Case: Deangrove Pty Ltd (Rec &amp; Mgrs Aptd) v Commonwealth Bank of Australia [2001] FCA 173 ; (2001) 108 FCR 77
Outcome: considered
I think the answer to that question is: not necessarily. In Deangrove Pty Ltd (Rec &amp; Mgrs Aptd) v Commonwealth Bank of Australia [2001] FCA 173 ; (2001) 108 FCR 77, one of a number of points which Sackville J had to decide arose from the circumstance that the applicants had, in a previous proceeding, several times failed to comply with an order that they file a Statement of Claim, in consequence of which that proceeding was dismissed. A few months later, the instant proceeding was commenced by the same applicants against the same respondent as had been parties to the earlier proceeding. Identical relief was claimed. Sackville J dealt with the argument that the later proceeding amounted to an abuse of process as follows (108 FCR at 82-83): "[21] Mr Bell relied on a line of English authority in holding that it is an abuse of process for a litigant to commence fresh proceedings founded on the same cause of action as previous proceedings, where the previous proceedings have been terminated in consequence of the litigant's failure to comply with self-executing orders (which are known as "unless orders" in England). Mr Bell relied particularly on Janov v Morris [1981] 3 All ER 780. In that case, an action for damages for breach of contract was dismissed in consequence of an order that, unless the plaintiff issued and served a summons for directions by a particular date, the action would be dismissed for want of prosecution. Three months later, the plaintiff brought a second action against the defendant founded on the same cause of action. The master struck out the second action as an abuse of process but, on appeal, a judge in chambers allowed the appeal and rescinded the master's order. [22] A further appeal to the Court of Appeal was allowed. Dunn LJ, with whom Watkins LJ agreed, said this (at 785): 'The court then has to consider whether, in the exercise of its discretion under Ord 18, r 19, [the] second action should be struck out. In my view, the court should be cautious in allowing the second action to continue and should have due regard to the necessity of maintaining the principle that orders are made to be complied with and not to be ignored... I regard it as a matter of discretion to be exercised having regard to the circumstances of the particular case. In this case there had, from first to last, been no explanation whatever by the plaintiff why there was the 10-month delay before the application to strike out the first action.... There was no explanation at all why he failed to comply with the 'unless' order [that is, the self-executing order] , and there has been no indication in this present action that he intends to comply with the orders of the court any more than he did in the first action. Indeed, he is still in contempt of court.' [23] An important factor in the reasoning of the Court of Appeal in Janov v Morris was the absence of any explanation for the failure to comply with the self-executing order. A similar approach has been taken in later English cases. In Re Jokai Tea Holdings Ltd [1993] 1 All ER 630, Browne-Wilkinson V-C observed (at 637) that the basis of the decision in Janov v Morris 'was that the failure to comply with the peremptory order was contumacious.... It is clear that the court, in reaching the conclusion that the conduct was contumacious, placed much reliance on the fact that no explanation or excuse being given by the plaintiff for his disobedience to the order. In my judgment, in cases in which the court has to decide what are the consequences of a failure to comply with an 'unless' order, the relevant question is whether such failure is intentional and contumelious. The court should not be astute to find excuses for such failure since obedience to orders of the court is the foundation on which its authority is founded. But, if a party can clearly demonstrate that there was no intention to ignore or flout the order and that the failure to obey was due to extraneous circumstances, such failure to obey is not to be treated as contumelious and therefore does not disentitle the litigant to rights which he would otherwise have enjoyed.' See also Grand Metropolitan Nominee (No 2) Co Ltd v Evans [1993] 1 All ER 642 (CA)". In Deangrove , the applicants' solicitor gave evidence that counsel had advised that their cause of action was not then complete, in consequence of which a Statement of Claim could not be drawn. Counsel advised that the applicants should allow the self-executing order to take effect. Sackville J accepted this evidence, and observed that it demonstrated that the applicants' behaviour had not been contumacious or such as to reflect wilful disobedience to the orders of the court. 35 The proposition that the later proceedings in Deangrove might have been regarded as an abuse of process not in the sense of demonstrating contumely but in the sense of an attempt to relitigate a matter which had previously been the subject of a final order disposing of identical proceedings appears not to have been the way the matter was put to Sackville J. That proposition was put to Holmes J in Clout v Klein [2001] QSC 401. There the earlier proceeding had been terminated not by a self-executing order but by a direct order of a Judge of the court. The ground which sustained the order, however, was that the plaintiffs in that proceeding had failed to comply with an order for security for costs. His Honour referred (at [44]) to some cases in which the application of the Anshun principle to situations in which there had been no adjudication had been doubted; doubts which, in my respectful view, would almost always be regarded as well-founded. However, on the facts, his Honour held that it was not unreasonable for the plaintiff which was common to both proceedings not to have raised the relevant claim in the earlier proceeding. 44 I do not believe that I would, on the facts of the present case, be justified in finding contumely on the part of the applicant apropos the self-executing order in the Victorian proceeding. Mr Frenkel did not put his case on this basis, at least explicitly, but he did urge me to find that the applicant's purpose in commencing the present proceeding was to "avoid" the operation and consequences of that order. In a sense it was, but in another sense so to conclude is to do no more than to beg the question. Although the applicant appears to remain in breach of so much of the order of Mandie J as required it provide security (a matter which is not for me to decide), it has suffered the adverse consequences of the self-executing part of that order. On one view, the respondents have achieved more from this sequence of events than they could have hoped for had security been provided and the Victorian proceeding continued. As in Deangrove , I think that the correct approach is to treat the applicant as, prima facie at least, entitled to allow the Victorian self-executing order to operate to its own disadvantage without holding that such conduct involves contumely.