Freeman v National Australia Bank Ltd - [2006] FCAFC 67

FEDERAL COURT OF AUSTRALIA
Freeman v National Australia Bank Ltd [2006] FCAFC 67
National Australia Bank Ltd v Freeman [2005] FCA 1895 cited
Ramsey v Skyring (1999) 164 ALR 378 applied
Attorney‑General v Wentworth (1988) 14 NSWLR 481 cited
Jones v Skyring (1992) 66 ALJR 810 cited
Hunters Hill Municipal Council v Pedler [1976] 1 NSWLR 478 cited
Commonwealth Bank of Australia v Heinrich [2003] FCA 540 cited
Horvath v Commonwealth Bank of Australia [1999] FCA 504 cited
Granich & Associates v Yap [2004] FCA 1567 cited
Rajski v Powell (1987) 11 NSWLR 522 considered
Cummings v Claremont Petroleum NL (1996) 185 CLR 124 cited
LYNTON NOEL CHARLES FREEMAN (A BANKRUPT) v NATIONAL AUSTRALIA BANK LIMITED and MATTHEW LESLIE JOINER and PHILIP GREGORY JEFFERSON, TRUSTEES IN BANKRUPTCY OF THE PROPERTY OF LYNTON NOEL CHARLES FREEMAN
QUD 3 OF 2006
SUNDBERG, KENNY AND GYLES JJ
19 MAY 2006
BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

QUD 3 OF 2006

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

LYNTON NOEL CHARLES FREEMAN (A BANKRUPT)
APPELLANT

AND:

NATIONAL AUSTRALIA BANK LIMITED (ACN 004 044 937)
FIRST RESPONDENT

MATTHEW LESLIE JOINER and PHILIP GREGORY JEFFERSON, TRUSTEES IN BANKRUPTCY OF THE PROPERTY OF LYNTON NOEL CHARLES FREEMAN
SECOND RESPONDENT

JUDGES:

SUNDBERG, KENNY AND GYLES JJ

DATE OF ORDER:

19 MAY 2006

WHERE MADE:

BRISBANE

THE COURT ORDERS THAT:
1.The appeal be dismissed.
2.The appellant pay the respondents’ costs of the appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

QUD 3 OF 2006

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

LYNTON NOEL CHARLES FREEMAN (A BANKRUPT)
APPELLANT

AND:

NATIONAL AUSTRALIA BANK LIMITED (ACN 004 044 937)
FIRST RESPONDENT

MATTHEW LESLIE JOINER and PHILIP GREGORY JEFFERSON, TRUSTEES IN BANKRUPTCY OF THE PROPERTY OF LYNTON NOEL CHARLES FREEMAN
SECOND RESPONDENT

JUDGES:

SUNDBERG, KENNY AND GYLES JJ

DATE:

19 MAY 2006

PLACE:

BRISBANE

REASONS FOR JUDGMENT
SUNDBERG AND KENNY JJ
THE ORDERS APPEALED FROM

On the application of the respondents under Order 21 rule 2 of the Federal Court Rules Spender J made the following orders, amongst others, affecting the appellant, from which he now appeals:
“1.Mr Freeman shall not, without the leave of the Court, commence in this Court any proceeding against the National Australia Bank Ltd (‘the Bank’) or against Matthew Leslie Joiner and Philip Gregory Jefferson, the respondent’s Trustees in Bankruptcy (‘the Trustees’), or against both the Bank and the Trustees, or any of their servants, officers, agents or employees, other than an appeal against this order.
2.Any proceeding initiated by Mr Freeman in the Federal Court of Australia against the Bank or the Trustees prior to the making of this order shall not be continued by Mr Freeman without the leave of the Court, other than an appeal against these orders.”
See National Australia Bank Ltd v Freeman [2005] FCA…

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.

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Details

Case: [2006] FCAFC 67
Decision Date: 19 May 2006

CaseChat Overview and Summary

In Freeman v National Australia Bank Ltd, the appellant, Mr. Freeman, appealed against orders made by Spender J in the Federal Court of Australia. These orders prohibited Mr. Freeman from initiating or continuing proceedings against the National Australia Bank Ltd (the Bank) and the respondents' Trustees in Bankruptcy, Matthew Leslie Joiner and Philip Gregory Jefferson, without the leave of the Court. The orders stemmed from a mediation agreement executed between Mr. Freeman and the Bank in December 1997, which established a $1,020,000 bill facility due for repayment on 6 April 1998. The agreement required Mr. Freeman to use his best efforts to refinance the Bank's debt or sell a property called "Glassford Vale," which was mortgaged to the Bank, by 4 March 1998, with settlement to be completed by 6 April 1998. The mediation agreement also included a release provision, whereby Mr. Freeman released the Bank from claims he had or might have had against it in respect of various matters.

The primary legal issues the court had to decide were whether the orders made by Spender J were justified and whether they appropriately restricted Mr. Freeman's ability to commence or continue proceedings against the Bank and the Trustees in Bankruptcy. The court had to consider the terms of the mediation agreement, the nature of the orders, and whether they were necessary to prevent an abuse of the judicial process. In his decision, Spender J found that the orders were appropriate, given Mr. Freeman's history of vexatious litigation and the potential for further abuse of the judicial process. The court also had to determine whether Mr. Freeman's claims were without merit and whether the orders were proportionate to the perceived risk of abuse.

Spender J dismissed Mr. Freeman's appeal and upheld the orders made against him. The court found that the orders were justified, as Mr. Freeman had a history of vexatious litigation and had failed to comply with the terms of the mediation agreement. The court held that the orders were necessary to prevent an abuse of the judicial process and to protect the respondents from further litigation that was likely to be without merit. The court also found that Mr. Freeman's claims were without merit and that the orders were proportionate to the perceived risk of abuse. As a result, the appeal was dismissed, and Mr. Freeman was ordered to pay the respondents' costs of the appeal.

Orders

Orders of the court

1. The appeal be dismissed.

2. The appellant pay the respondents’ costs of the appeal.

Background

Background to the litigation

On the application of the respondents under Order 21 rule 2 of the Federal Court Rules Spender J made the following orders, amongst others, affecting the appellant, from which he now appeals:“1.Mr Freeman shall not, without the leave of the Court, commence in this Court any proceeding against the National Australia Bank Ltd (‘the Bank’) or against Matthew Leslie Joiner and Philip Gregory Jefferson, the respondent’s Trustees in Bankruptcy (‘the Trustees’), or against both the Bank and the Trustees, or any of their servants, officers, agents or employees, other than an appeal against this order.2.Any proceeding initiated by Mr Freeman in the Federal Court of Australia against the Bank or the Trustees prior to the making of this order shall not be continued by Mr Freeman without the leave of the Court, other than an appeal against these orders.”See National Australia Bank Ltd v Freeman [2005] FCA 1895. Spender J features in earlier stages of the appellant’s curial history. In order to avoid confusion we will refer to his Honour as “the primary judge” in relation to his involvement in the judgment under appeal, and as Spender J in other contexts.BACKGROUND The following account of the events upon which the respondents based their application, and which founded the primary judge’s orders, is taken from his Honour’s reasons. The appellant disputed the completeness of the primary judge’s recital of some of the background facts. However, as will appear, the essential facts are not in dispute. In December 1997 a mediation took place between the appellant and the first respondent (the Bank), at which the appellant was represented by counsel and solicitors. As a result of the mediation the parties executed an agreement (the mediation agreement). The mediation agreement led to the establishment by the Bank of a bill facility of $1,020,000 in favour of the appellant which was due for repayment on 6 April 1998. By the mediation agreement the appellant agreed to use his best endeavours to refinance the Bank’s debt or to sell the property “Glassford Vale”, which was mortgaged to the Bank, by 4 March 1998. Settlement of any sale or refinancing was to be effected by 6 April 1998. The mediation agreement contained a provision by which the appellant released the Bank from claims which he had or might have had against the Bank in respect of a wide range of matters. The appellant was unable to refinance the Bank’s debt or sell Glassford Vale. On 14 May 1998 the Bank commenced proceedings (No 4013 of 1998) in the Queensland Supreme Court for possession of Glassford Vale, and for moneys owing under the expired bill facility. The appellant was represented by counsel at the hearing before Ambrose J. On 11 October 2000 his Honour gave judgment for the Bank for possession of Glassford Vale, and for $1,427,890.08, and awarded indemnity costs against the appellant. He rejected the appellant’s claim that he was mentally incompetent when the mediation agreement was entered into, found that the release was effective to protect the Bank from all the claims made by the appellant in his counter claim in the proceeding, and held that in any event the appellant had no real prospect of establishing those claims.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

SUNDBERG, KENNY AND GYLES JJ

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: SUNDBERG, KENNY AND GYLES JJ

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QUD 3 OF 2006

JUDGES:	SUNDBERG, KENNY AND GYLES JJ
DATE OF ORDER:	19 MAY 2006
WHERE MADE:	BRISBANE

JUDGES:	SUNDBERG, KENNY AND GYLES JJ
DATE:	19 MAY 2006
PLACE:	BRISBANE