Case: Spalla v St George Motor Finance Ltd (No 6 ) [2004] FCA 1699
Outcome: referred to
On 20 December 2004, French J ordered that most of the statement of claim in the primary proceeding be struck out: see Spalla v St George Motor Finance Ltd (No 6 ) [2004] FCA 1699 (" Spalla (No 6) "). In essence, his Honour held that most of the statement of claim was an abuse of process because it sought to relitigate issues that had been determined by Finkelstein J in proceeding V 74 of 1999: see Spalla (No 6) at [2]-[3], [71]-[108]. His Honour struck out all of Irlmond's claims for conversion and breach of duties against the St George and the Deloitte parties. 54 The only claim of Irlmond that was not struck out was the claim for $1.3 million against St George Motor Wholesale. That claim related to the application of proceeds of the sale of Essendon Mitsubishi which was a discrete event that post-dated the judgment of Finkelstein J. For this reason, his Honour concluded (at [91]-[92]) that the claim should not be struck out as an attempt to relitigate a matter already determined by Finkelstein J. At [92], however, his Honour expressed doubt as to whether "the impugned payment of $1.3 million" would be shown "to be anything other than a continuation" of practices already approved by Finkelstein J. His Honour did not strike out Mr Spalla's and Mr Still's claims for malicious prosecution and injurious falsehood: see Spalla (No 6) at [110]-[116]. 55 On 24 December 2004, Messrs Beck and Home filed a notice of motion seeking leave to appeal from the interlocutory orders of French J allowing Mr Spalla and Mr Still liberty to continue their claims for malicious prosecution and injurious falsehood. This application was given proceeding number VID 54 of 2005. On 31 January 2005, Irlmond also sought leave to appeal from the orders of French J that were unfavourable to it. This application was given proceeding number VID 83 of 2005. These two proceedings (hereafter "the appeals") were to be heard together. 56 With the judgment of French J in December 2004 and the institution of the appeals in January 2005, the primary proceeding entered a new stage and, so far as ILF, Irlmond, Mr Rambaldi and HWL were concerned, led to their reappraisal of the litigation. 57 On 13 January 2005, prior to Irlmond filing its appeal, Mr Vasudevan, Mr Bowman and Mr Stephen Foale from ILF, and Mr Borden and Ms April Arslan met at the offices of Pitcher Partners, in order to discuss French J's judgment. Mr Rambaldi did not attend although, as copies of Mr Vasudevan's emails of 13 and 23 January 2005 attest, Mr Vasudevan kept him informed. In these emails, Mr Vasudevan reported to Mr Rambaldi that Mr Bowman was concerned about ILF's exposure to any personal costs liability incurred by Mr Rambaldi or its own liability for costs as a "third party" beneficiary of the action. Mr Vasudevan also reported to Mr Rambaldi that HWL estimated that solicitor/client costs for the respondents would be between $1 million and $2 million. Significantly for present purposes, Mr Vasudevan notified Mr Rambaldi that: "There may be a possibility that Delloites [sic] may entertain the possibility of settling the matter or ending the matter where each party bears [its] own costs, and in that regard, Borden was prepared to help with the appeal. Spalla will not be a factor in settlement negotiations as if he does not come to the party, then IMF, HWL and the liquidator will drop this matter." Mr Vasudevan advised Mr Rambaldi that, after HWL left, Mr Bowman told Mr Vasudevan, that ILF was considering withdrawing its indemnity, although it would not do so until after the appeal was lodged and "if settlement negotiations do not go well".