FEDERAL COURT OF AUSTRALIA Yates Property Corporation Pty Ltd v Boland [2000] FCA 1106 COSTS – Costs of application to amend cross‑claim – no longer any issue of liability of respondents to applicant – substantive issues resolved – no judgment on applications on substantive issues – resolution of costs of application by reference to substantive issues although no judgment given on substantive issues. PLEADINGS – Cross-claim – application to amend cross-claim – claim that amendment would cause irreparable prejudice – prejudice alleged on basis of length of time between initial hearing and proposed hearing of amended cross-claim – no irreparable prejudice. DAMAGES – Damages on cross-claim - application to amend cross-claim – application based on claim for contribution – contribution claim based on Law Reform (Miscellaneous Provisions) Act 1946 (NSW) and on equity – claim based on statute inapplicable on facts – claim based on equity failed because of lack of co-ordinate liability or common burden. ESTOPPEL – Issue estoppel – application to amend cross-claim – challenge to amendment of cross‑claim based on existence of issue estoppel – determination of ultimate fact and evidentiary fact – whether duty of care owed by solicitor to client same as duty owed by counsel to client – no identity of issues. ESTOPPEL – Anshun estoppel – application to amend cross-claim – whether amendment of cross‑claim would create an inconsistent judgment – no inconsistent judgment. Federal Court of Australia Act 1976 (Cth): s 43 Federal Court Rules: O 13 r2(7) Story, Commentaries on Equity Jurisprudence 3rd ed 1920 Spencer Bower et al, The Doctrine of Res Judicata 3rd ed 1996 Australian Securities Commission v Aust‑Home Investments Ltd (1993) 44 FCR 194 referred to Gribbles Pathology Pty Ltd v Health Insurance Commission (1997) 80 FCR 284 referred to Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 143 ALR 1 referred to Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 distinguished James Hardie & Coy Pty Limited v Seltsam Pty Ltd (1998) 196 CLR 53 distinguished NRMA Ltd v Morgan & Ors (No 3) (Giles J, 4 August 1999, unreported, New South Wales Supreme Court) distinguished Albion Insurance Co Ltd v Government Insurance Office of NSW (1969) 121 CLR 342 distinguished Blair v Curran (1939) 62 CLR 464 followed Murphy v Abi‑Saab (1995) 37 NSWLR 280 followed Jackson v Goldsmith (1950) 81 CLR 446 referred to Linsley v Petrie [1998] 1 VR 427 followed Brunsden v Humphrey (1884) 14 QBD 141 followed Sandtara Pty Ltd v Abigroup Ltd (1997) 42 NSWLR 5 followed North West Water Ltd v Binnie & Partners [1990] 3 All ER 547 distinguished Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 referred to Arnold v National Westminster Bank Plc [1991] 2 AC 93 not followed O'Toole v Charles David Pty Limited (1991) 171 CLR 232 referred to YATES PROPERTY CORPORATION PTY LIMITED v JOHN BOLAND (as representative of Abbott Tout Russell Kennedy Solicitors) & ORS NG 44 of 1993 GOLDBERG J SYDNEY 9 AUGUST 2000 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY NG 44 of 1993 BETWEEN: YATES PROPERTY CORPORATION PTY LIMITED Applicant AND: JOHN BOLAND (as representative of Abbott Tout Russell Kennedy Solicitors) First Respondent THEODORE SIMOS Second Respondent JOHN WEBSTER Third Respondent JOHN BOLAND (as representative of Abbott Tout Russell Kennedy Solicitors) Cross Claimant THEODORE SIMOS First Cross Respondent JOHN WEBSTER Second Cross Respondent JUDGE: GOLDBERG J DATE OF ORDER: 9 AUGUST 2000 WHERE MADE: MELBOURNE (heard in Sydney) THE COURT ORDERS THAT: 1. The first respondent's amended cross‑claim against the second respondent filed on 13 October 1995 is dismissed. 2. The cross‑claimant pay to the first cross respondent his costs of and incidental to the amended cross‑claim up to 25 January 1999 including costs reserved up to that date. 3. The first cross respondent pay to the cross‑claimant its costs of and incidental to the cross‑claimant's motion filed 25 January 1999 and the first cross respondent's motion filed 9 April 1999 including any costs reserved in relation thereto. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY NG 44 of 1993 BETWEEN: YATES PROPERTY CORPORATION PTY LIMITED Applicant AND: JOHN BOLAND (as representative of Abbott Tout Russell Kennedy Solicitors) First Respondent THEODORE SIMOS Second Respondent JOHN WEBSTER Third Respondent JOHN BOLAND (as representative of Abbott Tout Russell Kennedy Solicitors) Cross Claimant THEODORE SIMOS First Cross Respondent JOHN WEBSTER Second Cross Respondent JUDGE: GOLDBERG J DATE: 9 AUGUST 2000 PLACE: MELBOURNE (heard in Sydney) REASONS FOR JUDGMENT Introduction 1 The only issue now outstanding in this matter in relation to the cross‑claim is the costs of the cross‑claimant ("Abbott Tout") and the first cross‑respondent ("Mr Simos" as he then was). The costs issue arises out of an amended cross‑claim by Abbott Tout against Mr Simos and the second cross‑respondent ("Mr Webster") filed on 13 October 1995, a motion filed by Abbott Tout on 25 January 1999 for leave to amend further that amended cross‑claim and a motion filed by Mr Simos on 9 April 1999 that it be dismissed. There is no longer any issue as to the liability of Abbott Tout, Mr Simos or Mr Webster to the applicant Yates Property Corporation Pty Limited ("Yates") as the High Court has upheld an appeal by Abbott Tout and Mr Webster and ordered in substance that the trial judge's order, that Yates' application against all respondents be dismissed, be reinstated: Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575. 2 The application by Abbott Tout for leave to amend further its amended cross‑claim and the application by Mr Simos that the amended cross‑claim be dismissed were argued before me on 4 and 11 June 1999. I reserved my decision on both applications. On 9 December 1999 the High Court handed down its decision on the appeal thereby rendering any issue on any counterclaim between Abbott Tout and Mr Simos moot. On 29 February 2000 the parties informed me that there was no longer any need for the applications which had been argued to be determined but that the parties could not agree on the issue of the costs of the applications. I was asked to determine the issue of costs and written submissions were subsequently filed on the issue of the costs of the applications and the costs of the amended cross‑claim. 3 Abbott Tout submitted that Mr Simos should pay its costs in relation to the two motions and that otherwise the cross‑claim should be dismissed with each party bearing its or his own costs. Mr Simos submitted that Abbott Tout should pay his costs incurred prior to January 1999 in relation to the amended cross‑claim and his costs of the two motions. 4 There have been a number of cases where a court has determined the issue of the costs of a proceeding although the matter has not proceeded to determination on the substantive issue before the court either because the substantive issue has been settled or because the matter has otherwise become moot: South East Queensland Electricity Board v Australian Telecommunications Commission (Pincus J, 10 February 1989, unreported); R v Gold Coast City Council; Ex parte Raysun Pty Ltd (1971) QWN 13; J T Stratford & Son Ltd v Linley (No 2) (1969) 1 WLR 1547; Australian Securities Commission v Aust‑Home Investments Ltd (1993) 44 FCR 194; Gribbles Pathology Pty Ltd v Health Insurance Commission (1997) 80 FCR 284. In each of these cases the court did not consider it necessary to determine the substantive merits of the matter before determining the appropriate order as to costs. 5 In Australian Securities Commission v Aust‑Home Investments Ltd (supra), Hill J examined a number of authorities and concluded that they supported the following propositions (at 201): "(1) Where neither party desires to proceed with litigation the Court should be ready to facilitate the conclusion of the proceedings by making a cost order: Stratford and the SEQEB case. (2) It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a Court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial: Stratford. This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue. (3) In determining the question of costs it would be appropriate, however, for the Court to determine whether the applicant acted reasonably in commencing the proceedings and whether the respondent acted reasonably in defending them (SEQEB). (4) In a particular case it might be appropriate for the Court in its discretion to consider the conduct of a respondent prior to the commencement of the proceedings where such conduct may have precipitated the litigation: cf: Sunday Times Newspaper Co Ltd v McIntosh (1933) 33 SR (NSW) 371. (5) Where the proceedings terminate after interlocutory relief has been granted, the Court may take into account the fact that interlocutory relief has been granted: cf Re Asiatic Electric Co Pty Ltd [1973] 1 NSWLR 603 at 606, a case which, however, depended upon the specific wording of the statute under consideration." In Gribbles Pathology Pty Ltd v Health Insurance Commission (supra) Finkelstein J emphasised that (at 287): "in the absence of a hearing on the merits it is difficult to see how any order, other than an order that each party bear its own costs, can be made except in special circumstances." In Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 143 ALR 1, McHugh J said (3‑4): "If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceeding." 6 Both Abbott Tout and Mr Simos submitted that their conduct in relation to the application to amend further the amended cross‑claim was reasonable, Abbott Tout submitted that, once filed, the hearing of that application should have been deferred pending the determination of the appeal to the High Court thereby avoiding the incurring of significant costs. Mr Simos had wanted the application determined before that appeal was determined so that any exposure he might have to liability to Abbott Tout was identified. 7 Although it is open to me on the authorities to which I have referred to determine the costs issues by reference to the reasonableness of the conduct of the parties in relation to the amendment application, I consider, in the circumstances of this case, that I should determine the costs issue by reference to the outcome of the application in respect of which I have been able to form a concluded considered view. Although the High Court decision has made it unnecessary to determine the application to amend further the amended cross‑claim, at the time the High Court decision was handed down I was well advanced in the preparation of my reasons for judgment. A hearing on the merits had occurred and all relevant matters were fully argued. I am therefore in a position to determine what orders I would have made had the two applications to amend further the amended cross‑claim, and to dismiss the amended cross‑claim, proceeded to judgment on the merits. 8 The discretion to order costs committed to me by s 43 of the Federal Court of Australia Act 1976 (Cth) is very wide and is only constrained by the need for me to exercise the discretion judicially: Hughes v Western Australian Cricket Association Inc (1986) ATPR 40‑748. It seems to me that where I am in a position to determine what would have been the outcome of the various applications, if judgment on those issues had been required, I should state what that determination would have been so that the incidence of costs can be determined by reference to what would have been the outcome of the applications. 9 I have reached the conclusion that I would have granted Abbott Tout leave to amend further its further amended cross‑claim and that, in those circumstances, I would have dismissed Mr Simos' application to dismiss the cross‑claim. Were it not for Abbott Tout's application to amend further its further amended cross‑claim, I would have granted Mr Simos' application to dismiss the cross‑claim. 10 In these circumstances I should make orders as to the costs of: · The cross-claim as amended up to 25 January 1999; · Abbott Tout's application to amend further that amended cross‑claim; · Mr Simos' application to dismiss the amended cross‑claim. For the reasons to which I shall refer the amended cross‑claim in its form as at 25 January 1999 was liable to be struck out or dismissed as not disclosing a cause of action against Mr Simos. In the events which have now occurred Mr Simos is entitled to have the amended cross‑claim dismissed. In those circumstances, Mr Simos should have his costs of the amended cross‑claim up to that point of time. 11 The fate of Mr Simos' application to dismiss the amended cross‑claim is integrally intertwined with the application by Abbott Tout that it be amended further. If leave to amend the further amended cross‑claim were to be granted, then the basis for dismissing the amended cross‑claim falls away. In those circumstances the costs of Mr Simos' application should follow the costs of the application to amend further the amended cross‑claim. 12 In the ordinary course, costs follow the event: Hughes v Western Australian Cricket Association Inc (supra) at 48,136. However Mr Simos submitted that Abbott Tout was seeking an indulgence and that the usual rule is that a party seeking an indulgence should pay the costs of the application irrespective of whether it is opposed successfully and especially where it throws up any difficult question. It is an over‑simplification of the events which occurred to characterise Abbott Tout's application as one seeking an "indulgence". At the time the cross‑claim and the amended cross‑claim were filed they provided an adequate basis for Abbott Tout to claim contribution from Mr Simos and Mr Webster particularly in the light of the understanding which had been reached between Abbott Tout, Mr Simos and Mr Webster. What occurred when Yates was obliged to abandon its appeal in respect of Mr Simos could not reasonably have been foreseen and was not due in any way to any default by Abbott Tout or conduct on its part. Although Abbott Tout was seeking leave to amend further its amended cross‑claim it was not seeking to do belatedly something which it should have done earlier at the time the cross‑claim was filed. Although it might have raised in the original cross‑claim the causes of action set out in the proposed further amended cross‑claim, it was not unreasonable for it not to do so. More particularly is this so when one has regard to the understanding reached between Abbott Tout, Mr Simos and Mr Webster. 13 Mr Simos resisted Abbott Tout's application on substantive grounds and, for the reasons to which I shall refer, he failed in that resistance on the merits of the substantive arguments. In those circumstances I consider that the costs should follow the event. I therefore consider that the following orders should be made: · The amended cross‑claim filed by Abbott Tout on 13 October 1995 is dismissed. · Abbott Tout pay to Mr Simos his costs of and incidental to the amended cross‑claim up to 25 January 1999 including costs reserved up to that date. · Mr Simos pay to Abbott Tout its costs of and incidental to Abbott Tout's motion filed 25 January 1999 and Mr Simos' motion filed 9 April 1999 including costs reserved in relation thereto. 14 The principal proceeding out of which the applications arose has been the subject of a judgment at first instance in favour of the respondents dismissing the claim by Yates for damages, a successful appeal by Yates against Abbott Tout and Mr Webster, the grant of an application by Abbott Tout and Mr Webster for special leave to appeal to the High Court and the granting of that leave and the allowing of that appeal by the High Court. Yates' appeal against the dismissal of its claim in favour of Mr Simos was dismissed after Yates was unable to comply with an order to provide security for the costs of its appeal against Mr Simos. 15 The reasoning which follows is predicated on the basis that the appeal to the High Court by Abbott Tout and Mr Webster has not been determined and that the further amendment of the amended cross‑claim is a live issue. It is necessary to proceed on this basis in order to determine how the costs of the amended cross‑claim and the costs of the two outstanding motions should be borne. Background 16 In June 1984 the Director of Public Works (NSW) informed Yates that its land in the Darling Harbour area was likely to be resumed by the proposed Darling Harbour Authority and that Yates should hold its development proposals in abeyance until the Authority could consider the matter. Proceedings by Yates to prevent the compulsory acquisition of the land were unsuccessful and on 7 May 1985 the land was acquired by the Darling Harbour Authority which became liable to pay compensation to Yates. 17 Yates retained Abbott Tout to act for it in respect of a claim for compensation and Mr Simos and Mr Webster were retained as senior counsel and junior counsel respectively. Yates filed its claim for compensation with the Land and Environment Court on 2 January 1986. Thereafter substantial work was carried out to prepare the claim which was interrupted by the winding up of Yates and the appointment of a liquidator to it. Three valuers were retained to give evidence on behalf of Yates. The trial in the Land and Environment Court commenced on 30 January 1990 before Cripps CJ who handed down his decision on 1 May 1990 fixing the compensation payable to Yates at $22,334,500: Yates Property Corporation Pty Ltd v Darling Harbour Authority (1990) 70 LGRA 187. Yates appealed to the Court of Appeal in New South Wales and on 11 July 1991 the Court of Appeal by a majority found that Cripps CJ had erred when dealing with the claim made for special value and remitted the case to the Land and Environment Court to determine what additional compensation (if any) should be allowed for special value: Yates Property Corporation Pty Ltd (In Liq) v Darling Harbour Authority (1991) 24 NSWLR 156. When the matter came back before Cripps CJ His Honour refused Yates leave to reopen its case to lead evidence to quantify the economic value of Yates being in a position to develop a market on the land immediately and refused to increase his award. An appeal against this decision to the Court of Appeal of New South Wales was compromised when the Authority agreed to pay Yates a further $1.25m. 18 Yates claimed that it should have received larger compensation for the work it had performed in bringing the market project to a state of imminent development and said that but for the negligence of Abbott Tout and counsel it would have received further compensation. 19 On 29 January 1993 Yates filed an application against Abbott Tout, Mr Simos and Mr Webster alleging that the claim in the Land and Environment Court had not been formulated or presented properly or in accordance with proper principles, that Yates incurred wasted expenditure and lost the opportunity to formulate and establish a claim for special value in accordance with proper principles and practice and valuation law and that it therefore received inadequate compensation for special value. Yates also sought damages for misleading and deceptive conduct against all respondents and breach of fiduciary duty against Abbott Tout. On 5 June 1997 Branson J dismissed Yates' claims finding that none of the respondents had been negligent in relation to the investigation, preparation and presentation of Yates' claim before the Land and Environment Court and that there was no misleading or deceptive conduct or breach of fiduciary duty: Yates Property Corporation Pty Ltd v Boland (1997) 145 ALR 169. 20 Yates appealed against the orders dismissing the claims against all three respondents. The respondents applied for an order that Yates provide security for their costs of the appeal. Yates was only able to provide security for the costs of Abbott Tout and Mr Webster and on 13 February 1998 Davies J ordered that the appeal against the order made in favour of Mr Simos be dismissed. 21 The appeal by Abbott Tout and Mr Webster came on for hearing before the Full Court of the Federal Court in March 1998 and on 5 August 1998 the Full Court allowed the appeals and ordered (which order was subsequently corrected under the slip rule) that the orders made by Branson J on 5 June 1997 in favour of Abbott Tout and Mr Webster be set aside and that the proceeding be remitted to another judge of the Court for the assessment of damages against Abbott Tout and Mr Webster: Yates Property Corporation Pty Limited v Boland (1998) 85 FCR 84. The Full Court also ordered that although Yates' appeal against Mr Simos did not proceed, Mr Simos should not be entitled to an order for his costs of the trial. 22 On 12 February 1999 the High Court granted Abbott Tout and Mr Webster special leave to appeal against the orders made against them and Mr Simos obtained special leave to appeal against the order depriving him of his costs of the trial. Those appeals were upheld and on 9 December 1999 the High Court ordered that the appeals be allowed with costs, that the orders of the Full Court of the Federal Court be set aside and that in place thereof it be ordered that the appeals to that Court (other than the appeal by Mr Yates against the order as to costs be made against him by Branson J) be dismissed with costs. 23 I turn to the sequence of events which occurred in relation to proceedings between the respondents between the commencement of the proceeding and the commencement of the trial. On 10 May 1993 the solicitors for Abbott Tout wrote to the solicitors for the other parties setting out a proposed time table for interlocutory matters which included the filing of cross‑claims and on 11 May 1993 Davies J ordered by consent, inter alia, that any cross‑claims be filed and served by 22 June 1993. No cross‑claims were filed pursuant to that order. There were numerous directions hearings between October 1993 and February 1995 but no further directions were made in relation to the filing of cross‑claims. 24 On 16 May 1995 Ms Michelle Carr, one of the solicitors for Mr Simos, had a telephone conversation with Mr David Hill, the solicitor for Abbott Tout, in which Mr Hill said that he had received advice to file a cross‑claim which would be a very formal document alleging that Abbott Tout relied on competent counsel. It was said that the respondents should not fight amongst themselves but that there had to be a mechanism for the apportionment of loss. There was also a reference to the fact that the cross‑claim would be bland. There was a further telephone conversation that day between Mr Frank Lawson, one of the solicitors for Mr Simos and Mr Hill in which there was further reference to the fact that any apportionment mechanism should be postponed. 25 On 24 May 1995 Abbott Tout filed a cross‑claim against Mr Simos and Mr Webster claiming that if the respondents were liable to Yates in respect of any of its causes of action then Abbott Tout was entitled to contribution to any judgment which might be given against it in favour of Yates. The cross‑claim claimed a declaration as to the apportionment of liability between Abbott Tout, Mr Simos and Mr Webster and consequential relief. 26 On 25 May the solicitors for Mr Webster sent a letter to each of the solicitors for Abbott Tout and Mr Simos which recorded an understanding which had been reached by the respondents. The terms of this letter are relied upon by Mr Simos as identifying the understanding upon which his solicitors acted thereafter in relation to the preparation and manner in which they ran the trial on his behalf. It was in the following terms: "RE: WEBSTER&ORSatsYATESPROPERTYCORPORATIONPTYLIMITED YOUR CLIENT: ABBOTT TOUT We refer to the telephone discussion between our Mr Connellan and your Mr Hill on 24 May 1995. This is [sic] letter is to record the understanding (as opposed to formal agreement) between the Respondents with respect to Cross Claims: 1. each of the Respondents will file Cross Claims against each of the other Respondents expressed in 'bland' language simply asserting that the [sic] in the event that the Respondent making the Cross Claim is held liable to the Applicant that Respondent would seek contribution from each of the other Respondents; 2. at the appropriate time the Respondents would seek an order from the Court that the hearing, in the first instance, would not require determination of the Cross Claims; 3. in the event that the Court was not prepared to make such an order then the Cross Claims would be determined in the same hearing as the Applicant's claims against the Respondents; 4. in the case of either 2 or 3 the Respondents would not file evidence on the Cross Claims (e.g. expert evidence from solicitors barristers etc.) which might assist the Applicant's claims against one or other of the Respondents; and 5. in the event that at any stage leading up to the hearing of the matter one or other of the Respondents wish to depart from the above then that Respondent would give notice to the other Respondents of its intention to do so to enable some consultation and discussions to take place between the Respondents. In relation to the last item a suggestion has been made that if a Respondent wished to proceed on a more fully detailed, formulated or particularised Cross Claim that such Cross Claim be circulated amongst the Respondents without being formally filed until, for example, shortly prior to the hearing or, indeed, during the course of the hearing. If additional evidence was intended to be relied upon by a Respondent in relation to a Cross Claim that evidence might be circulated amongst the Respondents without being filed until absolutely necessary. Please let me know whether the matter set forth in this letter properly reflects the understanding between the Respondents as it currently exists. Yours faithfully" On 23 June 1995 Abbott Tout's solicitors confirmed the understanding noted in the letter dated 25 May 1995 and on 15 November 1995 Mr Simos' solicitors wrote a letter confirming the understanding set out in the letter. 27 On 27 September 1995 the solicitors for Abbott Tout sent an amended cross‑claim to the solicitors for Mr Simos seeking their consent to its filing, which consent together with the consent of the other parties was given. The amended cross‑claim was filed on 13 October 1995. The only amendment in it was to seek in addition to a declaration as to apportionment of liability, an order that such judgment against Mr Simos and Mr Webster be given as may be necessary to give effect to such apportionment of liability as was declared. In its amended form the cross‑claim was in the following terms: "If: (a) the cross‑claimant [Abbott Tout] is liable to the applicant upon any of the causes of action pleaded by the applicant in the further amended statement of claim; and (b) the first cross‑respondent [Simos] or the second cross‑respondent [Webster] or both the first and second cross‑respondents is or are also liable to the applicant upon any of the causes of action pleaded against them by the applicant then the cross‑claimant is entitled to judgment against either the first cross‑respondent or the second cross‑respondent or both as the case may be, for contribution to any judgment which may be given against the cross‑claimant in favour of the applicant. The cross‑claimant claims: (i) A declaration as to the apportionment of liability between such of the cross‑claimant, first cross‑respondent and second cross‑respondent as may be held liable to the applicant upon any of the causes of action pleaded against them. (ii) Such judgment or other order or relief against the First and/or Second Cross Respondents as may be necessary to give effect to the apportionment of liability as declared pursuant to paragraph (i). (iii) An order that the first and second cross‑respondents pay the cross‑claimant's costs of the cross‑claim." (underlining in amended cross‑claim) 28 The trial before Branson J commenced on 3 March 1997. A directions hearing was held on 17 February 1997. At that time it had been agreed between the respondents that the determination of Abbott Tout's amended cross‑claim would not be dealt with at trial but cross‑claim issues would be resolved separately and subsequently if necessary. 29 In the course of the directions hearing Branson J asked senior counsel for Mr Simos whether he had pursued the issue of a defence to the amended cross‑claim. Counsel responded: "I say this now, your Honour, my familiarity with the underlying facts are not perfect and I may need to raise it your Honour at a later date. As between the respondents, my understanding is that consequent upon the filing of the cross‑claim an agreement is being reached not to pursue that before your Honour in these proceedings." Branson J asked whether the Court had been involved in that agreement and her Honour was told that the Court had not been involved. 30 The following exchange then occurred between senior counsel for Mr Simos and her Honour: "HER HONOUR:For my own part, Mr Allsop, can I say anything that you ask me not to deal with I will be more than happy not to deal with it. MR ALLSOP: Your Honour, if contrary to all our views any one or more of the respondents are found liable we will sort it out in some place somewhere. HER HONOUR: Yes, there probably are more suitable places in the end, Mr Allsop, I agree. MR ALLSOP: Your Honour, just while I am on my feet in relation to the --- HER HONOUR: Sorry, is it agreed by all those involved with that cross‑claim that it is not a matter that is being tried with the claim. MR ALLSOP: As I understand it. HER HONOUR: Yes very well I will make that note." The trial commenced two weeks thereafter. 31 Branson J delivered judgment on 5 June 1997 dismissing the application against all respondents and on 14 August 1997 her Honour made a costs order in which she ordered the applicant to pay the respondents' costs and ordered that Mr Ian Yates be liable with the applicant to meet those costs. Mr Yates appealed against the costs order made against him and that appeal was heard at the same time as the appeal against the dismissal of the claim. 32 On or shortly after 21 August 1997 each of the respondents filed a notice of motion seeking orders that Yates give security for their costs of the appeal. Mr Simos sought an order that in the absence of such security being provided the appeal as against him be dismissed. 33 On 7 October 1997 Davies J ordered Yates to provide security for the costs of each respondent in the sum of $100,000 on or before 15 December 1997. Yates failed to comply with the order for the provision of security of costs of Mr Simos and on 15 December 1997 Mr Simos applied to the Court for dismissal of the appeal as against him. The financial circumstances of Yates had changed and on 16 January 1998 Davies J varied his earlier order so as to require that Yates provide security in the sum of $40,000 in respect of each of the respondents by 30 January 1998. 34 Yates provided security for the costs of the appeal against Abbott Tout and Mr Webster but was unable to provide security for the costs of the appeal of Mr Simos and on 13 February 1998 Mr Simos applied to the Court for an order that the appeal as against him be dismissed. That application was not opposed by Abbott Tout or Mr Webster and Davies J ordered on that day that the appeal as against Mr Simos be dismissed with costs. 35 On the hearing of the appeals counsel representing Mr Simos appeared and were only heard in relation to the appeal by Mr Yates that he be personally liable for the costs of the respondents. 36 The Full Court delivered its reasons for judgment on 5 August 1998, allowed the appeals, set aside the orders made by Branson J on 5 June 1997 and 14 August 1997 and made consequential orders. The orders were clarified on 13 November 1998 pursuant to O 35 r7(3) of the Federal Court Rules to make it clear that it was the orders made by Branson J on 5 June 1997 and 14 August 1997 insofar as they related to Abbott Tout and Mr Webster which were set aside and that the proceeding was to be remitted to another judge of the Court for the assessment of damages against Abbott Tout and Mr Webster. 37 On 23 November 1998 a directions hearing was set down before me for the purpose of the giving of directions for the assessment of damages pursuant to the order of the Full Court. On 20 November 1998 Ms Carr, the solicitor for Mr Simos, had a telephone discussion with Mr Hill, the solicitor for Abbott Tout, in relation to an investigation he was undertaking at the time concerning the cross‑claim against Mr Simos. Mr Hill raised with Ms Carr the issue of amending the cross‑claim against Mr Simos. At the directions hearing Ms Carr told Mr Hill that if he had anything to show her in relation to the cross‑claim he should do so and they would consider their position. 38 On 5 January 1999 the solicitors for Mr Simos received from the solicitors for Abbott Tout a draft of a proposed further amended cross‑claim and on 25 January 1999 Abbott Tout filed a notice of motion seeking leave to file a further amended cross‑claim in the form of that draft. On 9 April 1999 Mr Simos filed a notice of motion seeking an order that the amended counterclaim filed on 13 October 1995 be dismissed. 39 The proposed further amended cross‑claim was amended further prior to the hearing of the application and the parties proceeded on the basis of that document being the form of the further amended cross‑claim in respect of which the leave was sought. 40 A notice of motion was also filed by Mr Webster seeking leave to deliver a cross‑claim against Mr Simos and Abbott Tout. That motion was initially opposed by Abbott Tout but it was settled on the basis that Mr Simos agreed to Mr Webster filing a cross‑claim limited to making a claim for contribution under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) and Mr Simos' right to have the cross‑claim dismissed at a later time was preserved. 41 The causes of action sought to be raised in Abbott Tout's proposed further amended cross‑claim include claims: · for apportionment of liability in equity or under s 5 of the Law Reform (Miscellaneous Provisions) Act; · that Mr Simos and Mr Webster breached the duty of care which they owed directly to Abbott Tout; · that Mr Simos and Mr Webster made representations to Abbott Tout which were misleading, deceptive or were likely to mislead or deceive in breach of s 42 of the Fair Trading Act 1987 (NSW). 42 Mr Simos opposed Abbott Tout being given leave to file the further amended cross‑claim on the following grounds: · he would suffer irremediable prejudice if the cross‑claim proceeded; · the judgment of Branson J created an issue estoppel between Abbott Tout and Mr Simos in relation to the issue whether he breached any duty of care he owed to Abbott Tout; · the allegations in relation to Mr Simos breaching a duty of care owed to Abbott Tout did not raise any cause of action. This claim was raised but was not pressed with any force. · Abbott Tout was estopped by virtue of the principles set out in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 from bringing any claim against Mr Simos relating to his conduct of the proceeding in the Land and Environment Court on behalf of Yates; · the allegations raising claims of misleading and deceptive conduct in contravention of s 42 of the Fair Trading Act were statute barred; · the apportionment claim whether based in equity or on s 5 of the Law Reform (Miscellaneous Provisions) Act was foreclosed by James Hardie & Coy Pty Limited v Seltsam Pty Ltd (1998) 196 CLR 53. Prejudice 43 Mr Simos contended that he approached his preparation for, and conduct of, the proceeding before Branson J on the basis that the only issue which would be litigated by way of cross‑claim was the issue of apportionment of liability between the respondents pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act. Mr Simos also contended that he approached the issue of any participation in the appeal on the same basis. The evidence relied upon by Mr Simos to support his claim of prejudice came from Ms Carr, the solicitor who acted for him in relation to the proceeding. Ms Carr believed that the cross‑claim based on s 5 of the Law Reform (Miscellaneous Provisions) Act was the only cross‑claim which would be litigated, that the only evidence which would be relied on in relation to that cross‑claim was the evidence before Branson J and that the deferral of the cross‑claim meant only the deferral of the submissions in relation to the cross‑claim until after judgment on Yates' claim had been given. 44 Ms Carr said that the understanding recorded in the letter of 25 May 1995 was her understanding at the time of the letter and at all times thereafter as to the intentions of the respondents concerning cross‑claims intended to be maintained in the proceeding. Ms Carr's belief as to what was the effect of the understanding recorded in the letter of 25 May 1995 is also recorded in two letters written to Mr Simos' professional indemnity insurer dated 22 and 25 May 1995. In those letters Ms Carr reported to the insurer the effect of the understanding reached between the respondents which was ultimately recorded in the letter of 25 May 1995. What is clear from those letters is that Ms Carr understood that if the Court found the respondents liable to Yates then on the basis of the evidence led by Yates the Court would be asked to determine the apportionment between the respondents. 45 Ms Carr said that her understanding dictated the manner in which she approached the trial of the proceeding and the appeal. Had she known or understood that Abbott Tout was intending to serve new cross‑claims raising substantive new allegations against Mr Simos for the purpose of circumventing the judgment in his favour prior to the Full Court hearing she would have taken a number of steps to obtain advice whether the cross‑claim should be struck out and whether the appeals before the Full Court should be deferred pending the resolution of the issues as to the cross‑claim. In substance, Ms Carr said that there were a number of steps she would have taken to protect Mr Simos' position in relation to the possible outcome of the appeal. 46 Ms Carr also contended that prejudice arose in relation to the manner in which the proceeding was conducted at trial. Her belief as to the meaning of the understanding contained in the letter of 25 May 1995 was that unless notice of an intention to the contrary was given before the hearing: · there would only ever be bland cross‑claims for contribution between the respondents; · there would never be evidence in support of the cross‑claims that would assist Yates in its claims against any of the respondents; · the only evidence for determining the cross‑claims would be the evidence at the trial of Yates' claims. Ms Carr said that if prior to commencement of the hearing before Branson J either Abbott Tout or Mr Webster had applied for leave to file substantive cross‑claims not limited to contribution claims, she would have done all that she could to have had them heard at the same time as the principal proceeding, so as to avoid Mr Simos giving evidence and being cross‑examined on more than one occasion, so as to avoid protraction of the litigation over an extended period and so as to avoid the risk of losing counsel in any later proceeding. She would have also formed the view that duplication of the proceeding would result in an added substantial cost burden which could have been avoided if the proposed cross‑claims had been heard with the principal claim. She would have opposed the granting of the leave to bring forward the cross‑claims but if leave was granted she would have taken steps to try and have them dealt with at the same time as the hearing of the principal claim. She would have instructed counsel to consider cross‑examination of the Abbott Tout solicitors who gave evidence and Mr Webster as to a range of matters which had not been the subject of cross‑examination. Ms Carr said that she would also have reconsidered the extent to which there should be co-operation with Mr Webster having regard to the potential conflict of interest between them. 47 There is an issue between Ms Carr and Mr Hill in relation to their belief or understanding as to what was the effect or consequence of the understanding recorded in the letter of 25 May 1995. The difference between them as to their belief is not critical to the determination of the issue before the Court as ultimately the relevant issue to be determined is whether Mr Simos would suffer irremediable prejudice if leave to file the further amended cross‑claim was granted. The resolution of that issue is not affected by the differing beliefs held by the two solicitors. 48 Mr Hill took the view that there should be a cross‑claim on foot under which Abbott Tout could seek to have liability apportioned and shared with the other respondents if the Court found fault on the part of any of the respondents. At the time the cross‑claim was drafted he believed that it was not in Abbott Tout's interest to make substantive allegations against the other respondents. Prior to the decision of the Full Federal Court he had not expected a situation where there was a decision against some respondents on the merits and in relation to others by default. It was for that reason that the application for leave to file a further amended cross‑claim was brought. 49 The solicitors for all the respondents believed in, and prior to, May 1995 that it was in the interests of the respondents to present a united front to the claim by Yates. Mr Hill did not intend that Abbott Tout would limit itself to a claim for contribution under s 5 of the Law Reform (Miscellaneous Provisions) Act and he entered into the understanding recorded in the letter of 25 May 1995 on this basis. Although Ms Carr says that she believed the understanding in the letter of 25 May 1995 meant that there would only ever be bland cross‑claims for contribution between the respondents, Mr Hill said that he never made a statement to this effect and he contended that the letter does not state that there would only ever be bland cross‑claims between the respondents. Unlike Ms Carr, Mr Hill did not believe that at the time of the understanding there was any reason why evidence for determining the cross‑claim should be limited to evidence at the trial of the principal proceeding. Mr Hill said that he never intended to agree that the evidence for determining the cross‑claims would be limited to evidence led at the trial of the principal proceeding. Mr Hill took the view at the time of the understanding that the benefit of a united front outweighed the possible disadvantages of cross‑examination on more than one occasion, a protraction of litigation, the risk of losing counsel in subsequent proceedings and the incurring of greater costs. 50 Mr Hill agreed with Ms Carr that in their conversation on 16 May 1995 he said that the cross‑claim to be filed would be the blandest cross‑claim but he did not intend that position to be immutable. Mr Hill agreed that he said in the second conversation on 16 May 1995 that he was proposing that evidence in the principal proceeding could be evidence in any further determination but he said that he intended that further evidence could be led. 51 The solicitor for Mr Webster who had the carriage of the matter up until at least May 1995, Mr Geoffrey Connellan, had a similar recollection to Mr Hill, namely that any cross‑claims would be filed in bland terms, that the parties would not have the cross‑claims determined in the hearing of the principal proceeding and that if it became necessary to have the cross‑claims determined in later proceedings the parties would not be limited to a formal cross‑claim filed in bland terms. 52 There is no dispute between the parties as to the actual terms of the understanding into which they entered. Rather what is in issue is the scope or extent of the matters covered by the understanding. What is abundantly clear is that the respondents intended to present a united front to Yates at the trial on the basis that none of them had been negligent or guilty of any default in the manner in which the compensation claim had been prepared, presented and argued at the Land and Environment Court. None of the respondents intended to be critical of each other in the course of the principal proceeding and they all intended that any issue of determining and apportioning, between themselves, the extent of any liability which might arise in favour of Yates was to be postponed at least until after judgment had been delivered in the principal proceeding. The issue to which the parties had not collectively turned their minds was what was to occur after judgment was given in the principal proceeding or on appeal in circumstances where one or more of the respondents was found liable to Yates. The understanding recorded in the letter of 25 May 1995 did not cover this situation. It covered what was to occur up to the commencement of the hearing and how any departure from the understanding was to be dealt with prior to the commencement of the hearing. The understanding recorded in the letter contemplated the filing of a "more fully detailed, formulated or particularised" cross‑claim but did not deal with whether or how that might occur after judgment in the principal proceeding. 53 What is clear from the letter, and in particular par 2, is that the cross‑claims were not to be determined as part of the principal hearing and the letter left open what was to happen thereafter. Certainly there was no agreement, arrangement or understanding between the parties that any cross-claim, substantive or otherwise, had to be made or brought forward prior to or at the hearing of the principal proceeding. Senior Counsel for Mr Simos, in effect, recognised this when he said to Branson J on 17 February: "[I]f contrary to all our views any one or more of the respondents are found liable we will sort it out in some place somewhere". 54 I am satisfied that there was no agreement reached, or understanding entered into, between the respondents whereby any party who filed a cross‑claim in bland terms prior to the commencement of the trial of the principal proceeding was to be limited after the determination of the principal proceeding to making a cross‑claim against the other respondents only in the terms of that bland cross‑claim. The understanding reached between the respondents simply did not deal with, or contain any provision in relation to, what was to occur post‑trial. I accept that Ms Carr may have had a belief as to what she thought was going to occur or ought to occur at trial but that belief was not shared by the solicitors for Mr Simos or Mr Webster nor was it induced by any conduct on their part. It was a belief based on what she saw as being in the interests of her client but then so was the belief held by the solicitors Abbott Tout and Mr Webster. 55 Accordingly I approach the issue of whether Mr Simos would be prejudiced by the filing of the further amended cross‑claim, not by reference to the terms of the understanding reached between the parties but rather by reference to an objective consideration of the issues as to prejudice raised by Ms Carr and submitted on behalf of Mr Simos. In this respect I am not indulging in a balancing exercise, that is to say, weighing any prejudice which might be suffered by Mr Simos if leave was granted as against the suffering of any prejudice suffered by Abbott Tout if leave was not granted. Abbott Tout submitted that if Mr Simos contributed to that prejudice it would not be just for such prejudice to result in Abbott Tout being shut out from bringing its further amended cross-claim. I do not consider that the circumstances before the Court are such that it can be said that any party "contributed" to what occurred in the sense that they should be shut out from relief otherwise available to them. What has occurred is not due to the default of any party but rather due to a situation which was not perceived or anticipated by the parties at the time they put in place their understanding in May 1995. Although the solicitors for Abbott Tout and Mr Webster at the time had beliefs and understandings different from the solicitor for Mr Simos, it was not unreasonable for those beliefs and understandings to be held. 56 The prejudice raised by Mr Simos is that he lost the opportunity to have the cross‑claim against him heard before Branson J at the same time as the principal claim (in March/April 1997) or at some time shortly after judgment was delivered (June 1997). The issue of prejudice is now of no relevance as a result of the High Court allowing the appeal by Abbott Tout and Mr Webster. But it is still necessary to deal with the submission in order to determine the issue of costs. It was submitted that Mr Simos: · Would face the prospect of a further hearing in which he would be subjected to further cross‑examination on issues canvassed before Branson J ten or more years after the relevant events occurred in 1989/1990; · has lost the opportunity to cross‑examine, in the hearing of Yates' claim, various of the witnesses relevant to the claims now sought to be propounded against him. I note that the respondents wished to present a united front and although Mr Simos said he lost this opportunity I have to consider the probability that in any event he would have wished to continue to present a united front with the other respondents and dealt with the cross‑claim after the hearing of the principal claim; · faced the prospect of the High Court deciding an issue sought to be raised by the proposed further amended cross‑claim (whether Abbott Tout was liable to Yates upon any of the causes of action pleaded against it) in an appeal proceeding to which he was not a party whereas that issue was decided in his favour by Branson J; · faced the prospect of the High Court considering and expressing views upon his conduct and whether he was or was not negligent in an appeal to which he was not a party but in a way which was likely to bear directly upon allegations made in the proposed further amended cross‑claim; · faced the prospect of inconsistent findings, as between himself and Yates on the one hand and as between himself and Abbott Tout and Mr Webster on the other hand, on the issue whether he was negligent and engaged in conduct which had any potential to mislead and deceive. 57 There is no doubt that if leave was granted to file and serve the further amended cross‑claim (and the High Court had not allowed the appeal) Mr Simos would be subjected to a procedure and process to which he was not otherwise subject. Absent the further amendment of the cross‑claim, there is no basis upon which Mr Simos could be asked to contribute to any liability which Abbott Tout and Mr Webster might have to Yates. Yates' claim as against Mr Simos has been dismissed and for the reasons identified by the High Court in James Hardie & Coy Pty Ltd v Seltsam Pty Ltd (supra) the claim against him in the present amended cross‑claim for contribution pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act must fail as the relevant substratum of co‑ordinate liability does not exist. In order for Mr Simos to be liable to contribute to any liability of Abbott Tout and Mr Webster to Yates, whether in equity or pursuant to the statute, he has to be a joint tortfeasor, that is to say there has to be co‑ordinate liability as between him and Abbott Tout and Mr Webster. Because Branson J dismissed the claim against him there is no such co‑ordinate liability. 58 Accordingly, Mr Simos is free from collateral attack in respect of his participation in Yates' compensation claim unless leave were to be granted to file and serve the proposed further amended cross‑claim. The question then to be considered is whether if that leave were to be granted Mr Simos would suffer prejudice which is either so irremediable or so severe that it ought not to be allowed to occur. I am not satisfied that the prospect of a further hearing in which he would be subjected to further cross‑examination, albeit on issues which occurred ten or more years ago, is so prejudicial that it ought not to be allowed to occur. If the issues raised in the proposed further amended cross‑claim had been heard at the time of the principal proceeding or after judgment they would have been heard at some time in 1997 or at the latest in early 1998. The probability is that a further hearing would have been necessary in any event and in such circumstances further cross‑examination was probable. The situation faced by Mr Simos if the proposed further amended cross‑claim were to be filed does not, in my opinion, in this respect result in irremediable prejudice. 59 Although it was submitted that Mr Simos has lost the opportunity in the hearing of Yates' claim to cross‑examine various of the witnesses relevant to the claims now sought to be propounded against him, it is not immediately clear as to the nature of such cross‑examination. Although Ms Carr identified some witnesses in respect of whom she would have considered cross‑examination it must be remembered that the position taken by Mr Simos at trial was that the conduct of the proceeding on behalf of Yates was "competent and entirely in accordance with the proper application of the relevant principles of valuation law": Yates Property Corporation Pty Ltd v Boland (1997) 145 ALR 169 at 190. I am not satisfied that it is a self evident proposition that the loss of that opportunity will not be cured by being able to cross‑examine such witnesses as Abbott Tout may lead on the hearing of any cross‑claim. Further, this submission must be considered in the light of the united front which the respondents wished to present at the principal hearing. Having regard to the cases advanced by each of the respondents I consider it highly improbable and quite remote that counsel for Mr Simos would have sought to cross‑examine any witness in terms which reflected upon or cast doubt upon the competence of any of the respondents. If I am wrong in that respect, Mr Simos would still be able to cross-examine any witnesses called by Abbott Tout in support of its claim. 60 It is not correct to say that Mr Simos faced the prospect of the High Court deciding an issue sought to be raised by the proposed further amended cross‑claim in an appeal proceeding to which he was not a party whereas that issue was decided in his favour before Branson J. The proposed further amended cross-claim does not raise for determination by the Court the issue whether Abbott Tout is liable to Yates upon any of the causes of action pleaded against it. That issue has already been determined by Branson J and then on appeal by the Full Court and was placed before the High Court. The continuation of any cross‑claim by Abbott Tout against Mr Simos would be dependent upon whether the High Court dismissed Abbott Tout's appeal. If that appeal was dismissed then the proposed further amended cross‑claim, if allowed, would proceed but it would be no part of the issues raised by that cross-claim whether Abbott Tout was liable to Yates. That issue has already been determined. As a result of the Full Court hearing there would have been remitted not only the issue of damages but the determination of any such cross‑claim. Mr Simos would be in no different a position now than he would have been if the issues in the proposed further amended cross‑claim had been raised before trial but had not been dealt with at trial. 61 It was then submitted that Mr Simos faced the prospect of the High Court considering and expressing views upon his conduct and whether he was or was not negligent in an appeal to which he was not a party, but in a way which was likely to bear directly upon allegations made in the proposed further amended cross‑claim. Prior to the High Court decision, one could only speculate about this issue. If (as occurred) the High Court allowed the appeal the issue would become moot. If the High Court had dismissed the appeal then the situation would have been similar to that which has already occurred in relation to the Full Court decision. In any event, for reasons to which I shall refer, I am not satisfied that any issue estoppel arises in relation to the allegations made in the proposed further amended cross‑claim so that neither Abbott Tout nor Mr Simos would be precluded from calling evidence or making submissions in relation to these allegations. 62 The prospect of inconsistent findings is not a matter which I consider to be prejudicial in the sense that Mr Simos is entitled to say that it is a reason not to allow the further amended cross‑claim to be filed. It is, of course, a matter of general principle that a court should try to avoid creating a situation which might result in inconsistent findings. However, that principle is not an absolute and must yield to the exigencies of particular situations. In the present case the possibility of inconsistent findings is brought about by an unusual situation where Yates was precluded from continuing an appeal due to an inability to provide security for Mr Simos' costs of the appeal. If, all other things being equal, Abbott Tout ought to be given leave to file the proposed further amended cross‑claim I do not consider that the spectre of inconsistent findings amounts to such prejudice that leave should be refused. 63 I should also deal with an argument advanced in the course of oral submissions that Mr Simos is prejudiced because at the trial before Branson J his counsel spent some days in submissions analysing the valuation evidence and his counsel was not able to carry out such analysis before the Full Court. It seems to have been submitted that counsel for Abbott Tout and Mr Webster were not able to undertake a similar analysis of the valuation evidence or make similar submissions before the Full Court. I am not satisfied on the evidence before me that this was the position and that such an element of prejudice has arisen. In any event it would be open to Abbott Tout to undertake such analysis and make such submissions before the High Court. 64 After I reserved my decision in this matter my attention was drawn by Mr Simos' solicitors (without objection from Abbott Tout's solicitor) to the recent decision in NRMA Ltd v Morgan & Ors (No 3) (Giles J, 4 August 1999, unreported, New South Wales Supreme Court). In that case Giles J (then CJ Comm Div), refused to allow the filing of cross‑claims after reasons for judgment were delivered in the principal proceeding. Two of the cross‑claims were against persons (the directors) who had not been party to the principal proceeding but who had given evidence in it and one cross‑claim was between defendants, by Abbott Tout against Mr Heydon QC (as he then was). Giles J was influenced in his decision not to allow the filing of the cross‑claims against the directors by the prospect of revisiting the claims in the principal proceeding and the prospect of having inconsistent findings and conclusions in the same proceeding. He was not prepared to countenance these prospects. Giles J was also influenced by the fact that any issue of Anshun estoppel had already arisen although he thought (at [47]) that there was a "remote, if not ephemeral prospect" of an Anshun estoppel. 65 The principal reason why Giles J refused to allow the amendment of the cross‑claim against the existing defendant was that it raised new facts and issues including a major issue which was to some extent inconsistent with whether Mr Heydon owed a duty of care to Abbott Tout. Giles J was concerned that the additional issues would give rise to possible inconsistent findings or conclusions or at least to further evidence which might lead to different findings or conclusions. Giles J took into account a submission that aspects of Mr Heydon's case, specifically the cross‑examination of one witness, would have been conducted differently had the proposed cross‑claim been on foot. 66 The circumstances before Giles J were quite different from the circumstances presently before me and each case must be considered by reference to its particular facts and circumstances. Although Ms Carr says that if the proposed further amended cross-claim had been heard at the same time as the principal proceeding she would have instructed counsel to consider cross-examination of the three Abbott Tout solicitors who gave evidence and Mr Webster on a number of issues which she identified, these persons were not cross‑examined by Mr Simos' counsel on these issues. Ms Carr expressed the belief that the cross-examination of these persons could have been done more expeditiously, and might have been done more effectively, in the hearing of the principal proceeding. Ms Carr also said that she would have instructed counsel to consider cross-examination of Yates' liquidator and Mr Yates on a number of issues which she identified. However it does not follow and it is not said, that the same opportunities will not be available at the hearing of any cross‑claim. 67 My conclusion on the issue of prejudice is that Abbott Tout is not precluded by the terms of the understanding recorded in the letter of 25 May 1995 from seeking leave to file and serve the proposed further amended cross‑claim. I am also not satisfied that such prejudice as Mr Simos might suffer from having to meet the issues raised in the proposed further amended cross‑claim would be such, or so irremediable, as to require me to exercise my discretion against allowing the filing and service of the proposed further amended cross‑claim. Abbott Tout's cross‑claim for contribution 68 I am satisfied that the amended cross‑claim in its present form is liable to be struck out on the ground that it does not disclose any cause of action against Mr Simos. It claims contribution from Mr Simos on two bases, s 5 of the Law Reform (Miscellaneous Provisions) Act and in equity. Section 5(1) is in the following terms: "Where damage is suffered by any person as a result of a tort (whether a crime or not) – … (c) any tort‑feasor liable in respect of that damage may recover contribution from any other tort‑feasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tort‑feasor or otherwise, so, however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by that person in respect of the liability in respect of which the contribution is sought." Section 5 is not available to Abbott Tout against Mr Simos because Mr Simos is not an "other tort‑feasor who is, or would if sued have been, liable in respect of the same damage". Mr Simos has a conclusive judgment in his favour that he is not liable in respect of the damage suffered by Yates. That judgment, for the reasons already stated, has not been the subject of challenge by way of appeal. Further, the fact that Mr Simos has been sued to judgment means that he is not a person "who … would if sued have been, liable …". This issue has been resolved by the High Court in James Hardie & Coy Pty Ltd v Seltsam Pty Ltd (supra). In that case the plaintiff sued three defendants for damages for injuries and disabilities flowing from asbestos‑related pleural disease. There were various cross‑claims between the defendants. The plaintiff settled with each defendant. A consent judgment was entered in the plaintiff's favour against the first two defendants and consent judgment was entered in favour of the third defendant against the plaintiff. The cross‑claim by the first defendant for contribution against the third defendant in respect of the first defendant's ascertained liability to the plaintiff was struck out. The High Court, by a majority, dismissed an appeal against that order on the basis that the third defendant had no liability to the plaintiff in respect of the damage for which the first defendant was liable. At 66‑67 Gaudron and Gummow JJ (who with Callinan J comprised the majority) said "The claimant tortfeasor who satisfies the condition precedent [the ascertainment of liability as between the plaintiff and the claimant tortfeasor] may recover contribution from those other tortfeasors who bear responsibility in respect of the same damage in a fashion which answers a description in the balance of par (c). The defendant tortfeasor must be one (i) 'who is … liable in respect of the same damage' or (ii) 'would if sued have been, liable in respect of the same damage'. Only those who satisfy (i) or (ii) are amenable to a claim for contribution under the statute. Further, those who have been sued to judgment, whatever its outcome, do not fall within (ii). That is the effect of settled authority in this Court." Their Honours then explained in the following passage (69) why, for present purposes Mr Simos does not answer the description of a tort‑feasor who "would if sued have been, liable in respect of the same damage": "However, in the present litigation, the order dismissing the plaintiff's action against the respondent was a final order which brought that action to an end. It would be a distortion of the text and structure of par (c) of s 5(1) to hold in those circumstances that the respondent thereafter answered the description of one yet to be sued. The plaintiff's cause of action against the respondent merged in the judgment, thereby destroying its independent existence. The status of the Tribunal as a court of record was such that the circumstance that the judgment in favour of the respondent was entered by consent renders it no less effective to absolve the respondent from liability to the plaintiff [Chamberlain v Deputy Commission of Taxation (ACT) (1988) 164 CLR 502 at 508]. It was for the appellant to have taken the necessary steps to oppose that entry of judgment and to have put itself in the procedural position whereby it was competent to appeal against that entry. In the meantime, whilst that judgment remained on the record of the Tribunal, the respondent did not answer either of the statutory descriptions necessary to confer entitlement upon the appellant to proceed against it for contribution. With respect to the first limb, the respondent had not been adjudged liable to the plaintiff. Rather, it had succeeded in establishing the opposite. With respect to the second limb, the presence of the judgment in the respondent's favour denied it the character of a party still awaiting a final determination of a suit in respect of the damage sustained by the plaintiff." Kirby J (with whom McHugh J agreed) dissented in respect of the construction of the words in s 5(1)(c) any other tort‑feasor who "would if sued have been, liable". His Honour said at 85‑86: "The words ' would if sued have been' in par (c) therefore envisage a completed action where the target tortfeasor has been sued to judgment and the action has been fully dealt with on its merits. … Clearly, in the context, the ascertainment of liability means ascertainment on its merits, not ascertainment by private arrangement between only some of the parties by which, unilaterally, they deprive others of rights which, for good purpose, Parliament has conferred on them by reforming legislation." The reasoning in this dissenting judgment is of no assistance to Abbott Tout because Mr Simos has been sued to judgment and he has obtained a judgment in his favour on the merits which, for reasons already explained, has not been the subject of an appeal. 69 Abbott Tout sought to distinguish James Hardie & Coy Pty Ltd v Seltsam Pty Ltd (supra) by submitting that Mr Simos was a person who came within s 5(1)(c) as he was a person who would if sued to finality on the merits, including exhaustion of the appeal process on the merits, have been liable to Yates in respect of the same damage. This reasoning is rejected by the reasoning of Gaudron and Gummow JJ and puts a gloss on the reasoning of Kirby J. Kirby J contemplated a determination on the merits of the claim rather than on a consensual basis. It was no part of Kirby J's reasoning that the ascertainment of liability had to be determined not only by a trial but by an appellate process. Abbott Tout also sought to distinguish James Hardie & Coy Pty Ltd v Seltsam Pty Ltd (supra) by relying on a passage in the judgment of Mason P in the New South Wales Court of Appeal (James Hardie & Coy Pty Ltd v Seltsam Pty Ltd (supra)) referred to by Gaudron and Gummow JJ at 62. Mason P said at 252‑253: "Unless and until the appellant can show that the respondent should have been found liable to the plaintiff then a vital step in its claim for contribution is missing. Since no attempt was made either below or here to challenge the judgment in the plaintiff's favour against the respondent, whether by appeal or otherwise, the fact that the judgment stands precludes the right of contribution." Abbott Tout submitted that it could be shown "otherwise" that Mr Simos should have been found liable to Yates by reference to the reasoning of the Full Court which must apply likewise to Mr Simos. However the reasoning of the majority of the High Court precludes such a conclusion. As noted earlier, it is the final order in favour of Mr Simos which precludes the application of s 5(1)(c) to Mr Simos. 70 The claim in the amended cross‑claim founded on the equitable doctrine of contribution is similarly flawed and misconceived. The principle upon which Abbott Tout rely is found in Story, Commentaries on Equity Jurisprudence (3rd ed 1920) at 205 in the following terms: "The claim certainly has its foundation in the clearest principles of natural justice; for, as all are equally bound and are equally relieved, it seems but just that in such a case all should contribute in proportion towards a benefit obtained by all … And the doctrine has an equal foundation in morals; since no one ought to profit by another man's loss where he himself has incurred a like responsibility." Abbott Tout submitted that if the Full Court decision stood, Mr Simos would be liable in equity to contribute as he was a tort‑feasor along with Abbott Tout and Mr Webster because at the time the tort was committed, and the cause of action accrued, the three parties were "under co‑ordinate liabilities" to make good the loss, relying on the judgment of Kitto J in Albion Insurance Co Ltd v Government Insurance Office of NSW (1969) 121 CLR 342 at 350. 71 However in order for the doctrine of equitable contribution to apply there has to be a substratum of co‑ordinate liability, that is to say the parties have to be equally bound in relation to the relevant liability so that the disproportionate discharge of the burden by one respondent gives rise to the equity by reason of the benefit which accrues to another respondent: Dering v Earl of Winchelsea (1787) 1 Cox 318, 322‑323, 29 ER 1184, 1185‑1186; McLean v Discount & Finance Ltd (1939) 64 CLR 312, 328, 336‑337. The principle was comprehensively analysed by Kitto J in Albion Insurance Co Ltd v Government Insurance Office of NSW (supra) at 350‑352. His Honour said at 351: "The justification for the description [the principle of contribution as a principle of natural justice] may be seen from Dering v Winchelsea itself. … The principle proceeded … 'on a principle of law that must exist in all countries, that where several persons are debtors, all shall be equal' … The judgment in Dering v Winchelsea itself had said that 'If we take a view of the cases both in law and at equity, we shall find that contribution is bottomed and fixed on general principles of justice' – 'founded on equality, and established by the law of all nations' … and it had gone on to show that law and equity were at one as to the nature of the right, though the doctrine of equality operated more effectually in a court of equity than in a court of law, and there were differences as to the mode and conditions of its application … The right arises at law when 'one of several persons has paid more than his proper share towards discharging a common obligation' … and it arises in equity when a liability of one of several to pay more than his share has been ascertained … what is important is the reason, namely that payment by the one discharges not only himself but each of the others, and qui sentit commodum sentire debet et onus." In the present circumstances there is no co‑ordinate liability or common burden and there would be no such co‑ordinate liability or common burden at the time Abbott Tout or Mr Webster discharged any of their liability to Yates as Mr Simos has been held by the decision of Branson J to be under no such liability or burden. Issue estoppel 72 Mr Simos submitted that the reasons for judgment of Branson J created an issue estoppel in relation to the issues: · Was Mr Simos negligent in relation to the performance of his retainer for Yates? · Was any conduct of Mr Simos misleading, deceptive or likely to mislead or deceive? It was submitted that there was an issue estoppel in relation to these issues so that any cross‑claim against Mr Simos, which relied on causes of action in negligence and conduct which was misleading or deceptive or likely to mislead or deceive, was doomed to failure. Accordingly, as it was futile to allow the amendments to the cross‑claim, I should not exercise my discretion to grant leave to amend. 73 Mr Simos submitted that Branson J, in dismissing the claim against Mr Simos, determined factual issues which were necessary for her to determine before she reached her decision. The particular factual issues which Branson J decided were whether Mr Simos was liable to Yates either in negligence or by reason of contravention of s 42 of the Fair Trading Act. It was said that these issues were directly raised for determination and in controversy between Abbott Tout and Mr Simos at the time of Branson J's determination because of the existence of Abbott Tout's amended cross‑claim which had been filed but which was not presented for determination before Branson J. Mr Simos submitted that the causes of action raised in the proposed further amended cross‑claim raised for determination the same issues and conduct which had been decided by Branson J in reaching her decision and that accordingly the claims against Mr Simos should be dismissed. 74 As an anterior point Mr Simos submitted, but did not press the proposition, that the duty alleged against Mr Simos in the proposed further amended cross‑claim was not a duty known to the law. However, at this stage I am satisfied, having regard to the current trend of authorities, that it is arguable that there may be such a relationship of proximity between an instructing solicitor and counsel retained by the solicitor that, independently of the duty of care which counsel owes to the client, there is also a duty of care owed to the instructing solicitor to carry out the retainer for the client in a competent manner. 75 Put shortly, Mr Simos submitted that the duty of care owed by Mr Simos to Yates was the same duty of care that Abbott Tout was seeking to allege was owed by Mr Simos in the proposed further amended cross‑claim. Mr Simos expanded on this submission by comparing relevant allegations in the final statement of claim delivered in the principal proceeding with the allegations raised in the proposed further amended cross‑claim. 76 It is therefore necessary to identify the substantive allegations raised in Yates' final statement of claim and to determine Branson J's findings in relation to those allegations. 77 In its final statement of claim Yates: · set out the underlying facts said to give rise to the claimed special value of the land, sometimes described as the headstart claim (pars 6 to 74); · set out the allegations against Abbott Tout in relation to the terms of its retainer, the duty of care it owed to Yates, the breaches of the retainer and duty and the respects in which it engaged in conduct that was misleading or deceptive or likely to mislead or deceive (pars 75 to 98); · set out the allegations against Mr Simos in relation to the duty of care he owed to Yates (par 102), the breaches of that duty (par 103) and the respects in which he engaged in conduct that was misleading or deceptive or likely to mislead or deceive (par 107); · set out the allegations against Mr Webster in relation to the duty of care he owed to Yates, the breaches of that duty and the respects in which he engaged in conduct that was misleading or deceptive or likely to mislead or deceive (pars 114 to 130). In particular the duty said to be owed by Mr Simos to Yates is expressed in very wide and general terms The breach of duty alleged is then set out and, in particular, it is alleged (par 103(f)) that Mr Simos negligently failed to advise Yates "accurately on all or any alternative ways in which to formulate and establish the Claim [for compensation]". Particulars are then given of the respects in which Mr Simos failed to advise on or formulate the special value and "headstart" claim (sub‑pars (g), (h), (i), (j) and (k)). Put generally, the claim against Mr Simos was that he was negligent in carrying out the work comprised in his brief and that he was guilty of misleading and deceptive conduct. 78 In order to determine whether the judgment of Branson J gives rise to an issue estoppel upon which Mr Simos can rely, against the issues raised in the proposed further amended cross‑claim, it is important to understand what matters are covered by an issue estoppel or a judicial determination of an issue of fact or law. A classic formulation of the principle is found in the judgment of Dixon J in Blair v Curran (1939) 62 CLR 464 where at 531‑533 his Honour said: "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, decree or order. In the phraseology of Coleridge J in R. v Inhabitants of the Township of Hartington Middle Quarter (1), 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. In the phraseology of Lord Shaw, 'a fact fundamental to the decision arrived at' in the former proceedings and 'the legal quality of the fact must be taken as finally and conclusively established (Hoystead v. Commissioner of Taxation (2)). But matters of law or 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. Decisions upon matters of law which amount to no more than steps in a process of reasoning tending to establish or support the proposition upon which the rights depend do not estop the parties if the same matters of law arise in subsequent litigation. The difficulty in the actual application of these conceptions is to distinguish the matters fundamental or cardinal to the prior decision or judgment, decree or order or necessarily involved in it as its legal justification or foundation from matters which even though actually raised and decided as being in the circumstances of the case the determining considerations, yet are not in point of law the essential foundation or groundwork of the judgment, decree or order." These passages immediately raise for consideration the questions: · What were the issues of fact or of law disposed of by the judgment of Branson J? · What were the matters necessarily established as the legal foundation or justification for the Court's conclusion? · What was legally indispensable to the Court's conclusion? · What were the ultimate facts which formed the ingredients of the cause of action against Mr Simos? · What were the matters cardinal to the Court's decision or necessarily involved in it as its legal justification or foundation? Mr Simos submitted that Branson J's judicial determination of the dismissal of the claim against him meant that he had not breached the duty of care he owed to Yates and fell within the formulation of issue estoppel in Blair v Curran (supra) because the issue determined in Mr Simos' favour was – did he negligently fail to exercise the professional care, skill and diligence reasonably to be expected from a practising barrister? Putting the matter round the other way – Did Mr Simos prepare and prosecute the claim competently (cf: par 103(d) of statement of claim)? Mr Simos submitted that Branson J answered this question in his favour. 79 Mr Simos also submitted that, in the language of Dixon J in Blair v Curran (supra), matters cardinal to Yates' claim against him dismissed by Branson J could not be raised in the proposed further amended cross‑claim as to raise them is to assert that Branson J's decision is erroneous. 80 Whether this proposition can be made out depends upon whether the allegations against Mr Simos in the proposed further amended cross‑claim raise issues which go beyond those raised against Mr Simos in the final statement of claim. 81 An analysis of the proposed further amended cross‑claim and Abbott Tout's submissions shows that Abbot Tout relies for the existence of the duty of care owed to it by Mr Simos upon Mr Simos' dutyto Yates. The cross‑claim proceeds upon the basis that: · Simos assumed a responsibility to Abbott Tout to provide Yates and Abbott Tout with the relevant advice; · Simos knew that Abbott Tout relied upon Simos to provide Yates and Abbott Tout with the relevant advice; · it was reasonably foreseeable by Simos that if he failed to provide Yates and Abbott Tout with the relevant advice, Abbott Tout might incur liability for any consequent loss and damage to Yates and thereby suffer loss and damage; · Simos therefore owed a duty of care to Abbott Tout to provide Yates and Abbott Tout with the relevant advice; · if Abbott Tout is liable to Yates then, in breach of the duty Simos owed to Abbott Tout, Simos failed to provide Yates and Abbott Tout with the relevant advice; · Simos made misrepresentations to Abbott Tout which are identical to the representations alleged in the statement of claim. Mr Simos said that it is an essential finding of Branson J that Mr Simos did not give careless advice to Yates. 82 Mr Simos demonstrated the submission that the duty of care owed to Yates was the same as the duty alleged in the proposed further amended cross‑claim by reference to the particular structure of the allegations in the proposed further amended cross‑claim. For example, in par 3 it is alleged that, in accepting a brief from Abbott Tout to advise and appear on behalf of Yates in its claim for compensation, each of Mr Simos and Mr Webster: "assumed a responsibility to the cross claimant to provide the applicant and the cross‑claimant with all necessary advice in relation to the items of compensation available to the applicant …" Paragraph 4 continues in the same way by alleging that each of Mr Simos and Mr Webster knew or ought to have known that Abbott Tout relied upon each of Mr Simos and Mr Webster: "to provide the applicant and the cross‑claimant with all necessary advice in relation to the items of compensation available to the applicant in the proceedings …" Paragraph 5 alleges that it was reasonably foreseeable by each of Mr Simos and Mr Webster that: "Should they fail to provide the applicant and the cross‑claimant with all necessary advice in relation to the items of compensation available to the applicant …" Abbott Tout might incur liability for any consequent loss and damage to Yates and thereby itself suffer loss and damage. 83 Paragraph 6 alleges: "In the premises each of the cross‑respondents owed a duty of care to the cross claimant to provide the applicant and the cross‑claimant with all necessary advice in relation to the items of compensation available to the applicant in the proceedings …" Paragraph 7 alleges that if Abbott Tout is liable to Yates on any of its causes of action then Abbott Tout says that: "in breach of the duty owed to the cross claimant each of the cross‑respondents failed to provide the applicant and the cross claimant with all necessary advice in relation to the items of compensation available to the applicant …" The particulars under par 7 are in the following terms: "(a) Each of the cross respondents failed to advise the applicant or the cross‑claimant that compensation was available to it on the basis that it had an advantage or a 'headstart' over any other hypothetical purchaser of the land as a result of being in a position to develop a market on the land more quickly than any other hypothetical purchaser ('headstart claim'). (b) Each of the cross respondents failed to advise the applicant or the cross‑claimant of the steps that should have been taken to have compensation on the basis of the headstart claim properly assessed so that it could be reflected in the claims for and in the award of compensation by the marshalling and presentation of lay and expert evidence to prove the existence and value of the headstart. (c) Each of the cross respondents failed to take any steps to have compensation on the basis of the headstart claim properly assessed so that it could be reflected in the claim for and in the award of compensation." 84 Mr Simos submitted that the duty alleged by Yates against Mr Simos in par 102 of the final statement of claim was expressed in wide terms but was in substance no different from the duty alleged in the proposed further amended cross‑claim. 85 Mr Simos submitted that the duty alleged in par 6 of the proposed further amended cross‑claim did not go beyond what the duty required Mr Simos to carry out vis‑a‑vis Yates. It was further submitted that the breaches alleged in par 103 of the final statement of claim were in substance replicated in the breaches alleged in par 7 of the proposed further amended cross‑claim. Mr Simos compared par (a) of the particulars under par 7 of the cross‑claim with subpars 103(b), (d), (e) and (f) of the final statement of claim and subpars (h), (i), (j) and (k) of the particulars under par 103. It was submitted that they were the same allegations in substance and that when one analysed Branson J's reasoning and her finding of no negligence against Mr Simos it was clear that the issue raised in par 7 of the proposed further amended cross‑claim and the particulars in subpar (a) had been decided by Branson J. 86 Similar submissions were made comparing subpars 103(b), (d), (e), (f), (i) and (n) of the final statement of claim and subpars (h), (i), (j), (k), (o) and (p) of the particulars under par 103 with par 7 and the particulars under it in subpars (b) and (c). 87 Similar submissions were made comparing subpars 103(f), (i) and (o) of the final statement of claim and subpars (h), (i), (j) and (k) of the particulars under par 103 and par 104(a), (b) and (e) with the allegations of negligent advice and reliance found in pars 8 and 9 of the cross‑claim. 88 Paragraph 104 of the final statement of claim alleged (in particular subpars (1), (b) and (e)) that Mr Simos had made certain implied representations to Yates. The same representations were raised in pars 8 and 11 of the proposed further amended cross‑claim. This issue was decided in favour of Mr Simos by Branson J (at 214) who concluded that Yates had failed to establish that the respondents' conduct, as legal representatives, had any potential to mislead or deceive. 89 In her reasons for judgment (at 191‑199) Branson J found that no negligence had been established against Abbott Tout, Mr Simos or Mr Webster in connection with the headstart claim (at 198). This conclusion or finding effectively resolves the allegation of breach of duty raised in par 7 of the proposed further amended counterclaim and particularised in subpars (a) and (b) of the particulars. Branson J accepted the validity of the reasoning of Mr Simos and Mr Webster not to call Mr Yates as a witness. Branson J also found the issues whether Mr Simos and Mr Webster had given negligent advice and whether Yates had relied on that evidence in favour of Mr Simos and Mr Webster. 90 The analysis of the final statement of claim and the proposed further amended cross‑claim undertaken by Mr Simos must be considered with care because it is most important to identify what is the particular issue of fact or law which is said to be the subject of an issue estoppel. 91 Mr Meagher SC, who appeared with Mr Whitford for Mr Simos, submitted that the issue which was the subject of the issue estoppel was whether Mr Simos had conducted the case competently, that is to say did his conduct meet the relevant standard of care. Mr Macaulay, who appeared for Abbott Tout, submitted that the correct issue on which to focus in determining whether there was an issue estoppel which foreclosed the issues raised in the proposed further amended cross‑claim was whether Mr Simos breached the duty of care he owed to Yates. It was that issue or finding on an ultimate fact which Branson J determined in favour of Mr Simos. There were findings on evidentiary facts made along the way to that finding on the ultimate fact but, in the language of Dixon J in Blair v Curran (supra), those findings did not give rise to preclusion. 92 The issue which arises for determination is how to decide what is an ultimate fact and what is an evidentiary fact. Blair v Curran (supra) answers the question by reference to what is legally indispensable to the conclusion, the ultimate facts which form the ingredients in the cause of action and matters cardinal to the groundwork of the decision itself though not directly the point at issue. 93 As Gleeson CJ said in Murphy v Abi‑Saab (1995) 37 NSWLR 280 at 288, after referring to the passages extracted from Blair v Curran above: "The difficulty is to distinguish between decisions of fact or law fundamental or cardinal to the judgment and other decisions. One thing, however, is clear. Only a decision about a matter which it was necessary to decide can create an issue estoppel … A practical test of whether a decision is fundamental is to ask whether it is possible to appeal against that finding: Spencer Bower and Turner, The Doctrine of Res Judicata, 2nd ed (1969) at 182". 94 Abbott Tout submitted that the application of this test resulted in the conclusion that there was no issue estoppel in favour of Mr Simos. This was because Yates could not have appealed against a finding that Mr Simos did not act in breach of the standard of care imposed upon him nor did Mr Simos breach the duty of care he owed without identifying the party in whose favour the duty of care was owed. It was said that the relevant ultimate issue decided by Branson J was whether Mr Simos breached the duty he owed to Yates by failing to conform to the standard of care he owed to Yates. The issue raised in the proposed further amended cross‑claim was whether Mr Simos breached a duty owed to Abbott Tout by failing to conform to the standard of care owed to Abbott Tout as his instructing solicitors. 95 Abbott Tout submitted these were different issues and that a finding in favour of Mr Simos as against Yates did not give rise to an estoppel as against Abbott Tout although there may involved in each issue similar findings of fact, such as whether the advice of Mr Simos conformed to a given standard. It was said that whether the advice given by Mr Simos was advice which a prudent skilled legal practitioner should have given constituted an evidentiary fact and not an ultimate fact and that the ultimate issue whether Mr Simos breached a duty he owed to Yates was a different issue to that whether Mr Simos breached any duty he owed to Abbott Tout. 96 Abbott Tout relied on Jackson v Goldsmith (1950) 81 CLR 446 in support of this submission and cited the following passage in the judgment of Latham CJ at 455‑456: "In the District Court the issue was whether Goldsmith had been guilty of contributory negligence, that is, had he contributed to the injury to Jackson by either–(1) carelessness with respect to his own safety; or (2) breach of a duty which he owed to Jackson to take care? What was decided was that Goldsmith was not guilty of contributory negligence. This decision therefore negated the following propositions:-(1) that Goldsmith contributed to his own injury by carelessness for his own safety; (2) that he contributed thereto by negligence consisting in a breach of a duty owed by him to Jackson to take care. In the third party proceedings in the Supreme Court the question is whether Goldsmith is liable in respect of the injury done to White by reason of a breach of duty to take care which he owed to White." It was said that this passage demonstrated the manner in which different ultimate issues will arise albeit out of the same or similar fact situations. 97 A similar situation arose in Linsley v Petrie [1998] 1 VR 427 where the plaintiff was injured in a collision between a car driven by her and a car driven by the defendant. The plaintiff's insurer indemnified her for the value of her car, paid her out and exercised its right of subrogation by bringing a proceeding in the Magistrates' Court to recover damages from the defendant. The Magistrate held that the defendant had not been negligent and dismissed the proceeding. The plaintiff brought proceedings in the County Court against the defendant for damages for personal injuries she suffered in the accident. The Victorian Court of Appeal held that no issue estoppel had arisen as a result of the decision in the Magistrates' Court which precluded the plaintiff from bringing the County Court proceeding. The members of the Court differed in their reasoning. There are a number of observations in the judgment of Hayne JA which are relevant to the present issues. 98 After citing the first two paragraphs from Blair v Curran (supra) referred to earlier in par 78, his Honour posed the relevant enquiry at 429: "It is therefore of the first importance to identify with care the issue of fact or law which is said now to be the subject of an issue estoppel." Hayne J analysed Brunsden v Humphrey (1884) 14 QBD 141 in which the majority of the Court of Appeal held that the owner of a cab involved in collision with the defendant's van as a result of the negligence of the driver of the van was not barred from bringing an action for personal injuries suffered in the collision by reason of his having brought an earlier action for damage to the cab and recovering the amount claimed from the defendant. The majority concluded that the action for damages to the cab was founded on a different cause of action for damages for personal injury. Hayne J also noted that Brunsden v Humphrey had been the subject of considerable criticism. 99 Hayne J then turned his attention to Azzopardi v Bois [1968] VR 183. In proceedings in the Court of Petty Sessions both parties claimed damages for the damage to their vehicles. Both were found negligent and responsibility was apportioned 60% to Azzopardi and 40% to Bois. In proceedings brought by Azzopardi in the Supreme Court for damages for personal injuries Adam J held that Azzopardi was estopped from alleging that the collision was caused entirely by the negligence of Bois but was not estopped from claiming that responsibility should be apportioned differently from the apportionment in the Court of Petty Sessions. Hayne J then said at 434: "This criticism of Brunsden v. Humphrey has considerable weight if the difference in kind of damage sustained by the plaintiff is the only distinction to be drawn between an action for personal injuries and an action for property damage caused in a single highway collision. But is it the only difference? What of the duty of care and the standard of care? It may be accepted that a road user owes a single duty to take reasonable care not to injure those persons whom the user may reasonably foresee will be injured if that care is not taken and there is a sufficient relationship of proximity between the person injured and the supposed tortfeasor. Accordingly it may no longer be appropriate to examine questions of duty of care by reference to the interests of the plaintiff that are to be protected and it would follow that the analysis by Machin ['Negligence and Interest' (1954) 17 Modern Law Review 405] may therefore be of no assistance. However, whether or not that is so, it seems to me that Adam J. was right to say, as he did in Azzopardi v. Bois, that in a case of this kind there are not two distinct duties of care owed by the allegedly negligent driver. That is, the driver does not owe one duty to avoid damage to the property of A and another, different, duty to the same person to avoid personal injury. That is not to say that different duties may not be owed to different persons. It may be that the duty a driver owes to A is different from the duty that driver owes to B. However, I need not consider this question and thus need not consider the various cases which have examined whether Jackson v. Goldsmith is authority for a general proposition that there can be no issue estoppel where breaches of different duties are litigated. But to decide that Linsley owed Petrie but a single duty of care does not conclude the matter. The estoppel which now is said to be created by the determination of the earlier Magistrates' Court proceeding is not an estoppel against contending that Linsley owed Petrie a duty of care, it is an estoppel against contending that in the particular circumstances of this collision, there was a breach of that duty. Counsel for Linsley submitted that to distinguish between the standard of care to be exercised to avoid damage to Petrie's property and the standard of care to be exercised to avoid damage to her person would be to draw distinctions without difference where, as here, the property that was damaged was nothing but the vessel containing Petrie and by reason of collision with which she was injured both in her property and her person. As I have already mentioned, if, as Adam J. pointed out in Azzopardi v. Bois there are different factors which may bear upon apportionment of responsibility between parties according to whether the plaintiff claims damages for personal injuries or for damage to property, why may there not be different factors which bear upon whether one of the drivers breached the relevant standard of care according to whether the resulting damage was to person or to property? In my view, there may. The steps which a driver may reasonably be expected to take to avoid colliding with an empty supermarket shopping trolley may be very different from the steps that that driver must take to avoid colliding with a child. It must be acknowledged that there will seldom be any difference in outcome according to whether the collision gives rise to damage to property or damage to person. But the question whether parties are estopped from re‑litigating an issue is not to be answered according to some prediction whether, in any particular case, re‑litigation of the matter would, or might lead to a different outcome. The question is whether parties should be precluded from seeking to obtain a different outcome. Because the nature of the damage sustained may, in at least some cases, reflect upon the standard of care required of the parties, I do not consider that the issue of breach of duty determined in an action for property damage is the same issue as falls to be determined in the claim for damages for personal injuries. Thus it is not only the difference in kind of damage which leads to the conclusion that the action brought in the Magistrates' Court in this case does not give rise to any res judicata precluding the later maintenance of the claim for personal injuries: not only are the damages claimed different in kind, so too are the issues of breach of duty." 100 Mr Macaulay relied on this line of reasoning to support the proposition that the ultimate or cardinal fact in the proceeding determined by Branson J was whether Mr Simos breached the duty of care he owed to Yates whereas the issue raised in the proposed further amended cross‑claim is whether Mr Simos breached the duty of care he owed to Abbott Tout in carrying out his retainer. 101 I accept this submission. I do not consider that the issue of the breach of the duty which Mr Simos owed to Abbott Tout is the same issue as the breach of the duty which Mr Simos owed to Yates. They are two different issues giving rise to different considerations: cf Jackson v Goldsmith (supra); Linsley v Petrie (supra), not only in relation to the nature and content of the duty owed but also in relation to the nature of the damage which flows from any breach of that duty. There is no identity of issues. What preceded Branson J's finding in this respect, such as whether it was reasonable for Mr Simos to hold the opinions he held, was an evidentiary finding used in determining the ultimate fact. There is no issue estoppel in relation to the duty and breach of duty raised against Mr Simos in the proposed further amended cross‑claim because there was no issue before Branson J as to the duty of care owed by Mr Simos to Abbott Tout or whether any such duty had been breached. Nor was it necessary to decide any matter relating to any duty owed by Mr Simos to Abbott Tout. For the same reason, to seize upon the conduct alleged against Mr Simos and to say it is the same conduct alleged against Abbott Tout and Mr Webster is to ignore the fact that the aspects of conduct referred to relate more to evidentiary matters and is to confuse the determination of ultimate facts and "matters cardinal" to them with evidentiary issues. 102 Mr Macaulay submitted in the alternative that if the relevant ultimate issue was, as Mr Meagher put it, whether Mr Simos had conducted the case competently (that is to say did his conduct meet the relevant standard of care), then there is no finding contrary to what is alleged in the proposed further amended cross‑claim in respect of which an issue estoppel can arise because the Full Court has reversed the finding of Branson J on this issue. Put shortly, it was submitted that there is nothing left standing which is in conflict with the issue propounded in the proposed further amended cross‑claim so that there cannot be inconsistent findings if the allegations in the proposed further amended cross‑claim are established. That submission was advanced on the basis that the same substantive case that was put against Abbott Tout and Mr Webster was put against Mr Simos. The Full Court found that that case was made out against Abbott Tout and Mr Webster who were negligent in the way they formulated, prepared and presented the case for special value. 103 This submission ignores the fact that Mr Simos is entitled to claim res judicata in relation to the issue of his conduct as against Yates. The fallacy of the submission is that Mr Simos' conduct was not the subject of consideration by the Full Court, rather it was the conduct of Abbott Tout and Mr Webster. Although the allegations against them may be the same, mutatis mutandis, as the allegations against Mr Simos it does not follow that it should be said that the Full Court has made a finding that Mr Simos was guilty of negligence. This argument fails to identify that it is the ultimate issue which forms the basis for the res judicata as it does for the issue estoppel if it exists. 104 I have already referred to the observations of Dixon J in Blair v Curran (supra) to the effect that an issue estoppel is confined to the ultimate facts which form the ingredients of the causes of action and that "matters cardinal" to the later claim cannot be raised if to do so is necessarily to assert that the former decision was erroneous. In Sandtara Pty Ltd v Abigroup Ltd (1997) 42 NSWLR 5 the issue was whether a cross defendant to a cross‑claim brought by the defendant in the primary or principal proceeding had the benefit of an issue estoppel against the plaintiff in respect of an issue decided between the plaintiff and the defendant in the primary proceeding. The New South Wales Court of Appeal answered the question in the affirmative and said at 8‑9: "A third party bound by the decision between the plaintiff and the defendant must also be entitled to rely on it because res judicata estoppels are mutual … Cenrin [the cross‑defendant] cannot rely on res judicata based on merger of the cause of action because no judgment was given against it on the cause of action for rent. However, as a party to the earlier proceedings, it can rely on issue estoppels flowing from that judgment, which include an estoppel as to the amount of rent due up to 31 August 1992. The distinction was explained in Blair v Curran … by Dixon J [in the passage referred to in par 78 above]." 105 Abbott Tout contended that these principles do not assist Mr Simos in relation to the cross‑claim as Abbott Tout and Mr Simos were not "in controversy" at the time of Branson J's judgment. Abbott Tout submitted that no issue estoppel can arise between defendants unless there be an identity of parties: Taylor v Ansett Transport Industries Ltd (1987) 18 FCR 342 at 357‑358. The manner in which an issue estoppel may arise between defendants has been the subject of analysis in Spencer Bower et al, The Doctrine of Res Judicata 3rd ed 1996 at 112 in the following terms: "Res judicata estoppels normally operate between plaintiffs and defendants. However they may also operate between defendants. The relevant principles were developed by the Privy Council in Indian appeals. In Munni Bibi v Tirloki Nath [(1931) 58 LR Ind App 158 at 165‑6], the Privy Council said: 'In such a case … three conditions are requisite: (1) There must be a conflict of interest between the defendants concerned; (2) It must be necessary to decide the conflict in order to give the plaintiff the relief he claims and (3) The question between the defendants must have been judicially decided'. These principles apply where the plaintiff's case failed. In a later case, Lord Simonds said: '… the doctrine may apply even though the party, against whom it is sought to enforce it, did not in the previous suit think fit to enter an appearance and contest the question. But to this the qualification must be added that, if such a party is to be bound by a previous judgment, it must be proved clearly that he had, or must be deemed to have had, notice that the relevant question was in issue and would have to be decided'. These principles apply when multiple defendants are sued jointly, severally, or in the alternative in contract, tort, equity or otherwise. They were applied in North Wales Water Ltd v Binnie & Partners by Drake J, although he was not referred to the Privy Council decisions. These cases illustrate a wider principle formulated by Fisher J in Taylor v Ansett Transport Ltd: '… issue estoppel can only be raised by or applied against parties who were in 'controversy' at the time when the issue was first determined, either in their favour or adversely to them. If a party was not involved in the litigation of that issue, either because it was not an issue between him and another party to the proceedings, or because he was not a party at all … at the time of resolution, then he is not affected by nor can he raise an estoppel. Likewise his presence initially or subsequently cannot affect the right of other parties to raise or rely upon issue estoppel as between themselves". Abbott Tout submitted that in the present case none of the three conditions referred to in Munni Bibi v Tirloki Nath (1931) 58 LR Ind App 158 at 165‑6 have been met or satisfied. 106 Abbott Tout and Mr Simos had an identical interest in the proposition that the advice given to Yates, in particular by Mr Simos, was not negligent and although there was agreement that neither party would advance a case at trial that the other party was liable to Yates, there was a conflict of interest between Abbott Tout and Mr Simos. The amended cross‑claim was in existence, albeit dormant and yet to be reviewed. Further there was a conflict of interest between Abbott Tout and Mr Simos in the sense that they were both being sued by Yates in respect of a matter in which there was the potential for a different result against each of them in Yates' action. It was necessary to decide which of Abbott Tout, Mr Simos and Mr Webster were guilty of breach of duty, negligence or misleading or deceptive conduct in order to give Yates the relief it sought. That question of the liability of Abbott Tout and Mr Simos to Yates was raised in the cross‑claim in which it was in Abbott Tout's interests to have the issue of Mr Simos' liability to Yates answered in the affirmative and in which it was in Mr Simos' interests to have that issue answered in the negative. It was in the interests of both Abbott Tout and Mr Simos that Yates' action fail against both of them. Abbott Tout had an alternative position. Mr Simos' sole interest was in having the issue of the liability of Abbott Tout and himself to Yates answered in the negative. Abbott Tout's alternative position was that if it was liable to Yates then Mr Simos should also be held liable to Yates. Although the amended cross‑claim for contribution was only activated when liability was found against Yates, its existence placed Abbott Tout and Mr Simos in a position of conflict. Although there may have been a conflict of interest between Abbott Tout and Mr Simos, it was not necessary to decide that conflict in order to give Yates the relief it claimed and the issue between Abbott Tout and Mr Simos was not determined by Branson J. It follows that the three conditions referred to by the Privy Council in Munni Bibi v Tirloki Nath (supra) were not satisfied. 107 The difficulty with the proposition that there was a conflict of interest between Abbott Tout and Mr Simos is that at the time of Branson J's judgment the amended cross‑claim was not before her for decision. However Mr Simos relied upon the decision in North West Water Ltd v Binnie & Partners (a firm) [1990] 3 All ER 547, for the proposition that, in the absence of any cross‑claims between defendants where there is a need to apportion liability or responsibility between defendants, there is a sufficient conflict of interest to give rise to an issue estoppel between defendants. In that case Drake J was not referred to the three Privy Council decisions on appeal from India and did not decide the issue in terms of there being a relevant conflict of interest. Rather he decided the issue on what he called the broad approach to issue estoppel (at 552): "… which holds that the true test of an issue estoppel is whether for all practical purposes the party seeking to put forward some issue has already had the issue determined against him by a court of competent jurisdiction, even if the parties to the two actions are different. The conflicting approach is to confine issue estoppel to that species of estoppel per rem judicatam that may arise in civil actions between the same parties or their privies: see, for example, Lord Diplock in Hunter v Chief Constable of West Midlands [1981] 3 All ER 727, [1982] AC 529." After analysing a number of authorities on the two approaches Drake J concluded (at 561): "In my judgment, this broader approach to a plea of issue estoppel is to be preferred. I find it unreal to hold that the issues raised in two actions arising from identical facts are different solely because the parties are different or because the duty of care owed to different persons is in law different. However, I at once stress my use of the word 'solely'. I think that great caution must be exercised before shutting out a party from putting forward his case on the grounds of issue estoppel or abuse of process. Before doing so the court should be quite satisfied that there is no real or practical difference between the issues to be litigated in the new action and that already decided, and the evidence which may properly be called on those issues in the new action. I have already decided, when considering abuse of process, that in the present case no such real or practical difference does exist. Thus on the broader approach to issue estoppel, which in my judgment should be applied, I hold that Binnies are estopped from denying negligence in the present action. Even if I am wrong about the limits to issue estoppel and the true limit is in fact the narrower one, that is to say that favoured by Goff LJ in McIlkenny v Chief Constable of West Midlands Police Force [1980] 2 All ER 227, [1980] 1 QB 283 and Lord Diplock on the appeal to the House of Lords ([1981] 3 All ER 727, [1982] AC 529), I would still hold that Binnies are in this case caught by issue estoppel. This is because I find that the issues arising in the present action have already been decided and that in practical terms they have been decided between the same parties, the water authority and Binnies. The absence of third party or contribution notices does not affect my finding on this for I think the reality is that all issues concerning negligence were in fact litigated before Rose J and decided by him and subsequently by the Court of Appeal" I do not consider that what Drake J called the "broader approach" to issue estoppel represents the law in Australia. It is inconsistent with the reasoning in Blair v Curran (supra), Jackson v Goldsmith (supra), Sandtara Pty Ltd v Abigroup Ltd (supra) and Linsley v Petrie (supra). 108 I would venture to disagree with Drake J's proposition that the issues had already, in practical terms, been decided between the same parties. Although the issue of the duty of care owed to those injured and killed by the explosion which had occurred had been decided in the first case, no issue had been determined as to the duty of care or the standard of care owed by the engineers to the water authority. 109 In any event the decision is distinguishable from the facts presently before the Court. In that case there was a substantive dispute between two of the defendants in the primary proceeding albeit there were no cross‑claims filed between them as one defendant (the water authority) in its defence had alleged that the engineers had been guilty of negligence and had caused the explosion. No such allegation had been made in the present proceeding. 110 I therefore do not consider that Branson J's reasons for judgment created an issue estoppel in relation to the issue whether Mr Simos breached the duty of care which he owed to Abbott Tout. That ultimate fact was not determined by Branson J although evidentiary facts along the way to such a determination were the subject of findings. But those findings do not create an issue estoppel in relation to the issue whether Mr Simos breached the duty of care he owed to Abbott Tout. Anshun estoppel 111 Mr Simos also relied on an Anshun estoppel in relation to the causes of action sought to be raised in the further amended cross‑claim. It was submitted that one cannot bring a claim which, if successful, will necessarily result in a judgment which conflicts with an earlier judgment by which the claimant is bound. In Port of Melbourne Authority v Anshun Pty Ltd (supra) Gibbs CJ, Mason and Aickin JJ said at 602‑603: "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. See the illustrations given in Cromwell v County of Sac. It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment" The key to an Anshun estoppel, it is said, is that the estoppel will arise if the proposed action, if successful, would result in a judgment which conflicts with an earlier judgment. As Dawson J said in Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 at 512: "The majority discussion of Henderson v Henderson in Port MelbourneAuthority v Anshun Pty. Ltd. was upon the basis that the latter case was not one of res judicata; there was a cause of action remaining [at 597]. The question was whether the plaintiff ought to have been allowed to pursue that cause of action having regard to the fact that the right asserted could and should have been raised in the earlier action in which judgment had been entered. To have allowed it to do so may have resulted in contradictory judgments which ought not be permitted save in special circumstances" 112 It is said in this case that Branson J determined that Mr Simos had not breached any duty of care he owed to Yates and was not guilty of misleading or deceptive conduct or conduct which was likely to mislead or deceive. It follows, Mr Simos submitted, that for Abbott Tout to succeed against Mr Simos in its proposed further amended cross‑claim there would need to be a judgment which necessarily conflicted with the judgment of Branson J: See also Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332, 346; Bryant v The Commonwealth Bank of Australia (1995) 57 FCR 281, 298; The Doctrine of Res Judicata (supra) at 260. I do not consider that such a conflict will arise. A judgment that Mr Simos is not liable to Yates and had not breached the duty of care he owed to Yates does not conflict with a judgment that Mr Simos is liable to Abbott Tout for the damage it suffered and that he has breached the duty of care he owed to Abbott Tout. Any judgment obtained by Abbott Tout against Mr Simos would not contradict the judgment Mr Simos obtained against Yates. Although Mr Simos would be held liable in damages to Abbott Tout for breach of the duty he owed to Abbott Tout in circumstances where Mr Simos had been held not liable to Yates, the judgments themselves would not be in conflict nor would they contradict each other. In the former case the judgment would be in terms of a judgment that Abbott Tout recover damages from Mr Simos and, in the latter case, the judgment would be in terms of a judgment that the proceeding against Mr Simos by Yates be dismissed. Although it may be that some of the reasoning in the former case might be inconsistent with the reasoning in the latter case, the vice to which the Anshun estoppel is directed is not so much inconsistent reasoning as conflicting or inconsistent judgments. 113 There is a further basis for the conclusion that an Anshun estoppel does not arise in the present proceeding. The majority in Anshun based the estoppel on the proposition that it was unreasonable not to rely upon the matter raised in the later proceeding in the earlier proceeding (at 602 cited in par 111 above). All the respondents had agreed not to bring forward at the trial the issue of the apportionment of liability between the respondents. They wanted to present a united front to Yates and they only wished to have the mechanism for apportionment of liability available, albeit not to be resorted to, at the trial of the principal proceeding. Although the cross‑claim based on contribution between tortfeasors has turned out not to be such an adequate mechanism it was not unreasonable for Abbott Tout not to pursue it at the trial having regard to the arrangement and understanding reached with Mr Simos and Mr Webster. 114 I therefore reject the submission that an Anshun estoppel arises in relation to the causes of action raised in the proposed further amended cross‑claim. Special circumstances 115 Abbott Tout submitted in the alternative that even if there was a basis for Mr Simos to raise an issue estoppel or an Anshun estoppel there were special circumstances which existed which prevented the operation of either estoppel. Abbott Tout submitted that it was a principle of law that the operation of an issue estoppel or Anshun estoppel could be precluded where special circumstances existed such as to warrant the preclusion of the operation of such estoppel. Abbott Tout relied on Arnold v National Westminster Bank Plc [1991] 2 AC 93. At 104 Lord Keith (who delivered the leading judgment) said: "Cause of action estoppel extends also to points which might have been but were not raised and decided in the earlier proceedings for the purpose of establishing or negativing the existence of a cause of action. In Henderson v Henderson (1843) 3 Hare 100, 114‑115, Sir James Wigram V.-C. expressed the matter thus: 'In trying this question, I believe I state the rule of the court correctly, when I say, that 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.' It will be seen that this passage appears to have opened the door towards the possibility that cause of action estoppel may not apply in its full rigour where the earlier decision did not in terms decide, because they were not raised, points which might have been vital to the existence or non‑existence of a cause of action. The passage has since frequently been treated as settled law, in particular by Lord Shaw, giving the advice of the Judicial Committee of the Privy Council, in Hoystead v. Commissioner of Taxation [1926] A.C. 155, 170." The exception of "special circumstances" to the operation of the doctrine of issue estoppel or Anshun estoppel has been doubted in Australia. In Chamberlain v Deputy Commissioner of Taxation (supra) Brennan J said at 504: "For reasons which I gave in Port of Melbourne Authority v Anshun Pty Ltd, Wigram V. C. was not, in my view, advancing any exception to the doctrine but was referring to the equity practice of that time which allowed for the impeaching of the first judgment in special circumstances. As the doctrine of res judicata does not admit of any exception so long as the first judgment stands, I do not find it necessary to consider the 'special circumstances' exception addressed in the joint judgment." Dawson J said at 512: "I do not understand Wigram V. C. to have held in Henderson v Henderson that there is a discretion to deny the application of the doctrine of res judicata in special circumstances. A discretion could only arise where the doctrine in its strict sense does not apply but the principle is extended to cover matters were not raised but could and should have been raised in an earlier action in which judgment is entered. Any discretion arises from the extension of principle. It forms no part of the doctrine of res judicata itself. It could not." In O'Toole v Charles David Pty Limited (1991) 171 CLR 232 Brennan J, at 258, in passing referred to Arnold v National Westminster Bank Plc at first instance ([1989] Ch 63) as being "a case which, in my respectful view, rests on an uncertain foundation". 116 In Linsley v Petrie (supra) Hayne J, at 441, was not prepared to express a concluded view whether Arnold v National Westminster Bank Plc was to be accepted as good law in Australia although, at 449, he shared Brennan J's scepticism in O'Toole v Charles David Pty Limited (supra) concerning Arnold v National Westminster Bank Plc. 117 Abbott Tout submitted that special circumstances arose for the following reasons: · Before the trial there was no reason for Abbott Tout to file anything more than a contribution claim and for it to do so would have been contrary to the common interests of all respondents; · Abbott Tout had no reason to challenge the correctness of Mr Simos' advice to Yates nor the correctness of Branson J's dismissal of Yates' claim against Mr Simos; · the dismissal of the complaint against Mr Simos, which preserved the decision in his favour, was in substance a default judgment; · the appeal resulted in the finding that the conduct adjudged by Branson J to have been reasonable and not negligent was unreasonable and negligent; · Branson J found that Mr Simos was the person whose judgment was chiefly responsible for the conduct of Yates' case. 118 As I am satisfied that no issue estoppel of Anshun estoppel arises in the present circumstance it is not necessary for me to reach any concluded view as to whether the "special circumstances" exception referred to in Arnold v National Westminster Bank Plc (supra) represents the law in Australia. The claim for misleading and deceptive conduct 119 Mr Simos did not submit that what was put against him was not "conduct" for the purpose of a misleading and deceptive conduct claim. Rather it was submitted that an estoppel arose in the same way as it did in relation to the claim for breach of duty, that is by way of an issue estoppel and an Anshun estoppel. It was also submitted that this claim was statute‑barred because of the three year limitation period found in s 68(2) of the Fair Trading Act. Abbott Tout first suffered damage when it incurred defence costs on or about 4 March 1993 so that the relevant limitation period expired on 4 March 1996. Although the contribution claim was brought by the amended cross‑claim within that period, the cause of action sought to be raised against Mr Simos by way of breach of duty and misleading deceptive conduct was brought outside that period and enlivens the discretion of the Court under O 13 r2(2), (3) and (7) of the Federal Court Rules. Abbott Tout did not dispute the claim was statute‑barred but submitted that I should nevertheless exercise the discretion in O 13 r2 to allow the amendment. 120 Order 13 r2(7) provides: "An amendment may be made notwithstanding that the effect of the amendment will be to add or substitute a new claim for relief or another foundation in law for a claim for relief if the new claim for relief or foundation in law for that claim arises out of the same facts or substantially the same facts as those already pleaded to support existing claims for relief by the party applying for leave to make the amendment." The claim under s 42 of the Fair Trading Act arises out of substantially the same facts as those raised in the amended cross‑claim, that is to say the advice given, or not given, to Yates in relation to the compensation claim. However the claim in the amended cross‑claim as presently pleaded, without further amendment, is bound to be struck out. Thus, there was not pleaded within the limitation provided in s 68(2) of the Fair Trading Act a cause of action which was sustainable as a matter of law. In those circumstances I would not be disposed as an exercise of discretion under O 13 r2(7) to allow an amendment to raise a cause of action under s 42 of the Fair Trading Act for misleading and deceptive conduct. Conclusion 121 If the appeal to the High Court had not been allowed I would have allowed the application to amend further the cross‑claim, dismissed Mr Simos' application to dismiss the amended cross‑claim and ordered Mr Simos to pay the costs of both applications. I certify that the preceding one hundred and twenty‑one (121) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg. Associate: Dated: 9 August 2000 Counsel for the First Respondent: Mr C C Macaulay Solicitor for the First Respondent: Minter Ellison Counsel for the Second Respondent: Mr A J Meagher SC and Mr P R Whitford Solicitor for the Second Respondent: Corrs Chamber Westgarth Counsel for the Third Respondent: Mr R A Conti QC and Mr S White Solicitor for the First Respondent: Moray Agnew Dates of Hearing: 4, 11 June 1999 29 February 2000 Date of Judgment: 9 August 2000