Fraudster’s negligence claim against appeal counsel permanently stayed as collateral attack abuse of process

Update, 16 August 2010: Justice Emerton’s decision dismissing the appeal is at [2010] VSC 351.

Original post: In Walsh v Croucher [2010] VSC 296, a convicted fraudster who was, at least in about the year 2000, a bald-faced, opportunistic, calculating and manipulative liar (see R v Walsh [2002] VSCA 98 and R v Walsh [2000] VSC 114), sued his appeal counsel for negligence, breach of fiduciary duties, and misleading and deceptive conduct.  But for the negligence, the claim contended, his appeal would have succeeded.  The Supreme Court let the proceedings roll along for two and a half years before Associate Justice Mukhtar permanently stayed them as an abuse of process.  Mr Walsh’s attempts, in the very last days in Victoria of the grand jury, to convene one, were not enough to avoid the termination of his negligence claim.

The proceedings were an abuse of process in that they sought impermissibly to attack collaterally the decisions of the jury and of the Court of Appeal that he was guilty of the frauds he was convicted of.  It was impermissible for him now to contend, as a foundation of his cause of action against the barrister, and not having appealed the decision of the Court of Appeal, that he was not guilty, because to do so is against public policy.  I considered the law of collateral attack abuse of process in its applications to solicitor’s negligence claims in ‘Compromise of litigation and lawyers’ liability: Forensic immunity, litigation estoppels, the rule against collateral attack, confidentiality and the modified duty of care’, (2002) 10 Torts Law Journal, 167.  Let me know if you would like a copy by email.  Associate Justice Mukhtar’s explanation is concise and worth setting out in full:

’24 The determination of this application does not now depend solely upon the plaintiff’s inaction or procrastination. That is, the defendant is not moving the Court to determine that the plaintiff has breached his undertaking to prosecute with all due expedition. Rather, in the circumstances, the defendant now returns to the basis upon which he said in the first place that this case was an abuse of process. As the plaintiff has not taken either of the appeal courses that were proposed, the defendant now asks the Court to not only conclude that the plaintiff has not proceeded with due expedition with his previously intended applications, but as a primary matter, the Court should now certainly conclude that this proceeding is an abuse of process on the ground as always propounded, that is, the proceeding apart from its inherent defects in composition is an abuse of process because it constitutes a collateral attack on the decision of the Court of Appeal and the jury.

25 It is now established as a matter of public policy which is part of the common law that decisions of the Court, unless set aside or quashed, are to be accepted as incontrovertibly correct, a principle which is not only fundamental but is essential for the maintenance of public respect and confidence in the administration of justice: see Rogers v The Queen[2] and D’orta-Ekenaike v Victorian Legal Aid.[3] On principle, the Court will not allow the use of its process for a purpose alien to administration of justice, to cause improper vexation and oppression: see Williams v Spautz [4], Walton v Gardiner [5] and R v Smith [6]

26 In a case of this type, the principles were stated by Keane JA as a member of the Queensland Court of Appeal in Lewis v Hillhouse.[7] Like this case, the appellant in Lewis contended that, had certain submissions been advanced on appeal, his conviction would have been quashed and he would not have been convicted on a retrial of the charges. The appellant in Lewis accepted that a collateral attack on the decision of the Court of Appeal would be an abuse of process. To avoid that, the case was put instead on the basis that the appellant had lost the prospect or chance of a successful appeal and a fair trial. The Court of Appeal held that made no difference. His Honour identified two legal obstacles which are also present here:

The first is that the public policy against collateral attack on a judgment is also offended by the prosecution of a claim that an earlier decision which has not been set aside is likely to have been wrong so as to found a claim for unlawfully inflicted damage. The second obstacle is that the principles which permit the recovery of damages for loss of a chance or loss of an opportunity have no application here. If the appellant cannot show that he remained wrongly convicted because the evidence admission point was not pressed on his behalf, he was not adversely affected by reason of the point not being taken. In short, unless the appellant can show that he remained wrongly convicted, he cannot show that he has suffered any loss at all.

27 There are directions of the highest authority to say the power to grant a stay should be exercised only in exceptional cases, and not exercised where there is a power or means to remedy the abuse: see R v Smith[8]. The cases which tend to attract difficulty in judgment are those where it is said that the proceedings are foredoomed to failure, or where issues of ulterior motives arise. But in this case the illegitimate purpose is manifest. The plaintiff’s claim necessarily calls into question his convictions, which he is precluded from calling into question in a civil proceeding. If the proceedings are serving an alien purpose, the Court should not hesitate to exercise its powers to ensure that the legal process is not used as in instrument of injustice.’

[2] [1994] HCA 42; (1994) 181 CLR 251 at 273.

[3] [2005] HCA 12; (2005) 223 CLR 1.

[4] [1992] HCA 34; (1992) 174 CLR 509 at 518-20, 535-7.

[5] (1993) 378 at 392.

[6] [1995] 1 VR 10 at 14-15.

[7] [2005] QCA 316.

[8] [1995] 1 VR 10 at 14-15, 25.