Res judicata, issue estoppel and Anshun estoppel 

A judgment is meant to end a dispute. The preclusion doctrines give effect to that by preventing parties from relitigating what has been decided — and, in one branch, from raising what they should have decided to litigate the first time. They are separate doctrines with different requirements, and the commonest error is to run them together under the label "res judicata".

What they have in common

Each doctrine requires:

• a final judgment — interlocutory decisions and orders made without a determination on the merits generally do not found an estoppel, though a consent judgment may;
• a court of competent jurisdiction; and
• identity of parties or their privies. Privity means a sufficient interest in the subject matter of the earlier proceeding — a successor in title, an assignee, a person for whose benefit the proceeding was brought. Mere common interest is not enough.

Cause of action estoppel

Also called res judicata in the strict sense. Where a cause of action has been determined by a final judgment, that cause of action merges in the judgment and can never be sued on again. The successful plaintiff's rights are now on the judgment; the unsuccessful plaintiff's cause of action is extinguished.

The doctrine is absolute. It admits no discretionary exception, and it does not matter that the earlier proceeding was poorly run, that new evidence has emerged, or that the decision was wrong. The remedy for a wrong decision is appeal.

The critical question is what counts as the same cause of action. It is defined by the essential facts the plaintiff must prove, not by the label attached or the relief sought. Pleading a new legal characterisation of the same facts does not create a new cause of action.

Issue estoppel

Issue estoppel operates where the causes of action differ but a particular issue was determined in the earlier proceeding. That determination binds the parties in the later one.

Blair v Curran (1939) 62 CLR 464 supplies the limiting principle.² The estoppel attaches only to matters that were legally indispensable to the earlier decision — the ultimate facts forming the ingredients of the cause of action. It does not attach to:

• the reasoning by which the court reached those facts;
• subsidiary or evidentiary findings; or
• matters merely collateral, however emphatically stated.

This makes the identification of what was actually decided the hard work in any issue estoppel argument. Where the earlier judgment does not disclose which of several possible grounds was the basis of the decision, no estoppel arises on any of them.

Unlike cause of action estoppel, issue estoppel yields in special circumstances, notably where fresh evidence that could not reasonably have been obtained earlier would have been decisive.

Anshun estoppel

The extended doctrine in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 reaches matters that were never litigated at all.¹ A party is precluded from raising in later proceedings a claim or defence that was so relevant to the subject matter of the earlier action that it was unreasonable not to have raised it then.

The test is unreasonableness, not mere availability. Relevant considerations include:

• whether the later claim arises out of the same substratum of facts;
• whether raising it earlier would have been practicable, given the state of knowledge, the forum's jurisdiction, and any limitation position;
• the risk of conflicting judgments, which the High Court treated as a particularly weighty factor; and
• the expense and vexation of a second proceeding.

Anshun estoppel is discretionary in character and evaluative in application. A party who genuinely could not have known of the claim, or who was unable to bring it in the earlier forum, is not caught.

Abuse of process

Where none of the estoppels applies — because the parties are not identical, or the earlier proceeding did not conclude in a judgment — the court retains power to stay proceedings as an abuse of process. This is the doctrine that addresses collateral attacks on earlier decisions by strangers to them, and serial proceedings that are oppressive.

It is a residual power, exercised sparingly, and directed to the integrity of the administration of justice rather than to the rights of the parties inter se.

Criminal proceedings

Issue estoppel does not apply in Australian criminal proceedings, because a general verdict does not disclose which issues were decided. The protection there comes from the pleas of autrefois acquit and autrefois convict, and from abuse of process.

Consent and default judgments

A consent judgment may found a cause of action estoppel, because the cause of action merges in the judgment however it was arrived at. Whether it founds an issue estoppel is more doubtful: nothing was decided, and the estoppel usually rests instead on the terms of the compromise as a contract, or on the parties' agreement not to reopen the matter.

A default judgment likewise extinguishes the cause of action, but supports no issue estoppel, because no issue was litigated. It also remains liable to be set aside on the ordinary grounds, and an estoppel cannot be asserted on a judgment that is under challenge.

Judgments obtained by fraud may be set aside, and no estoppel survives a judgment so impeached.

Applying this in a problem question

1. Set out precisely what the earlier proceeding decided, and confirm the judgment was final.
2. Establish identity of parties or privity before anything else — this defeats many arguments at the threshold.
3. Ask whether the causes of action are identical. If they are, cause of action estoppel applies and nothing further is needed.
4. If not, identify the specific issue said to be precluded and test it against Blair v Curran: was it legally indispensable, or collateral?
5. Turn to Anshun only for matters not raised earlier, and argue unreasonableness on the facts rather than asserting it.
6. Keep abuse of process in reserve for cases the estoppels do not reach.

Self-check

• Have I used "res judicata" precisely rather than as a label for all four doctrines?
• Have I checked privity rather than assuming identity of parties?
• Have I distinguished indispensable findings from collateral ones?
• Have I applied an unreasonableness test to the Anshun question, with reasons?
• Have I avoided applying issue estoppel to a criminal proceeding?