Commonwealth Trading Bank v Inglis

[1974] HCA 17

HIGH COURT OF AUSTRALIA

Barwick C.J., McTiernan and Walsh JJ. (The RIGHT HONOURABLE MR. JUSTICE WALSH died before judgment was delivered in this appeal).

COMMONWEALTH TRADING BANK v. INGLIS

(1974) 131 CLR 311

14 May 1974

High Court

High Court—Practice—Vexatious litigant—Inherent jurisdiction—To restrain commencement of action without leave—To restrain lodging of appeal without leave—To restrain making of unwarranted applications in existing proceedings without leave—High Court Rules, O. 63, r. 6(1)*. * Order 63, r. 6(1) of the High Court Rules provides: "Upon the application of a Law Officer, or the Crown Solicitor of the Commonwealth or of the Principal Registrar of the Court, the Court or a Justice, if satisfied that a person, frequently and without reasonable ground has instituted vexatious legal proceedings, may, after hearing that person or that other person or giving him an opportunity of being heard, order that he shall not, without the leave of the Court or a Justice, begin any action appeal or other proceeding in the Court."

Decision

May 14.
THE COURT delivered the following written judgment:-
The applicant in the matter now before the Court (herein called the applicant) was the defendant in an action brought against it in the original jurisdiction of this Court by the respondents to the present application (herein called the respondents). The action was tried by a Justice of this Court who dismissed it. An appeal against that decision had been lodged but had no been heard at the time this application was before the Court. The applicant's notice of motion seeks an order "pursuant to the inherent jurisdiction" of the court that no legal proceedings should be instituted or applications in existing proceedings made or appeals lodged by the respondents or either of them without leave of a Justice of the court "by reason of their having habitually and persistently and without any reasonable grounds instituted vexations legal proceedings, made repeated vexatious applications in pending actions and conducted legal proceedings in a vexatious and time-wasting manner". (at p312)

2. Order 63, r, 6(1) of the Rules of this Court provides:

"Upon the application of a Law Officer, or the Crown Solicitor of the Commonwealth or of the Principal Registrar of the Court, the Court or a Justice, if satisfied that a person, or another person in concert with that person, frequently and without reasonable ground has instituted vexatious legal proceedings, may, after hearing that person or that other person or giving him an opportunity of being heard, order that he shall not, without the leave of the Court or a Justice, begin any action appeal or other proceeding in the Court."

It is clear and it was conceded that the present application is not authorized by that provision. It is apparent also that this is not an application of the kind described in r. 2 of O. 63, which provides: "An application to stay proceedings on the ground that there is not a reasonable or probable cause of action or suit, or that the proceeding is vexatious and oppressive or is an abuse of the process of the Court, may be made at any time and whether the plaintiff does or does not admit the allegations of fact, if any, on which the application is founded." (at p313)

3. The question was raised during the hearing whether this Court has power under its inherent jurisdiction to make an order of the kind here sought upon an application brought by the applicant. The Court decided that it would consider that question before proceeding further with the hearing of the application. (at p313)

4. It is to be noticed that the order sought refers (1) to the institution of legal proceedings; (2) to the making of applications in existing proceedings; and (3) to the lodging of appeals. We are of opinion that different considerations apply to a restraint on the making of applications in existing proceedings and to the instituting of new proceedings. We propose to consider, in the first instance, the application in so far as it seeks to prevent the institution of any future proceedings except by leave. The application is not framed so as to limit such future proceedings to proceedings of the same kind as those that have been previously brought or to proceedings against the applicant or against other specified persons who have already been sued by the respondents. It refers to any legal proceedings against any person. (at p313)

5. Counsel for the applicant was unable to refer the Court to any authority for the making of an order of that kind in the exercise of the Court's inherent jurisdiction. We have been unable to find any reported decision or dictum which affirms the existence of the power to do so. There is a statement in Walker, Practice of the Supreme Court of New South Wales at Common Law, 4th ed., p. 209, which appears to suggest that on several occasions orders had been made in general terms that a "vexatious" party should not be allowed to commence or to continue proceedings without the leave of a judge. It is said that these judgments have not been reported. An order in that form is described as being "frequently referred to as the order in Lord Kinnaird v. Field" and it is said that it is to be found in the judgment therein of Warrington J. (1905) 2 Ch 306, at p 308 . But the order there made was not an order that no future proceedings might be instituted without leave. It was an order relating to proceedings in an action then pending. If it has been treated in New South Wales as authority for the making of a general restraining order, this, in our opinion, has been a mistake. It is significant that in Davison v. Colonial Treasurer (1930) 47 WN (NSW) 19 , Halse Rogers J. was asked to make an order restraining the plaintiff from bringing any further proceedings and counsel for the applicant referred to Lord Kinnaird v. Field (1905) 2 Ch 306 , and to Grepe v. Loam (1887) 37 Ch D 168 , which was applied by Warrington J. in the later case. But Halse Rogers J. did not make such a general order. He ordered that the declaration be struck out and the plaintiff restrained from filing a further declaration in the same or in a similar form. The matter is now governed in New South Wales by the Supreme Court Act 1970, s. 84. So far as we are aware, it had not previously been dealt with in that State by any Act or rule of court. (at p314)

6. Whilst conceding that he could cite no authority in direct support of his proposition, counsel for the applicant submitted that it is settled that a court has inherent power to protect itself from an abuse of its process and he argued that to make an order preventing a vexatious litigant from bringing proceedings without leave is but one means which the court may use in certain circumstances to achieve that end. In addition, counsel drew attention to decisions to the effect that the inherent powers of the court may exist side by side with a rule of court dealing with the like subject matter which is not regarded as being necessarily intended to abrogate the inherent power. It is true that there are statements of high authority referring to the power of the court to prevent abuse of its process. But these statements have been made in cases in which the court was concerned with actions which had been instituted in the court and were pending therein. The cases were concerned with such summary steps relating to the action as the making of an order staying it or dismissing it or striking out a pleading. Examples of statements of the principle relating to the court's inherent power to prevent an abuse of its process and of the circumstances in which that power was exercised are provided by the judgments in Willis v. Earl Beauchamp (1886) 11 P 59 ; Metropolitan Bank Ltd. v. Pooley (1885) 10 App Cas 210, at pp 214, 220-221 ; and Cox v. Journeaux (No. 2) (1935) 52 CLR 713 (at p314)

7. In our opinion, it is not surprising that the courts do not appear (so far as we have been able to discover) to have taken the further step of intervening in a summary way to prevent the commencement, except by leave, of actions and other proceedings by a particular person or persons but have limited themselves to exercising their powers in relation to proceedings which have been taken in a court and have thus been placed under its control. It may be that the exercise of supervision, by means of a requirement that leave should be obtained for the bringing of proceedings, could have been justified logically as a proper safeguard against abuse of the court's process in cases where it was shown to be probable that a person would continue bringing groundless proceedings. But, in our opinion, it is apparent that the courts, both in England and in this country, have declined to regard themselves as having power to do so, except where such power has been conferred upon them by an Act of Parliament or by rules promulgated under statutory authority. This is demonstrated, not merely by the absence of reported cases in which such orders have been made under the inherent power of the court, but by the fact that it has been thought necessary to deal with specific cases of the bringing of numerous unfounded proceedings by legislation rather than by invoking the inherent power of the court. There have been cases in which the vexatious character of the proceedings was so clear that it cannot be supposed that the court would have hesitated to exercise such a power if it had been regarded as existing. (at p315)

8. In England there appears to have been no relevant statute or rule of court until the enactment of the Vexatious Actions Act, 1896 (56 &60 Vict. c. 51). In moving the second reading of the bill in the House of Lords, Lord Halsbury referred in detail to numerous actions that had been brought by one person against a number of other persons, including judges and other persons holding public office. It was said that "the time had arrived when some sort of stop should be put to such proceedings". The Bill provided that an application for an order that a person should not issue process without leave should be made by the Attorney-General. The person to whom Lord Halsbury referred had brought some forty-eight actions, the details of which were given. His name was Alexander Chaffers. An application against him was the first case brought under the 1896 Act. It is reported as Ex parte the Attorney-General; Re Alexander Chaffers (1897) 76 LT 351; 45 WR 365 . It was argued that the court could not take account of actions that had been instituted before the passing of the Act. The argument was rejected and an order was made. No one suggested that there was any relevant inherent power. In In re Boaler (1915) 1 KB 21 , the Court of Appeal considered a question as to the construction of the Act of 1896, that is, whether the expression "legal proceedings" included criminal proceedings. It was held that it did not. Kennedy L.J. described the Act as "one which even in regard to civil proceedings seriously abridges the right of the subject to such redress in the Courts of law" (1915) 1 KB, at p 34 . Scrutton J. spoke of the Act as having deprived the subject in part of a valuable right. The view has later been taken that an amendment of the similar Act passed in England in 1925 did not interfere with a "substantive right" of a litigant: see Attorney-General v. Vernazza (1960) AC 965, at pp 975, 977 . But the observations of Kennedy L.J. and Scrutton J. in the earlier case are quite incompatible with the notion that the Court had power apart from statute to make an order of the kind to which the 1896 Act referred. Vernazza's Case was based on s. 51 (1) of the Supreme Court of Judicature (Consolidation) Act, 1925, which replaced the 1896 Act, which gives power to make an order that no legal proceedings should be instituted without leave. The Supreme Court of Judicature (Amendment) Act, 1959 contained an amendment which empowered the courts to order that any legal proceedings already instituted should not be continued without leave. (at p316)

9. In Victoria a man named Millane produced an even greater crop of legal process than had been achieved in England by Chaffers. Most of the proceedings instituted by Millane were of a criminal nature, being prosecutions for offences. His activity led to the enactment of s. 33 of the Supreme Court Act 1928 which was similar to the English provision enacted in 1896. The first application under the new provision, which came into operation in December 1929, was brought against Millane and an order was made. The Full Court of the Supreme Court of Victoria declined to follow In re Boaler (1915) 1 KB 21 and held that in s. 33 the words "legal proceedings" included criminal proceedings: In re Millane (1930) VLR 381 . Special leave to appeal was refused by this Court (1930) 45 CLR 603 . (at p316)

10. In Western Australia, there was a similar enactment in the Vexatious Proceedings Restriction Act, 1930, s. 3. As in other jurisdictions, this provided that application was to be made by the Attorney-General and the power conferred extended to a power in the Supreme Court to restrain the bringing of proceedings in inferior courts. The provision is set out in In re Barlow (1934) 8 ALJ 314 , where there is a report of the refusal of this Court to grant special leave to appeal against an order made by the Supreme Court. (at p316)

11. In Queensland it appears that no similar provision came into force until 1943. The Supreme Court Rules were amended in that year by inserting therein O. 60A, rr. 1 and 2. These provided for the making on application, by a Crown Law Officer, the Crown Solicitor or the Registrar, for an order that no legal proceedings should be instituted in the court by a person who had frequently instituted vexatious legal proceedings without leave. (at p317)

12. An enactment similar to those of other States was made in South Australia in s. 39 of the Supreme Court Act, 1935. (at p317)

13. In this Court the rule from which the present O. 63, r. 6 is derived was first introduced in 1943, as O. XLIV A (S. R. 1943 No. 74). The terms of the rule are not identical, but are very similar to those of r. 6(1) of O. 63. When the new rules of this Court were promulgated in 1952 the former rule was copied with minor verbal alterations, but shortly afterwards the new provision was amended so as to delete that part of it that had authorized the making of an order against some other person who had acted in concert with the person who had instigated vexatious proceedings. Before the introduction in 1943 of the new provision the rule had already contained rules corresponding to those which are now rr. 1-5 of O. 63. At the same time in 1943, there was added to the rules a provision, now replaced by O. 58, r. 4(3), relating to the issue of process which appears on its face to be an abuse of the process of the court or a frivolous or vexatious proceeding. (at p317)

14. Provisions of the kind under consideration were prompted in England and in Victoria by specific cases multiple vexatious proceedings being brought by a particular person. According to an interesting article published in the Australian Law Journal, Vol. 17, p. 9, the relevant amendment in 1943 of the rules of this Court had a similar origin, except that several litigants took part in a campaign of litigation aimed against the issue of money by means of bank credit and against the Commissioner of Taxation for alleged offences consisting of the collection of taxes. On applications made by defendants, orders were made by judges of the Supreme Court of Western Australia (exercising federal jurisdiction pursuant to s. 17 of the Judiciary Act, 1903-1940) striking out the statements of claim and dismissing the actions. The article refers also to another litigant in Victoria, in respect of whose writs an order was made by a Justice of this Court staying the proceedings in accordance with the rule which is now O. 63, r. 2. The author makes the comment that the orders in Western Australia were "based on the inherent jurisdiction of the Court to reject process which amounted in effect to an abuse of that Court's process" and that this appeared a more direct method of dealing with the question than was the expedient adopted in Victoria. No doubt it was more direct. Whether it was correct or not need not be determined in the present case. If there is inherent jurisdiction to strike out a statement of claim and to dismiss summarily an action which has been commenced in the Court because the action constitutes an abuse of process, a matter which need not presently be decided, the existence of the jurisdiction would be of no assistance in determining whether or not there is inherent jurisdiction to restrain a person from commencing a new proceeding without leave. It is significant that in the cases in Victoria and in Western Australia, to which the article refers, no order of the latter kind was made, although it seems plain enough that such an order would have been appropriate if it had been considered that there was power to make it. (at p318)

15. In all the foregoing provisions corresponding to O. 63, r. 6, and in that rule itself, it is provided that an application may be made only by specified persons holding some responsible office. Some of the provisions go beyond empowering the court to control the issue of its own process and authorize it to restrain the issue without leave of proceedings in other courts. But in so far as the provisions relate to the issue of the court's own process, it is a consequence of the argument for the applicant that they have had the effect, not of adding to the power of the court to deal with vexatious litigants, but of restricting its power to do so. In our opinion, the nature of such provisions and the history of their introduction show clearly that they were intended as grants of an additional power. It is unacceptable, in our opinion, to say, as the applicant submits, that the enactment of such a provision as that contained in O. 63, r. 6 leaves unaffected an inherent power which the court is said to have to make an order of the kind for which that rule provides. Those authorities which refer to the continued existence of an inherent power, notwithstanding that a like power is conferred by rules of court, have no application, in our opinion, to a provision of the kind now being considered. (at p318)

16. In our opinion, the Court should hold that it has no power to make an order on the application of the present applicant, that no legal proceedings should be instituted by the respondents or either of them without leave of a Justice of the Court. (at p318)

17. In so far as the notice of motion refers to the lodging of appeals, we are of opinion that there is no inherent power to make an order requiring the respondents to obtain leave for the lodging of an appeal. The bringing of an appeal to this Court from the decision of certain other courts is regulated by s. 35 of the Judiciary Act, 1903-1969. An appeal from an order of a Justice exercising the original jurisdiction of the court may be brought as provided by s. 34 of the same Act. In our opinion, the Court has no inherent power to make an order which would negate or modify the operation of those provisions or of other statutes which provide for appeals to this Court and set out the conditions in which such appeals are available. Clearly, it would have no such power to make an order inconsistent with s. 73 of the Constitution. (at p319)

18. But the making of unwarranted and vexatious applications in an action which is pending in the court is, in our opinion, a matter over which there is an inherent power in the court to exercise control. There is an essential difference, in our opinion, between regulating the conduct of such an action so as to prevent the court's process from being abused, on the one hand, and impeding a particular person in the exercise of the right of access to the court, on the other hand. In Cox v. Journeaux (No. 2) (1935) 52 CLR, at p 720 it was stated that there is inherent power to stay an action as vexatious and in that case that power was exercised. In Lord Kinnaird v. Field (1905) 2 Ch 306 , to which we have referred, a defendant in an action, who had put on a counterclaim, had made twenty-nine interlocutory applications and had failed to pay costs which he had been ordered in many of those applications to pay. The plaintiffs sought an order that the defendant should not be allowed to make any further applications in the action without leave of the Court. Warrington J. considered that the cases of Grepe v. Loam (1887) 37 Ch D 168 and Suir v. Newton (1886) 37 Ch D 169n , were sufficient as precedents for such an application. He made an order that the defendant was not to be allowed without leave to make any application under the summons for directions, or to issue any summons on matters of procedure, or to serve any notice of motion to discharge any order made in chambers on any such application as aforesaid, without such leave. The Court of Appeal entertained no doubt that Warrington J. had power to make the order and it dismissed an appeal. As we have said earlier, the order related to the proceedings in an existing action before the Court. The case of Grepe v. Loam (1887) 37 Ch D 168 , mentioned by Warrington J., was one in which, after judgment had been given in two actions, repeated applications were made to have the judgments set aside or for orders inconsistent with them. An order was made prohibiting the making of any further applications in these actions without leave. The applications were regarded as being made "in the actions", although they were after judgment. The case of Suir v. Newton (1886) 37 Ch D 169n is reported very briefly, but it appears that non-compliance with an order for costs was the ground upon which it was ordered that no notice of motion was to be given without leave. (at p319)

19. In our opinion, the cases to which we have referred provide authority for the proposition that there is an inherent power in the court to control the bringing of applications in the course of an action of which the court is seized for the purpose of preventing a party abusing the process of the court. When positive provisions directed to the same end have been made by statute or by rules of court, it may be necessary to consider whether the inherent power has been wholly or partly superseded. But, in our opinion, the power by virtue of which the applicant seeks to obtain an order that no applications in existing proceedings should be made without leave has not been abrogated by the rules of court. The words "other proceeding in the Court" at the end of r. 6(1) should be construed, in our opinion, as referring to an original proceeding, rather than to an interlocutory proceeding in a matter which has already been initiated: see the definition of "suit" in O. 1, r. 5 of the Rules. On this view, there is no overlapping of the power conferred by r. 6(1) and the inherent power now being considered. (at p320)

20. In our opinion, we should hold that the Court has power to make an order in this application, in so far as the application relates to the bringing of applications in existing proceedings, but not otherwise. (at p320)

21. However, during the period we have had our decision in this matter under reservation, the appeal from the Justice of this Court, to which the applicant was respondent, has been heard and dismissed. Any occasion for an order in relation to these proceedings has thus passed. (at p320)

22. In the circumstances, we shall make no order beyond dismissing the application. (at p320)

Orders

Application dismissed.