Commonwealth Bank v Heinrich (No 2)

[2003] SASC 436

COMMONWEALTH BANK OF AUSTRALIA & ORS v

STEPHEN GLENN HEINRICH (NO 2)
[2003] SASC 436

Civil

1. DEBELLE J On 12 September 2003 I made orders on the application of the plaintiffs permanently staying prosecutions commenced in the Adelaide Magistrates Court by the defendant. I also made an order pursuant to s 39(1) of the Supreme Court Act 1935 (“the Act”) that the defendant be prohibited from instituting further proceedings without leave of this Court.

2. On 25 September 2003 the defendant applied for an order granting leave to appeal to the Full Court.  On the same day he purported to file a Notice of Appeal to the Full Court.  A clerk in the Registry did not permit the Notice of Appeal to be filed.  However, a copy of it was placed on the Court’s file.

3. The application of 25 September 2003 was filed when I was on leave.  I did not return until 3 November.  My associate attempted to list the application in November but the defendant was not available until 9 December.

4. Mr Heinrich’s application for leave to appeal and his purported appeal give rise to a number of issues for resolution.  They are:

   1.Does Mr Heinrich have a right of appeal from both the order made pursuant to s 39(1) of the Act and from the order permanently staying the proceedings in the Magistrates Court?

   2.If yes, does Mr Heinrich require leave of the Court pursuant to s 39(1) of the Act to commence each appeal?

   3.If the answer to question 2 is no, is either the order made pursuant to s 39(1) or the order permanently staying the proceedings in the Magistrates Court an interlocutory order or interlocutory judgment within the meaning of s 50(3) of the Act so that no appeal lies unless Mr Heinrich obtains leave to appeal?

   4.If the answer to question 3 is yes, should leave to appeal be granted in either appeal?

   5.If Mr Heinrich has a right of appeal and if he does not require leave to appeal, should an extension of time be granted in which to file and serve the Notice of Appeal against either order?  Although Mr Heinrich has not formally applied for an extension of time within which to appeal, it will assist him if I proceed on the footing that he made an oral application to do so.

   I turn to examine each issue.  Before doing so, I acknowledge the assistance I have had from the reasons of Chernov JA in Kay v Attorney-General [2000] 2 VR 436.

   1.     A Right of Appeal?

5. Section 50(1) of the Act provides a right of appeal to the Full Court “against every judgment ..., order, or direction of a judge, whether in court or chambers” subject to three listed exceptions. None of the exceptions apply in this case. Section 50(1) is expressed in wide terms. It is clear that Mr Heinrich has a right of appeal against each of the orders made on 12 March 2003.

   2. Is leave required under s 39(1)?

6. As Mr Heinrich is entitled to appeal, the question then arises whether, when an order has been made pursuant to s 39(1) of the Act, it is necessary for the person bound by that order and who wishes to appeal against the order to obtain leave pursuant to s 39(1) of the Act. Expressed another way, the question is whether the terms of s 39(1) require Mr Heinrich to obtain leave to appeal against both of the orders made on 12 September under that provision.

7. If the matter is considered without resort to authority, ordinary principles of fairness dictate that leave under s 39(1) should not be required. The judge who has made an order pursuant to s 39(1) could have erred in a material respect and it would be manifestly unjust to deny the person against whom the order had been made the right to appeal against that decision. Expressed another way, if the order under s 39(1) should not have been made, the person subject to that order should not be denied the right to appeal from that order. In this case, that position should obtain in respect of both of the orders especially as both orders were sought in the same proceeding. In other words, had the application for a permanent stay been made in a separate proceeding issues before the application under s 39 of the Act, Mr Heinrich would have had a right of appeal in any event.

8. The prohibition in the order under s 39(1) which was made on 12 September prohibits Mr Heinrich from “instituting further proceedings”. Unlike the provisions in some other jurisdictions which enable orders to be made preventing vexatious litigants from prosecuting legal proceedings, s 39 does not authorise prohibiting a person from continuing legal proceedings. It merely prohibits the person from instituting legal proceedings. An example of a provision prohibiting continuing legal proceedings is s 21 of the Supreme Court Act 1986 of Victoria which requires a person declared to be a vexatious litigant to obtain leave to continue or to commence any legal proceedings. The question, therefore, is whether the filing of a notice of appeal constitutes the commencement of legal proceedings. There is a body of opinion to the effect that it does: In re Vernazza [1960] 1 QB 197 at 209 – 210; Braeside Bearings Pty Ltd v H J Brignell & Associates (Boronia) [1996] 1 VR 17 at 19; Cheney v Spooner (1929) 41 CLR 532 at 536 – 537, 538 – 539; In re Crittendon; Ex parte The Law Institute of Victoria [1958] VR 101 at 102. However, it is arguable that the filing of the notice of appeal is no more than a continuation of a legal proceeding. There is considerable force in that view, particularly in a case such as this where Mr Heinrich is the defendant. It seems unjust to require a defendant to obtain leave to appeal if adversely affected by a judgment in an action he did not institute.

9. There are also practical reasons why it is inappropriate to hold that leave is required under s 39(1) to institute an appeal against a decision made pursuant to s 39 subjecting the appellant to an order under that section. They are set out in para 29 of the reasons of Chernov JA in Kay v Attorney-General and I respectfully adopt them.

10. For these reasons, although, as a general rule, an appeal may constitute the institution of legal proceedings, an exception should be made in the case of an appeal from an order made pursuant to s 39(1) of the Act. I expressly limit this conclusion to an appeal against orders made under s 39(1). There are compelling reasons to conclude that all other appeals should be regarded as the institution of legal proceedings.

11. For these reasons, it is unnecessary for Mr Heinrich to obtain leave to appeal pursuant to s 39(1) of the Act in order to institute an appeal against the order made pursuant to s 39.

12. It is an interesting question whether Mr Heinrich requires leave under s 39(1) to appeal against the order staying the informations in the Magistrates Court. As is apparent from the reasons below, it is unnecessary to decide the issue. I will proceed on the footing that he does not require leave.

    3.     A final or interlocutory order?

13. The next question is whether the orders made on 12 September 2003 are final or interlocutory in nature. If final, Mr Heinrich does not require leave. If interlocutory, Mr Heinrich requires leave pursuant to s 50(3) of the Act.

14. A judgment or order is final if it finally determines the rights of the parties having regard to the legal rather than the practical effect of the order: Carr v Finance Corporation of Australia Limited (No 1) (1981) 147 CLR 246 per Gibbs CJ at 248. See also Hall v The Nominal Defendant (1966) 117 CLR 423 per Taylor J at 439 – 440; Licul v Corney (1976) 180 CLR 213 per Gibbs J at 225; Little v State of Victoria [1998] 4 VR 596 at 597 – 598. A number of judgments and orders have been held to be interlocutory orders. Some are listed by Taylor J in Hall v Nominal Defendant (supra).  They include orders staying or dismissing proceedings on the ground that they are scandalous, vexatious and an abuse of process.  In Kay v Attorney-General, it was decided that an order declaring a person to be a vexatious litigant made under s 21 of the Supreme Court Act of Victoria was interlocutory in nature.  In reaching that conclusion, the court had regard to the fact that the order could be varied or revoked by later order of the court.  In New South Wales, there seems to be a division of opinion on this question.  In Pedler v Hunters Hill Municipal Council [1976] 2 NSWLR 411, it was held that such an order was final in nature. Later decisions of the Court of Appeal in that State suggest that the order is interlocutory: see Valassis v McCabe [1999] NSWCA 423 and Attorney General In and For the State of NSW v Spautz [2000] NSWSC 45.

15. On one view, an order made pursuant to s 39(1) constitutes a final order. Such an order will remain in full force and effect until it is either varied or revoked. While the order remains in force, its practical and legal effect is to prevent the person bound by the order from issuing proceedings without leave. Until it is varied or revoked, the order operates in the same way as a final order. Should a court make an order granting or refusing leave to institute proceedings, it will do so in reliance on the order. In other words, the order as made will, until varied or revoked, operate in respect of any attempt by the person bound by the order to institute legal proceedings. An order varying or revoking the order will not be made unless there is a material change in circumstances. These factors all point to the conclusion that the order is a final order.

16. However, the fact that an order under s 39(1) may be varied or revoked is, I think, a compelling reason for concluding that the order is not a final order. It is a misuse of language, if not also legal heresy, to characterise as final an order which is capable of being later varied or revoked. For these reasons, I apply the reasoning in Kay v Attorney-General and conclude that an order made pursuant to s 39(1) is interlocutory in nature. It follows, therefore, that Mr Heinrich must obtain leave to appeal.

17. It is necessary to examine also whether the order permanently staying the informations in the Magistrates Court is a final order or interlocutory order.  The order is a permanent stay and so finally determines the rights of Mr Heinrich to prosecute the informations and the rights of Bank in relation to them.  For that reason, Mr Heinrich does not require leave to appeal from that order.

    Should Leave be Granted?

18. I turn to examine whether Mr Heinrich should have leave to appeal from the order made under s 39(1).

19. Mr Heinrich’s notice of appeal, like many of his applications, portrays misunderstanding of legal principle and of the issues in this action.  Some of the grounds of appeal canvass irrelevant issues.  Others display a preoccupation of Mr Heinrich with irrelevant questions.  I do not propose to examine in these reasons each ground of appeal.  I simply state that I have carefully examined each.  There is nothing in any ground which warrants granting leave to appeal.  I have also had regard to Mr Heinrich’s extensive written submissions and his oral submissions.  More than one set of written submissions has been filed.  An examination of them reinforces the conclusion that there is no basis for granting leave to appeal.  There is simply no merit in any of the grounds of appeal.  I would, therefore, refuse leave to appeal.

    Extension of Time

20. As Mr Heinrich does not require leave to appeal from the order permanently staying the informations in the Magistrates Court, it is necessary to examine whether he should be granted an extension of time within which to appeal from that order. In case I have erred in concluding that the orders made pursuant to s 39(1) are interlocutory and not final, I also consider whether he should be granted leave to appeal against those orders. It is convenient to deal with both matters at the same time. There is one notice of appeal. The same considerations are common to most aspects of the appeal.

21. There are usually four main factors to which a Court will have regard when determining whether to exercise its discretion to grant an extension of time within which to appeal.  They are the length of the delay, the reason for the delay, whether there was an arguable case, and the extent of any prejudice suffered by the respondent: Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196. I turn to examine each.

22. The length of the delay is just over two months.  In all the circumstances, that is not a long time.  The reason for the delay is that Mr Heinrich was prevented from filing his notice of appeal by staff in the Registry.  It must be noted that Mr Heinrich attempted to file the notice of appeal within the prescribed time.  Mr Heinrich should not, therefore, be prejudiced by having been prevented from filing his notice of appeal.

23. The only prejudice suffered by the Bank, as respondent, is delay in achieving a final resolution of the issues between it and Mr Heinrich.  As the litigation between the Bank and Mr Heinrich has now extended over almost 10 years, I do not think that the Bank is able to point to any significant disadvantage caused by a delay of a few months more.  I acknowledge that the Bank seeks finality.  However, there are other proceedings between it and Mr Heinrich in the Federal Court so that delay in the resolution of this action does not give rise to sufficient prejudice to refuse to grant an extension of time within which to appeal.  Thus, three of the four factors must be resolved in favour of Mr Heinrich.

24. I turn to the fourth factor, namely, whether Mr Heinrich has an arguable case.  In the case of the appeal against the order permanently staying the informations in the Magistrates Court, the Notice of Appeal does not contain the single ground which might suggest that Mr Heinrich has an arguable case.  Some grounds are irrelevant.  Others display Mr Heinrich’s misunderstanding of the relevant legal principles.  I have searched the other grounds and I am unable to find any which would suggest an arguable case.  I have taken as liberal view as is possible of the grounds of appeal and of Mr Heinrich’s submission, both oral and written, but there is no ground which justifies extending the time within which to appeal against the order granting the stay.

25. Similar considerations affect the question whether there is an arguable case on the appeal against the orders made under s 39(1). I incorporate here, without repeating them, the reasons why leave to appeal should not be granted against that order. They apply with equal force to the question whether there was an arguable case. Again, taking the most liberal view of the grounds of appeal, there is nothing which indicates an arguable case.

26. For these reasons, I do not think that there should be an order extending the time within which to appeal against either the order granting the permanent stay or the order made under s 39(1). In the result, Mr Heinrich has failed in all his applications. There will therefore be orders refusing leave to appeal and dismissing his application to extend the time within which to appeal.