Bride v Campbell-Smith
[2004] FMCA 848
•8 November 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BRIDE & ANOR v CAMPBELL‑SMITH & ORS | [2004] FMCA 848 |
| BANKRUPTCY – Application to declare void deed of compromise and declare deed of assignment ‘unlawful’. PRACTICE AND PROCEDURE – Summary dismissal – whether abuse of process, frivolous or vexatious, Rule 13.10 Federal Magistrates Court Rules 2001 – vexatious litigants – Rule 13.11(1)(b) – Applicants seeking to declare void deed of compromise executed before subsequent sequestration order – futility of application. |
Vexatious Proceedings Restriction Act 2002 WA
Bankruptcy Act 1966, s.30, 222
Limitations Act 1935 Western Australia
Evidence Act 1995 (Cth), s.185
Bride v ABL & Ors CIV 1570 of 1989
Bride v Peats & Ors CIV 1804 of 1989
Bride v Brian Guthrie Stewart WAG 136 of 1990
CBA v E.J. Bride & Ors (2004) WASC 177
Dey v Victorian Railways Commissioners (1949) 78 CLR 62
Duncan v Hotop & DFACS [2002] FMCA 56
Loevski v ASIC [2003] FMCA 126
Hunter v Chief Constable of the West Midlands Police (1982) AC 529
Hassan v Hume [2003] FMCA 476
Ashmore v British Coal Corporation (1990) 2 QB 338
Smith v Linskills (1996) 1 WLR 763
Bride v Anglo-Australian Foods & Ors (2000) WASCA 124).
General Steel Industries Incorporated v Commissioner for Railways NSW (1964) 112 CLR 125
M99/2003 v Minister for Immigration [2004] FMCA 156
Attorney-General v Wentworth (1988) 14 NSWLR 481
Re Cameron (1996) 2 Qd R 218
| Applicants: | EDWARD JAMES BRIDE and WENDY MARGARET BRIDE |
| Respondents: | DONALD CAMPBELL-SMITH, KIM HOLBROOK, THE AUSTRALAN BANK LTD/COMMONWEALTH BANK OF AUSTRALIA LTD and PEAT MARWICK MITCHELL/KMPG |
| File No: | WZ 112 of 2004 |
| Delivered on: | 8 November 2004 |
| Delivered at: | Perth |
| Hearing Date: | 8 November 2004 |
| Judgment of: | McInnis FM |
REPRESENTATION
| Applicant: | Mr E.J. Bride in person |
| First Respondent: | In person |
| Second Respondent: | No appearance |
| Counsel for the Third and Fourth Respondents: | Mr K.J. de Kerloy |
| Solicitors for the Third and Fourth Respondent: | Freehills |
ORDERS
The application filed 23 August 2004 be dismissed pursuant to rule 13.10 of the Federal Magistrates Court Rules 2001 (the FMC Rules).
The applicants or either of them pursuant to rule 13.11(1)(b) of the FMC Rules shall not without the leave of a Federal Magistrate institute any proceedings in the Federal Magistrates Court.
The officers of the Federal Magistrates Court, including the Chief Executive Officer and/or any Registrar be and are hereby directed:
(a)to refuse to seal any document constituting an application or a process for the commencement of a proceeding by or in the name of the applicants or either of them where the formal contents of the documents show that the proceedings to be commenced would be irregular and/or an abuse of process without first obtaining a direction from a Federal Magistrate;
(b)to refuse to accept for filing any document by or in the name of the applicants or either of them that is not prepared in accordance with the Federal Magistrates Act 1999, the FMC Rules without first obtaining a direction from a Federal Magistrate.
The applicants shall pay the third and fourth respondents’ costs of and incidental to this application for summary dismissal together with reserved costs, if any, to be taxed in default of agreement pursuant to order 62 of the Federal Court Rules.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
WZ 112 of 2004
| EDWARD JAMES BRIDE AND WENDY MARGARET BRIDE |
Applicants
and
| DONALD CAMPBELL-SMITH, KIM HOLBROOK, THE AUSTRALIAN BANK LTD/COMMONWEALTH BANK OF AUSTRALIA LTD, PEAT MARWICK MITCHELL/KMPG |
Respondents
REASONS FOR JUDGMENT
(Revised from transcript)
In this matter Edward James Bride and Wendy Margaret Bride, the applicants, by an application filed 23 August 2004 have sought orders as follows:
i)That the deed of compromise and release signed by Mr Donald Campbell-Smith, the first respondent, Mr Bernard Putnin deceased, Australia Bank Limited, the third respondent and Peat Marwick Mitchell, the fourth respondent on the 19th day of August 1986 be declared void.
ii)That the deed of assignment between Mr Bernard Putnin and Edward James Bride dated the 12th day of January 1995 be declared a lawful assignment of all the remaining rights of action then held by Mr Putnin as the then remaining trustee of bankrupt estate 455 of 1984.
The third and fourth respondents to this application by a response filed 6 September 2004 have effectively sought summary dismissal of the application by the applicants. I note at the commencement that the first‑named applicant who is unrepresented seeks to appear for and on behalf of the second-named applicant. In the circumstances I was prepared to allow that to occur in the absence of objection. It should not be thought, however, that a person not legally represented who is named as one applicant should automatically expect the right of audience to appear for and on behalf of another applicant.
It should also be noted that the second-named respondent whilst present in court did not make submissions other than to indicate an interest in the outcome of this application for summary dismissal. During the course of submissions it was evident that the third and fourth respondents have now relied upon and sought orders in the response which are orders numbered 1, 4, 5 and 65. Those orders sought are as follows:
(1)The application filed by the applicants and dated 23 August 2004 be struck out on one or more of the following grounds:
(a)The court does not have the jurisdiction to hear it;
(b)It is an abuse of process;
(c)It does not disclose an actionable cause of action on the grounds of expiration of limitation period and in the alternative res judicata.
(4)In the alternative an order upon its own motion pursuant to rule 13.11.(1)(a) of the Federal Magistrates Court Rules that these proceedings not be continued without the leave of the court.
(5)The following orders upon its motion pursuant to rule 13.11(1)(b):
(a)The applicants or either of them shall not without the leave of a Federal Magistrate institute any proceeding in the Federal Magistrates Court;
(b)The officers of the Federal Magistrates Court including the chief executive officer and/or any registrar and are hereby directed:
(i)To refuse to seal any document constituting an application or a process for the commencement of a proceeding by or in the name of the applications or either of them where the form or contents of the documents show that the proceedings to be commenced would be irregular and/or an abuse of process without first obtaining a direction from a Federal Magistrate;
(ii)To refuse to accept for filing any document by or in the name of the applicants or either of them that is not prepared in accordance with the Federal Magistrates Act 1999 and the Federal Magistrates Rules without first obtaining a direction from a Federal Magistrate.
(6)The Applicants shall pay the third and fourth respondents costs of the application.
It is noted in passing that order (5) which I have recited seeking an order that these proceedings not be continued without the leave of the court would of course be unnecessary if the court were to accede to the submission for and on behalf of the third and fourth respondents summarily dismissing the application and/or dismissing it on the basis that the court does not have jurisdiction in response to the submissions made on what is described as a preliminary point.
Rules 13.10 and 13.11 of the Federal Magistrates Court Rules 2001 (the FMC Rules) provide:
“13.10 Disposal by summary dismissal
The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if it appears to the Court that:
(a)no reasonable cause of action is disclosed in relation to the proceeding or claim for relief; or
(b) the proceeding or claim for relief is frivolous or vexatious; or
(c) the proceeding or claim for relief is an abuse of the process of the Court.
13.11 Vexatious litigants
(1) If the Court is satisfied that a person has instituted a vexatious proceeding and the Court is satisfied that the person has habitually, persistently and without reasonable grounds instituted other vexatious proceedings in the Court or any other Australian court (whether against the same person or against different persons), the Court may order:
(a)that any proceeding instituted by the person may not be continued without leave of the Court; and
(b)that the person may not institute a proceeding without leave of the Court.
(2)An order under subrule (1) may be made:
(a)on the Court’s own motion; or
(b)on the application of the Attorney-General or Solicitor-General of the Commonwealth or of a State or Territory; or
(c)on the application of the Registrar.
(3)If a person (a vexatious litigant) habitually and persistently and without reasonable grounds institutes vexatious proceedings in the Court against another person (the person aggrieved), the Court may, on application of the person aggrieved, order:
(a)that any proceeding instituted by the vexatious litigant against the person aggrieved may not be continued without the leave of the Court; and
(b)that the vexatious litigant may not institute any proceeding against the person aggrieved without leave of the Court.”
Paragraphs 4 and 5 of the Further and better particulars of the Response are relevant and provide as follows:-
“4.In the alternative, the Third and Fourth Respondent will invite the Court to make an order upon its own motion pursuant to Rule 13.11(1)(a) that these proceedings not be continued without the leave of the Court.
Particulars
(a) the Applicants have instituted many proceedings in the Federal Court, Supreme Court of Western Australia and District Court of Western Australia (and now the Federal Magistrates Court) which proceedings all relate to the events surrounding the enforcement by the Third Respondent of securities over the applicants’ assets in 1984;
(b) if orders are not made by the Court pursuant to Rule 13.11 it is very likely that the applicants will continue to raise issues in this Court which have already been litigated in other Courts and which, as a result of the Heenan Orders they are barred from commencing in WA Courts without first obtaining leave;
5.The Third and Fourth Respondent will invite the Court to make the following orders upon its own motion pursuant to Rule 13.11(1)(b):
(a) the Applicants, or either of them, shall not without the leave of a Federal Magistrate institute any proceeding in the Federal Magistrates Court;
(b) the officers of the Federal Magistrates Court, including the Chief Executive Officer and/or any Registrar be and are hereby directed:
(1)to refuse to seal any document constituting an application or a process for the commencement of a proceedings by or in the name of the Applicants or either of them where the form or contents of the document show that the proceedings to be commenced would be irregular and/or an abuse of process without first obtaining a direction from a Federal Magistrate;
(2)to refuse to accept for filing any document by or in the name of the Applicants or either of them that is not prepared in accordance with the Federal Magistrates Act 1999 and the Federal Magistrates Court Rules without first obtaining a direction from a Federal Magistrate.
Particulars
(A)the Applicants have instituted many proceedings in the Federal Court, Supreme Court of Western Australia and District Court of Western Australia (and now the Federal Magistrates Court) which proceedings all relate to the events surrounding the enforcement by the Third Respondent of securities over the applicants’ assets in 1984;
(B)if orders are not made by the Court pursuant to Rule 13.11 it is very likely that the applicants will continue to raise issues in this Court which have already been litigated in other Courts and which, as a result of the Heenan Orders they are barred from commencing in WA Courts without first obtaining leave.”
Counsel for the third and fourth respondents have relied upon the third and fourth respondents’ submissions in support of the response filed 29 October 2004. The applicant has relied upon submissions filed by him in support of the application on 2 November 2004. I should indicate in passing that a further motion which had been filed by the applicant on 5 October 2004 seeking leave to issue a subpoena and other matters whilst having been listed this day is the subject of a ruling by this court at the commencement that it should not be dealt with until I had first considered and dealt with the issue of summary dismissal and other matters raised by the third and fourth respondents in their response.
In the submissions filed on 29 October 2004 the respondents set out the background to the applicant’s application. That background it seems to me on the material currently before the court is not seriously in issue and it is appropriate that I refer to it in brief terms. Since 1986 the applicants have commenced numerous proceedings against a number of parties. Those parties have included the third respondent, Australian Bank Ltd (ABL), KMG Hungerfords, Peat Marwick Mitchell, its successor firm the fourth respondent, KPMG and several former partners of KPMG, Alan Porter and Linda Porter, George Fulford and Patricia Fulford, Anglo-Australian Foods Ltd, Milne Feeds Pty Ltd, Southern Foods Pty Ltd, Freehill Hollingdale & Page, Muirwill Nominees Pty Ltd, Brian Guthrie Stewart, the Shire of Katanning, the Brides’ former solicitors Hammond Fitzgerald & King, the Brides’ former accountants Bird Cameron and Elders Pastoral Company Limited.
In excess of 60 separate proceedings have been commenced by the Applicants against one or more of these parties in various courts including the District Court of Western Australia, the Supreme Court of Western Australia, the Federal Court of Australia and the High Court of Australia. All the proceedings brought by the Applicants are connected with actions taken by Australian Bank Ltd (ABL) under the securities held by it over the assets of the Applicants. The applicants have claimed that the receivers to various of their assets were wrongly appointed, that the receivers affected a sale of assets at an undervalue.
Those claims have been made against ABL, Commonwealth Bank of Australia (CBA) and parties who purchased the applicants’ assets. The applicants have claimed that Stewart who was appointed by the Applicants in 1984 to provide advice as to their business was fraudulent and he was a party to a conspiracy to harm the interests of the applicants. They claim that two partners of Peats, John Andersen and David Young, acted fraudulently and negligently in the conduct of the receivership and the sale of various assets.
They further claimed they have an interest in land sold to third parties pursuant to the exercise of security rights of ABL. Proceedings involving Anglo, Milne, Southern, Elders, the Porters and the Fulfords have arisen as a result of the applicants placing caveats over land sold by ABL following the appointment of receivers over the applicants’ land or in proceedings in which the applicants have sought recovery of the land.
They have claimed that Freehills has conspired against their interests in acting for various parties in proceedings instituted by the applicants. The proceedings against Muirwill involve claims for damages based on allegations that it was used as a vehicle to bring about a conspiracy involving, amongst others, Freehills and ABL, involving the sale of the applicants’ land and business.
The applications have claimed that Hammond Fitzgerald & King failed to adequately provide legal advice to them and conspired with Stewart and ABL to defraud them of their business. They further claim that Bird Cameron provided fraudulent and negligent services and advice at the time it was engaged as accountant to the applicants and their businesses. They have claimed that the preparation of a report on their business by Hungerfords in 1983 was fraudulent and negligent and appeared in breach of fiduciary duty and was part of a conspiracy to harm them.
All of those claims have been determined against the applicants and despite having commenced over 60 actions since 1984 they have been substantially successful in two matters which are disclosed in written judgments before the court. First they were awarded $500 damages for trespass in the matter of Bride v ABL & Ors CIV 1570 of 1989, Bride v Peats & Ors CIV 1804 of 1989 and secondly a sequestration order was set aside on appeal in Bride v Brian Guthrie Stewart WAG 136 of 1990.
Following an application by the CBA to the Supreme Court of Western Australia on 17 August 2004 His Honour Heenan J in CBA v E.J. Bride & Ors (2004) WASC 177 handed down reasons for the decisions and made orders pursuant to s.4 of the Vexatious Proceedings Restriction Act 2002 WA (the Heenan decision) whereby the Court:
· Permanently stayed all current Bride accounts in the Supreme Court and District Court of Western Australia; and
· Prohibited the Brides from instituting any further act, proceeding, appeal or other application in any court in Western Australia relating to the subject matters set out in order 3 of his Honour’s orders which in general terms are covered in material to which I have made reference.
The court has had the benefit of reading the reasons for decision of Heenan J which are annexed to the affidavit of Gavin Jezza McCosky sworn 6 September 2004. Those reasons for decision in my view present a comprehensive and careful analysis of the background to this matter and provide by way of further narrative background which although not directly relevant to some aspects of the applications before this court necessarily provide a useful addition to that narrative. I refer to the following paragraphs by way of background from the Heenan decision, namely paragraphs 1, 2, 3, 4, 5, 6 and 7:
Since the financial collapse of their businesses in August 1984, followed by the appointment of receivers and managers under securities held by the principal creditor and the later sale of most of the secured assets, the respondents Edward James Bride and Wendy Margaret Bride, either personally or as trustees of the Pinwernying Family Trust have commenced over 60 actions or proceedings. These have sought various relief challenging the validity and efficacy of the actions of the principal creditor; the appointment of the receivers and managers; the validity and conclusiveness of sales of properties under the securities to third parties; asserting proprietary claims against lands sold under mortgages to third parties who have since become registered as proprietors of estates in fee simple in those lands; and claiming damages for alleged breach of duty, negligence or fraud against the principal creditor, the receivers and managers and others involved in the actions taken to enforce the securities. The secured creditor was Australian Bank Ltd ("ABL" or "the bank"), since acquired by the Commonwealth Bank of Australia, the present plaintiff, which has taken over control of ABL and assumed all its liabilities.
ust 1984 Mr and Mrs Bride were indebted to the bank in the amount of $3,535,617.38 and it was on that day that Mr Bride was served by the bank with notices demanding repayment of that amount. Ultimately, following the appointment of receivers and managers and the sale of various properties, both real property and personal property, which had been mortgaged or charged to secure the indebtedness to the bank, the bank was able to recoup approximately $1,745,000 of the debt. The Brides became bankrupt twice and nothing was available to meet the claims of unsecured creditors.
Although the Brides have sought to recover damages against ABL and others claiming $1.99 million for the loss of land, buildings and plant, and a further $3.69 million for alleged loss of profits, together with many proprietary claims over their former lands, the only successes which they have achieved are two small claims. In an action against ABL, the receivers and managers and others, heard in this Court before Parker J they were awarded an amount of $500 damages for trespass against the receivers and managers alone to that land. The second success was that sequestration orders made against them in November 1990 were set aside by the Full Court of the Federal Court of Australia in August 1991. Those were orders which had been made after they had each been discharged from their first bankruptcies but they were both later made bankrupt again in November 1997.
In the many actions and proceedings which have been heard and determined since 1984 involving the Brides, ABL and others associated with the enforcement of the secured claims and with the sale of the charged properties there have been many instances when issues of either fact or law or both which had been determined conclusively in earlier litigation, have been raised again by the Brides so as to amount to a collateral attack on the earlier determinations. On this basis many of the Brides' subsequent claims have been stayed, or dismissed because of their attempts to re‑litigate concluded issues. Notwithstanding this, their attempts to determine those issues differently in subsequent proceedings have been repeated. Other claims by the Brides against various defendants have been dismissed on the merits after full hearings but, as this application has revealed, the Brides have then attempted to bring the same or similar claims against different defendants or on a slightly different basis only to fail again.
There remain four proceedings current in courts of this State in which the Brides are attempting to prosecute similar claims. Three of these are pending in this Court, one being an action claiming an estate or interest in land which has been sold to third parties by the secured creditor. There are two appeals pending before the Full Court of this Court, one from the decision of Parker J dismissing (except for the $500 awarded for damages for trespass) the Brides' claims for damages against the bank and others. The second appeal is from a decision of Acting Master Chapman striking out an amended statement of claim and dismissing the Brides' action against ABL, the Commonwealth Bank of Australia and others. The fourth set of proceedings is an action pending in the District Court of Western Australia brought against the Shire of Katanning, the Commonwealth Bank and others relating to the liability for Shire rates owing on other land secured by the mortgages to the ABL.
As the Commonwealth Bank of Australia is a party to two of these actions, and as the other two actions affect it indirectly, first through its ownership of ABL, and secondly because of the potential of the claims to affect action taken by ABL under the security, it now makes this present application under the Vexatious Proceedings Act for leave to have the Brides declared vexatious litigants and seeking orders staying these four sets of proceedings and any other proceedings which might hereafter be commenced or pursued by the Brides.
The application is, therefore, unusual in that one of its purposes and effects, perhaps the dominant purpose and effect, which would follow if the plaintiff's case succeeds would be that appeals pending to the Full Court would be stayed and that this effect would result from the decision of a single Judge of the Court who does not, and could not, exercise any of the appellate jurisdiction of this Court in those causes. That the Vexatious Proceedings Restriction Act 2002 contemplates that such a result may occur is explained later in these reasons. So there is a need to identify the considerations and principles applicable in such circumstances. However, before that can be done it is necessary to describe, more fully, the details of the four current proceedings which would be affected by any order made in the present case.”
In his Honour’s reasons for decision he clearly considers a number of the issues relevant to the application for summary dismissal and relevant to the issue of whether or not this court should accede to the application by the third and fourth respondents in making an order based upon a finding that the application currently before the court is vexatious otherwise exercising the discretion the court undoubtedly has under rule 13.11 of the FMC Rules.
Other relevant paragraphs in the Heenan decision are paragraphs 62, 63, 66, 69, 70 and 136 as follows:
“62. In the course of his submissions Mr Bride attempted to meet the point, that any rights which he or his wife may have had against ABL, Peat Marwick Mitchell, Messrs Young and Anderson or others arising from the enforcement of the bank's securities and the actions of the receivers and managers had become vested in the trustee in bankruptcy and did not revest in the Brides upon their discharge by asserting that the rights of action against those and other parties had been expressly assigned to him by Mr Putnin as trustee (and, presumably, by Mr Campbell‑Smith). No evidence of any such assignment was adduced in these proceedings nor referred to by the parties in the course of their submissions. As the onus of establishing the existence of such a vital assignment must rest upon the Brides it is enough to dispose of this issue by concluding, as I do, that the Brides have simply failed to establish that any such right or rights have been re‑assigned to them as asserted. In this regard, however, I consider it appropriate to notice previous findings which have been made in other proceedings dealing with assertions by Mr Bride that rights of action have been re‑assigned to him and his wife by Mr Putnin as their trustee in bankruptcy. In WA G62 of 1987, an application by the Brides made in the Federal Court of Australia against ABL and Mr B G Stewart, French J decided, in a judgment of 26 July 1988, that the Brides had no standing to bring those proceedings against the bank or Mr Stewart because any such right of action had vested in their trustee in bankruptcy (Mr Putnin) as a result of their 1984 bankruptcies. Mr Bride had sought to avoid that consequence by claiming that, by a letter of 29 October 1984, Mr Putnin had indicated that as bankruptcy trustee he had no objection to the Brides commencing such an action and that, consequently, Putnin had assigned that right of action to them personally. French J decided that that letter did not constitute any such assignment and that, in any event, this could not at that stage have been done by the trustee.
63. In the more recent proceedings before Acting Master Chapman in this Court (CIV 1090 of 2000) Mr Bride asserted that the rights of action had been assigned to the Brides by Mr Putnin pursuant to a deed of assignment dated 12 January 1995. That deed of assignment is not in evidence before me and therefore there is again a failure by the Brides to prove the alleged assignment to them. But the matter was dealt with more extensively by the learned Acting Master Chapman in his reasons for decision of 18 December [2000] WASC 310 which specifically addressed the fact that this deed of assignment of 12 January 1995 was from Mr Putnin alone and not from both co‑trustees, Putnin and Campbell‑Smith. Acting Master Chapman was not persuaded that necessary orders of the court as required by s 180 and s 183 of the Bankruptcy Act had been made and that, consequently, Mr Putnin could not effectively assign the rights purported to be assigned without the express concurrence and participation in the assignment by Mr Campbell‑Smith. The learned Master also observed (at [44]) that the trustees in bankruptcy could only assign property (including rights of action) which they then had and, that because of the provisions of the earlier deed of compromise with the bank and receivers the alleged rights of action had been discharged by that 19 August 1996 deed of compromise and there was nothing left to assign. The conclusion of the learned Master was that Mr and Mrs Bride had no right of action, deriving from the conduct of the bank and the receivers to enforce the securities between 1984 and 1986 which could be advanced by them.
…..
66. There is yet another answer to Mr Bride's contention that he and his wife were entitled to assert rights of action which became vested in their original trustee in bankruptcy from 1984 onwards. Any such rights, assuming contrary to the finding of Acting Master Chapman, which may have been assigned to Mr and Mrs Bride by the deed of assignment granted by Mr Putnin alone on 12 January 1995 would then have become the property of Mr and Mrs Bride. Subsequent to that date, however, each was again declared bankrupt by the sequestration orders made by French J in the Federal Court on 26 November 1997 and affirmed on appeal by the Full Federal Court in its decision of 23 April 1998 (WA G149 of 1997). By those sequestration orders all property then owned by Mr and Mrs Bride or to which they were entitled vested in the Official Trustee and this would have included any such right of action against ABL or others. Later discharge from that second bankruptcy would not result in the reassignment of any such rights of action to the Brides for reasons previously described. There is no plea, submission or any suggestion that the Official Trustee under the second bankruptcy in 1997 has reassigned any such rights to the Brides.
…..
69. In the course of argument, and in answer to questions put by me, the possibility arose that any such alleged fraud might affect the deed of compromise and release made between the bank, the receivers and managers and the trustees in bankruptcy on 19 August 1986 and, therefore, constitute a basis for setting aside that deed, and, in the process, the mutual discharges and releases which it contains. On that hypothesis rights of action against the bank and the receivers and managers previously vested in the trustees of the 1984 bankruptcy might possibly revive and, if they could be assigned to the Brides, provide a basis for them asserting their claims against the bank and others. However, I am satisfied that any such potentiality in the present proceedings is entirely unreal and artificial. The Brides have never suggested in any of their previous actions, or indeed on the application to amend before Parker J, that there was any basis to allege invalidity or voidability of the deed of compromise of 19 August 1986. They have never attempted to do so. There is no evidence whatever to support any suggestion that Messrs Putnin and Campbell‑Smith were induced to execute that deed by fraud or any other conduct which might lead to the deed being set aside. No effort has ever been made to join the parties to the deed, Messrs Putnin and Campbell‑Smith and Messrs Young and Anderson to the proceedings before Parker J or in the proceedings before Chapman AM in order to advance a claim that the deed be set aside. There is simply no avenue for advantage to Mr and Mrs Bride in this hypothesis.
70. The insuperable difficulties which Mr and Mrs Bride face are that the securities which they gave to the bank, and which were enforced by the bank from 1984 onwards covered both property which they held on the terms of the Pinwernying Family Trust and property which they owned personally and beneficially without differentiating between the two categories of ownership. As the bank held valid securities over all the land, personal property and trust property it was entitled to proceed to enforce those securities according to law. The subsequent bankruptcies of the Brides' mean, as has been repeatedly held, that they cannot now advance any claims for damages or other relief arising from the conduct of ABL or by others in relation to property which they had held both personally and beneficially. They are limited to advancing claims solely affecting property which they held on trust and which did not vest in any trustee in bankruptcy.
…..
136. For reasons which I have already given I am satisfied that, to a very large degree, the two pending appeals brought by Mr and Mrs Bride to the Full Court are vexatious because they involve the abuse of the process of the court in attempting to recontest issues which have finally been concluded against them in other litigation to which the respondents to those appeals or their privies were parties. In relation to those aspects of appeal FUL 104 of 2000 which are not an abuse of process in this sense, namely the claims for relief against ABL and Peat Marwick Mitchell with respect only to the actions taken in respect of trust lands which were subject to the bank's securities, and in relation to the proposed appeal from the refusal of Parker J to allow fraud to be pleaded with regard to the treatment of trust assets, I consider that the appeals have been instituted and are sought to be pursued without any reasonable ground and without any prospect of success. For those reasons, and I hope recognising the restraint which should be exercised before reaching such a conclusion, I am satisfied that the institution and pursuit of the two appeals by the Brides in all respects constitute vexatious proceedings.”
In considering the issue of the disposal of any application by summary dismissal under the court rules and in particular rule 13.10 it is important to remember and apply the general principles which must be applied by a court when exercising any power granted, whether by the rules or indeed arising out of inherent jurisdiction of the court.
I refer to the principles set out in the matter of Dey v Victorian Railways Commissioners (1949) 78 CLR 62. In that case Dixon J states the following:
“A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle a court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined, whether of fact or law, and that the rights of the parties depend upon it then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process.”
It is further relevant to consider and apply the decision of Burton v Shire of Bairnsdale (1908) 7 CLR 76 at page 92 where O’Connor J then stated:
“Prima facie every litigant has a right to have matters of law as well as of fact decided according to the ordinary rules of procedure which give him full time and opportunity for the presentation of his case to the ordinary tribunals in the inherent jurisdiction of the court to protect its process from abuse by depriving a litigant of these rights and summarily disposing of an action as frivolous and vexatious will never be exercised unless the plaintiff’s claim is so obviously untenable that it cannot possibly succeed.
….
It cannot be doubted said Lord Herschell in Lawrance v Norreys (1888) 39 ChD 213, 15 App Cas 210 at 219 ‘that the court has an inherent jurisdiction to dismiss an action which is an abuse of process of the court. It is a jurisdiction which ought to be very sparingly exercised and only in very exceptional case’”.
I accept as a general proposition that the power to summarily dismiss under rule 13.10 must be exercised with great caution (See Duncan v Hotop & DFACS [2002] FMCA 56 and Loevski v ASIC [2003] FMCA 126).
In support of the application for summary dismissal it was submitted on behalf of the third and fourth respondents that this court does not have jurisdiction to hear the application. Whilst referring to the original jurisdiction vested in the court by s.10 of the Federal Magistrates Act 1999 it was submitted that this application does not fall within the jurisdiction of the court because:
a)it does not enliven any jurisdiction vested in the court by any law or by the application of section 15C of the Acts Interpretation Act 1901;
b)That there is no section in the Bankruptcy Act 1966 which would give the Court jurisdiction to hear the applicants’ application.
It is clear from a recital of the applicants’ application and the orders sought that there has been no specific reference made to provisions of the Bankruptcy Act sought to be relied upon. It is relevant, however, to note that during the course of submissions made on his behalf the first applicant at least in support of the first order sought in the application sought to rely upon s.222 of the Bankruptcy Act. He otherwise sought to invoke other provisions of the Bankruptcy Act including the general power this court has under s.30 of that Act. It is not necessary for me to consider in detail the other provisions to which reference has been made.
It was submitted on behalf of the third and fourth respondents that the court does not have jurisdiction to hear the applicants’ application because they do not have standing to bring the application because they are not parties to the deed of compromise and release, and further, it is argued that they are out of time pursuant to the Limitations Act 1935 Western Australia. It is argued that even if they once had a claim with respect to the deed of compromise and release which is denied, then that right expired six years after the date of that deed, that is, on 19 August 1992.
Similarly it is argued that the deed of assignment is dated 12 January 1995 and therefore any cause of action in relation to that deed would have expired on 12 January 2001. In support of the submission that there is no reasonable cause of action the third and fourth respondents submit that the proceedings that constituted collateral attack on earlier judicial determination disclosed no reasonable cause of action (See Hunter v Chief Constable of the West Midlands Police (1982) AC 529 at 541, Hassan v Hume [2003] FMCA 476 at paragraph [27]).
It was submitted that the applicants’ application is a collateral attack on decisions made in the Federal Court and the District and Supreme Courts of Western Australia about the effect and validity of the deed of compromise and release and the deed of assignment. It was clear during the course of submissions of the first applicant that a number of the issues raised in this matter were perhaps issues which he either did not fully appreciate or understand or which he did not wish to pursue in great detail.
In any event, I am satisfied, having regard to the reasons for decision which I have incorporated in the Heenan decision, having regard to the detailed chronology and history of events by way of background that the application does amount to what I would describe properly as a collateral attack as submitted by the third and fourth respondents upon decisions made in the Federal Court and the District and Supreme Courts of Western Australia regarding the effect of the validity of the deed compromise and release and the deed of assignment.
It seems to me having made that finding it is probably unnecessary to apply, though I will if need be, the principles of res judicata which would otherwise prevent the applicants from seeking to relitigate the validity of the deed of compromise and release to this court. On a proper assessment of the history that this is an attempt to seek to relitigate matters which clearly have been raised on at least one or many of the earlier proceedings as indicated by Heenan J. I refer to paragraph 69 of the Heenan decision which I have incorporated in this judgment.
I accept as submitted by the third and fourth respondents that in any event the issues raised in the application are what might be described as ‘abstract’ because the declarations are incapable of affecting any existing or future rights of the applicants or any other party. Even if successful in this application and even if I were to take a most generous view of it by imputing reference to relevant provisions of the Bankruptcy Act and otherwise arguments which perhaps have not even been advanced by the applicants, it is clear that in the circumstances, any orders that I would make in relation to this application would be futile. As submitted by the third and fourth respondents, even if the applicants did have standing to challenge the validity of the deed of compromised or released in this court then the claims available to the applicants compromised a release by that deed would have vested in the applicants’ trustee in bankruptcy following their second bankruptcy which occurred in November 1997. That fact, as I have indicated, was referred to in the Heenan decision set out earlier in this judgment.
Any order that the deed of assignment is valid is futile because any rights that could have been assigned to the applicants by that deed also vested in the applicants’ trustee in bankruptcy following their second bankruptcies in November 1997.
It was further submitted and I accept that the applicants have not established that any relevant causes of action which vested in their trustee in bankruptcy in 1984 and 1997 have revested in themselves. The third and fourth respondents otherwise rely upon s.185 of the Evidence Act 1995 (Cth) which requires the court to give full faith and credit to decisions of the Federal Court and the Supreme Court and District Courts of Western Australia. It was submitted therefore, and
I accept, that this court must take judicial notice of previous judicial determinations relating to the applicants’ claim and specifically the vexatious order already in place against the applicants pursuant to the Heenan decision.
I add again, so that there be no uncertainty about the matter, that I have read the Heenan decision and the history set out in that decision was carefully considered and thorough reasons provided. It would be inappropriate for the court in this case, having regard to the discretion it has, combined with the obligations it has under s.185 of the Evidence Act to fail to take judicial notice of that carefully considered and well-reasoned judgment.
During the course of submissions I was at pains to try and encourage the applicant to identify the benefit that might be obtained by the applicants should I decide to make an order in their favour in accordance with the orders sought in the application. I did not receive a satisfactory submission which would persuade me that there is any argument which could possibly be advanced to rebut the suggestion that even if successful orders made, arising out of the application, would be anything other than futile and I so find.
It is clear to me that the proceedings which have been commenced, including this current application by the applicants, arise essentially from the same subject matter, that is, the circumstances the businesses in which they had an interest collapsed, as described in the Heenan decision. It is also clear to me that on many occasions the applicants have had ample opportunity to deal with all issues arising out of or relevant to that subject matter.
It is important to emphasise what his Honour Heenan J said at paragraph 69 and in particular the comments his Honour made in relation to the deed of compromise and release. In paragraph 69 set out earlier in this judgment his Honour states the following, which I now restate:
The Brides have never suggested in any of their previous actions or indeed on the application to amend before Parker J that there was any basis to allege invalidity or voidability of the deed of compromise of 19 August 1986. … No effort has ever been made to join the parties to the deed, Messrs Putnin and Campbell-Smith and Messrs Young and Anderson in order to advance a claim that the deed be set aside.
I can only speculate that those comments of his Honour have perhaps to some extent inspired the application currently before this court. I am concerned in any event that in the circumstances even if there is no jurisdiction to entertain the application as correctly submitted by the third and fourth respondents. I further find in the exercise of my discretion that on the material before me there is clear evidence that this is an abuse of process and/or the proceedings are vexatious.
In relation to the issue of abuse of process it is quite clear that in matters of this kind the court has a discretion to consider the material based upon the authorities to which I have referred. It is also clear that litigants, as submitted by the third and fourth respondents only have a right to have his or her claim litigated if it is not frivolous, vexatious or an abuse of process (See Ashmore v British Coal Corporation (1990)
2 QB 338 at 348).
It is clear to me that the respondents in seeking to demonstrate an abuse of process do not have to advance evidence on their behalf to establish any ulterior motive for bringing the proceedings which might be visited upon the applicants in this application (See Smith v Linskills (1996)
1 WLR 763 and Bride v Anglo-Australian Foods & Ors (2000) WASCA 124).
It is also clear to me that in matters of this kind the voluminous nature of either the material relied upon by the applicants or indeed as would be evident the voluminous material relied upon both in terms of submissions and affidavit material of the respondents does not of itself provide an argument against the notion that there should be summary dismissal on the grounds of an abuse of process. These principles were set out in General Steel Industries Incorporated v Commissioner for Railways NSW (1964) 112 CLR 125 at 129 and cited by this court in the matter of M99/2003 v Minister for Immigration [2004] FMCA 156 at paragraphs 13 and 14 as follows:
“13. A preliminary issue which was raised and relied upon by all applicants concerned the standard of proof which the court should apply in considering whether to refuse the application for an order nisi at this hearing. It was submitted that effectively the hearing is a summary dismissal proceeding and that the authorities dealing with summary dismissal should apply. It was submitted that effectively the application brought by the respondent is one brought pursuant to Order 13 Rule 10 of the Federal Magistrates Court Rules which provides as follows:-
“13.10 Disposal by summary dismissal
The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if it appears to the Court that:
no reasonable cause of action is disclosed in relation to the proceeding or claim for relief; or
the proceeding or claim for relief is frivolous or vexatious; or
the proceeding or claim for relief is an abuse of process of the Court.”
14. It was noted that there is no application for summary dismissal before the High Court or the Federal Court. It was argued that this is not an adjourned directions hearing as contemplated by the orders of Marshall J in the Federal Court. The Court is mindful of the authorities in relation to summary dismissal and in particular I note the principles referred to by Barwick CJ in General Steel Industries Inc v Commissioner For Railways (NSW) (1964) 112 CLR 125 at 129:
“It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; "so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow them" (the pleadings) "to stand would involve useless expense". (at p129) 9. At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or "so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument"; "so to speak apparent at a glance". (at p129) 10.
… Dixon J. (as he then was) sums up a number of authorities in Dey v. Victorian Railways Commissioners (1949) 78 CLR 62 VOL CXII-9 where he says (1949) 78 CLR, at p 91 : "A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process." Although I can agree with Latham C.J. in the same case when he said that the defendant should be saved from the vexation of the continuance of useless and futile proceedings (1949) 78 CLR, at p 84, in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed.”
I accept and apply the principles which I had referred to in the matter of Loevski v ASIC [2003] FMCA 126 (at paragraph 39) where I stated that in principle once it is established that a matter is an abuse of process then it is not only appropriate but the duty of the court to ensure the application is summarily dismissed. In my view the application is an abuse of process. It is clear to me that on a proper reading of the application and the orders sought in the application that there is no arguable case put forward by the applicants. It is not discernable from the application on its face or from the affidavit material. Indeed the affidavit material relied upon by the applicants in my view clearly raises matters which have been judicially determined by both the Federal Court and the Supreme Court of Western Australia as clearly indicated in the judgment of Heenan J and in the chronology of events to which reference was made earlier in this judgment.
I turn now to consider the issue of whether or not these are vexatious proceedings. I have already incorporated in this decision rule 13.11 of the FMC Rules. It is clear from that rule and particularly subrule (1) and subrule (2), that the court in considering the matter needs to have regard to the exercise of its powers with due care of the kind demonstrated in the decision of Heenan J. His Honour in that case expressed what I would describe as extreme caution in considering whether or not to make a declaration of the kind then made in that case. Likewise I have to exercise extreme caution.
The principles which apply in relation to the question of whether or not a matter may be regarded as vexatious were considered by the court in Attorney-General v Wentworth (1988) 14 NSWLR 481. In that case Roden J set out the following:
1.Proceedings are vexatious if they are instituted with the intention of annoying or embarrassing the person against whom they are brought;
2.They are vexatious if they are brought for collateral purposes and not for the purpose of having the court adjudicate on the issues to which they give rise;
3.They are also to be properly regarded as vexatious if irrespective of the motive of the litigant they are so obviously untenable or manifestly groundless as to be utterly hopeless;
4.In order to fall within the terms of [the rule]:
(a) proceedings in categories 1 and 2 must be also instituted without reasonable ground, proceedings in categories 3 necessarily satisfy that requirement;
(b) the proceedings must have been ‘habitually and persistently’ instituted by the litigant.
It is also noteworthy to consider what President Fitzgerald said in the matter of Re Cameron (1996) 2 Qd R 218 at 220 where in considering what makes a proceeding vexatious his Honour stated the following:
“Although there are sometimes statutory indications the broad test potentially concerns such factors as the legitimacy or otherwise of the motives of the person against whom the order is sought, the existence or lack of reasonable grounds for the claim sought to be made, repetition of similar allegations or arguments to those which have already been rejected, compliance with or disregard of the court’s practices, procedures and rulings, persistent attempts to use the court’s processes to circumvent its decisions or other abuse of process, the wastage of public resources and funds and the harassment of those who are the subject of the litigation which lacks reasonable basis.”
It is clear to me in applying the relevant principles to which I have referred and having found already that the proceedings in my view have been brought for a collateral purposes and are an abuse of process that there is sufficient material before me to find that these are indeed vexatious proceedings.
It is equally clear to me on a proper reading of the chronology of events and the circumstances set out in detail that the applicants in these proceedings have ‘habitually, persistently and without reasonable grounds’ instituted other vexatious proceedings in the Courts and any other Australian court” which in this case includes the courts to which reference has already been made.
I am satisfied and so find applying the appropriate principles, that the requirements in rule 13.11(1) and (2) have been complied with and that I should make orders accordingly. It was clear during the course of the submissions by the applicant that although he was concerned about the issue of whether or not this application could be regarded as vexatious and the consequences which might follow from orders to be made by this court if it were to make an adverse finding to the applicants, that he was unable to identify in any detail the basis upon which it could properly be said that these proceedings were not pursued for collateral purposes.
Although he endeavoured to seek to persuade the court that by making declarations of the kind sought that that would somehow obviate the need for the court on appeal in Western Australia to otherwise consider key issues agitated by the applicants before those courts, now subject to the order of Heenan J, in my view those submissions are ill-considered and ill-conceived. They do nothing to advance the argument against the submissions which I have accepted made for and on behalf of the third and fourth respondents that these proceedings currently constitute an abuse of process and/or are vexatious and should be accordingly dismissed with consequential orders in relation to the decision I have made that the application is vexatious.
It was noted that during the course of these proceedings that there is no appeal currently pending against the decision of Heenan J. I was informed from the bar table by the first-named applicant that an application has been prepared. He made reference to there being some confusion or what might be described as a mix-up in registry in relation to any application he sought to file.
It is noted, however, that the decision made by Heenan J was a decision made in August this year. It is further noted that this application by the Applicants was commenced just six days after the vexatious orders were made by Heenan J who had handed down his decision on 17 August 2004. In my view the applicants have had ample opportunity to consider their position in relation to his Honour’s decision which
I have described earlier as being a most reasoned and careful consideration of all the relevant material, some of which is particularly relevant to these proceedings.
Ultimately, however, I conclude that there is an inherent and obvious futility in this application in any event. The inherent and obvious futility arises from the bankruptcies which occurred in November 1997. That fact alone, however, is not determinative of my decision in this matter but is certainly a factor that is relevant in the decisions that
I have made. It follows, therefore, that the orders of the court will be:
1) The application filed 23 August 2004 be dismissed pursuant to rule 13.10 of the Federal Magistrates Court Rules 2001 (the FMC Rules).
2) The applicants or either of them pursuant to rule 13.11(1)(b) of the FMC Rules shall not without the leave of a Federal Magistrate institute any proceedings in the Federal Magistrates Court.
3) The officers of the Federal Magistrates Court, including the Chief Executive Officer and/or any Registrar be and are hereby directed:
(i)to refuse to seal any document constituting an application or a process for the commencement of a proceeding by or in the name of the applicants or either of them where the formal contents of the documents show that the proceedings to be commenced would be irregular and/or an abuse of process without first obtaining a direction from a Federal Magistrate;
(ii)to refuse to accept for filing any document by or in the name of the applicants or either of them that is not prepared in accordance with the Federal Magistrates Act 1999, the Federal Magistrates Court Rules without first obtaining a direction from a Federal Magistrate.
4) The applicants shall pay the third and fourth respondents’ costs of and incidental to this application for summary dismissal together with reserved costs, if any, to be taxed in default of agreement pursuant to order 62 of the Federal Court Rules.
I certify that the preceding fifty-one (51) paragraphs are a true copy of the reasons for judgment of McInnis FM
Associate:
Date: 8 November 2004
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