Application of Vito Zepinic

[2020] NSWSC 269

Supreme Court

New South Wales

Medium Neutral Citation:

Application of Vito Zepinic [2020] NSWSC 269

Hearing dates:

15, 27 March; 28, 29 November 2018; further written submissions 29 January 2019

Decision date:

19 March 2020

Jurisdiction:

Equity

Before:

Kunc J

Decision:

Leave to commence proceedings refused with one limited exception

Catchwords:

CIVIL PROCEDURE — Parties — Vexatious litigants — Leave to institute proceedings

Legislation Cited:

Vexatious Proceedings Act 2008 (NSW)
Trustee Act 1925 (NSW)

Cases Cited:

Chateau Constructions (Aust) Ltd v Zepinic [2013] NSWSC 1326
Zepinic v Chateau Constructions (Aust) Limited [2013] NSWCA 214
Zepinic v Chateau Constructions (Aust) Ltd [2016] NSWCA 50
Zepinic v Chateau Constructions (Aust) Limited; Chateau Constructions (Aust) Limited v Zepinic [2017] NSWSC 582
Zepinic v Chateau Constructions (Aust) Limited [2018] NSWCA 317

Category:

Principal judgment

Parties:

Vitomir Zepinic (Plaintiff)

  Nicholas Craig Malanos (Defendant)

Representation:

Counsel:

 

S S Ahmed (Plaintiff) (until 28 August 2018)

 

V Zepinic (in person) (after 28 August 2018)

 

D G Healey (Defendant)

 

Solicitors:

 

SLF Lawyers (Plaintiff) (until 28 August 2018)

  Bridges Lawyers (Defendant)

File Number(s):

2017/353311

Publication restriction:

No

Judgment

Summary

1. The plaintiff, Vito Zepinic, is currently subject to orders made under the Vexatious Proceedings Act 2008 (NSW) (the “Act”) arising from his long running dispute with Chateau Constructions (Aust) Limited (“Chateau”) in relation to what had been the Zepinic family home at Turramurra (the “Property”). The putative defendant, Nicholas Malanos, was the trustee appointed to sell the Property (the “Trustee”).

2. Mr Zepinic applies for leave under the Act to commence proceedings against Mr Malanos in relation to Mr Malanos’ conduct as trustee. The relief Mr Zepinic seeks in the proposed proceedings has no reasonable prospects of success. As such, the proposed proceedings are vexatious as an abuse of process under the Act. The Court is therefore required by s 15(1) of the Act to dismiss Mr Zepinic’s application.

The Act

3. The statutory framework governing Mr Zepinic’s application is set out in ss 14 to 16 of the Act:

“14 APPLICATION FOR LEAVE TO INSTITUTE PROCEEDINGS

(1) This section applies to a person ("the applicant") who is:

(a) subject to a vexatious proceedings order prohibiting the person from instituting proceedings, or

(b) acting in concert with another person who is subject to an order referred to in paragraph (a).

(2) The applicant may apply to an appropriate authorised court for leave to institute proceedings that the order would otherwise prohibit the person from instituting.

(3) The applicant must file an affidavit with the application that:

(a) lists all occasions on which the applicant has applied for leave:

(i) under this section, or

(ii) before the commencement of this section--as required by an order under section 70 of the Land and Environment Court Act 1979 or section 84 of the Supreme Court Act 1970 , and

(b) lists all other proceedings the applicant has instituted in Australia, including proceedings instituted before the commencement of this section, and

(c) discloses all facts material to the application, whether supporting or adverse to the application, that are known to the applicant.

(4) The applicant must not serve a copy of the application or affidavit on any person unless:

(a) an order is made under section 16 (1) (a), and

(b) the copy is served in accordance with the order.

(4A) An authorised court may decline to consider an application made under this section if the court is not satisfied that the application is materially different from an earlier application under this section that was dismissed under section 15 (1) (b) or (c).

(5) An appropriate authorised court may dispose of the application by:

(a) dismissing the application under section 15, or

(b) granting the application under section 16.

(6) Despite any other Act or law, the applicant may not appeal from a decision disposing of the application.

15 DISMISSING APPLICATION FOR LEAVE

(1) An appropriate authorised court must dismiss an application made under section 14 for leave to institute proceedings if it considers:

(a) the affidavit required by section 14 (3) does not substantially comply with that subsection, or

(b) the proceedings are vexatious proceedings, or

(c) there is no prima facie ground for the proceedings.

(2) The application may be dismissed:

(a) even if an oral hearing is not held, or

(b) even if the applicant does not appear at any hearing of the application.

16 GRANTING APPLICATION FOR LEAVE

(1) Before an appropriate authorised court grants an application made under section 14 for leave to institute proceedings, it must:

(a) order that the applicant serve each relevant person with a copy of the application and affidavit and a notice that the person is entitled to appear and be heard on the application, and

(b) give the applicant and each relevant person an opportunity to be heard at the hearing of the application.

(2) At the hearing of the application, the court may receive as evidence any record of evidence given, or affidavit filed, in any proceedings in any Australian court or tribunal in which the applicant is, or at any time was, involved either as a party or as a person acting in concert with a party.

(3) The court may grant leave to institute proceedings subject to the conditions that the court considers appropriate.

(4) However, the court may grant leave only if it is satisfied that:

(a) the proceedings are not vexatious proceedings, and

(b) there are one or more prima facie grounds for the proceedings.

(4A) A grant of leave to institute proceedings made under this section includes leave to make interlocutory applications, and other procedural applications, in connection with or incidental to those proceedings, unless the grant of leave specifies otherwise.

(4B) However, a grant of leave to institute proceedings does not include leave to make the following applications (unless the grant of leave specifically extends to such applications):

(a) an application to join a new party to the proceedings,

(b) an application to introduce into the pleadings for the proceedings a substantially new cause of action based on facts different from those already pleaded,

(c) an application to remove the proceedings from one court or tribunal to another.

(5) In this section:

"relevant person" , in relation to the applicant for leave to institute proceedings, means each of the following persons:

(a) the person against or in relation to whom the applicant proposes to institute the proceedings,

(b) the Attorney General,

(c) the Solicitor General,

(d) the appropriate registrar for the authorised court that made the vexatious proceedings order concerned if the registrar applied for the order in relation to the applicant,

(e) any person referred to in section 8 (4) (d) or (e):

(i) who applied for a vexatious proceedings order in relation to the applicant, and

(ii) who the appropriate authorised court dealing with the application considers should be served,

(f) any person:

(i) who made an application in relation to the applicant under section 70 of the Land and Environment Court Act 1979 or section 84 of the Supreme Court Act 1970 before the commencement of this section, and

(ii) who the appropriate authorised court dealing with the application considers should be served.

Procedural history

4. On 25 May 2017, in Zepinic v Chateau Constructions (Aust) Limited; Chateau Constructions (Aust) Limited v Zepinic [2017] NSWSC 582, Pembroke J reached this conclusion and made these orders:

“48.   What is clear is that Mr Zepinic, in his own right and on behalf of his wife and daughter, has become a ‘vexatious’ litigant in every sense of the word. Not only has he pursued one hopeless claim after another, but he has criticised or condemned his own solicitors and sought to disqualify judges who have made orders against him. His obsessive behaviour is wasteful and destructive. And it has been exacerbated by his dishonesty, which takes it to a new level of seriousness. It must be stopped. It is contrary to the public interest.

Orders

49.   In proceedings No 2009/290598 I make the following orders:

(1) Order pursuant to section 8(7)(a) of the Vexatious Proceedings Act 2008 that all proceedings in New South Wales instituted by Vitomir Zepinic and/or Milla Zepinic:

(a)   relating to or arising out of the subject matter of Consumer Trader and Tenancy Tribunal proceeding HB07/03657;

(b)   relating to or arising out of the subject matter of Consumer Trader and Tenancy Tribunal proceeding HB07/33225;

(c)   relating to or arising out of the subject matter of Supreme Court of New South Wales proceeding 2009/290598;

(d)   relating to or arising out of the subject matter of Supreme Court of New South Wales proceeding 2013/132492;

(e)   relating to or arising out of the subject matter of Supreme Court of New South Wales proceeding 2016/97515;

(f)   relating to or arising out of the construction contract entered into in or about February 2006 between Vitomir Zepinic and Milla Zepinic and Chateau Constructions (Aust) Limited; and/or

(g)   relating to the property known as XX Turramurra Avenue, Turramurra, New South Wales, being the land comprised in folio A/XXXX, including, but not limited to, the sale of that property completed in or about December 2014,

are stayed.

(2) Order pursuant to section 8(7)(b) of the Vexatious Proceedings Act 2008 that Vitomir Zepinic, also known as Vito Zepinic, is prohibited from instituting proceedings in New South Wales:

(a)   relating to or arising out of the subject matter of Consumer Trader and Tenancy Tribunal proceeding HB07/03657;

(b)   relating to or arising out of the subject matter of Consumer Trader and Tenancy Tribunal proceeding HB07/33225;

(c)   relating to or arising out of the subject matter of Supreme Court of New South Wales proceeding 2009/290598;

(d)   relating to or arising out of the subject matter of Supreme Court of New South Wales proceeding 2013/132492;

(e)   relating to or arising out of the subject matter of Supreme Court of New South Wales proceeding 2016/97515;

(f)   relating to or arising out of the construction contract entered into in or about February 2006 between Vitomir Zepinic and Milla Zepinic and Chateau Constructions (Aust) Limited; and/or

(g)   relating to the property known as XX Turramurra Avenue, Turramurra, New South Wales, being the land comprised in folio A/XXXX, including, but not limited to, the sale of that property completed in or about December 2014.

(3) Order pursuant to section 8(7)(b) of the Vexatious Proceedings Act 2008 that Milla Zepinic is prohibited from instituting proceedings in New South Wales:

(a)   relating to or arising out of the subject matter of Consumer Trader and Tenancy Tribunal proceeding HB07/03657;

(b)   relating to or arising out of the subject matter of Consumer Trader and Tenancy Tribunal proceeding HB07/33225;

(c)   relating to or arising out of the subject matter of Supreme Court of New South Wales proceeding 2009/290598;

(d)   relating to or arising out of the subject matter of Supreme Court of New South Wales proceeding 2013/132492;

(e)   relating to or arising out of the subject matter of Supreme Court of New South Wales proceeding 2016/97515;

(f)   relating to or arising out of the construction contract entered into in or about February 2006 between Vitomir Zepinic and Milla Zepinic and Chateau Constructions (Aust) Limited; and/or

(g)   relating to the property known as XX Turramurra Avenue, Turramurra, New South Wales, being the land comprised in folio A/XXXX, including, but not limited to, the sale of that property completed in or about December 2014.

50.   In proceedings No 2016/97515 I make the following orders:

(1) Order pursuant to section 8(7)(a) of the Vexatious Proceedings Act 2008 that all proceedings in New South Wales instituted by Vitomir Zepinic and/or Nina Zepinic:

(a)   relating to or arising out of the subject matter of Consumer Trader and Tenancy Tribunal proceeding HB07/03657;

(b)   relating to or arising out of the subject matter of Consumer Trader and Tenancy Tribunal proceeding HB07/33225;

(c)   relating to or arising out of the subject matter of Supreme Court of New South Wales proceeding 2009/290598;

(d)   relating to or arising out of the subject matter of Supreme Court of New South Wales proceeding 2013/132492;

(e)   relating to or arising out of the subject matter of Supreme Court of New South Wales proceeding 2016/97515;

(f)   relating to or arising out of the construction contract entered into in or about February 2006 between Vitomir Zepinic and Milla Zepinic and Chateau Constructions (Aust) Limited; and/or

(g)   relating to the property known as XX Turramurra Avenue, Turramurra, New South Wales, being the land comprised in folio A/XXXX, including, but not limited to, the sale of that property completed in or about December 2014,

are stayed.

(2) Order pursuant to section 8(7)(b) of the Vexatious Proceedings Act 2008 that Vitomir Zepinic, also known as Vito Zepinic, is prohibited from instituting proceedings in New South Wales:

(a)   relating to or arising out of the subject matter of Consumer Trader and Tenancy Tribunal proceeding HB07/03657;

(b)   relating to or arising out of the subject matter of Consumer Trader and Tenancy Tribunal proceeding HB07/33225;

(c)   relating to or arising out of the subject matter of Supreme Court of New South Wales proceeding 2009/290598;

(d)   relating to or arising out of the subject matter of Supreme Court of New South Wales proceeding 2013/132492;

(e)   relating to or arising out of the subject matter of Supreme Court of New South Wales proceeding 2016/97515;

(f)   relating to or arising out of the construction contract entered into in or about February 2006 between Vitomir Zepinic and Milla Zepinic and Chateau Constructions (Aust) Limited; and/or

(g)   relating to the property known as XX Turramurra Avenue, Turramurra, New South Wales, being the land comprised in folio A/XXXX, including, but not limited to, the sale of that property completed in or about December 2014.

(3) Order pursuant to section 8(7)(b) of the Vexatious Proceedings Act 2008 that Nina Zepinic is prohibited from instituting proceedings in New South Wales:

(a)   relating to or arising out of the subject matter of Consumer Trader and Tenancy Tribunal proceeding HB07/03657;

(b)   relating to or arising out of the subject matter of Consumer Trader and Tenancy Tribunal proceeding HB07/33225;

(c)   relating to or arising out of the subject matter of Supreme Court of New South Wales proceeding 2009/290598;

(d)   relating to or arising out of the subject matter of Supreme Court of New South Wales proceeding 2013/132492;

(e)   relating to or arising out of the subject matter of Supreme Court of New South Wales proceeding 2016/97515;

(f)   relating to or arising out of the construction contract entered into in or about February 2006 between Vitomir Zepinic and Milla Zepinic and Chateau Constructions (Aust) Limited; and/or

(g)   relating to the property known as XX Turramurra Avenue, Turramurra, New South Wales, being the land comprised in folio A/XXXX, including, but not limited to, the sale of that property completed in or about December 2014.

5. On 14 December 2018, an appeal by Mr Zepinic and his daughter, Ms Nina Zepinic, against Pembroke J’s orders was unanimously dismissed by the Court of Appeal: Zepinic v Chateau Constructions (Aust) Limited [2018] NSWCA 317.

6. In between the hearings before Pembroke J and the Court of Appeal, on 22 November 2017, Mr S S Ahmed of Counsel, instructed by Ms M Pavey of SLF Lawyers, approached Ward CJ in Equity sitting as Duty Judge on behalf of Mr Zepinic. Her Honour granted leave for a motion and supporting affidavits to be filed in Court. This was the first step in the process required by the Act, the object of which was an application by Mr Zepinic to commence proceedings against Mr Malanos by summons seeking:

“1.   On order that the defendant pay the balance of the proceeds of sale of the property described as the land comprised in Folio A/XXXX and also known as XX Turramurra Avenue, Turramurra (the “Property”) into Court.

2. An order that pursuant to s 102 of the Trustees Act 1925 (NSW), the Defendant provide an account to the Court of the proceeds of sale of the Property.

3.   An order that the defendant pay the costs of the plaintiff.”

7. At that first mention of the matter on 22 November 2017, the Chief Judge made orders which included:

“5. Order for the purposes of s16(1)(a) of the Vexatious Proceedings Act 2008 (NSW) that the applicant serve by 5.00pm on 23 November 2017 the following persons with a copy of the documents specified in (a) to (d) below:

Nicholas Craig Malanos;

The Attorney-General;

The Solicitor-General; and

Chateau Constructions (Australia) Limited.

(a)   summons dated 21 November 2017;

(b)   affidavit sworn 17 November 2017 of Margaret Pavey;

(c)   affidavit sworn 21 November 2017 of Vito Zepinic;

(d)   a notice that each person is entitled to be heard on the application by the applicant for leave to institute the proceedings, contemplated by the draft summons which is annexure A to the affidavit sworn 21 November 2017 of Vito Zepinic.”

8. The draft summons which Mr Zepinic was seeking leave to file contained these substantive prayers for relief:

“1.   An order that the Defendant pay the balance of the proceeds of sale of the property described as the land comprised in folio A/XXXX and also known as XX Turramurra Avenue, Turramurra NSW (“the Property”) into Court.

2. An order that pursuant to Section 102 of the Trustees (sic) Act 1925 (NSW), the Defendant provide an account to the Court of the proceeds of sale of the Property.”

9. Section 102 of the Trustee Act 1925 (NSW) (the “TA”) provides:

“102   Account by fiduciary

Where any guardian, manager, receiver, trustee or other fiduciary appointed by the Court has been or is (whether by Act, by rule of court or by order in any proceedings) directed to account from time to time to the Court, or to file any report or account in any registry of the Court, the Court may order compliance with the direction, on the application of any party interested or of its own motion.”

10. The proceedings were listed for further directions before her Honour as Duty Judge on 1 November 2017.

11. At the return date on 1 December 2017, a legal representative for the Attorney-General indicated that the Attorney would wish to see submissions on behalf of both Mr Zepinic and Mr Malanos. (By the time the matter came before me, the Attorney had read the parties’ submissions and indicated that he did not wish to be heard.) The Court was also informed that the Solicitor-General did not wish to be heard. The Chief Judge made these orders:

“1.   Order that the respondent to the Notice of Motion Mr Nicholas Craig Malanos file and serve any evidence on which he wishes to rely in opposition to the application by 4pm Friday, 2 February 2018.

2   Order that submissions by the plaintiff be filed and served by 16 February 2018.

3.   Order that Mr Malanos file any submissions in reply by 23 February 2018.

4.   Direct that any submissions to be filed and served by the Attorney General be filed by 9 March 2018.

5. Copy of applicant’s motion to be served on Respondent

6. Stand matter over to the Duty Registrar’s List on 15 March 2018.”

12. In accordance with her Honour’s direction the matter came before the Registrar on 15 March 2018 and was referred to me, sitting as Duty Judge. On that occasion Mr S S Ahmed of Counsel appeared again for Mr Zepinic, Mr D G Healey of Counsel appeared for Mr Malanos and Mr A Loel, solicitor, appeared for Chateau.

13. The Court embarked upon hearing Mr Zepinic’s application under s 16 of the Act for leave to commence proceedings against Mr Malanos. Mr Zepinic was cross-examined by Mr Healey. Mr Ahmed made his submissions and the proceedings were then interrupted by other urgent matters in the Duty List. However, before adjourning the matter, I raised with the parties the fact that the real dispute appeared to be about the payment of moneys into Court by Mr Malanos in accordance with an order made some time before by Pembroke J, and the question of Mr Zepinic’s entitlement to an accounting from Mr Malanos as trustee. It seemed to me that rather than engaging in what might be described as satellite litigation about whether or not Mr Zepinic should have leave to commence proceedings, a more pragmatic approach might commend itself to the parties. Owing to other matters in the Duty List on that day, I was unable to complete the hearing. Directions were made for the filing of further submissions and the proceedings were stood over to 27 March 2018.

12. On that day the hearing continued with the same appearances. By that time, the amount which Mr Zepinic sought to have paid into Court had been paid in, so that the first prayer in his draft summons had been rendered otiose. Insofar as Mr Zepinic continued to press for leave to file a summons seeking an account from Mr Malanos, Mr Healey submitted that it would be futile and unnecessary because the complaints and issues raised by Mr Zepinic had been substantially answered. In other words, Mr Zepinic was unable to demonstrate a prima facie case. In practical terms, the issue became whether Mr Zepinic would be able to demonstrate that there was still something in the nature of an account which had not been properly explained by the various materials that had been provided by Mr Malanos to Mr Zepinic’s lawyers. Because of the volume and detail of the material, Mr Zepinic’s counsel was unable to provide a comprehensive response at the time of the hearing.

13. However, the parties accepted that a pragmatic approach to determining what was really in dispute should be maintained and the Court made these directions:

“1.   The Applicant provide to the Respondent a list of the items in Ex 6D of which he requires further satisfaction by 10 April 2018.

2.   The Respondent respond to the Applicant including by:

(a)   the provision of documents the Respondent says ought to satisfy the Applicant;

(b)   identifying whether or not the Applicant has any particular document; or

(c)   stating that the Applicant does not need to provide the information or document sought and giving brief reasons why,

by 26 April 2018.

3.   The Applicant identifies to the Respondent any items which he says are not supported by the Respondent’s response with brief reasons why and remain in dispute between the parties by 2 May 2018.

4.   The matter be listed for directions before Kunc J at 9.30am on 4 May 2018.

5. Pursuant to s 26 of the Civil Procedure Act 2005 (NSW), the matter be referred to mediation, such mediation not to be held prior to the directions hearing referred to in Order 4.”

16. On 4 May 2018 the parties informed the Court that there had been a significant narrowing of the issues. According to Mr Zepinic’s counsel, there were ten issues that remained. There were five that it was hoped could be resolved between the parties. The other five were described as “substantive” and which would require the assistance of the mediation which I had ordered on the previous occasion.

17. The Court ordered that the mediation was to occur no later than 29 June 2018 and the matter was listed for further directions before me on 10 July 2018.

18. The mediation took place on 4 July 2018. Mr Zepinic attended the mediation himself, without the assistance of his solicitor or counsel. When the matter came back before me on 10 July 2018, Mr Ahmed informed the Court that, from his client’s point of view, three “key matters” remained outstanding. Mr Ahmed also said “It seems to us that this application, insofar as we are seeking an accounting, has now reached its end in the sense that no more can be done. We have sought an account, there have been concerted efforts by us to get documents. Your Honour ordered Dr Zepinic to go to mediation, that matter was ventilated for the better part of a day. That is probably as far as we are going to get”. (T1:41-45). Mr Ahmed submitted that the Court should in its inherent jurisdiction review Mr Malanos’ conduct.

19. In circumstances where it appeared that Mr Zepinic no longer wished to press for the relief (an account) in respect of which he had originally sought leave, Mr Healey submitted that the appropriate course was to dismiss Mr Zepinic’s application with costs. Mr Healey submitted that, in the interests of efficiency, his client was likely to bring an application for a gross sum costs order. However, Mr Ahmed responded that his client wished to have the opportunity to reformulate the relief in respect of which he would seek leave and also wished to add an application for moneys to which he said he was entitled to be paid out of Court.

20. In an endeavour to bring all these matters together, the Court made these directions:

“1.   DIRECT on or before 31 July 2018 the applicant is to serve and file with the Associate to Kunc J a Summons amended to seek such further relief as the applicant may be advised and any draft notice of motion for payment out of funds held in Court together with any affidavit evidence in support and an outline of submissions.

2.   DIRECT on or before 21 August 2018 the defendant respondent is to serve and file with the Associate to Kunc J any affidavit evidence in reply and any affidavit evidence in support of a lump sum costs order and an outline of submissions.

3.   DIRECT the plaintiff applicant to file any outline of submissions in reply with the Associate to Kunc J on or before 24 August 2018.

4.   LIST the application for hearing before Kunc J on 30 August 2018.”

21. The proceedings were relisted for directions on 28 August 2018 at the request of Mr Zepinic’s legal representatives. On that occasion the matter then took another turn.

22. Mr Ahmed, in what was to be his last appearance for Mr Zepinic in these proceedings, informed the Court that his solicitors had filed and served a summons, affidavit and submissions in conformity with the Court’s orders made on 10 July 2018. However, on the same date, Mr Zepinic had filed in the Court registry his own documents: an amended summons, three affidavits affirmed by him, a notice of motion and submissions. Mr Ahmed went on to say (T2:13-34):

“AHMED: The submissions that we drafted and the summons et cetera and the affidavit of Ms Pavey, we hopefully at that point in time put forward the best case that we could and, hopefully, with some persuasion that your Honour would make the orders that are contemplated in the summons being principally the referring out of the matter.

Unfortunately, the documents that have been filed by Dr Zepinic on the same date, in particular an amended summons conflicts with the summons that has been filed by my instructing solicitors. The submissions that have been drafted by him are not submissions that I can make. The evidence that's been served by him is not evidence that I can read as an officer of the Court and it puts my solicitor and I in an untenable position.

A notice of intention to cease to act was served on Dr Zepinic on 20 August. The position has not changed from that date in so far as the defendant's solicitor wrote to Ms Pavey asking what documents Dr Zepinic intends to rely on and the instructions that we received was all of the documents. In other words both summons, both submissions, the three affidavits of Dr Zepinic and the notice of motion.

My instructions are to withdraw from the proceedings and I have a notice of ceasing to act which I seek leave to file in Court. “

23. I granted leave to Mr Zepinic’s solicitors to file their notice of ceasing to act in Court. Mr Ahmed and Mr Zepinic’s former solicitors then withdrew and Mr Zepinic came to the Bar table to represent himself.

24. As a result of Mr Zepinic continuing the proceedings unrepresented, and owing to other interlocutory delays, the Court vacated the hearing for 30 August 2018. In fixing the matter for hearing on 28 and 29 November 2018, the Court also directed Mr Zepinic to file and serve full written submissions and any affidavits in reply to Mr Malanos’ submissions on or before 12 October 2018.

25. At a further directions hearing on 22 October 2018 Mr Healey, for Mr Malanos, raised concerns about a number of serious allegations made against Mr Malanos in Mr Zepinic’s latest round of submissions. He also drew attention to the fact that it was unclear precisely what relief Mr Zepinic now sought in respect of which he was seeking leave to commence proceedings under the Act. Accordingly, the Court made these directions:

“1.   The plaintiff/applicant is to file and serve a final version of the Summons in respect of which he seeks leave to commence proceedings on or before 29 October 2018.

2.   The respondent/defendant is to request particulars of the allegations in the plaintiff's submissions of 10 October 2018 on or before 5 November 2018.

3.   The plaintiff/applicant is to provide answers to those particulars on or before 19 November 2018.

4.   The defendant/respondent is to serve and file with the Associate to Kunc J a Court Book for the hearing on 28 and 29 November on or before 26 November 2018.”

26. The final hearing took place on 28 and 29 November 2018. Mr Zepinic appeared for himself and Mr Healey for Mr Malanos. The court book comprised 9 volumes together with two additional volumes of judgments and orders in various proceedings involving Mr Zepinic. At the conclusion of the hearing it was necessary to make these further directions:

“1.   On or before 7 December 2018, the defendant is to serve and file by email with the Associate to Kunc J:

a.   A document setting out or including those submissions made that are recorded in the transcript of earlier hearings in these proceedings on which the defendant still relies;

b.   An updated copy of the aide memoire headed “Zepinic v Malanos Summary of Court’s Orders” including the evidentiary references that were not in the version provided to the Court today.

2.   On or before 1 February 2019, the plaintiff is to file and serve by email with the Associate to Kunc J full written submissions in reply to the defendant’s submissions (being, for the avoidance of doubt, the defendant’s submissions included in the Court Book, the defendant’s submissions made orally today, and the defendant’s submissions set out in the document referred to in Order 1(a)).

3.   Grants liberty to the defendant to apply by email to the Associate to Kunc J within 14 days after receiving the plaintiff’s reply submissions referred to in Order 2 if the defendant wishes to seek leave to make submissions in response to any of the plaintiff’s reply submissions on the basis that those submissions or some part of them were not properly in reply.”

27. Mr Zepinic provided his submissions referred to in Order 2 in the previous paragraph on 29 January 2019. However, for whatever reason, a copy of his submissions was not served on Mr Malanos’ legal representatives. That fact was not drawn to the Court’s attention until 26 February 2019. Mr Malanos did not exercise the liberty which the Court had granted to him to seek to make any submissions in reply to Mr Zepinic’s submissions of 29 January 2019.

28. The Court therefore had a great deal of material to consider, including the parties’ extensive written submissions. The procedural history of Mr Zepinic’s dispute with Chateau has become, to say the least, byzantine in its complexity, a fact which I formed the view Mr Zepinic attempts to deploy to his advantage. As a judge with no prior involvement in these matters, I record my gratitude to Mr Healey for the clear and painstaking exposition of that procedural history in his written submissions and other materials which he provided to the Court.

The issue for determination

29. On 31 July 2018 Mr Zepinic filed a Notice of Motion seeking the following relief (the “payment out motion”):

“1.   This motion be decided in chambers.

2.   The plaintiff may withdraw $280,845.29 paid into Court in this matter on or about 13 February 2018 and 23 March 2018.

3.   No order as to costs.”

30. On 31 July 2018 Mr Zepinic also filed an Amended Summons seeking:

“1.   An order to invalidate Defendant's Notice of Motion filed in Court on 11 August 2014 and subsequent judgment/orders as void (having no legal effect).

2.   An order to invalidate the Consent Order between Toomey Pegg lawyers and Bridges lawyers made on or around 18 December 2014.

3. An order pursuant to r20.i4 of UCPR 2005 that the conduct, remuneration and disbursements of Nicholas Craig Malanos, as Trustee for sale of XX Turramurra Avenue, Turramurra NSW 2074, be referred to Daniel Juratovich within 14 days, or such other Refer (sic) as the Court deems fit, for investigating and report.

4.   An order that the Defendant pay to the Plaintiff the sum of $830,690.68 as the balance of the proceeds of sale of the property described as land comprised in folio A/XXXXX and also known as XX Turramurra Avenue, Turramurra NSW 2074 (“the Property”).

5.   The Defendant provide to the Plaintiff, within 14 days, the following documents:

(A)   All source documents, including costs certificates, underlying each of the figures set out in the Schedule to the Affidavit of Andrew Loel dated on or around 18 December 2014;

(B)   All documents evidencing communications between Nicholas Craig Malanos and the ATO in relation to the filing of any tax return by him as Trustee for sale of XX Turramurra Avenue and any application by the Trustee for a Private Tax Ruling in relation for Capital Tac (sic) Gain.

6. An order that, pursuant to Sections 12 & 102 of the Trustees Act 1925 (NSW), the Defendant, within 14 days, provide to the Plaintiff the following:

•   Copy of all documents used to register the “Trust for XX Turramurra Avenue, Turramurra NSW” (“Turramurra Trust”);

•   Full address and contact details of the registered “Turramurra Trust”;

•   Name and all details of the person(s) who are Trustee(s);

•   Name and full details of the beneficiaries;

•   All details about the “Turramurra Trust” financial statements (deposit(s), income, debits, interest, refunds, etc.) from the date of “Turramurra Trust” being registered until 30 August 2018.

•   Copy of all documents used to register the “Mr and Mrs Zepinic Trust” (“Zepinic Trust”) at XX Little Thames Walk, London SE8 3FB, UK;

•   Full address and contact details of the registered “Zepinic Trust”;

•   Name and all details of the person(s) who are Trustee(s);

•   Name and full details of the beneficiaries;

•   All details about the “Zepinic Trust” financial statements (deposit(s), income, debits, interest, refunds, etc) from the date of “Zepinic Trust” being registered until 30 August 2018.

7.   An order that the Defendant pay to the Plaintiff loss of the rent incomes ($120,804 + interest) since October 2013 until 27 November 2015 as per Residential Tenancy Agreement signed on 28/11/2012 and valid until 27/11/2015.

8.   An order that the Defendant pay to the Plaintiff the sum of $47,026, plus interest from 18 December 2014 until 30 August 2018, being a loss of personal belongings being in the Property.

9.   An order that the Defendant pay to the Plaintiff the sum of $85,182.88, plus interest from 18 December 2014 until 30 August 2018, being withheld by the Defendant for the alleged services done on the Property (insurance, flooring, window cleaning, gardening, internal/external painting, tailing, security at auction, withholding tax paid, etc.).

10.   An order that the Defendant pay interest on amount stated above at prayer 4 from 18 December 2014 until 30 August 2018.

11.   An order that the Defendant repay to the Plaintiff estimated amounts regarding the legal costs ($361,058.96) and remuneration ($93,506.96) reviewed by an independent Refer (sic) appointed by the Court.

12.   An order that the Defendant pay the costs of this proceedings and disbursements to the Plaintiff on an indemnity basis.

13.   Such further or other order(s) as the Court deems fit.”

31. On 26 October 2018 Mr Zepinic filed a Summons seeking:

“1. Pursuant to Articles 15 & 16 of the 14. Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, Articles 11 & 15 of the Vienna Convention on the Law of Treaties 1969, r11.5, r11A.4, r11A.11 and r18.2(i) of the Uniform Civil Procedure Rules 2005, and s78.59 of the NSW Supreme Court Rules 1970, an order that the Defendant’s Notice of Motion filed in Court on 11 August 2014 is invalid and subsequent orders void (having no legal effect);

2. Pursuant to r39.21 - 39.28 of the Uniform Civil Procedure Rules 2005, and s57 & s58 of the Real Property Act 1900, an order to invalidate the process of selling the property at XX Turramurra Avenue (Folio: AXXXX);

3. Pursuant to s6, s12, s86 & s104 of the Trustees Act 1925 and s23 of the Supreme Court Act 1970, an order that the Defendant serve, within seven days of the date of this summons, to the Applicant about (sic) created ‘Mr and Mrs Zepinic Trust' and 'XX Turramurra Avenue Trust' the following, but not limited, documents:

•   All documents being used to create both trusts;

•   Deed for both trusts being registered;

•   Names and all details of the all (sic) beneficiaries for both trusts;

•   Pursuant to the Property, Stock & Business Agents Act 2000, the copies of the trust accounts from authorised deposit-taking institution;

•   Australian Business Number and Tax File Number for both trusts;

•   Copy of all correspondences between the Trustee (the Defendant) and the Australian Taxation Office in regards to both trust (sic);

•   Copy of all financial statements for both trusts (deposit, income, debit, payments in and/or out, tax return, interest, refunds, etc.).

4.   An order to Defendant to close both trusts (‘Mr and Mrs Zepinic Trust', and ’XX Turramurra Avenue Trust') within seven days and balance on the trust accounts to be transferred to Vito Zepinic.

5.   An order to affirm prayers 4-14 stated in the Plaintiff’s Submissions of 10 October 2018.”

32. Prayers 4-14 of the Plaintiff’s Submissions of 10 October 2018 were:

“4.   Mr Malanos is to pay to the Plaintiff the sum of $830,690 being as the balance of sold property (as per 19 December 2014) plus interest from 19 December 2014 until the Court judgment of this proceeding.

5.   Mr Malanos is to pay to the Plaintiff the sum of $120,804 plus interest being a loss of the rent income from 28/11/2013 until 27/11/2015.

6.   Mr Malanos is to pay to the Plaintiff the sum of $361,000 plus interest from 19 December 2014 until the Court judgment of this proceeding.

7.   Mr Malanis (sic) is to pay to the Plaintiff the sum of $93,485 (or other amount that Court finds fit) plus interest from 19 December 2014 until the Court judgment of this proceeding.

8.   Mr Malanos is to pay to the Plaintiff the sum of $22,925 plus interest from 19 December 2014 until the Court judgment of this proceeding being difference between estimated real estate agency costs by valuation ($44,000) and amount of $66,925 allegedly being paid by the Trustee.

9.   Mr Malanos is to pay to the Plaintiff the sum of $22,209 plus interest from 19 December 2014 until the Court judgment of this proceeding being allegedly paid to Toomey Pegg lawyers.

10.   Mr Malanos is to pay to the Plaintiff the sum of $85,182 plus interest from 19 December 2014 until the Court judgment of this proceeding being withheld by Mr Malanos for alleged services done on the property.

11.   Mr Malanos is to pay to the Plaintiff the sum of $17.901 (sic) plus interest from 19 December 2014 until the Court judgment of this proceeding being withheld by Mr Malanos (security at auction, trading and travel expenses, withholding tax paid, insurance).

12.   Mr Malanios (sic) is to pay to the Plaintiff the sum of $47,026 plus interest from 19 December 2014 until the Court judgment of this proceeding being a loss of the personal belongings held in the property.

13.   Mr Malanos is to pay to the Plaintiff costs of this proceeding on indemnity basis.

14.   Such further or other orders as the Court deems fit.”

33. At the hearing on 28 November 2018, Mr Zepinic confirmed to the Court that the relief which he sought in the proceedings that he sought leave to commence was what I have set out in paragraphs [29] to [32] above (T8:29-T9:21).

34. Having identified the relief which Mr Zepinic wants in the proceedings for which he seeks leave, three preliminary points should be made before turning to the substance of his application.

35. First, while nothing ultimately turns on it, I accept Mr Healey's submission that Mr Zepinic's application is in an irregular form, having been commenced by a Notice of Motion which appears to have been given a fresh proceedings number. In the absence of any specific provision in the Court's rules otherwise, an application for leave to bring proceedings under the Act should ordinarily be commenced by a summons in fresh proceedings. The originating process in respect of which leave is sought should either be annexed to that summons or attached to the affidavit in support.

33. Second, it may be accepted that the three separate forms of process (including by reference to written submissions) is an unsatisfactory way to identify the relief sought, and not in compliance with the directions which I have made. Nevertheless, given the history of these proceedings and Mr Zepinic's determination to persist, I am satisfied that this is a case where substance should take precedence over form. Mr Zepinic has indicated what he wants and the Court will deal with it accordingly.

34. Third, I propose to deal immediately and shortly with the payment out motion. There appears to be no dispute that after all other interested parties (including Chateau and the Trustee) have been paid whatever it is to which they may be entitled, whatever is left of the proceeds of sale of the Property belongs to Mr and Mrs Zepinic. Payment out of the moneys now held in court will have to be dealt with. In my view, the desire of Mr Zepinic (presumably on behalf of himself and his wife as the former registered proprietors of the Property) to be heard on the question of the moneys in court is not vexatious or otherwise made impermissible by s 15 of the Act.

35. Subject to one qualification I propose to grant leave, pursuant to the inherent jurisdiction of the Court to control its own process and under the Act, to Mr Zepinic to proceed with the payment out motion as a means of crystallising the issue of who is entitled to the remaining funds. However, the one qualification is that I see no utility in the entitlement to the funds in court being debated until the question of the Trustee's costs of the present application has been determined. In reaching this conclusion, I have taken into account that Mr Healey's submissions foreshadowed the possibility of the Trustee making an application for a gross sum costs order to the extent the Court is satisfied that the Trustee is entitled to his costs of the present application. As I note in the final paragraph of these reasons, that is a matter yet to be determined.

Dealing with the issues raised by Mr Zepinic generally

39. With no disrespect intended, Mr Zepinic's oral and written submissions were lengthy, repetitive and not always easy to follow. Nevertheless, before turning to consider the specific relief which he says he now seeks, it is convenient to deal with what might be described as four overarching themes in Mr Zepinic's application.

40. First, many of Mr Zepinic's submissions appear to be directed towards an attack on orders made in earlier proceedings such as the appointment of Mr Malanos as Trustee and for the sale of the Property, together with other orders in relation to the disbursement of funds. To the extent that any of the relief sought by Mr Zepinic in the present application is directed to those matters, I accept Mr Healey's submission that Mr Zepinic is engaging in what might be referred to as a classical example of abuse of process. The Property has been sold and the proceeds have been disbursed in accordance with orders of the Court. In relation to those matters, Mr Zepinic has either not appealed or his appeals have been unsuccessful. Third parties’ rights have now intervened. On any view, even if otherwise satisfied of the formal prerequisites under the Act, the reagitation of those matters is not something for which the Court would grant leave.

41. Second, it is apparent from Zepinic's oral and written submissions that he is much exercised about, and deeply suspicious of, what are referred to in tax returns submitted by the Trustee as the "Mr & Mrs Zepinic Trust" and the "34 Turramurra Avenue Trust". Much of Mr Zepinic's application appears to be addressed to obtaining copies of documents in relation to those trusts and asserting that somehow the Trustee has established an independent trust for his own benefit which he was not entitled to do, including wrongfully using the Zepinic name.

42. With respect to Mr Zepinic, his concerns are based on a complete misconception. This question is compendiously dealt with in Mr Healey's written submissions which I have substantially reproduced and gratefully adopt in paragraphs [43] to [46] below.

43. The position in relation to the trusts may be summarised as:

1. The Court constituted Mr Malanos a trustee for sale of the Property;

2. When the Property was sold, it is trite that Mr Malanos continued to hold the proceeds of sale on trust (with Chateau having a priority charge over those funds, ie an equitable interest in them, and for that matter Mr Malanos also having an equitable lien over those funds). So much was confirmed by Darke J in Chateau Constructions (Aust) Ltd v Zepinic [2013] NSWSC 1326 at [34], where his Honour held ;

"... Of course, if the legal ownership of the property vests in the trustee pursuant to the orders of the court, the defendants might then be regarded as having an equitable interest in the property, and if the property is eventually sold in accordance with the orders of the court the defendants would in my view have an equitable interest in the proceeds of such sale. ..."

3. When capital assets are sold, a capital gains tax liability can arise;

4. Trustees that hold capital assets which are disposed of may be liable to pay capital gains tax;

5. A trustee must lodge tax returns for each tax year;

6. The Australian Taxation Office (“ATO”) return forms require a name of the trust to be inserted into the return form;

7. The proceeds of sale of the Property were held on trust by Mr Malanos in a bank account, which earned interest;

8. The bank account opened also has a name, signifying that it is a trust account;

9. Interest earned in a bank account may be liable to income tax;

10. Rental income derived by a person may be subject to income tax;

11. Trustees who earn income may be liable to pay income tax and beneficiaries who are presently entitled to income of a trust may also be subject to income tax;

12. Income tax returns, income tax assessments, income tax statements, income tax refund cheque copy, banks statements and a private tax ruling have all been given to Mr Zepinic;

13. There is no evidence whatever to suggest that Mr Malanos has himself independently established some trust in Mr Zepinic's name. Any trust in existence arises out of the Court's orders or by operation of law;

14. There is no evidence to suggest that, at the time Mr Malanos did so, that it was improper for a trustee in his circumstances to seek clarification of his tax obligations by applying for a private tax ruling or that, prior to receiving funds to enable him to do so, he was obliged to incur costs and seek a ruling earlier than he did.

44. The following appears from the documents provided to Mr Zepinic:

1. By orders made on 8 April 2010 (and as later varied), Mr Malanos was appointed as trustee for the sale of the Property and his costs and expenses were to come out of the proceeds of sale (ie he was to sell the Property as trustee, receive the proceeds of sale, hold them and disburse funds out of them, including to Chateau);

2. On 29 November 2012, well after the Court declared that title to the Property had vested in the Trustee and made orders requiring Mr Zepinic to hand over to the Trustee the Certificate of Title for the Property on request, Mr Zepinic entered into a residential tenancy lease of the Property with a tenant;

3. The Property was sold at auction on 14 November 2014. It was therefore necessary for the Trustee to prepare an income tax return for that year of income;

4. The sale settled on 19 December 2014;

5. the Trustee applied for a tax ruling from the ATO, which was issued on 24 September 2015, following which tax returns could be lodged with the ATO;

The 2014 ITR

1. The income tax return for the year ended 30 June 2014 was prepared. The return form asked for the '"Name of the trust”. Mr and Mrs Zepinic were beneficiaries of the trust for sale established by the Court. Unsurprisingly, the return form therefore gave the name of the trust as "Mr and Mrs Zepinic Trust";

2. As the person entitled to immediate possession of the premises by Order of the Court (see Order 4 made 8 April 2010, as varied), any rental income emanating from the lease of the Property entered into by Mr Zepinic, the trustee therefore derived rental income as trustee for the benefit of Mr and Mrs Zepinic. This is shown in the Rental Property Schedule of the income tax return and elsewhere as the taxable income of the trust. Mr and Mrs Zepinic are shown as beneficiaries of the trust and their respective shares of the income of the trust (each having a half-share). Mr Zepinic's share is shown as $6,713 (being 50% of the $13,417 income derived by the trust as rental income). The return was prepared by a tax agent;

3. The $13,417 is derived from the orders made by the CTTT and is shown in the bank statement of the trust bank account. It is the amount that the Trustee received from the tenant under the tenancy agreement signed by Mr Zepinic, net of compensation payable to the tenant and net of expenses paid to the tenant in respect of termination of the lease and early vacation, to permit the sale of the Property;

4. In due course, the ATO issued notices of assessment. The 2014 income tax return lodged by the Trustee (the “2014ITR”) generated assessments to tax under the trust tax file number XXXXX XXXX on 26 November 2016. The notices of assessment record that the ATO broke up the assessments as between the beneficiaries:

1. For Mr Zepinic

• Assessment addressee: The Trustee for Mr and Mrs Zepinic A/c Vitomir Zepinic

• Tax period ending: 30 June 2014

• Tax file number: XXXXX XXXX

• Taxable income: $6,713

• Assessed tax payable: $2,181.72

2. For Mrs Zepinic

• Assessment addressee: A/C Milla Zepinic

• Tax period ending: 30 June 2014

• Tax file number XXXXX XXXX

• Taxable income $6,714

• Assessed tax payable: $2,182.05

5. This reconciles to the 2014 ITR. Mr Zepinic was provided with the 2014 ITR on 14 June 2017; the ATO assessment notices were provided to Mr Zepinic's lawyers on 26 April 2018, together with bank statements showing that the Trustee had paid the tax liability assessed out of the trust bank account;

6. Mr Zepinic started to make his own enquiries with the ATO in March 2018. After receiving the above information, he continued his enquiries with the ATO and lodged an FOI request with the ATO in May 2018, answered under cover of an ATO letter dated 18 June 2018.

7. The Trustee was not assessed on any capital gain from the sale of the Property, as was confirmed by the private tax ruling provided to Mr Zepinic.

2015 ITR

1. The Property was sold on 14 November 2014 and the sale settled on 19 December 2014;

2. As those dates fall within the tax year ended 30 June 2015, if there was any capital gains tax payable by the trustee, the capital gain would have been included in the income tax return for the year ended 30 June 2015 (the “2015 ITR”);

3. the private tax ruling was issued on 24 September 2015 and confirmed that the Trustee was not liable to capital gains tax;

4. The 2015 ITR shows:

• no rental income;

• interest income of $7,590;

• deductions of $7,590;

• at Item 21, that there was a capital gains tax event during the year but no net capital gain assessable to the trustee;

• at Item 26, zero total net income;

• at item 54, income to which no beneficiary is presently entitled is zero income but with a TEN tax credit of $3,709.00;

5. The 2015 ITR was given to Mr Zepinic on 14 June 2017 and it was explained to Mr Zepinic that the 2015 ITR resulted in a refund of the $3,709.00;

6. The 2015 income tax assessment issued on 28 November 2016 showing an amount refundable to the trustee of $3,709.00;

7. the 2015 income tax assessment was given to Mr Zepinic on 26 April 2018 and the amount and nature of the amount refundable was explained;

8. The notice of assessment for 2015 confirmed that the Trustee was assessed on zero taxable income with zero tax payable, and, no capital gain;

9. The Trustee was not assessed on any capital gain from the sale of the Property, as was confirmed by the private tax ruling provided to Mr Zepinic;

10. The Trustee was not liable to capital gains tax and Mr and Mrs Zepinic are therefore liable for any capital gains tax consequences of the sale of the Property;

2016 and 2017 ITRs

1. The income tax assessments arising from the income tax return for the years ended 30 June 2016 (the “2016ITR”) and 30 June 2017 (the “2017ITR”) were provided to Mr Zepinic on 26 April 2017 together with an ATO Statement of Account and copy of ATO refund cheque and bank statements showing tax paid by or refunded to the Trustee with an explanation of the relevant transactions;

2. In summary:

• they each show only interest income being earned and a tax credit for TFN withholding tax and deductions;

• the assessment for the 2016 ITR showed zero taxable income and a refund of the tax credit of $3,010.00;

• the assessment for the 2017 ITR showed zero tax payable with a refund of the tax credit of $479.00;

• the ATO Statement of Account shows all of the above transactions plus credits for interest on tax overpaid (ie on the TFN withholding tax credits);

• the bank statements accord with the transactions shown.

45. It is clear from the foregoing that the Trustee did not pay tax on any net capital gain on sale of the Property. By the private tax ruling, the Trustee was not liable for tax on the sale. The Trustee declared rental income where received and the tax applicable was paid by the Trustee. The Trustee earned interest and tax was deducted at source in respect of it with TFN withholding tax credited to the Trustee and the Trustee paid tax and deposited tax refunds in the trust bank account.

46. There can be no doubt that there was a trust established by the Court of which Mr and Mr Zepinic were the beneficiaries (with Chateau and the Trustee claiming priority interests over its assets) and when the Property was sold, the trustee continued to hold the proceeds on trust for Mr and Mrs Zepinic. The Court is satisfied that there is nothing untoward or unusual about any of this.

47. The third broad area of complaint advanced by Mr Zepinic relates to both the Trustee's own remuneration and legal fees incurred by the Trustee. Both before and after the present application was commenced, Mr Zepinic (or his then legal representatives) was provided, as the evidence before me demonstrates, with relevant narrative bills and similar records. I accept Mr Healey's submission that it is difficult to imagine what more could be provided to Mr Zepinic to assuage his concerns. Mr Zepinic himself adduces no evidence to support his assertions that the charges are excessive or unreasonable. In the absence of any such evidence, I do not think it is any part of the Court's role to conduct some review, informal or formal, of those accounts, especially on an application of this kind. To the extent that Mr Zepinic has standing to do so, there are other authorities to which he can make complaint about those matters. He has failed to demonstrate any basis on which proceedings in this Court are the appropriate or convenient forum for those matters to be ventilated.

48. The fourth trope that ran through a number of Mr Zepinic’s submissions relied on this argument. Mr and Mrs Zepinic left Australia in March 2009 and moved to London. In respect of a number of notices of motion Mr Zepinic contended that they had not been property served upon him in accordance with the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (the “Convention”) as given effect in Part 11A of the Uniform Civil Procedure Rules 2005. He therefore argued that various orders were void or liable to set aside.

49. Mr Zepinic has raised this argument before, at all times unsuccessfully and including in the Court of Appeal. While I am not strictly bound by the following Court of Appeal dicta, I respectfully agree with and adopt them.

50. In Zepinic v Chateau Constructions (Aust) Limited [2013] NSWCA 214 McColl JA said (emphasis added):

“5.   The original notice of motion, according to Mr Loel's affidavit, was forwarded to Dr and Ms Zepinic under cover of a letter of 29 May 2013, to an address at XXXX Little Thames Walk, London. The amended notice of motion was forwarded to Dr and Ms Zepinic at the same address, under cover of a letter of 17 June 2013.

6   A notice of motion is not one of those documents referred to in the Supreme Court Rules or the Uniform Civil Procedure Rules ("UCPR") as one which must be personally served. Subject to the rules, UCPR 10.5(b) provides that a document may be served on a person by posting a copy to the person's address for service. The only address for service in relation to the Court of Appeal proceedings insofar as Dr and Ms Zepinic are concerned appears in the summons they filed in February 2010 seeking leave to appeal. It is sufficient to note (having regard to identity fraud issues) that, while they nominated an address for service in the United Kingdom, that address was not that to which Mr Loel forwarded the documents to which I have referred.

…

10   In my view, that evidence is sufficient to establish that the forwarding under cover of the letters referred to in Mr Loel's affidavit of the original notice of motion and the amended notice of motion to the Little Thames Walk address should be taken to constitute sufficient service for the purpose of the amended notice of motion, and I so order. On that basis, Chateau Constructions seeks to proceed only against Dr Zepinic in relation to the amended notice of motion.”

51. The Court of Appeal had occasion to consider Mr Zepinic’s arguments under the Convention again in Zepinic v Chateau Constructions (Aust) Ltd [2016] NSWCA 50. On that occasion the Court was constituted by McColl and Leeming JJA. Their Honours said:

15. Secondly, although we agree that Dr Zepinic’s reliance on UCPR r 11A.12 is misplaced, that does not go to the competency of the application for leave to appeal but to its merits.

…

20.   It follows that the application for leave to appeal should be dismissed as incompetent.

21. What follows is not necessary to this Court’s decision dismissing Dr Zepinic’s summons seeking leave, and was not the subject of full submissions, but is provided because Dr Zepinic seems to consider his submissions based on Pt 11A as unanswerable.

22. The application heard in December 2014 was, on any view, an interlocutory application, brought by notice of motion filed in proceedings commenced in 2009. Personal service is not required of notices of motion. UCPR r 10.20(1) states the general rule that any document may be served personally, but “need not be personally served unless these rules so require or the court so orders”.

23. Dr Zepinic’s submissions are primarily based on in Pt 11A, which implements the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters. Those rules apply to “local judicial documents”. Although as Dr Zepinic observes, the term “local judicial document” is not defined, it would be surprising if on its true construction Pt 11A altered long-standing rules as to the service of notices of motion. After all, art 10 of the Convention states that “Provided the State of destination does not object, the present Convention shall not interfere with ... the freedom to send judicial documents, by postal channels, directly to persons abroad”. As one commentator has observed, this “makes it clear that the purpose of the Convention is to provide additional methods of service, and is not to replace or abolish those less formal methods of service”: A Briggs, Private International Law in English Courts (2014, Oxford University Press), at 369.

24. That said, there are questions of the precise operation of Pt 11A (which only took effect upon Australia’s accession to the treaty in 2010) which are best left to a case where the question is the subject of full submissions, and where its answer will affect the outcome.

25. One further matter should be mentioned. This is not the first time in which substantially the same points about service have been raised in proceedings between the parties, including in this Court: see Zepinic v Chateau Constructions (Aust) Ltd [2014] NSWCA 27; 85 NSWLR 289 at [7]. A litigant who continues to advance a point when it has repeatedly been determined against him or her may be committing an abuse of the processes of the court, and may be bringing proceedings which fall within the definition of “vexatious proceedings” under the Vexatious Proceedings Act 2008 (NSW). It should not be thought that Dr Zepinic can repeatedly bring proceedings against Chateau Constructions agitating the same matters.”

52. Mr Zepinic does not contend he was unaware of the relevant notices of motion. Having reviewed the several judgments in which Mr Zepinic is taking the points about service, his litigious conduct does appear to display a tendency to invoke the jurisdiction of the Court when it suits him and on other occasions to question jurisdiction over him by claiming to have been ineffectively served. Fortified by the observations made in the Court of Appeal on at least two occasions, I conclude that any reliance by Mr Zepinic on the Convention has no reasonable prospect of success.

The proposed relief sought by Mr Zepinic – Amended Summons

53. I will next consider each of the prayers for relief sought by Mr Zepinic.

1.   An order to invalidate Defendant's Notice of Motion filed in Court on 11 August 2014 and subsequent judgment/orders as void (having no legal effect).

2.   An order to invalidate the Consent Order between Toomey Pegg lawyers and Bridges lawyers made on or around 18 December 2014.

54. These prayers are an attempt to re-litigate matters that were decided some years ago. Third party rights have intervened through such matters as the sale of the Property. Furthermore, for the reasons set out in paragraph [48] to [52] above, insofar as this relief relies on an argument concerning service under the Convention, it has no reasonable prospect of success.

3. An order pursuant to r20.i4 of UCPR 2005 that the conduct, remuneration and disbursements of Nicholas Craig Malanos, as Trustee for sale of XX Turramurra Avenue, Turramurra NSW 2074, be referred to Daniel Juratovich within 14 days, or such other Refer (sic) as the Court deems fit, for investigating and report.

55. Mr Juratovich is an accountant. Mr Zepinic has not posed any particular questions for the proposed referee to answer. A reference is not an occasion to conduct a roving royal commission. Furthermore, Mr Zepinic has been unable to demonstrate even a prima facie case of anything that warrants investigation and report into the Trustee’s conduct.

4.   An order that the Defendant pay to the Plaintiff the sum of $830,690.68 as the balance of the proceeds of sale of the property described as land comprised in folio A/XXXXX and also known as XX Turramurra Avenue, Turramurra NSW 2074 (“the Property”).

56. This order is futile. The Trustee has paid into Court what the Trustee had.

5.   The Defendant provide to the Plaintiff, within 14 days, the following documents:

(A)   All source documents, including costs certificates, underlying each of the figures set out in the Schedule to the Affidavit of Andrew Loel dated on or around 18 December 2014;

(B)   All documents evidencing communications between Nicholas Craig Malanos and the ATO in relation to the filing of any tax return by him as Trustee for sale of XX Turramurra Avenue and any application by the Trustee for a Private Tax Ruling in relation for Capital Tac (sic) Gain.

57. In relation to Mr Loel’s affidavit and the costs certificates, the Court accepts Mr Healey’s submission that there is no evidence the Trustee ever had the costs certificates. The Trustee was never entitled to them. They belong to Chateau and Mr Zepinic is entitled to inspect the Court file to obtain copies if he wishes. Moreover, the Court also accepts Mr Healey’s submission that, in any event, the Court has made orders consistent with those costs certificates and the Trustee has complied with them. Mr Zepinic has not identified any reason why the Court would not give him access to the relevant files. I see no reason why he should not have access to those files if he asks for it.

58. Insofar as Mr Zepinic seeks material relating to the Trustee’s communications with the ATO, the Court is satisfied by the Trustee’s evidence that Mr Zepinic has been provided with all relevant primary documents. Furthermore, Mr Zepinic’s apparent concerns underlying his request for those documents suffer from the misconception dealt with in paragraphs [41] to [46] above.

6.   An order that, pursuant to Sections 12 & 102 of the Trustees Act 1925 (NSW), the Defendant, within 14 days, provide to the Plaintiff the following:

•   Copy of all documents used to register the “Trust for XX Turramurra Avenue, Turramurra NSW” (“Turramurra Trust”);

•   Full address and contact details of the registered “Turramurra Trust”;

•   Name and all details of the person(s) who are Trustee(s);

•   Name and full details of the beneficiaries;

•   All details about the “Turramurra Trust” financial statements (deposit(s), income, debits, interest, refunds, etc.) from the date of “Turramurra Trust” being registered until 30 August 2018.

•   Copy of all documents used to register the “Mr and Mrs Zepinic Trust” (“Zepinic Trust”) at XX Little Thames Walk, London SE8 3FB, UK;

•   Full address and contact details of the registered “Zepinic Trust”;

•   Name and all details of the person(s) who are Trustee(s);

•   Name and full details of the beneficiaries;

•   All details about the “Zepinic Trust” financial statements (deposit(s), income, debits, interest, refunds, etc) from the date of “Zepinic Trust” being registered until 30 August 2018.

59. This prayer is, again, motivated by the same misconception dealt with in paragraphs [41] to [46] above. Furthermore, s102 of the TA (see paragraph [9] above) has no application because there has been no order for accounts.

60. Section 12 of the TA provides:

“12 Registration

(1) Any instrument by which a new trustee is appointed, or by which a trustee retires or disclaims, or by which an executor declares that the executor holds as trustee or as beneficiary, as the case may be, may be registered in the office of the Registrar-General in the manner and on payment of the fees prescribed by regulation under the Conveyancing Act 1919.

(2) This section extends to an appointment or retirement, whether under this Part or under the provisions of the instrument creating the trust or otherwise, and to a consent to an appointment or retirement.

(3) This section applies whether the trust does or does not relate to land subject to the provisions of the Real Property Act 1900.

(4) In the case of land subject to the provisions of the Real Property Act 1900, where an appointment or retirement or an instrument by which an executor declares that the executor holds as trustee or as beneficiary, as the case may be, is registered, the Registrar-General is hereby authorised and directed to make an entry of the vesting of the trust property or to enter vary and withdraw caveats as may be proper in the circumstances:

Provided that the Registrar-General shall not be bound so to do until a written request is made to the Registrar-General by the persons in whom the property is to be vested, such evidence is given as the Registrar-General may reasonably require, and such notice, if any, is given to any other person as the Registrar-General may direct.

(5) Nothing in this section shall prevent an appointment retirement disclaimer or other instrument from being registered under any law now in force.

(6) This section applies to instruments executed either before or after the commencement of this Act.”

61. As will be apparent from its terms, s 12 is also irrelevant to the present circumstances because there was no instrument whereby the Trustee was appointed.

62. This prayer is either or both misconceived and otiose.

7.   An order that the Defendant pay to the Plaintiff loss of the rent incomes ($120,804 + interest) since October 2013 until 27 November 2015 as per Residential Tenancy Agreement signed on 28/11/2012 and valid until 27/11/2015.

63. The Court accepts Mr Healey’s submission that from the time orders were made in 2010 which gave the Trustee immediate right to the title of the Property, the Trustee was entitled to the benefit, and was subject to the obligations, of the lease which Mr Zepinic arranged. Mr Zepinic’s material discloses not even a prima facie case for an entitlement of the kind alleged.

8.   An order that the Defendant pay to the Plaintiff the sum of $47,026, plus interest from 18 December 2014 until 30 August 2018, being a loss of personal belongings being in the Property.

64. This claim relates to personal items which Mr Zepinic alleges went missing from the Property. Mr Zepinic has presented no other evidence beyond his own assertions that there was such property, that it had the value which he alleges and that the property is missing. In the context of the history of this matter and Mr Zepinic’s status as a vexatious litigant, in the absence of any independent corroboration the Court is not satisfied that this is a bona fide claim and would not, in the exercise of its discretion, grant leave to bring it.

9.   An order that the Defendant pay to the Plaintiff the sum of $85,182.88, plus interest from 18 December 2014 until 30 August 2018, being withheld by the Defendant for the alleged services done on the Property (insurance, flooring, window cleaning, gardening, internal/external painting, tailing, security at auction, withholding tax paid, etc.).

65. The evidence demonstrates that the services were done pursuant to orders of the Court approving the Trustee incurring the relevant expenditure. With the unremarkable exception of the absence of a receipt for withholding tax, the Trustee has provided receipts for those payments. Mr Zepinic has not demonstrated any basis on which he would be entitled to an order of this kind.

10.   An order that the Defendant pay interest on amount stated above at prayer 4 from 18 December 2014 until 30 August 2018.

66. This claim has no reasonable prospects of success for the same reasons given in relation to Prayer 4 in paragraphs [56] above.

11.   An order that the Defendant repay to the Plaintiff estimated amounts regarding the legal costs ($361,058.96) and remuneration ($93,506.96) reviewed by an independent Refer (sic) appointed by the Court.

67. This proposed relief is tied to the appointment of a referee and would therefore fail for the reasons given in relation to the referee in paragraph [55] above. Furthermore, Mr Zepinic has failed to provide any evidence upon which the Court could be satisfied that there was any basis to call the Trustee’s legal costs or remuneration into question.

12.   An order that the Defendant pay the costs of this proceedings and disbursements to the Plaintiff on an indemnity basis.

13.   Such further or other order(s) as the Court deems fit.

68. These prayers fall away because, for the reasons set out in the preceding paragraphs, the Court concludes that the various relief sought in the Amended Summons has no reasonable prospects of success.

The proposed relief sought by Mr Zepinic – Summons

69. I will next consider the proposed Summons filed by Mr Zepinic on 26 October 2018. Much of it repeats relief sought in the Amended Summons.

1.   Pursuant to Articles 15 & 16 of the 14. Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, Articles 11 & 15 of the Vienna Convention on the Law of Treaties 1969, r11.5, r11A.4, r11A.11 and r18.2(i) of the Uniform Civil Procedure Rules 2005, and s78.59 of the NSW Supreme Court Rules 1970, an order that the Defendant’s Notice of Motion filed in Court on 11 August 2014 is invalid and subsequent orders void (having no legal effect).

70. This has no reasonable prospects of success for the reasons set out in paragraphs [48] to [52] above.

2.   Pursuant to r39.21 - 39.28 of the Uniform Civil Procedure Rules 2005, and s57 & s58 of the Real Property Act 1900, an order to invalidate the process of selling the property at XX Turramurra Avenue (Folio: AXXXX).

71. This has no reasonable prospects of success for the reasons set out in paragraph [40] above.

3.   Pursuant to s6, s12, s86 & s104 of the Trustees Act 1925 and s23 of the Supreme Court Act 1970, an order that the Defendant serve, within seven days of the date of this summons, to the Applicant about (sic) created ‘Mr and Mrs Zepinic Trust' and 'XX Turramurra Avenue Trust' the following, but not limited, documents:

•   All documents being used to create both trusts;

•   Deed for both trusts being registered;

•   Names and all details of the all (sic) beneficiaries for both trusts;

•   Pursuant to the Property, Stock & Business Agents Act 2000, the copies of the trust accounts from authorised deposit-taking institution;

•   Australian Business Number and Tax File Number for both trusts;

•   Copy of all correspondences between the Trustee (the Defendant) and the Australian Taxation Office in regards to both trust (sic);

•   Copy of all financial statements for both trusts (deposit, income, debit, payments in and/or out, tax return, interest, refunds, etc.).

72. This has no reasonable prospects of success for the reasons set out in paragraphs [42] to [46] and [59] above. Insofar as this prayer refers to s 6 of the TA, it is of no application because that section deals with the registration of a new trustee by deed. As I have explained above, that is not how the Trustee was appointed. Insofar as the prayer refers to s 86 of the TA, which deals with indemnity to a trustee or a person claiming through the trustee by impounding the interest of a beneficiary, Mr Zepinic has made out no case for the applicability of that section. In particular, he has presented no evidence suggestive of a breach of a trust by the Trustee. I assume the reference to s 104 of the TA (which deals with the Court’s rule making power) is an error which should refer to s 102.

4.   An order to Defendant to close both trusts (‘Mr and Mrs Zepinic Trust', and ’XX Turramurra Avenue Trust') within seven days and balance on the trust accounts to be transferred to Vito Zepinic.

73. Quite apart from Mr Zepinic having demonstrated no jurisdictional basis for such an order to be made, it is otiose because the Trustee has paid the balance of the proceeds of the sale of the Property in his possession into Court.

The proposed relief sought by Mr Zepinic – submissions of 10 October 2018

74. I will next consider the prayers for relief incorporated by reference from Mr Zepinic’s submissions of 10 October 2018.

4.   Mr Malanos is to pay to the Plaintiff the sum of $830,690 being as the balance of sold property (as per 19 December 2014) plus interest from 19 December 2014 until the Court judgment of this proceeding.

75. This prayer has no reasonable prospects of success by reason of the matters set out in paragraph [56] above.

5.   Mr Malanos is to pay to the Plaintiff the sum of $120,804 plus interest being a loss of the rent income from 28/11/2013 until 27/11/2015.

76. This prayer has no reasonable prospects of success by reason of the matters set out in paragraph [63] above.

6.   Mr Malanos is to pay to the Plaintiff the sum of $361,000 plus interest from 19 December 2014 until the Court judgment of this proceeding.

77. I assume this is the same amount as that referred to in prayer 11 of the Amended Summons and, on that basis, it fails to disclose any reasonable prospects of success by reason of the matters set out in paragraph [67] above.

7.   Mr Malanis (sic) is to pay to the Plaintiff the sum of $93,485 (or other amount that Court finds fit) plus interest from 19 December 2014 until the Court judgment of this proceeding.

78. I assume this is the same amount as that referred to in prayer 11 of the Amended Summons and, on that basis, it fails to disclose any reasonable prospects of success by reason of the matters set out in paragraph [67] above.

8.   Mr Malanos is to pay to the Plaintiff the sum of $22,925 plus interest from 19 December 2014 until the Court judgment of this proceeding being difference between estimated real estate agency costs by valuation ($44,000) and amount of $66,925 allegedly being paid by the Trustee.

79. Other than mere assertion, Mr Zepinic has not demonstrated any basis as a matter of fact or law why this relief should be granted.

9.   Mr Malanos is to pay to the Plaintiff the sum of $22,209 plus interest from 19 December 2014 until the Court judgment of this proceeding being allegedly paid to Toomey Pegg lawyers.

80. Other than mere assertion, Mr Zepinic has not demonstrated any basis as a matter of fact or law why this relief should be granted.

10.   Mr Malanos is to pay to the Plaintiff the sum of $85,182 plus interest from 19 December 2014 until the Court judgment of this proceeding being withheld by Mr Malanos for alleged services done on the property.

81. This prayer has no reasonable prospects of success for the reasons set out in paragraphs [65] above.

11.   Mr Malanos is to pay to the Plaintiff the sum of $17.901 (sic) plus interest from 19 December 2014 until the Court judgment of this proceeding being withheld by Mr Malanos (security at auction, trading and travel expenses, withholding tax paid, insurance).

82. Other than mere assertion, Mr Zepinic has not demonstrated any basis on which he might have an entitlement to this relief.

12.   Mr Malanios (sic) is to pay to the Plaintiff the sum of $47,026 plus interest from 19 December 2014 until the Court judgment of this proceeding being a loss of the personal belongings held in the property.

83. This prayer has no reasonable prospects of success and, in any event, would not be a matter in respect of which the Court would grant leave for the reasons set out in paragraph [64] above.

13.   Mr Malanos is to pay to the Plaintiff costs of this proceeding on indemnity basis.

14.   Such further or other orders as the Court deems fit.

84. Given the views to which the Court has come in relation to the prayers sought to be incorporated from Mr Zepinic’s submissions of 10 October 2018, these prayers themselves also have no reasonable prospects of success.

Application of the Act

85. For convenience, I will again set out s 15 of the Act, together with s 6:

6 Meaning of “vexatious proceedings”

In this Act, vexatious proceedings includes:

(a) proceedings that are an abuse of the process of a court or tribunal, and

(b) proceedings instituted to harass or annoy, to cause delay or detriment, or for another wrongful purpose, and

(c) proceedings instituted or pursued without reasonable ground, and

(d) proceedings conducted in a way so as to harass or annoy, cause delay or detriment, or achieve another wrongful purpose.

…

15 Dismissing application for leave

(1) An appropriate authorised court must dismiss an application made under section 14 for leave to institute proceedings if it considers:

(a) the affidavit required by section 14 (3) does not substantially comply with that subsection, or

(b) the proceedings are vexatious proceedings, or

(c) there is no prima facie ground for the proceedings.”

86. Mr Healey submitted that Mr Zepinic’s application must be dismissed because the affidavit which had been filed by Mr Zepinic’s then solicitor (and then incorporated by reference into an affidavit of Mr Zepinic’s) purportedly for the purposes of s 14(3)(b) of the Act (listing all other proceedings Mr Zepinic had instituted) did not “substantially comply” because it omitted at least two sets of proceedings. It is unnecessary for me to determine that question because of the clear view to which I have come as set out in the next paragraphs.

87. It will be apparent from the analysis I have set out above of the various prayers for relief in respect of which Mr Zepinic seeks leave, that the Court is well satisfied that the proceedings which Mr Zepinic proposes are vexatious proceedings and proceedings which have no prima facie ground for the purposes of s 15(1) of the Act.

86. The analysis I have set out above demonstrates my reasons as to why there is no prima facie ground for the proceedings. Insofar as I have concluded the proceedings are vexatious, I am satisfied for the purposes of s 6 of the Act that the proposed proceedings are an abuse of the process of the Court (a matter to which I will return), that given their repetitive particularity they have been instituted to harass or annoy, or to cause delay or detriment to the resolution of the Trustee’s appointment, and that the proposed proceedings are intended to be instituted without reasonable ground.

87. Insofar as what may constitute an abuse of process, it is well settled that attempts to re-litigate matters or other otherwise propound multiple claims that have no reasonable prospects of success can constitute an abuse of process. I am satisfied they do in this case. Mr Zepinic’s various claims are a melange which attempt to relitigate matters that have been decided adversely to him some years ago, combined with complaints about the Trustee’s conduct which he has comprehensively failed to demonstrate have any reasonable basis or prospects of success. The irresistible conclusion is that the proceedings in respect of which Mr Zepinic seeks leave are yet another example of the vexatious conduct which led to the orders made by Pembroke J that I have set out in paragraph [4] above.

88. By reason of the conclusions set out in paragraphs [87] to [89] above, I have no hesitation in giving effect to the mandatory requirement in the chapeau of s 15(1) of the Act that Mr Zepinic’s application should be dismissed.

Costs

91. The Trustee’s submissions included reasons why, if the application were dismissed, Mr Zepinic should pay the Trustee’s costs on the indemnity basis. An application for a gross sum costs order was also foreshadowed. Mr Zepinic’s various submissions did not engage with the Trustee’s submissions as to costs. The Court will give the parties an opportunity to propose short minutes for the determination of the costs arguments.

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Decision last updated: 19 March 2020