Baycorp Collections PDL (Australia) Pty Ltd v Reaper (No.2)
[2017] FCCA 244
•16 February 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BAYCORP COLLECTIONS PDL (AUSTRALIA) PTY LTD v REAPER (No.2) | [2017] FCCA 244 |
| Catchwords: BANKRUPTCY – Abuse of process by bankrupt – review of authorities – whether fifteen unsuccessful applications amount to conducting vexatious proceedings – bankrupt’s applications permanently stayed. |
| Legislation: Bankruptcy Act 1966 (Cth), s.178 Federal Circuit Court of Australia Act 1999 (Cth), ss.88N, 88Q, 88P |
| Cases cited: Commonwealth Trading Bank of Australia v Inglis (1974) 131 CLR 311 |
| Applicant: | BAYCORP COLLECTIONS PDL (AUSTRALIA) PTY LTD |
| Respondent: | BRETT VINCENT REAPER |
| File Number: | MLG 887 of 2012 |
| Judgment of: | Judge Wilson |
| Hearing date: | 9 December 2016 |
| Date of Last Submission: | 23 December 2016 |
| Delivered at: | Melbourne |
| Delivered on: | 16 February 2017 |
REPRESENTATION
Solicitors for the Applicant: | Ms D. McCreddin of White Cleland |
| Respondent in person |
ORDERS
Pursuant to s.88Q(2)(a) of the Federal Circuit Court of Australia Act 1999 (Cth) and the Court’s power at common law to prevent abuse of its process, the following applications are permanently stayed -
(a)the application in a case filed by the respondent on 18 July 2016;
(b)paragraph 2 of the application in a case filed by the respondent on 13 September 2016; and
(c)the application in a case filed by the respondent on 20 January 2017.
Pursuant to s.88Q(2)(b) of the Federal Circuit Court of Australia Act 1999 (Cth), the respondent is prohibited from instituting proceedings in the Federal Circuit Court of Australia.
The respondent pay the costs of the applicant.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 887 of 2012
| BAYCORP COLLECTIONS PDL (AUSTRALIA) PTY LTD |
Applicant
And
| BRETT VINCENT REAPER |
Respondent
REASONS FOR JUDGMENT
Introduction
On 9 December 2016 I delivered judgment on Brett Reaper’s application to stay the execution of a warrant of possession in relation to Mr Reaper’s home in proceeding MLG 931 of 2013.[1] That was
Mr Reaper’s fifteenth unsuccessful application to resist due process in his bankruptcy. In this proceeding, litigation separate to the proceeding in which Mr Reaper’s trustee in bankruptcy (“the trustee”) sought orders, Mr Reaper has sought the setting aside of orders that led to a sequestration order being made against him. On 9 December 2016 the solicitor for Baycorp Collections PDL (Australia) Pty Ltd (“Baycorp”) informed me that Baycorp wished to ventilate an application for orders the effect of which would permanently prevent Mr Reaper from bringing applications impeding Baycorp’s collection of sums due from
Mr Reaper.
[1] Vrsecky as Trustee of the Bankrupt Estate of Reaper v Reaper & Anor [2016] FCCA 3278.
Proceeding MLG 931 of 2013 was heard with this proceeding on several occasions. Throughout, Mr Devanny of counsel appeared for the trustee in bankruptcy and Ms McCredden, the solicitor for Baycorp, appeared for Baycorp.
After disposing of Mr Reaper’s application on 9 December 2016,
two substantive applications remained in this proceeding. The first was Baycorp’s application for orders permanently preventing Mr Reaper from impeding Baycorp’s collection of sums due from Mr Reaper.
The second was Mr Reaper’s own application for orders setting aside the making of the sequestration order against him.
Since 9 December 2016 Mr Reaper has filed a number of affidavits as well as a further application in a case seeking orders with respect to setting aside orders and the warrant previously issued in this proceeding. He also sought orders that I disqualify myself on the grounds of “ostensible bias” and that the transfer of this proceeding to me was “contrary to the Central Practice Note”.[2]
[2] Application in a case filed by Brett Reaper on 20 January 2017 at p.2.
Those applications were independent of the applications that were on foot when I called this litigation on for hearing on 9 December 2016.
On that day, Mr Reaper told me he wanted to agitate the following –
a)an application for leave to issue several statements of claim;
b)an application to cross-examine various persons;
c)an application to rely on cross-examination;
d)an application to rely on coincidence evidence;
e)
an application to rely on affidavit material that went beyond the evidence when her Honour Judge Hartnett fixed the hearing of
Mr Reaper’s application to set aside his sequestration order;
f)an application to set aside the bankruptcy notice; and
g)an application under s.178 of the Bankruptcy Act1966 (Cth) that the trustee adjudicates on the petitioning creditor’s proof of debt.
The debate on 9 December 2016 included discussions about which of the above applications should be heard first. Mr Reaper told me he did not pursue the recusal application. I put to the parties that logically, the application by Baycorp for orders preventing Mr Reaper from impeding Baycorp’s collection of sums due to it should be heard first. The solicitor for Baycorp agreed as did Mr Devanny. Mr Reaper said he wanted his applications to be heard and determined on
9 December 2016. In the upshot I made orders permitting the parties to file and serve such further submissions on which they wished to rely, and I indicated that I would determine the matter on the papers.[3]
[3] Orders made by his Honour Judge Wilson on 9 December 2016.
Immediately after handing down judgment on 9 December 2016,
Mr Reaper swore at me and left the Court prior to the conclusion of the directions hearing.
With that lamentably long introduction, let me record the conclusions that I have reached before turning to the reasons for those conclusions.
Synopsis
For the reasons that follow –
a)I make orders under Pt.6B of the Federal Circuit Court of Australia Act 1999 (Cth) (“the Act”) and at common law, as are recorded at the beginning of these reasons;
b)I dismiss Mr Reaper’s application to set aside the sequestration order;
c)I dismiss Mr Reaper’s application to set aside the bankruptcy notice served by the petitioning creditor; and
d)I dismiss Mr Reaper’s application in a case filed 20 January 2017.
Factual setting
The facts giving rise to Mr Reaper’s bankruptcy have been addressed in other judgments collected together in my decision handed down on
9 December 2016. No useful purpose is served in reciting those details here. Suffice it to say that prior to the assignment of the debt to Baycorp, Westpac had obtained a default judgment against Mr Reaper, which judgment was not set aside nor was it the subject of an appeal. That judgment has stood for over four years. The judgment debt has not been compromised, compounded or discharged. Further, at no stage has Mr Reaper adduced any evidence of his own solvency. That last mentioned matter was singled out by Mortimer J as having significance in Reaper v Luxton.[4]
[4] [2015] FCA 1296 at [15].
Instead, for a sustained period Mr Reaper has brought and argued
(all unsuccessfully) an array of applications, those having been detailed in paragraph 8 of my reasons given on 9 December 2016. In most,
if not all, of those applications, costs orders were made against
Mr Reaper. Those costs orders have not been paid. Despite that,
the trustee of Mr Reaper’s bankrupt estate and Baycorp have been,
and Baycorp continues to be, vexed by a seemingly never-ending avalanche of groundless applications. In the course of those many unsuccessful applications, Mr Reaper caused the depletion of the trustee’s resources as to both time and costs and he is doing the same to Baycorp.
The time has come to put a stop to Mr Reaper’s abuse of the process of this Court.
Consideration
This Court has power to regulate its own process so as to efficiently and expeditiously control its own business. One outcome of its power to regulate its own process is the making of an order that has the effect of staying - even permanently staying - a proceeding, claim,
cross-claim or application.
In addition to that power, under 2012 amendments to the Act, Pt.6B was inserted, entitled “Vexatious proceedings”. Part 6B of the Act applies to a “proceeding” as defined, meaning a proceeding in court and it includes an appeal.
It seems to me that the provisions of s.88Q of the Act apply to this litigation in which Baycorp has sued Mr Reaper. While Mr Reaper did not commence the proceeding, he has nevertheless “conducted”[5] the proceeding in a manner that was vexatious, as defined.
[5] Federal Circuit Court of Australia Act 1999 (Cth), s.88Q(1)(a).
Section 88Q of the Act applies to a person who “has frequently instituted or conducted vexatious proceedings in Australian courts or tribunals”.[6] A “vexatious proceeding” is defined in s.88N of the Act to include –
a)a proceeding that is an abuse of the process of a court or tribunal; and
b)a proceeding instituted in court or tribunal to harass or annoy, to cause delay or detriment, or for another wrongful purpose; and
c)a proceeding instituted or pursued in a court or tribunal without reasonable ground; and
d)a proceeding conducted in a court or tribunal in a way so as to harass or annoy, cause delay or detriment, or achieve another the wrongful purpose.
[6] Federal Circuit Court of Australia Act 1999 (Cth), s.88Q(1)(a).
It will be immediately apparent that in two of the four definitions of “vexatious proceedings” the proceeding must have been “instituted” by a person (relevantly here, by Mr Reaper) whereas in one of the four definitions in s.88N of the Act, the proceeding must have been “conducted” by that person, irrespective of whether it had been commenced by the same person. That bifurcation was reflected in s.88Q of the Act. Applying the criteria in s.88Q of the Act for the applicability of Pt.6B, I am satisfied that Mr Reaper has not “frequently instituted” vexatious proceedings for the simple reason that he did not begin this proceeding.
Even though Mr Reaper did not “commence” this proceeding, he has conducted it in a manner specifically addressed in the definition of “vexatious proceeding” mentioned in paragraph 16(d) above. In other words, in relation to this piece of litigation, it was conducted in this Court “in a way so as to harass or annoy, cause delay or detriment, or achieve another wrongful purpose”.[7] If for no other reason than the fact that he has incurred costs orders that remain unpaid, he has “harassed” or “annoyed” Baycorp or caused detriment to it. There can be no doubt that Mr Reaper has caused delay to Baycorp’s litigation. He also delayed the trustee’s orderly conclusion of the bankruptcy.
[7] Federal Circuit Court of Australia Act 1999 (Cth), s.88N(d).
In my view, the making of 15 separate applications, all unsuccessful, meets the definition of “conducted a proceeding” so as to “harass or annoy, cause delay or detriment”. The word “conducted” is not defined. In my view it means a proceeding that while not having been commenced vexatiously, is subsequently conducted vexatiously. That would include, for example, a litigant pressing for relief under a grossly inadequate counterclaim.
Accordingly, for the purposes of s.88Q(1)(a) of the Act, I am satisfied the Mr Reaper has frequently conducted vexatious proceedings in this Court and in the Federal Court of Australia. Those proceedings
were the ones identified in paragraph 8 of my reasons given on
9 December 2016.
Re-litigating matters previously decided has been held to constitute “vexatious proceedings”, according to Pagone J in Garrett v Commissioner of Taxation (Cth)[8] as applied by Reeves J in Mathews v State of Queensland.[9] A more expansive consideration of the concept of abuse of process founded in the re-litigation of a matter already disposed of was given by the Court of Appeal of the Supreme Court of New South Wales (Barrett JA, especially) in Liao v State of New South Wales.[10] Davies J referred to Mr Reaper’s re-litigation of matters finally determined. Her Honour also referred to Mr Reaper’s wilful disregard of prior decisions of the Federal Court of Australia in
Reaper v Baycorp Collections PDL (Australia) Pty Ltd.[11] Pagone J referred to Mr Reaper not understanding why he had not succeeded when instituting separate proceedings in Reaper v Luxton.[12]
Mr Reaper’s failed attempt on a contempt application was the subject of comment by Pagone J in Reaper v Baycorp Collections PDL (Australia) Pty Ltd (No 3).[13]
[8] [2015] FCA 117 at [11].
[9] [2015] FCA 1488.
[10] [2014] NSWCA 71.
[11] [2016] FCA 579 at [22].
[12] [2016] FCA 784 at [10].
[13] [2014] FCA 729.
Upon being satisfied that s.88Q(1)(a) of the Act applies to Mr Reaper,
I am empowered under s.88Q(2) of the Act to make various orders. Those recorded in ss.88Q(2)(a) and (b) of the Act are relevant.
Section 88Q(2)(c) enables me to make “any other order” I consider appropriate.
It seems to me that ss.88Q(2)(a) and (b) of the Act meet the circumstances of this litigation. Accordingly, I order that any extant application issued by Mr Reaper but not yet determined is forthwith permanently stayed.
I make a further order prohibiting Mr Reaper commencing any application in this litigation before me without leave. I prohibit him from commencing any other litigation whether in the form of a
cross-claim or a new proceeding without leave from a judge of this Court.
Section 88P of the Act provides that nothing in Pt.6B limits or otherwise affects the powers possessed by the Federal Circuit Court of Australia to deal with vexatious proceedings. The language is not entirely apposite because the regime prescribed by the Pr.6B of the Act relates to a “vexatious proceeding” whereas the power possessed by the Federal Circuit Court of Australia outside of the regime of Pt.6B of the Act relates to common law principles governing a vexatious litigant, as opposed to a vexatious proceeding. Be that as it may,
it concerned me that my above examination of the concept of a person’s conduct of a vexatious proceeding may be open to a different construction.
In those circumstances, it seemed to me to be appropriate to examine other learning governing vexatious litigants or the conduct of litigation that was an abuse of process.
In Commonwealth Trading Bank of Australia v Inglis,[14] the High Court of Australia held that a court does have inherent jurisdiction to restrain a person from making unwarranted and vexatious applications in an action which is pending in the court without the leave of the court.[15]
[14] (1974) 131 CLR 311.
[15] See Jones v Skyring (1992) 109 ALR 303, 311.
As the High Court explained in Jones v Skyring,[16] behind the power that the court possesses to restrain a person from making unwarranted and vexatious applications in an action is the court’s protection of its own process against unwarranted use of its time and resources and the avoidance of loss caused to those who have been forced to face actions (or, I interpolate, applications) that lack any substance.
[16] (1992) 109 ALR 303.
Certain authorities contain some indicators to the effect that only a superior court possesses the inherent jurisdiction to stay a proceeding on grounds of abuse of process. In Walton v Gardiner[17] the majority (Mason CJ, Deane and Dawson JJ) spoke in those terms. On that analysis, this Court is not a superior court with the consequence that it does not possess the power possessed by a superior court with inherent jurisdiction. Yet the very authority on which the majority relied to make that point, Hunter v Chief Constable of the West Midlands Police[18] did not confine that observation to superior courts and instead referred to the inherent power possessed by any court of justice to prevent misuse of its procedures. Similarly, in Jago v District Court of New South Wales[19] (“Jago”), the High Court of Australia did not distinguish between a superior court and any other court, holding instead that a court whose function is to dispense justice with impartiality and fairness (to again interpolate, this Court) possesses the necessary power to prevent its processes being employed in a manner that gives rise to unfairness. Gaudron J in Jago held that the power to grant a permanent stay is exercisable if the administration of justice so demands.
[17] (1993) 177 CLR 378, 393.
[18] [1982] AC 529, 536.
[19] (1989) 168 CLR 23.
Various formulations of the test for assessing whether conduct amounts to an abuse of process exist. Among them are the following –
a)where the use of the court’s procedure would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute;[20]
b)prosecuting a proceeding for an improper purpose;[21]
c)using litigation for the purpose of obtaining some collateral advantage beyond what the law offers;[22] and
d)litigation that is productive of serious unjustified trouble and harassment.[23]
[20] Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507 at [25].
[21] Dowling v Colonial Mutual Assurance Society Ltd (1915) 20 CLR 509, 521.
[22] Williams v Spautz (1992) 174 CLR 509, 526.
[23] Ridgeway v R (1995) 184 CLR 19, 74.
While the categories of abuse of process are not closed, many cases of abuse fall into one of three categories, namely –
a)first, where the court’s procedure is invoked for an illegitimate purpose;
b)second, where the use of the court’s procedure is unjustifiably oppressive to one of the parties; or
c)third, where the use of the court’s procedures would bring the administration of justice into disrepute.[24]
[24] See Rogers v R (1994) 181 CLR 251, 286 andA very recent examination of the subject was given by the Full Court of the Federal Court of Australia (Allsop CJ, Dowsett and Besanko JJ) in Culleton v Balwyn Nominees Pty Ltd.[25]
[25] [2017] FCAFC 8 at [65] et seq.
The rules of the Federal Circuit Court of Australia are silent on the question of staying a proceeding, an aspect of the proceeding or an application in the proceeding on the basis that an abuse of the process of the court has been committed. Where the rules of this Court are silent on a particular point, r.1.05 of the Federal Circuit Court Rules 2001 (Cth) (“Federal Circuit Court Rules”) provides that the rules of the Federal Court of Australia may be invoked. Rule 26.01 of the Federal Court Rules 2011 (Cth) (“Federal Court Rules”) permits any party to a proceeding to apply for a permanent stay on the basis that the proceeding is vexatious or an abuse.
Conclusion
In this case, I have invoked r.1.05 of the Federal Circuit Court Rules so as to apply r.26.01 of the Federal Court Rules in the making of an order under r.26.01 by which I grant orders in favour of Baycorp permanently staying the proceeding.
I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of Judge Wilson
Date: 16 February 2017
[2011] HCA 48.
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