant facts. Wtf is a class action? 4
Class actions (also known as representative actions) are an equitable practice which allows a single person or party to bring proceedings against a defendant on behalf of a number of other plaintiffs with the same interests. Under UCPR 7.4, a class action may be brought where a single person can represent a group of either defendants or plaintiffs if they have the SAME interests. (e.g denying liability in tort, or enforcing a contract) The practical consequence of a class action is that if successful, a defendant may be liable not only to the litigating party, but also to all parties joined in the action. Carnie v Esanda Finance Corp Ltd The modern approach to representative actions was discussed in the case of: The appellants were farmers who had obtained credit from the defendant, sought a declaration that certain agreements between themselves and the defendants were in breach of the Credit Act NSW and thus void. The appellants also sought to establish a class action together with parties privy to the same agreements. The defendants challenged the validity of the class action. Mason CJ: Whether the present case was or was not a class action is not the critical question. More than that it is not a question which is susceptible of a precise or instructive answer... Once the existence of numerous parties and the requisite commonality of interest are ascertained the rule is brought into operation subject only to the exercise of the courts power to do otherwise. And that leaves for consideration the question whether the case is one in which the court should in the exercise of that power, make an order that the action should not continue as a representative action. [His honor then referred to several considerations which should be made when deciding whether a representative action should be used] (1) Whether or not consent is required for the group members, the right of such members to opt out of proceedings, (3) the position of persons under a disability, (4) alterations to the description of the group, settlement and discontinuance of proceedings and giving the various notices to the group members. [His honor then said that for rep actions, the interpretation of requisite commonality of interest is to be interpreted liberally in determining whether to allow a rep action] Toohey and Gaudron JJ: [Their honors noted that under legislation a representative action may be commenced by parties with similar interests unless otherwise ordered by a court] If the representative action succeeds those represented will have the benefit of declaratory relief as to the meaning of the Act. Whether they choose to take advantage of such a declaration will be a matter for them. But what if the action fails? [Their honors then referred to the case of Naken v GM of Canada].. the court was clearly concerned as to the consequences of res judicata for those who sought to be represented particularly as a fixed sum was sought for each purchaser of a motor vehicle, though each might still have rights flowing from the contract between themselves and GM. [His honor here is making the comment that the doctrine of Res judicata might 5
unfairly prejudice parties in rep action if they lose, making them unable to enforce rights they otherwise would have had] In the argument before the court nothing emerged to show that members of the class in question would be prejudiced by the outcome of this action other than in the obvious sense that they would be bound by the decision of the court... Appeal allowed. While the UCPR deals with representative actions in NSW courts, the Federal court of Australia has separate rules for representative action. Under s33c(1) of the federal court rules a representative action may only be brought under certain circumstances such as: where 7 or more persons wish to bring an action; and the claims of all those persons are in respect of or arise out of the same similar or related circumstances and the claims of all those persons give rise to a substantial common issue of law or fact. It is important to note that the wording in the legislation specifically implies that all these criterion must be met for a representative action. What exactly is defined as a substantial common issue of law or fact is discussed in the case of: Wong v Silkfield The appellants in this case wished to bring a rep action against a vendor of land. At issue was the application of s33c(1) and whether such an action gave rise to a substantial issue of law or fact. The court: The term substantial may have various shades of meaning...in the case of Carnie, Mason, Deane and Dawson JJ expressed the view that to equate the meaning of the phrase same interest with a common ingredient in the cause of action of each member might not adequately reflect the content of the statute. Their honours said that the expression may extend to a significant common interest in the resolution of any question of law or fact arising from in the relevant proceedings. Toohey and Gaudron JJ treated as sufficient a significant question common to all members of the class, to be determined by the grant of declaratory relief. Clearly the purpose of the enactment of this legislation was not to narrow access to the new form of representative proceedings beyond that which applied under regimes considered in cases such as Carnie. This suggests that, when used to identify the threshold requirements of 33C(1), substantial does not indicate that which is large or of special significant or would have a major impact on litigation, but rather is directed to issues which are of real substance. 6