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Commonwealth Bank of Australia v Heinrich

Commonwealth Bank of Australia v Heinrich

Case [2003] FCA 540 6 June 2003

Jurisdiction

Breach of Contract

Unconscionable Conduct

Res Judicata

Limitation Periods

Abuse of Process

Civil Litigation & Procedure

Bankruptcy Law

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FEDERAL COURT OF AUSTRALIA
Commonwealth Bank of Australia v Heinrich [2003] FCA 540
PRACTICE AND PROCEDURE – vexatious litigant – whether O 21 r 2 directs Court to have regard only to proceedings in Federal Court – whether respondent had habitually instituted a vexatious proceeding against applicant – whether application to annul sequestration order is a proceeding against the petitioning creditor
Federal Court of Australia Act 1975 (Cth)
Bankruptcy Act 1966 (Cth)
Federal Court Rules O 21 r 2
Ramsey v Skyring (1999) 164 ALR 378 followed
Horvath v Commonwealth Bank of Australia [1999] FCA 504 cited
Attorney-General v Wentworth (1998) 14 NSWLR 481 cited
Hunters Hill Municipal Council v Pedler [1976] 1 NSWLR 478 referred to
Horvath v Pattison [1999] FCA 924 followed
Heinrich v Commonwealth Bank of Australia [1999] SASC 210 cited
Bank SA v Ferguson (1998) 151 ALR 729 cited
COMMONWEALTH BANK OF AUSTRALIA v STEPHEN GLEN HEINRICH
S 241 of 2002
MANSFIELD J
6 JUNE 2003
ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

S 241 OF 2002

BETWEEN:

COMMONWEALTH BANK OF AUSTRALIA
APPLICANT

AND:

STEPHEN GLEN HEINRICH
RESPONDENT

JUDGE:

MANSFIELD J

DATE:

6 JUNE 2003

PLACE:

ADELAIDE

REASONS FOR JUDGMENT

The Commonwealth Bank of Australia (the CBA) seeks orders under O 21 r 2 of the Federal Court Rules that Stephen Glen Heinrich (Mr Heinrich) shall not, without leave of the Court, institute any proceeding against the Bank in the Federal Court of Australia. The complex fact which the CBA must establish to be entitled to the order sought is that Mr Heinrich has habitually and persistently and without any reasonable grounds instituted a vexatious proceeding against the CBA. An order under O 21 r 2 may be rescinded or varied at a later time: O 21 r 4.
Sackville J in Ramsey v Skyring (1999) 164 ALR 378 (Skyring) stated the principles which should be applied to an application under O 21 r 2 at 389 [51]-[52]. His Honour said:
‘[Order] 21, r 1 must be applied having regard to a fundamental principle of the legal system. It is that every person has a right of access to a court to seek remedies in consequence of an alleged infringement of his or her rights: Bremer Vulkan Schiffbau Und Maschinenfabrik v South India Shipping Corp Ltd [1981] AC 909 at 977, per Lord Diplock. Because an order made under a provision such as O 21, r 1 denies a litigant this right, it has been treated as an “extreme” remedy: Attorney-General v Wentworth (1988) 14 NSWLR 481 at 484, per Roden J. As Kirby J has pointed out in one of the many cases involving the respondent, “it is regarded as a serious thing in this country to keep a person out of the courts”: Re Attorney-General (Cth); Ex parte Skyring (at 323).
52. Nonetheless, provisions such as O 21, r 1 give effect to an important countervailing policy. As Toohey J pointed out in relation to the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Commonwealth Bank of Australia v Heinrich

Details

AGLC: Commonwealth Bank of Australia v Heinrich [2003] FCA 540
Case: [2003] FCA 540
Decision Date: 6 JUNE 2003

CaseChat Overview and Summary

The Commonwealth Bank of Australia brought an application against Stephen Glen Heinrich for orders under O 21 r 2 of the Federal Court Rules that Mr Heinrich shall not, without leave of the Court, institute any proceeding against the Bank in the Federal Court of Australia. The complex fact which the CBA must establish to be entitled to the order sought is that Mr Heinrich has habitually and persistently and without any reasonable ground instituted a vexatious proceeding against the CBA. An order under O 21 r 2 may be rescinded or varied at a later time: O 21 r 4. Mansfield J found that the CBA had not shown that Mr Heinrich had habitually instituted vexatious proceedings in the Court. While it was clear that he had persistently pursued his claims against the CBA, it was not presently clear that he had habitually and persistently done so. His proceedings had been partly responsive. He did not appeal from the decisions refusing to set aside the first bankruptcy notice or the second bankruptcy notice. He appealed from the making of the sequestration order, but the timing of that application was dictated by the Rules. The only proceeding which was entirely within his initiative, in terms of timing, was the annulment application. The appeal was instituted in September 2000, and judgment was given on 6 May 2001. No further proceeding was issued in the Court to raise the indebtedness to the CBA until the annulment application made on 4 September 2002. It was made by Mr Heinrich in person, and his evidentiary material was in part an attempt to present that which he claimed presented the issue of his indebtedness to the CBA in a fresh light, and with allegedly fresh evidence. The refinement of his position with the assistance of counsel revealed that there was little, if any, fresh evidence but it was not thought Mr Heinrich sought to mislead the Court about that. As best as could be, in the absence of oral evidence, and based upon Mr Heinrich's extensive affidavits, it was understood he was giving his 'best shot' in a final attempt to demonstrate that he was not indebted to the CBA, consistent with a belief on his part to that effect. It was suspected that further proceedings by Mr Heinrich in the Court raising the same issues and in the absence of significant fresh evidence which he could not previously have been able to obtain with the expenditure of all reasonable effort might be imbued with a habitual character. The other descriptor of the proceedings used in O 21 r 2, namely persistence, was one which had now been met. Mr Heinrich had, with determination, and it may fairly be said with a degree of stubbornness and in the face of the consideration of much the same material by the trial judge in the debt action, and by judges of the Court in his appeal from the sequestration order and in the annulment application continued with further proceedings. On the findings, the CBA had satisfied the Court on each of the elements in O 21 r 2 other than that, to this point and presently culminating in the annulment application, Mr Heinrich had habitually brought proceedings in the Court which were vexatious. The decision in the annulment application had addressed afresh the matters he had now raised in several proceedings in the Court, and in other courts. It was to be hoped that Mr Heinrich now accepted that, whatever belief he may hold about the conduct of the CBA or his indebtedness to the CBA, the complaints he had on those matters had been the subject of final and authoritative judicial determination. The Court did not propose to make the orders presently sought under O 21 r 2 by the CBA. The parties would be heard as to any other orders which should be made.

Orders