SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
GARRETT & ANOR v MILDARA BLASS LTD & ORS; ATTORNEY-GENERAL FOR THE STATE OF SOUTH AUSTRALIA v GARRETT
[2009] SASC 19
Judgment of The Honourable Justice Layton
30 January 2009
PROCEDURE - JUDGMENTS AND ORDERS - AMENDING, VARYING AND SETTING ASIDE - VARIATION AND SETTING ASIDE OF CONSENT JUDGMENT
Three applications in two actions heard concurrently - evidence in one application was evidence in all applications.
First application by the second plaintiff to set aside and re-open a consent judgment - whether second plaintiff had standing to bring the application - whether an alleged breach of the Deed of Settlement which is linked to the entering of a consent judgment could give rise to setting aside the consent judgment.
Held: second plaintiff had no standing to bring application - there was no basis upon which the deed of settlement was rendered void or voidable - it was out of time and not all parties were represented - there was no basis for an application of Rule 84.12 of the Supreme Court Rules 1987 - the justice of the case did not require setting aside the order - application was instituted vexatiously - application dismissed.
EQUITY - EQUITABLE REMEDIES - INJUNCTIONS - INJUNCTIONS FOR PARTICULAR PURPOSES - TO RESTRAIN LEGAL PROCEEDINGS
Second application by first defendant for a declaration pursuant to s 39 of the Supreme Court Act 1935 that Andrew Morton Garrett has persistently instituted vexatious proceedings - orders sought that the litigant be prohibited from instituting proceedings against first defendant and related entities without the leave of the Court and a permanent stay of the action - whether previous declaration that the litigant had persistently instituted vexatious proceedings against National Australia Bank amounted to a declaration in rem so that no further declaration was necessary and the Court would only be required to extend or broaden the scope of the orders.
Held: previous declaration and orders were orders made in personam - a s 39 declaration still required - however previous declaration and orders are relevant in a later application and to the exercise of discretion - orders granted.
Third application by Attorney-General for a declaration pursuant to s 39 of the Supreme Court Act 1935 that Andrew Morton Garrett has persistently instituted vexatious proceedings - orders sought that the litigant be prohibited from instituting proceedings in any court of South Australia without the leave of the Court - whether litigant has "instituted proceedings" for the purposes of s 39 when they have been rejected for filing by the Court - whether the filing of interlocutory proceedings in an action may be regarded as "instituting proceedings" for the purposes of s 39 - whether a defendant can be a vexatious litigant even if proceedings not instituted in their own name.
Held: given the broad context and purpose of s 39, proceedings have been instituted if they have been lodged for the purpose of filing but have been rejected pursuant to Rule 53 of the Supreme Court Rules 2006 - an interlocutory proceeding which seeks substantive relief may amount to the institution of proceedings - a defendant can institute vexatious proceedings even when they have not been instituted in the defendant's own name - declaration made and orders granted in the terms sought by Attorney-General.
Supreme Court Act 1935 (SA) s 39; Supreme Court (Civil) Rules 2006 (SA); Limitation of Actions Act 1936 (SA) s 35; Trustee Act 1936 (SA) s 15; Real Property Act 1886 (SA) s 192; Criminal Law Consolidation Act 1935 (SA), referred to.
Just, in Estate of (No 1) (1973) 7 SASR 508; Andrew Garrett Wines Resorts Pty Ltd & Anor v National Australia Bank Ltd & Other Actions (2007) 248 LSJS 349; PE Bakers Pty Ltd & Ors v Yehuda & Anor (1988) 15 NSWLR 437; Andrew Garrett Wines Resorts Pty Ltd & Anor v National Australia Bank Ltd & Ors [2006] SASC 381; Miller v Cameron (1936) 54 CLR 572; Cameron v Cole (1944) 68 CLR 571; Harvey v Phillips (1956) 95 CLR 235; Mohtar v Mohtar and Seputis (1998) 146 LSJS 377; Commonwealth Bank of Australia v Forshaw (1990) 55 SASR 247; Andrew Garrett Wine Resorts Pty Ltd & Anor v National Australia Bank Ltd & Anor (No 2) [2004] SASC 229; Tierney v Wood (1854) 52 ER 377; Comptroller of Stamps (Victoria) v Howard Smith (1936) 54 CLR 614; Garrett v Foster's Wines Estates Ltd [2007] FCA 253; Kay v Attorney-General for the State of Victoria [2000] 2 VR 436; Mitsubishi Motors Australia Ltd v Kowalski [2005] SASC 154; Attorney-General for the State of South Australia v Piepkorn [2005] SASC 425; Attorney-General v Collier [2001] NZAR 137; Hunters Hill Municipal Council v Pedlar [1976] 1 NSWLR 478; Attorney-General for the State of Victoria v Weston [2004] VSC 314; Attorney-General v Wentworth (1988) 14 NSWLR 481; Valassis v South Sydney City Council (1996) 92 LGERA 275; Attorney-General (NSW) v Solomon (1987) 8 NSWLR 667, applied.
Jones v Skyring (1992) 66 ALJR 810; Attorney-General (Vic) v Horvath Senior [2001] VSC 269, distinguished.
Industrial Mutual Liability Pty Ltd & Ors v International Vineyards Pty Ltd (No 1) [2005] SASC 153; Industrial Mutual Liability Pty Ltd & Ors v International Vineyards Pty Ltd & Ors (No 2) [2005] SASC 238; Evajade Pty Ltd & Ors v Cockatoo Ridge Wines Ltd & Ors (No 2) [2005] SASC 237; IML Pty Ltd & Ors v International Vineyards Pty Ltd & Ors [2005] SASC 396; IML P/L & Ors v International Vineyards P/L & Ors (No 3) [2006] SASC 11; IML P/L & Ors v International Vineyards P/L & Ors [2006] SASC 310; Evajade Pty Ltd & Ors v Cockatoo Ridge Wines Limited [2005] SASC 152; Andrew Garrett Wine Resorts Pty Ltd & Anor v National Australia Bank Limited and Other Actions [2006] SASC 38; Sunburst Properties Pty Ltd (in liq) v Agwater Pty Ltd & Ors [2005] SASC 335; Garrett v Macks [2006] FCA 601; Garrett v Tseng [2007] FCA 93; Garrett v Foster's Wine Estates Ltd [2007] FCA 253; Garrett v Rann [2007] FCA 528; Garrett v National Australia Bank [2007] FCA 530; Garrett v Westpac Banking Corporation [2007] FCA 439, considered.
GARRETT & ANOR v MILDARA BLASS LTD & ORS; ATTORNEY-GENERAL FOR THE STATE OF SOUTH AUSTRALIA v GARRETT
[2009] SASC 19TABLE OF CONTENTS
Introduction
Preliminary IssuesEffect of declaration by Anderson J in Action Number SCCIV-04-127 (“Action 127 of 2004”)
Mr Garrett’s standingMr Garrett as Appointor of the GFT
Mr Garrett as Sole Trustee of the GFT
Application by Mr Garrett to re-open Action 2244 of 1996
Alleged breaches by FWE of the Deed of Settlement generally and whether the consent order is void or voidable
Whether the AGFT No 3 was entitled to the income stream
Purported termination of the Deed of Settlement
Whether the income stream should not have been paid into courtConclusion on Mr Garrett’s Application to re-open
Vexatious proceedings – the law
Meaning of “vexatious”
Meaning of “instituting proceedings”
Meaning of “ persistently”
Attempt to file proceedingsThe Attorney-General’s application
Action Number SCCIV-04-247, IML Pty Ltd and Ors v International Vineyards Pty Ltd and Ors (“Action 247 of 2004”)FDN 22 – Notice for Specific Directions
Conclusion
FDN 24 – Notice for Specific Directions
Conclusion
FDN 40 – Notice for Specific Directions
Conclusion
FDN 56 – First Defence and Counterclaim
Conclusion
FDN 63 – Notice for Specific Directions
Conclusion
FDN 71 – Notice for Specific Directions
Conclusion
FDN 127 – Second Defence and Counterclaim
Conclusion
FDN 122 and FDN 124 – Notices for Specific Directions
Conclusion
FDN 125 and FDN 126 – Notices to Produce
Conclusion
FDN 138 – Notice for Specific Directions
Conclusion
FDN 168 – Notice for Specific Directions
Conclusion
Action Number SSCIV-05-57, Bruce James Carter and John Ronald Hart v Andrew Kenneth Sandow (“Action 57 of 2005”)
FDN 4 – Notice for Specific Directions
Conclusion
FDN 14 – Notice for Specific Directions
Conclusion
FDN 15 – Defence and Counterclaim
Conclusion
FDN 16 – Notice for Specific Directions
Conclusion
Action Number DCCIV-05-78, J&W Holdings Pty Ltd v Shey Ashley Fair (“Action 78 of 2005”)
FDN 2 – Interlocutory Summons
Conclusion
Action Number DCCIV-05-145, Evajade Pty Ltd & Ors v Advertiser Newspapers Limited (“Action 145 of 2005”)
Conclusion
Action Number SCCIV-05-257, Evajade Pty Ltd & Ors v Cockatoo Ridge Wines Ltd & Ors (“Action 257 of 2005”)
Conclusion
Action Number SCCIV-05-422, Evajade Pty Ltd & Ors v The Registrar-General and Ors (“Action 422 of 2005”)
FDN 1 and FDN 3 – Summons and Notice for Specific Directions
Conclusion
FDN 29 – Notice of Appeal
Conclusion
FDN 34 – Application for Leave to Appeal
Conclusion
Action Number SCCIV-05-423, Phoenix Rising Vineyards Pty Ltd & Ors v The Registrar-General & Ors (“Action 423 of 2005”)
FDN 1 and FDN 3 – Summons and Notice for Specific Directions
Conclusion
FDN 22 – Notice of Appeal
Conclusion
FDN 27 – Application for Leave to Appeal
Conclusion
Action Number DCCIV-05-1443, Andrew Morton Garrett v Shey Ashley Fair (“Action 1443 of 2005”)
Conclusion
Action Number SCCIV-06-590, Andrew Morton Garrett v Sunburst Properties Pty Ltd & Anor (“Action 590 of 2006”)
FDN 10 – Notice for Specific Directions
Conclusion
FDN 1 – Summons
Conclusion
Action Number AMC-06-7132, Andrew Morton Garrett v Shey Ashley Fair, Jan Fair and Noel Pugsley (“Action 7132 of 2006”)
Conclusion
Action Number AMC-06-7625, Andrew Morton Garrett v Shey Ashley Fair, Jane Fair and Noel Pugsley (“Action 7625 of 2006”) and Action Number AMC-06-7624, Andrew Morton Garrett v Shey Ashley Fair, Jane Fair and Noel Pugsley (“Action 7624 of 2006”)
Conclusion
Action Number AMC-07-780, Andrew Morton Garrett v Stephen James Duncan & Ors (“Action 780 of 2007”)
Conclusion
Attempted Filing of Proceedings
Action 127 of 2004“Notice for Specific Directions ‘Application for Leave to File this Notice re Contempt of Court’” – 14 October 2007
Conclusion
“Cross Action (Counterclaim) ‘Application for Leave to File & Serve this Cross Action’” and “Notice for Specific Directions ‘Application for Leave to File this Application to Join Parties’” – 30 October 2007
Conclusion
Action 1342 of 2007
“Cross Action (Counterclaim) ‘A Case in the Public Interest’ ‘Application for Leave to File & Serve this Cross Action’” and “Notice for Specific Directions – ‘A Case in the Public Interest’ ‘Application for Leave to File this Application to Join Parties’” – 5 November 2007
Conclusion
Concluding summary of proceedings instituted by Mr Garrett within the jurisdiction of the State of South Australia
Federal Court Proceedings
Application by FWEWhether proceedings were instituted “persistently”
Orders
Action 2244 of 1996
Action 1342 of 2007Introduction
There are three applications before me. The first is a Notice for Specific Directions filed on 3 May 2007 by Andrew Morton Garrett in Action Number SCCIV-96-2244 (“Action 2244 of 1996”). Mr Garrett seeks, inter alia, to re-open and set aside the judgment entered in that action.
The second is an application which was filed on 27 June 2007 by the first defendant, Mildara Blass Limited (“Mildara Blass”), now known as Foster’s Wine Estates Ltd (“FWE”), in Action 2244 of 1996. The Notice for Specific Directions seeks orders, pursuant to s 39 of the Supreme Court Act 1935 (SA) (“the Act”), that Mr Garrett be declared a vexatious litigant, that he be prohibited from instituting any proceedings with respect to FWE and related entities without the leave of the Court, and a permanent stay of the proceedings issued by Mr Garrett in Action 2244 of 1996.
The third is an application filed on 10 October 2007 in Action Number SCCIV-07-1342 (“Action 1342 of 2007”), instituted by the Attorney-General for the State of South Australia against Mr Garrett pursuant to s 39 of the Act. This application seeks, inter alia, a declaration that Mr Garrett has persistently issued vexatious proceedings, and an order that he be prohibited from instituting any proceedings in any court without permission of the Court.
On 16 November 2007, I made an order that the applications in Action 2244 of 1996 be listed for hearing concurrently with Action 1342 of 2007. I also made an order that the applications should be heard both as to evidence and submissions, in the following order: first, the Attorney-General’s application in Action 1342 of 2007; second, the application by FWE in Action 2244 of 1996; and, lastly, Mr Garrett’s application to re-open in Action 2244 of 1996. I also ordered that, subject to relevance, the evidence adduced and submissions made in Action 1342 of 2007 be treated as evidence and submissions in the applications by the first defendant and second plaintiff in Action 2244 of 1996, and vice versa.
At the hearing, Mr Livesey QC, counsel for FWE, identified and made submissions with respect to two preliminary matters, namely:
·the effect of the declaration made by Anderson J on 17 May 2007 that Mr Garrett had persistently instituted vexatious proceedings as defined by s 39 of the Act; and
·Mr Garrett’s standing to take out the application in Action 2244 of 1996.
I will deal with these preliminary issues before moving on to the substantive matters which I will then deal with in the following order:
·the application made by Mr Garrett to re-open Action 2244 of 1996;
·the application made by the Attorney-General pursuant to s 39 of the Act;
·the application made by FWE pursuant to s 39 of the Act.
Preliminary Issues
Effect of declaration by Anderson J in Action Number SCCIV-04-127 (“Action 127 of 2004”)
On 17 May 2007 Anderson J, in Action 127 of 2004, made a declaration pursuant to s 39 of the Act that Mr Garrett had “persistently instituted vexatious proceedings” in response to an application made by the National Australia Bank (“the NAB”).[1] Mr Livesey submitted that as a consequence of that declaration, this Court is not required to make another declaration to the same effect with respect to the current applications made by FWE and the Attorney-General. Instead, the Court is only required to consider whether or not to broaden the scope of the orders made by Anderson J to include the orders sought in these applications.
[1] Andrew Garrett Wines Resorts Pty Ltd & Anor v National Australia Bank Ltd & Other Actions (2007) 248 LSJS 349, 382.
Mr Livesey’s essential argument was that the declaration made by Anderson J was not merely a declaration in personam but a declaration in rem. He submitted that by virtue of s 39(3), a declaration under s 39(1) declares the status of a person both at that time and in the future. Thus, where there is already an existing order, it is unnecessary for the Court to make a further declaration. Instead, the only issue on a subsequent application is whether further orders should extend the scope of the prohibition ordered by Anderson J to include FWE and related entities.
Section 39 relevantly provides as follows:
39 - Vexatious proceedings
(1) If, on the application of the Attorney-General or any other interested person, the court is satisfied that a person has persistently instituted vexatious proceedings, the court may make either or both of the following orders:
(a) an order prohibiting the person by whom the vexatious proceedings were instituted from instituting further proceedings, or further proceedings of a particular class, without permission of the court;
(b) an order staying proceedings already instituted by that person.
(2) Where it appears to a prescribed court that there are proper grounds for an application under this section, it may refer the matter to the Attorney-General for consideration.
(3) An order under this section remains in force (subject to variation by the court)—
(a) if a period for the operation of the order is fixed—until the expiration of that period or the revocation of the order (whichever first occurs);
(b) if no such period is fixed—until revocation of the order.
(4) Where an order is made under this section, a copy of the order must be published in the Gazette.
(5) For the purposes of this section, proceedings are vexatious—
(a) if instituted to harass or annoy, to cause delay, or for any other ulterior purpose; or
(b) if instituted without reasonable ground.
(6) In this section—
prescribed court means—
(a) the Supreme Court; or
(b) any other court of the State; or
(c) the Workers Compensation Tribunal; or
(d) any other tribunal of the State prescribed by the regulations;
proceedings means civil or criminal proceedings instituted in a prescribed court.
Section 39 requires a two-step process. First, the Court has to be satisfied that a person has persistently instituted vexatious proceedings and make a declaration to this effect. The second step requires the Court to exercise a discretion whether to make orders restraining the person from instituting further proceedings against a named person(s) and/or permanently staying existing proceedings. Any orders made by the Court remain in force for a prescribed period or, alternatively, if no period is prescribed, until the Court revokes the orders.
In Action 127 of 2004 the NAB successfully sought and obtained orders, inter alia, in the following terms:[2]
2.I make a declaration that Andrew Morton Garrett has persistently instituted vexatious proceedings as defined by s 39(1) of the Supreme Court Act.
3.I make the orders that Mr Garrett should be prohibited from:
a) instituting in his own name;
b) causing others to institute; or
c) being concerned whether directly or indirectly in the institution of any proceedings in any Court of the State of South Australia against National Australia Bank or Sunburst Properties Pty Ltd (Receivers & Managers Appointed) (In Liquidation), Sunburst Properties or any related body corporate, officer, employee, agent, adviser, receiver, receiver and manager, or liquidator, or any of their partners or staff, including any former employee, agent, adviser, receiver, receiver and manager, or liquidator, or any of their partners or staff of the defendant or Sunburst, without the leave of this Court.
[2] South Australian Government Gazette, 24 May 2007, 2149, as contained within the Affidavit of Jane Maria Rusalen sworn 9 October 2007 at JMR 3.
In support of his argument that the declaration made by Anderson J was a declaration in rem, Mr Livesey relied on Hope JA’s reasoning in P E Bakers Pty Ltd & Ors v Yehuda & Anor.[3] His Honour stated:[4]
For relevant purposes judicial decisions are commonly divided into judgments in rem and judgments in personam. Estoppels resulting from judgments in personam bind only the parties to the proceedings and their privies; they do not bind other parties who may re-litigate the same issues in other proceedings. On the other hand estoppels arising from judgments in rem bind the whole world, although the estoppels do not extend to every issue decided in the proceedings.
In Spencer-Bower and Turner, Res Judicata, 2nd ed (1969) at 213, the following statement is made as to the nature of a judgment in rem:
“A judicial decision in rem is one which declares, defines, or otherwise determines the status of a person, or of a thing, that is to say, the jural relation of the person, or thing, to the world generally, and therefore is conclusive for, or against, everybody, as distinct from those decisions which purport to determine the jural relation of the parties only to one another, and their personal rights and equities inter se, and which, therefore, are commonly termed decisions in personam.”
There are many examples of judgments in rem in the books. Sometimes the judgment creates or changes the status or creates a new right in respect of the person or thing. Thus, assuming jurisdiction, the judgment of a divorce court dissolving a marriage: Bater v Bater [1906] P 209, a decision of a licensing court to grant a licence to sell liquor in respect of specified premises: Washington H Soul Pattinson & Co Ltd v Ogilvy (1954) 55 SR (NSW) 143; 72 WN 87, and a judgment of the Admiralty Court establishing a lien: Ballantyne v Mackinnon [1896] 2 QB 455, are examples of judgments in rem which create or sometimes, on one view, destroy a status. However the concept is not limited to judgments of this kind; declaratory judgments can be judgments in rem. Thus a decision of justices, having power so to do, affirming the existence of a public road: Wakefield Corporation v Cooke [1903] 1 KB 417; affirmed [1904] AC 31, and a decree of nullity by a divorce court; Salvesen (or Von Lorang) v Austrian Property Administrator [1927] AC 641, are essentially declaratory decisions, but nonetheless are and have the effect of judgments in rem. [emphasis added]
[3] (1988) 15 NSWLR 437.
[4] P E Bakers Pty Ltd & Ors v Yehuda & Anor (1988) 15 NSWLR 437, 442.
Mr Livesey submitted that following the reasoning of Hope JA, declarations such as those made pursuant to s 39 of the Act are orders in rem, which bind the whole world. It is a declaration to the world generally that a person has persistently instituted proceedings and this status applies from the time of the declaration and into the future. Further, orders made under s 39 are required to be published in the Government Gazette,[5] which emphasises the public nature of the declaration and subsequent orders. On Mr Livesey’s submission, the declaration and orders made by Anderson J were therefore still in force.[6] There was no need to again make a declaration that Mr Garrett had persistently instituted vexatious proceedings either in relation to the application made by FWE or by the Attorney-General.
[5] Supreme Court Act1935 (SA) s 39(4).
[6] T 8.
Mr Mackintosh, counsel for the Attorney-General, submitted that although there was much to commend in the argument of Mr Livesey,[7] nevertheless, I should proceed to hear the application in Action 1342 of 2007 and determine whether a declaration should be made on the material adduced in that action. He pointed to the fact that the material before Anderson J was different from that on which the Attorney-General sought to rely. A further practical aspect was that the judgment of Anderson J was subject to a notice of appeal by Mr Garrett to the Full Court.[8]
[7] T 16.
[8] T 18.
In considering these arguments I note that while a person who is the subject of a declaration and orders made under s 39 is often thereafter referred to for convenience as a “vexatious litigant”, this does not render such a description to become the “status” of the person. The declaration is the first step which leads to the relief sought by the applicant. Section 39 involves a declaration that a person has persistently instituted vexatious proceedings based on the evidence before the Court. The orders made are dependent on the circumstances in which proceedings have been instituted, by whom an application is brought, and the extent to which orders should be made to prevent further proceedings being instituted. If orders are sought upon the application of an “interested person” rather than the Attorney-General, necessarily, evidence is presented concerning litigation instituted against that party and any orders are crafted to protect the interests of that person and any related parties, associates or affiliates. This process does not, in my view, determine the “status” of the person to the world at large, nor do the orders bind the world at large, only the parties are bound; their personal rights and equities. Such orders do not prevent the person the subject of a s 39 declaration from instituting proceedings against other parties. It depends upon the scope of the orders made.
The publication in the Government Gazette is a commonly used and useful tool for promulgating information to the public. In the case of s 39 proceedings, it would include orders obtained by the Attorney-General, which by their nature are likely to be broad in scope, as well as orders which are obtained by an interested person. Particularly in the former situation, an order may be made by a court which provides protection for a class of persons who may not otherwise know of that protection.
The examples given by Hope JA of declaratory judgments involving individual parties being characterised as judgments in rem, were a declaration of a public road and a decree of nullity of a marriage. These judgments by reason of their nature and topic affect not merely the parties, but have relevance to and impact on the public at large. They differ markedly from a declaration that a particular defendant has vexatiously instituted proceedings against a named plaintiff.
In my view, the declaration and orders made by Anderson J in respect of the NAB, together with their subsequent publication in the Government Gazette, do not alter the character of the action as being an action and judgment in personam. I reject the argument of Mr Livesey that the declaration renders it unnecessary for FWE, or indeed the Attorney-General, to obtain a declaration in a separate application.
At the same time, the existence of an earlier s 39 declaration and related orders may be relevant in subsequent proceedings against the same litigant in deciding whether proceedings have been instituted vexatiously and in particular, whether the litigant has persistently instituted such proceedings. Earlier proceedings may be relevant, for example, as to whether proceedings issued by the litigant against other parties have been instituted on reasonable grounds; or perhaps for an ulterior purpose; or there may be a pattern or connection by subject matter or type of action; or they may involve related parties.
Mr Garrett’s standing
The second preliminary issue concerns Mr Garrett’s standing. Unlike the first preliminary issue, this second issue affects FWE only in respect of Action 2244 of 1996.
Mr Livesey submitted that Mr Garrett lacked standing to bring the application for two reasons. First, he was an undischarged bankrupt, and second, Mr Garrett was unable to satisfy the Court that he had been validly appointed as the sole trustee of the Garrett Family Trust (“GFT”) and was therefore unable to establish standing in the capacity as trustee of the GFT.
Mr Garrett has been an undischarged bankrupt since 24 September 2004. His status as a bankrupt was due to expire in 2007, but Mr Garrett’s bankrupt status has been extended to 24 November 2012.[9]
[9] Affidavit of Jane Maria Rusalen sworn 9 October 2007, JMR 24.
Mr Livesey made reference to a judgment handed down by Anderson J in Andrew Garrett Wines Resorts Pty Ltd & Anor v National Australia Bank Ltd & Ors.[10]In his reasons, his Honour summarised a number of earlier decisions given by the Court in which Mr Garrett had been found to lack standing both in his personal capacity or as trustee of various trusts. In particular, Anderson J concluded that bankruptcy per se was prima facie evidence that Mr Garrett was unfit to act as a trustee and he therefore lacked standing to appear on behalf of the defendant by counterclaim and as an appellant.
Anderson J reasoned as follows:[11]
[Mr Garrett] is an undischarged bankrupt. On his own admission, he is not able to act as a director of a company. His submission that he appears as a trustee of a trust is not valid and is not in accordance with the rules of this court. I would not grant Mr Garrett leave to appear on this basis. Further, if Mr Garrett were to act as trustee of a trust, it is likely that a court would find cause for his removal from such a position purely because of his bankrupt status and the undesirability of having him act as trustee having regard to the circumstances in which he seeks to control the trust. (See In re Barker’s Trusts [1875] 1 Ch D 43). In Re Matheson; ex parte Worrell v Matheson (1994) 121 ALR 605, Spender J at 614 said:
These are cases which suggest that bankruptcy of a trustee per se is sufficient ground to show, prima facie, that a trustee is “unfit to act” as a trustee for the purposes of s 12 of the Trusts Act, (see Chambers v Jones (1902) 2 SR (NSW) 177.
A H Simpson CJ in Eq at 182 said:
…I think the principles deducible from the above cases are the following: Bankruptcy prima facie renders a trustee unfit to act for two reasons – first, because the fact of bankruptcy is prima facie evidence that the bankrupt is a person who has been improvident or unwise to act in the management of other people’s business; and secondly, because it shows that the person who is bankrupt is not a person of small or no means, “and a necessitous man is more likely to be tempted to misappropriate trust funds than one who is wealthy”: Per Jessel MR, Re Barker’s Trusts (1875) 1 Ch D 43.
This is, of course, only prima facie evidence, and the bankrupt may be able to rebut both presumptions:…
In my opinion, the principles are clear. Having considered the circumstances, I do not think that it is appropriate for Mr Garrett to act as a trustee of a trust.
[11] Ibid, [21]-[22].
His Honour summarised Mr Garrett’s position as follows:[12]
It is not appropriate to allow Mr Garrett to continue to assert that he appears pursuant to the rules for the reasons which I have set out earlier. He cannot continue to lodge appeals and file documents in his personal capacity when a trustee of his bankrupt estate has been appointed and does not consent to such a course of action. Mr Garrett has been told numerous times by different Judges that he does not have valid standing and that he cannot continue to bring actions and lodge appeals without recognised standing. The other parties to this action, namely, the liquidators appointed for Andrew Garrett Wines Resorts P/L, discontinued action 127-04 on 20 September 2005 (FDN 194). A trustee in bankruptcy has been appointed for Mrs Averil Gay Garrett. That trustee has also elected not to assume the conduct of this action. Further, NAB’s counterclaims against Andrew Garrett Wines Resorts P/L, Mrs Garrett and Mr Garrett have been stayed by operation of the Corporations Act and the Bankruptcy Act. It is for these reasons that Mr Garrett does not have standing. If this action is still on foot, it is for all relevant purposes, moribund.
[12] Ibid, [24].
Mr Mackintosh submitted that the Attorney-General agreed with FWE’s submissions.[13]
[13] T 18.
The approach taken by Anderson J is in accordance with the view expressed by the High Court in Miller v Cameron.[14] The High Court was considering an appeal against a decision to remove a sole trustee from a trust. In affirming the decision, Latham CJ stated:[15]
It has long been settled that, in determining whether or not it is proper to remove a trustee, the Court will regard the welfare of the beneficiaries as the dominant consideration. Perhaps the principal element in the welfare of the beneficiaries is to be found in the safety of the trust estate. Accordingly, even though he has been guilty of no misconduct, if a trustee is in a position so impecunious that he would be subject to a particularly strong temptation to misapply the trust funds, the Court may properly remove him from his office as trustee. No distinction in this connection can be drawn between a bankruptcy and an assignment for the benefit of creditors. A trustee who becomes bankrupt is removed almost as of course. There may be exceptions under special circumstances to this rule, but the rule is generally applied. If the bankruptcy is explained by financial misfortune without moral fault and the trustee has recovered from pecuniary distress he may be allowed to retain his office. [citations omitted]
[14] (1936) 54 CLR 572.
[15] Miller v Cameron (1936) 54 CLR 572, 575
Applying these principles to the case at bar, the fact that Mr Garrett is an undischarged bankrupt is prima facie a circumstance which suggests that he lacks standing as a fit person to act on behalf of the trust. In this case, rather than there being other information before me which would rebut this presumption, to the contrary, the material before me confirms that he is an unfit person to act for the GFT. Despite having been told on many previous occasions that he lacked valid standing, he has continued to creatively contrive proceedings in this Court using the guise of another legal identity to air his grievances. In endeavouring to establish standing in the name of the GFT for the purpose of resurrecting Action 2244 of 1996, he is exposing the property of the GFT to the risk of detriment, including costs orders against it in the event that the application is dismissed.
I therefore conclude that Mr Garrett has no standing to bring the application to re-open Action 2244 of 1996 by reason of his bankruptcy alone.
There is, however, a second prong to the submission by FWE that Mr Garrett lacks standing, namely, that I could not be satisfied that Mr Garrett was validly appointed as sole trustee of the GFT.
Mr Garrett deposed that the original trust deed (“the Original Deed”) of the GFT “could not be located”[16] and that the Deed of Variation of the GFT dated 10 March 2007 is the relevant instrument which appointed him as sole trustee.[17]
[16] Affidavit of Andrew Morton Garrett sworn 30 April 2007, [4].
[17] Ibid, AMG 3.
The Deed of Variation is itself an unusual instrument and contains the following provisions:
·The parties to the deed are “the New Appointor”, who is named as being Andrew Morton Garrett©®; “the Trustee” who is also named as being Andrew Morton Garrett©®; and “the New Settlor” who is named as being Barbara Frances Garrett M.B.E., who is the late mother of Mr Garrett.
·The First Recital asserts that “it is acknowledged that the original Deed of the Garrett Family Trust cannot be located” and that the three parties “acknowledge that the Garrett Family Trust was settled somewhere between mid-1992 and late-1992”.[18]
[18] Ibid.
·The First Recital specifically states:[19]
[19] Ibid.
It is a common provision in the Andrew Garrett family Trust Deed (Clause 22), The Andrew Garrett Family Trust No 2 (Clause 10) & The Andrew Garrett Family Trust No 3 (Clause 10) that the original Trust Deed may be amended in whole or in part.
·Immediately after that assertion, the First Recital continues:[20]
[20] Ibid.
For the purposes of replacing or varying the original Deed Clause 22(a)(b) but not clause 22(b) of the Andrew Garrett Family Trust Deed is adopted.
“The Trustee may at any time and from time to time by Deed revoke, add to or vary all or any of the provisions of this Deed or any alteration variation or addition made hereto from time to time and may by the same or any other Deed or Deeds declare any new or other Trusts or powers concerning the Trust Funds or any part or parts thereof but not so that neither the laws of perpetuities nor the law relating to accumulation is thereby infringed and that such new or other trust powers discretions alterations or variations shall not
a.Be in favour of or for the benefit of the Settlor or result in any benefit to the settlor;
b.Affect the beneficial entitlement to ay (sic) amount set aside for or vested in any one or more of the beneficiaries prior to the date of variation alteration or addition”
·Clause 1 purports to settle a trust in the sum of $10 and states: “The trust created by this Deed is known as ‘THE GARRETT FAMILY TRUST’”.
·Clause 9 provides for variation of the deed in the following terms:
The trustee may from time to time as it thinks fit vary or add to this deed by further deed supplement or hereto but not so that any person other than a beneficiary may acquire a beneficial interest in the trust fund.
·Clause 10 provides for the appointment of new trustees. The relevant clauses are as follows:
10.1The trustee may at any time as it thinks fit resign and by instrument in writing appoint a new trustee or trustees in succession and must transfer the trust fund to such trustee or trustees.
10.2The office of a trustee will be vacated if that trustee becomes incapable of discharging his or her duties because of illness or an unsound mind or becomes bankrupt or, if the trustee is a corporation, an order is made or a resolution is passed which will have the effect of winding up the corporation with the sole exception of Andrew Morton Garrett as trustee of this Trust.
10.3An appointor has the power exercisable jointly with any other appointor from time to time by deed or will to remove a trustee from office and to appoint any person (including a corporation which is not a trustee company within the meaning of the Trustee Act 1958 as amended or re-enacted from time to time) other than an appointor to act alone or jointly with any other person as a trustee hereof. Any appointor may at any time by deed renounce any power granted thereto by this deed and when made such renunciation will be irrevocable.
[The portion in italics was added by handwritten amendment, and purports to be initialled by Mr Garrett and his mother.]
There are a number of features of the Deed of Variation to which Mr Livesey drew my attention in support of his argument.
The entity named in the Deed of Variation as being both the New Appointor and the Trustee is Andrew Morton Garrettãâ in both capacities. The Deed on its face appears to be referring to a legal entity which is either a registered trademark or the subject of copyright, rather than a person whose name is Andrew Morton Garrett.
More importantly, the document itself is inherently contradictory. It purports to be a variation of the Original Deed and yet in its own terms in clause 1, it provides for a fresh settlement in the sum of $10.
Two important features which require detailed consideration are the references to Mr Garrett being the New Appointor and also the Trustee. The appointment of an appointor or a successor of an appointor, as well as the role of an appointor in relation to appointment of trustees, are inter-related features.
Mr Garrett as Appointor of the GFT
The Deed of Variation refers to Michael Cowan Garrett, being Mr Garrett’s brother, as the Appointor of the Original Deed. The absence of the Original Deed is of critical importance in relation to the appointment of an appointor, the role of an appointor and the appointment of trustees. As a result of the absence of the Original Deed, it is not clear what the precise provisions on this topic were. The Deed of Variation purports to set out some aspects of the Original Deed, insofar as the assertions can be relied on as being accurate.
In relation to clause 22 of the GFT Deed which is purported to be adopted in the First Recital, I note the following.
·The clause in italics sets out the provisions of clause 22 of the Andrew Garrett Family Trust (“AGFT”) Deed, but is not the complete paragraph. In the AGFT Deed, clause 22 includes a further sub-clause (c) in the following terms:[21]
(c)affect the powers of the person or persons (if any) other than the Trustee hereinafter vested with the power of removing and appointing trustees hereunder.
·Clause 22 of the AGFT Deed is not simply stating that the “original Trustee Deed may be amended in whole or in part”, as asserted in the First Recital. Clause 22 contains important provisions which limit the additions or variations which may be made, being the limitations set out in clause 22(a), 22(b) and 22(c).
·The terms in which clause 22 of the AGFT Deed are sought to be adopted in the Deed of Variation are inherently contradictory. The adoption seeks to both replace “clause 22(a)(b)” but not “22(b)”. Clause 22(b) is therefore both included and excluded. This is clearly an error, but the issue is, what was intended to be adopted? There are two possibilities. One, that 22(a) alone was to be included, but not 22(b). Alternatively, that it was clause 22(c) which was intended to be adopted. Bearing in mind that 22(c) is not set out in the italicised section in the Deed of Variation, the latter interpretation is the most likely – but it is uncertain.
[21] “Affidavit of Andrew Morton Garrett” sworn 25 January 2007 at AMG 1 as contained in Affidavit of Jessamine Clare Lumley sworn 27 June 2007 at JCL-1, tab 12.
If the intendment was that clause 22(c) not be adopted, a problem then arises as to what was contained in the Original Deed. The sub-clause specifically concerns the removal and appointment of trustees by an appointor or trustee – what was the situation in the Original Deed in respect of such powers of appointment? If the AGFT Deed emulated the Original Deed, then clause 23 of the AGFT Deed which dealt with removal and appointment of trustees and appointors provided as follows:[22]
REMOVALS AND APPOINTMENTS
The following provisions shall apply to the appointment removal and retirement of trustees:-
(a)Trustees or a Trustee may be appointed or removed or may retire at any time in accordance with the law for the time being in force in the State of South Australia;
(b)all or one or more of the Trustees for the time being may be removed at any time by deed duly executed by or under the authority of MICHAEL COWAN GARRETT of 498 Greenhill Road Hazelwood Park 5066 Chartered Accountant (hereinafter in this clause called “the appointor”);
(c)the power of appointing new trustees or a new Trustee in the place of a Trustee or in addition to any existing Trustee or Trustees are vested in the appointor and may be exercised from time to time and at any time by deed duly executed by or under his authority. On making any such appointment the appointor may appoint himself as such Trustee;
(d)the appointor may by deed appoint his successor who shall have the same powers of removal and appointment of Trustees and of appointment of his successor as are hereinbefore vested in the appointor. If the appointor neglects or declines to appoint his successor during his lifetime then the said power of removal and appointment of Trustees hereinbefore conferred upon the appointor shall vest in and be exercisable by the Trustee.
[22] Ibid.
Clause 23(c) of the AGFT Deed gave Michael Garrett as Appointor of the AGFT Deed the power to appoint new trustees or a new trustee. The trustees named in the AGFT were Mr and Mrs Garrett. By virtue of clause 22(c), Mr and Mrs Garrett were also vested with the power of removing and appointing trustees to the AGFT, but only if Michael Garrett had neglected or declined to appoint his successor.
In short, on the premise that clause 22(c) of the AGFT Deed was not adopted and that the Original Deed mirrored the clause in the AGFT Deed on removals and appointments, only Michael Garrett as the Appointor was able to appoint Mr Garrett as his successor. Only Michael Garrett was able to appoint or remove trustees in the absence of him having neglected or declined to remove Mrs Garrett as a trustee.
I also note the AGFT Deed No 2 and the AGFT Deed No 3 both contain a definition clause for the term “Appointor”. Clause 2.7 of the AGFT Deed No 2 and the AGFT Deed No 3 provides as follows:[23]
“APPOINTOR” means Michael Cowan Garrett and/or such person as he solely by deed or will appoint and in the absence of any such nomination after his death, his legal personal representative or representative[s].
[23] Ibid, see AMG 5 and AMG 7.
To the extent that any clause such as this existed in the Original Deed, again it was only the Appointor who could appoint a successor by deed. Therefore, in each of the three deeds to which Mr Garrett has referred in his efforts to demonstrate the provisions of the Original Deed, only the Appointor can appoint a successor.
Exactly the same provision is mimicked in clause 1.7 of the Deed of Variation, but instead Mr Garrett is named as the Appointor. Michael Garrett is not a party to the Deed of Variation, and there was no evidence before me confirming that Michael Garrett appointed Mr Garrett, in substitution of himself, as the Appointor under the original Deed. Instead, Mr Garrett purports by the execution of the Deed of Variation to appoint himself as the appointor as well as the sole trustee of the GFT.
I am not satisfied that Mr Garrett was validly appointed as the “New Appointor” with powers to then appoint himself as sole trustee of the GFT.
Mr Garrett as Sole Trustee of the GFT
The Deed of Variation refers to there being two trustees under the Original Deed, namely Mr Garrett and his wife.[24] Mr Garrett purports to have become the sole trustee of the GFT based on the assertion in the terms of the Deed of Variation itself, as well as reliance on a document purported to be signed by Mrs Garrett on 9 March 2007, in which she tendered her “resignation as a trustee” of the GFT, to take effect from 19 March 2007.[25]
[24] Affidavit of Andrew Morton Garrett sworn 30 April 2007 at AMG 3, 1.
[25] Ibid at AMG 2.
Again, the absence of the Original Deed places uncertainty on the assertion that Mr and Mrs Garrett were both the trustees under the Original Deed. There is, however, some confirmation of this assertion contained in the Deed of Settlement dated 26 July 2000, as both Mr and Mrs Garrett are named as the trustees and appear to have signed the execution page both personally and as trustees of the GFT.[26]
[26] Ibid at AMG 4, 31.
Assuming for the purposes of argument that Mr and Mrs Garrett were the trustees under the Original Deed, the question then becomes, what were the provisions relating to resignation, discharge or removal of trustees?
Insofar as it may be argued that provisions contained in the AGFT emulated those in the Original Deed, clauses 22 and 23, as referred to above, relate to removal, retirement and appointment. Clause 23(c) empowers the Appointor under deed to appoint a new trustee or replacement trustee or an additional trustee; it does not deal with retirement or discharge. Likewise clause 22(c), if it was included. The provision for retirement is contained in clause 23(a) of the AGFT, which enables a trustee to retire at any time “in accordance with the law for the time being in force in the State of South Australia”.[27]
[27] “Affidavit of Andrew Morton Garrett” sworn 25 January 2007 at AMG 1, as contained in Affidavit of Jessamine Clare Lumley sworn 27 June 2007 at JCL-1, tab 12.
The South Australian law relating to a retirement of a trustee is contained in s 15 of the Trustee Act 1936 (SA). Section 15(1) provides:
Where there are more than two trustees, if one of them by deed declares that he is desirous of being discharged from the trust, and if his co-trustees and any other person who is empowered to appoint trustees, by deed consent to the discharge of the trustee, and to the vesting in the co-trustees alone of the trust property, then the trustee desirous of being discharged shall be deemed to have retired from the trust, and shall, by the deed, be discharged therefrom under this Act, without any new trustee being appointed in his place.
Assuming that Mrs Garrett wished to be discharged from the trust leaving only Mr Garrett, then s 15(1) requires that Mr Garrett as the co-trustee together with Michael Garrett as the Appointor, consent to the discharge of Mrs Garrett by a written deed. There was no such document tendered before me. Therefore, on the basis that the AGFT provisions reflect the content of the lost Original Deed, Mr Garrett is not simply able to appoint himself as the sole trustee by virtue of the Deed of Variation or the discharge signed by Mrs Garrett.
Alternatively, if the provisions of the AGFT No 2 and the AGFT No 3 are reflected in the Original Deed, then clause 11 of both deeds provides:[28]
[28] Ibid at AMG 5 and AMG 7.
Appointment of a new trustee
11.1The trustee may at any time as it thinks fit resign and by instrument in writing appoint a new trustee or trustees in succession and must transfer the trust fund to such trustee or trustees.
11.2The office of a trustee will be vacated if that trustee becomes incapable of discharging his or her duties because of illness or an unsound mind or becomes bankrupt or, if the trustee is a corporation, an order is made or a resolution is passed which will have the effect of winding up the corporation.
11.3An appointor has the power exercisable jointly with any other appointor from time to time by deed or will to remove a trustee from office and to appoint any person (including a corporation which is not a trustee company within the meaning of the Trustee Act 1958 as amended or re-enacted from time to time) other than an appointor to act alone or jointly with any other person as a trustee hereof. Any appointor may at any time by deed renounce any power granted thereto by this deed and when made such renunciation will be irrevocable.
11.4The trustee must upon retirement or removal cause the trust fund and the assets thereof to be vested in the new trustee or trustees and must deliver thereto all books, documents and other property relating to the trust fund.
11.5A retiring trustee will be effectually discharged from the trusts created by this deed notwithstanding that any trustee appointed in substitution is acting alone or is not the Public Trustee of South Australia or a trustee company as defined in the Trustee Act 1958 as amended or re-enacted from time to time.
11.6A new trustee may accept the accounts rendered and the property delivered by a continuing or retiring trustee without being bound to enquire further as to the assets and income of the trust fund.
Clause 11.1 enables the trustee to resign and to appoint a new trustee in succession. This suggests two steps, namely a resignation and an appointment by deed. The second step has not been done in this case. However, this may only be a provision which is referable to a substitution and not where there are two trustees, one of whom resigns. None of the later clauses contained in clause 11 refers to that situation. Therefore, s 15 of the Trustee Act 1936 (SA) would again come into play and Mr Garrett together with the Appointor must consent to the discharge of Mrs Garrett by a written deed.
In conclusion on this point, the absence of the Original Deed means that I am unable to make any affirmative finding that there were two trustees of the GFT as asserted in the Deed of Variation. However, assuming that were the case, I am not satisfied that Mrs Garrett has been legally discharged from her responsibilities as a trustee and that she no longer remains a joint trustee of the GFT with Mr Garrett. I am not satisfied that Mr Garrett has been validly appointed as an appointor, nor am I satisfied that he is the sole trustee of the GFT. Mr Garrett has no standing to represent the GFT unilaterally[29] and to thereby re-open Action 2244 of 1996. I therefore refuse the leave sought by Mr Garrett.
[29] Just, in Estate of (No 1) (1973) 7 SASR 508, 513.
Application by Mr Garrett to re-open Action 2244 of 1996
Although the result of my earlier findings means that Mr Garrett has no standing as the sole trustee of the GFT to seek to re-open this action, I will nonetheless deal with his application on the merits.
The application made by Mr Garrett on behalf of the GFT was to:
[R]eopen and set aside the judgement (sic) … on the basis that;
a.The Deed of Settlement executed between (sic) the parties on the 26th July 2000 has been breached by the 1st Defendant [FEW].
b.The Deed of Settlement executed between the parties on the 26th July 2000 has been terminated by the 2nd Plaintiff [the Garrett Family Trust] on 21st July 2006.
The GFT was one party to Action 2244 of 1996. It was also a party to the Deed of Settlement.[30] The other parties to the action were Mr Garrett personally (first plaintiff and also second defendant by counterclaim); FWE (first defendant and plaintiff by counterclaim); Tatachilla Winery Pty Ltd (second defendant); Registrar of Trade Marks (third defendant); International Vintners Pty Ltd (first defendant by counterclaim); Mrs Garrett (third defendant by counterclaim); and Andrew Garrett Vineyard Estates Pty Ltd (fourth defendant by counterclaim). Only five of the eight parties to this action are sought to be represented before me on the application to re-open, namely the GFT purporting to be represented by Mr Garrett; FWE represented by Mr Livesey and International Vintners Pty Ltd and Andrew Garrett Vineyard Estates Pty Ltd represented by counsel Mr Tisato.No other parties are represented. Mr Garrett has no standing in his own personal capacity as a result of sequestration orders.[31]
[30] Affidavit of Andrew Morton Garrett sworn 30 April 2007 at AMG 4.
[31] Mr Garrett is the subject of a sequestration order on 24 September 2004 (Affidavit of Jane Maria Rusalen sworn 9 October 2008 at JMR 1) which order was extended until 23 November 2012 (Affidavit of Jane Maria Rusalen sworn 9 October 2008 at JMR 24).
The brief background is that the action was commenced on 26 November 1996. The plaintiffs were Mr Garrett and the GFT. The Amended Statement of Claim pleaded various causes of action and the plaintiffs sought various remedies including damages and royalties in respect of a Licence Agreement and the use of the “Garrett Family” brand name for the making and selling of wine. FWE, the plaintiff by counterclaim, claimed that the named defendants by counterclaim were producing, selling and promoting wine in Australia in bottles bearing the mark “Andrew Garrett Winemaker” and other related marks, which was contrary to the Licence Agreement and also to the agreements for the purchase by FWE of the assets and intellectual property of the Andrew Garrett Group Pty Ltd.
On 26 July 2000, the GFT, FWE (which at the time was Mildara Blass Estates), International Vintners Pty Ltd and Andrew Garrett Vineyard Estates Pty Ltd, as well as Mr and Mrs Garrett personally, together with two other parties, Vinpack International Pty Limited and Andrew Garrett Wine Resorts Pty Limited (who are not parties to the action), entered into a Deed of Settlement to resolve proceedings. The Deed of Settlement is a comprehensive and complex 31 page document containing a number of separate agreements. The most relevant provisions for the purpose of the application by Mr Garrett to re-open are clauses 19 and 29. Those clauses provide as follows:[32]
[32] Affidavit of Andrew Morton Garrett sworn 30 April 2007 at AMG 4, 1.
19 Release
Without any admission of liability:
19.1 The AMG Entities jointly and severally:
(a)release and forever discharge MBL and its respective employees, officers, agents, and assigns from all claims, causes of action, proceedings, accounts, demands, interest, expenses and costs of whatever nature which but for this Deed they had, now have or at any time in the future have against MBL in respect of or in connection with or arising out of the Proceeding; and
(b)will take all steps necessary to have the Proceedings against MBL dismissed by consent within 14 days of the Date of this Deed with no order as to costs; and
19.2 MBL:
(a)releases and forever discharges each AMG Entity and his her or its respective officers, employees, agents and assigns from all claims, causes of action, proceedings, accounts, demands, interest, expenses and costs of whatever nature which but for this Deed it had, now has or any time in the future has against the AMG Entities in respect of or in connection with or arising out of the Proceeding; and
(b)will take all steps necessary to have the Proceeding against the AMG Entities dismissed by consent within 14 days of the Date of this Deed with no order as to costs.
19.3 Each party agrees to bear its own costs in relation to the Proceeding and the preparation and execution of this Deed.
…
29. Entire Agreement
This agreement constitutes the entire agreement of the parties about its subject matter and supersedes all previous agreements, understandings and negotiations on that subject matter.
In accordance with clause 19, on 30 August 2000, by a consent order, the claim and the counterclaim were dismissed.[33]
[33] Certificate of Record in Action 2244 of 1996 as contained in Affidavit of Andrew Morton Garrett sworn 30 April 2007 at AMG 1 and Consent Order as contained in Affidavit of Jessamine Clare Lumley sworn 27 June 2007 at JCL 1, tab 3.
This application to re-open was filed on 30 April 2007, almost seven years after there had been a Deed of Settlement and a consent order. The affidavit of Mr Garrett sworn on 30 April 2007, filed in support of his application to re-open, sets out the primary grounds for his application. Paragraphs 6 to 15 of his affidavit provide as follows:
6.From the date of execution of the Deed until today’s date FWE has failed to comply with the terms, conditions and tenor of the Deed.
7.From the date of execution of the Deed FWE was obliged to pay $600,000 per annum by using its best endeavours and has only ever paid at the rate of $300,000 per annum.
8.During the period from the date of execution FWE has halved the value of the ANDREW GARRETT name, brand and associated marks.
9.On the 22nd July, 2005 FWE commenced an action in the Victorian Supreme Court to pay the monies due under the Deed into the Victorian Supreme Court to pay the monies due under the Deed into the Victorian Supreme Court Litigant’s Fund. Now produced and shown as exhibit “AMG 5” is a copy of the originating process in 7323 of 2005 in that Court.
10.That action was further breach of the terms and conditions of the Deed. The competing claims of other parties were irrelevant to the Deed.
11.That action was cross vested to the Federal Court of Australia South Australian Registry on the 16th December 2005 by consent between the parties now produced and shown are the minutes of the consent orders made in the Victorian Action. Now produced and shown as exhibit “AMG 6” is a copy of the consent order made in that action
12.The action was given Number SAD 5 of 2006 and the Moneys due under the Deed of Settlement were paid into the Federal Court in SAD 29 of 2005 until further order.
13.That action was further breach of the terms and conditions of the Deed.
14.On the 20th July 2006 The Deed of Settlement was terminated by me in my capacities as Trustee of;
i. The Andrew Garrett Family Trust (AGFT); which Trust received the income (at the direction of GFT) from the date of settlement until the 15th July 2003 when it was assigned to Andrew Garrett Family Trust No 2 (AGFT2), now produced and shown as exhibit “AMG 7” is a true and correct copy of that Deed of assignment.
ii. AGFT2; which Trust received the income (at the direction of GFT) from the date of assignment until the 7th November 2005 when it was assigned to Andrew Garrett Family Trust No 3 (AGFT 3), now produced and shown as exhibit “AMG 8” is a true and correct copy of that Deed of assignment.
iii. AGFT 3; which trust was entitled to receive the income (at the direction of GFT) until the date of termination of the Deed.
15.I refer to the exhibit annexed hereto and hereinafter referred to as “AMG 9” as being a true and correct copy of the Notice of Termination of the Deed.
Mr Garrett additionally relied on his affidavit sworn on 17 October 2007 (FDN 57), together with six volumes of annexures, and his affidavit sworn on 28 May 2007.
In respect of Mr Garrett’s affidavit sworn on 30 April 2007, the bases upon which Mr Garrett seeks to re-open the action may conveniently be summarised under four major topics:
·That FWE has breached the Deed of Settlement in that it has failed to comply with terms, conditions and the tenure of the Deed of Settlement from the date of its execution “until today’s date”, being 30 April 2007. This includes failing to pay $600,000 per annum, and instead paying only $300,000 per annum, and failing to use best endeavours, which resulted in reducing the value of the Andrew Garrett name brand and associated marks by half.
·That the AGFT No 3 was entitled to receive the income from the Deed of Settlement at the direction of the GFT until the date of termination of the Deed of Settlement on 20 July 2006.
·That Mr Garrett had terminated the Deed of Settlement in his capacities as trustee of the Andrew Garrett Family Trust; the AGFT No 2 and the AGFT No 3, on 20 July 2006.
·That the institution by FWE of an action in the Victorian Supreme Court to pay monies due under the Deed of Settlement into the Victorian Supreme Court Litigants’ Fund, which was later transferred by a cross-vesting action into the Federal Court, was contrary to the requirements of the Deed of Settlement.
Before dealing with each of these arguments in turn, I note the most obvious issue arising from these grounds is the contradiction between the assertion that the Deed of Settlement was terminated by Mr Garrett on 20 July 2006, and at the same time the assertion that FWE “continued” to breach the Deed of Settlement until 30 April 2007.
Alleged breaches by FWE of the Deed of Settlement generally and whether the consent order is void or voidable
In respect of Mr Garrett’s allegations of breaches by FWE, all of the alleged breaches referred to in the affidavit of 30 April 2007 advert to subsequent events which do not impeach the validity of the Deed of Settlement as at the date of its execution on 26 July 2000.
A fundamental submission made by FWE in opposition to the application is that an alleged breach of the Deed of Settlement by FWE could not give rise to setting aside a consent judgment. At best, a breach or breaches could only give rise to an application for damages.
The consent judgment was entered in the following terms:[34]
Pursuant to Rule 84.05 and by consent IT IS ORDERED THAT:
1. The plaintiffs’ claim and the first defendant’s counter-claim be dismissed.
2. There be no order as to costs.
This order is by consent and is of the same force as if made by the court.
[34] Affidavit of Jessamine Clare Lumley sworn 27 June 2007 at JCL-1, tab 3.
It is well understood that an order made by a superior court of record is binding unless and until it is set aside.[35] Rules of the Supreme Court contain provisions with regard to varying or setting aside a judgment or order. By reason of Rule 8 of the Supreme Court Civil Rules 2006 (“the 2006 Rules”) the Supreme Court Civil Rules 1987 (“the 1987 Rules”) apply to this application.
Rule 84.12 of the 1987 Rules states that: [36]
The Court may vary or set aside a judgment or order at any time if the justice of the case so requires.
[36] There is also an equivalent provision contained in Rule 242 of the 2006 Rules.
In this case the order by consent is linked to the Deed of Settlement made between the parties. The order by consent can only be set aside by invalidating the Deed of Settlement by reason of it being rendered void or voidable. This proposition emerges from a number of cases, notably the High Court decision in Harvey v Phillips[37] as well as in Mohtar v Mohtar and Seputis[38] and Commonwealth Bank of Australia v Forshaw.[39]
[37] (1956) 95 CLR 235 at 243-4.
[38] (1998) 146 LSJS 377.
[39] (1990) 55 SASR 247 at 253-4 and 257.
The allegations contained in Mr Garrett’s 30 April 2007 affidavit do not give rise to a valid base for rendering the Deed of Settlement void from the outset, or voidable. As a result, there is no proper foundation for an application to set aside the consent order on the basis of it being either void or voidable. This deficiency applies to allegations of failure to use best endeavours and the paying of what he asserts is an incorrect amount per annum. I will separately discuss the three remaining allegations of post-settlement breaches, as there are particular features which were the subject of argument before me.
Examples of contracts which are void ab initio are contracts which include fraud, illegality and common mistake. Examples of voidable contracts are contracts which have been induced by misleading conduct or misrepresentation. No such claims were made by Mr Garrett in his affidavit of 30 April 2007.
However, the affidavit of Mr Garrett sworn on 17 October 2007 contends that Mr Garrett was misled and deceived into entering into the Deed of Settlement which was contrary to ss 52 and 53 of the Trade Practices Act 1974 (Cth).
Paragraph 5 of the affidavit of 17 October 2007 asserts:
It is my contention that I was misled & deceived into entering into the Deed of Settlement as construed under section 52 & 53 of the Trade Practices Act (1974);
i.At the date of execution of the Deed Fosters had no intention of specific performance under clause 9(2) of the Deed.
ii.At the date of entering into the Deed Fosters had no intention of honouring the option set out in clause 14 of the Deed.
iii.At the date of entering into the Deed Fosters intended to continue to breach section 53 of the Trade Practices act (1974 in representing that the Brand Andrew Garrett produced by them was made by a real person.
iv.At the date of entering into the Deed of Settlement Fosters intended to leverage my reputation in the wine industry for their own benefit to the detriment of the Trust Interests that I act for.
The affidavit in turn exhibited what appears to have been an earlier affidavit of Mr Garrett purported to be sworn on 10 March 2000.[40] That affidavit predates the Deed of Settlement, which was signed on 26 July 2000. Mr Garrett therefore seeks to rely on historical assertions made in Action 2244 of 1996, prior to a Deed of Settlement being entered into. He is essentially seeking to resurrect the same arguments to support contentions that he was misled and deceived by FWE, whom he asserts “had no intention” of performing certain clauses of the Deed of Settlement.
[40] “Statement of Andrew Morton Garrett” as contained in the Affidavit of Andrew Morton Garrett sworn 17 October 2007 at AMG 1.
The affidavit of Mr Garrett of 17 October 2007 also alleges deliberate “oppression” by FWE.[41] In addition, a Transaction Agreement involving International Vintners Australia Pty Ltd and Andrew Garrett Vineyard Estates Pty Ltd is referred to, and allegations are made of oppression of the AGFT interests.[42] Mr Garrett further asserts that International Vintners Australia Pty Ltd, FWE and the NAB by their conduct, rendered “the Garrett Interests impecunious and unable to defend their case in the courts of Australia”.[43]
[41] Affidavit of Andrew Morton Garrett sworn 17 October 2007, [8].
[42] Affidavit of Andrew Morton Garrett sworn 17 October 2007, [24].
[43] Ibid, [27].
The contentions set out in the affidavit of Mr Garrett of 17 October 2007 go nowhere close to satisfying me that there are grounds upon which it could reasonably be argued that the Deed of Settlement was either void or voidable. They either amount to a resurrection of old assertions which Mr Garrett purported to be aware of prior to entering into the Deed of Settlement, or they are random disconnected assertions using legal terminology, which in their context are meaningless and lack legal or factual foundation.
There is nothing contained in the affidavit of Mr Garrett sworn on 28 May 2007 of relevance to this issue.
Therefore, none of these matters contained in the two affidavits of Mr Garrett give rise to a reasonably arguable basis for rendering the Deed of Settlement either void or voidable, thereby justifying an application to set aside the consent order.
There are still further impediments. The application to set aside the consent judgment, which is founded on a binding settlement between the parties absent fraud, is subject to the Limitation of Actions Act 1936 (SA). According to this Act, an application was required to be instituted within six years of the Deed of Settlement and/or consent order.[44] As such, this action is out of time. Finally, the Deed of Settlement involved a number of parties who are not presently before me and whose interests would be affected by the setting aside of the consent order considering the Deed of Settlement. The Deed of Settlement has been substantially performed. If the Deed of Settlement was to be set aside on the basis of it either being void or voidable, the parties would need to be substantially restored to the position each of them occupied prior to entering into the contract.[45] This would require a significant un-bundling of all aspects already executed, including a repayment of the royalties paid pursuant to the Deed of Settlement.
[44] Limitations of Actions Act 1936 (SA) s 35.
[45] Alati v Kruger (1995) 94 CLR 216. Also see discussion in J W Carter, E Peden and G J Tolhurst Contract Law in Australia (5th Ed, 2007), 392-394
In my view, using the wording of Rule 84.12 of the 1987 Rules, I am far from being satisfied that “the justice of the case” requires the consent judgment to be set aside.
Whether the AGFT No 3 was entitled to the income stream
Mr Garrett alleged that FWE had breached the Deed of Settlement by not paying the royalty stream to the appropriate party under the Deed of Settlement, namely the AGFT No 3.[46] This allegation, even if made out, would not provide a basis for setting aside the consent order. However, there are additional grounds upon which the argument of Mr Garrett fails.
[46] Affidavit of Andrew Morton Garrett sworn 30 April 2007, [14].
Mr Garrett described a convoluted process of assignments in demonstrating that the AGFT No 3 was entitled to the royalty stream. On his submissions, at the direction of the GFT on 15 July 2003, the debt was first assigned on 15 July 2003 from the Andrew Garrett Family Trust to the AGFT No 2 for $10,000.[47] Thereafter on 7 November 2005 it was allegedly assigned by Evajade Pty Ltd, as the then trustee for the AGFT No 2, at the direction of the GFT to the AGFT No 3 for the sum of $10,000.[48] Mr Garrett contended that, therefore, the AGFT No 3 was then entitled to the income stream until such time as the Deed of Settlement was allegedly terminated by Mr Garrett on 21 July 2006.
[47] Affidavit of Andrew Morton Garrett sworn 30 April 2007 at AMG 7.
[48] Ibid at AMG 8.
Mr Livesey on behalf of FWE contends that these assignments cannot be substantiated.
The judgment of Besanko J in Andrew Garrett Wine Resorts Pty Ltd & Anor v National Australia Bank Ltd & Anor (No 2)[49] in particular at [14]-[18] suggests that a possible reason for the convoluted process of purported assignments of the income stream was to try and preserve the proceeds of the royalty from attachment by the NAB. A debt was owed to the NAB for the interest on a bill facility. The NAB alleged that Mr and Mrs Garrett had, as trustees of the AGFT, given a negative pledge by undertaking not to transfer the assets of the AGFT to another trust or distribute assets of that trust without prior written consent of the bank, whose consent would not unreasonably be withheld. Besanko J made an interim injunction order restraining Evajade Pty Ltd as the then trustee of the AGFT from disposing of any right to receive monies.
[49] [2004] SASC 229.
These efforts made by Mr Garrett to further remove the income stream from the reaches of creditors, may provide an explanation for the overtly invalid assignments. The GFT was the only family trust which was a signatory to the Deed of Settlement. Mr Garrett was also another party and he is referred to in the Deed of Settlement as “AMG”. The AGFT was not a party to the Deed of Settlement.
Clause 9 of the Settlement Deed relevantly provides as follows:[50]
[50] Affidavit of Andrew Morton Garrett sworn 30 April 2007 at AMG 4.
Payments to AMG
9.1In consideration of the Assignment by the Trustees of the Australian trade mark application number 634077 and registered marks set out in Part B of Schedule 2 to this Deed:
(a) MBL shall pay the Trustees $1.8 million on the Commencement Date. Payment shall be made by telegraphic transfer to the following account:
Bank SA (a division of St George Bank Limited)
Private Banking
BSB 105 972
A/C No 015024740 in the name of Andrew Garrett Family Trust; and
(b) Subject to clause 9.2 MBL shall pay to the Trustees a fee of $2.00 for each Case of Product sold by MBL in the MBL Territory or Japan or overseas wine clubs in the period commencing 1 July 2000 and ending 30 June 2010. MBL shall not be required to make any further payments to AMG for sales of Product after 1 July 2010. Sales to any associated company of MBL shall be ordered sales for the purposes of this clause. Payment shall be made by telegraphic transfer as set out in clause 9.1(a).
9.2Regardless of the value of actual sales made by MBL in accordance with sub-clause 9.1(b):
(a) Subject to 9.2(b), MBL shall pay AMG a minimum of $75,000 in each quarter from 1 July 2000; and
(b) The maximum MBL shall be liable to pay AMG in any 12 month period from 1 July 2000 shall be $600,000.
9.3The amounts set out in clause 9.1(b) and 9.2 above shall be payable on sales made during each quarter commencing on 1 July, 1 October, 1 January and 1 April in each year and shall be paid within thirty (30) days of the last day of each such quarter.
9.4MBL shall keep at its principal place of business concerned with the sale of the products referred to in clause 9.1(b) clear and detailed accounts and records showing all amounts payable under this Deed.
9.5MBL will provide AMG not later than 30 days following the end of each quarter in which sales of the products have been made in accordance with clause 9.1(b) a complete and accurate statement duly certified by MBL in respect of the previous quarter setting out the description, number and sales value of all products sold as set out in sub-clause 9.1(b) and the amount payable to AMG in accordance with this Deed.
9.6If AMG so requires, his nominated firm of chartered accountants may, on reasonable prior notice to MBL and at any reasonable time during business hours, inspect and audit the accounts and records of MBL and any other book record voucher receipt or invoice relating to the manufacture, sale and disposal of the products referred to in clause 9.1(b). If any such examination reveals an error exceeding five (5) per cent of the total sums paid to AMG, the cost of its inspection and audit shall be borne by MBL.
Clause 9 of the Deed of Settlement on one reading suggests that FWE was to pay royalties to “AMG”, being the reference by definition to Mr Garrett. At the same time, there is a reference to payments being made into a bank account of the AGFT. The interpretation of this clause and the entity entitled to the income stream is the subject of other litigation discussed hereafter. I make no findings of fact which would impact on the outcome of that litigation.
Assuming that for the purposes of argument the AGFT was entitled to and did receive income up until 15 July 2003 as set out in the affidavit of Mr Garrett of 30 April 2007, it is questionable how the AGFT No 2 had any right to receive the income stream by direction from the GFT. The date of the purported assignment was 15 July 2003, which was prior to the AGFT No 2 trust deed having been settled on 21 August 2003.[51] The affidavit of Mr Garrett sworn on 25 January 2007 and filed in the Federal Court in Action Number SAD 12/2007 (“Action SAD 12/2007”) purports to give an explanation. Mr Garrett in that affidavit deposed that AGFT No 2 was initially established by way of a “declaration” as a trust as at 8 July 2005.[52]
[51] “Affidavit of Andrew Morton Garrett” sworn 25 January 2007 at AMG 5, as contained in Affidavit of Jessamine Clare Lumley sworn 27 June 2007 at JCL-1, tab 12.
[52] “Affidavit of Andrew Morton Garrett” sworn 25 January 2007 at [23], as contained in Affidavit of Jessamine Clare Lumley sworn 27 June 2007 at JCL-1, tab 12.
The declaration of trust states:[53]
The person or persons described in this schedule as Trustees of the Andrew Garrett Family Trust (AGFT) created by Deed of Settlement on the 31st May 1993 between the parties, being registered as the holder of the Bank Account described in the Schedule (“the account”) HEREBY DECLARE that:
The Account described in the schedule was held by the Trustees, from the date of opening of the account, for and on behalf of the Beneficiaries of AGFT (the Beneficial Owners) up until the Date of this Declaration of Trust as the Beneficiaries of AGFT were entitled to the proceeds from investments of AGFT in the Garrett Entities and in particular the proceeds from the Berringer Blass Wine Estates Deed of Settlement.
…
From the Date of this Declaration of Trust the Trustees hold the account solely for the Benefit of the Beneficiaries of the Andrew Garrett Family Trust No 2 (AGFT2).
AGFT2 is established from the date of this declaration of Trust, by way of this declaration, and will be more formerly defined by way of Deed of Settlement to be executed by the Trustees once proper advice has been obtained in respect of form and structure of that Deed of Settlement.
[53] Ibid at AMG 4.
This declaration, in my view, would not amount to the establishment of a valid trust, namely the AGFT No 2. The person who is enabled by law to declare a trust, is the person who is the beneficial owner of the property the subject of the trust.[54] Alternatively, if there is to be a transfer of the property of the trust from one trust to another, a beneficiary entitled to the property may cause a new trust to be created by direction to a trustee that the property thereafter is to be held on trust for another, or authorise the trustee to take appropriate steps.[55] There is no evidence of a beneficiary to the AGFT having given such a direction such as to enable a transfer of what appeared to be an account held on behalf of the beneficiaries of the AGFT for the royalty payments.
[54] Tierney v Wood (1854) 52 ER 377, 379.
In short, the starting point for this somewhat bizarre chain of assignments appears to be invalid, which in turn would affect the validity of the purported subsequent assignment from the AGFT No 2 to the AGFT No 3. Therefore, the argument of Mr Garrett on this point appears highly questionable and certainly would not suggest that FWE has in any way been in breach of the Deed of Settlement.
Purported termination of the Deed of Settlement
A further strand of Mr Garrett’s submission is the assertion that the Deed of Settlement had been terminated by the GFT on 21 July 2006.
The material before me in relation to this alleged termination is inherently contradictory. Paragraph 14 of the affidavit of Mr Garrett sworn on 30 April 2007 claims that the Deed of Settlement was terminated by Mr Garrett in his capacities as trustee of the Andrew Garrett Family Trust, the AGFT No 2 and the AGFT No 3. In other words, this paragraph is adverting to Mr Garrett’s capacity as an alleged trustee with regard to four family trusts and that he personally was acting in his capacity as trustee for each of them. He is also indicating that he is acting unilaterally which, for reasons I have set out earlier, is highly questionable.
Further, Mr Garrett’s 30 April 2007 affidavit exhibits a document described by Mr Garrett as “a true and correct copy of the Notice of Termination of the Deed”.[56] The document is a letter from Mr Garrett to FWE’s solicitors at Coors Chambers Westgarth. It is dated 20 July 2006 and titled “Termination of Settlement Deed dated 26th July 2000”.[57] Within the letter, Mr Garrett provides notice that as of 5pm Friday 21 July 2006, the Deed of Settlement is terminated by him in his capacity as “Managing Trustee of the Andrew Garrett Group of Trusts”, unless: he receives a response to his letter of 19 July 2006; Berringer Blass Wine Estates (“BBWE”) consents to his proposed Draft Consent Orders; and BBWE undertakes to not seek any orders of restraint in Action Number SAD 5/2006 or any other application to prevent Mr Garrett from terminating the Deed of Settlement. I have the following concerns in relation to this “Notice of Termination of the Deed”:
·Mr Garrett purports to terminate the deed in his capacity as “Managing Trustee of the Andrew Garrett Group of Trusts”. This is the first and only reference to this title and it is contrary to other assertions by Mr Garrett. It implies that there is more than one trustee but that he seeks to act unilaterally, which on its face is not valid.
·It is a conditional notice which purports to come into operation in the future, and the demands made by Mr Garrett bear no direct relationship to any ground upon which the Deed of Settlement could be terminated.
·The Notice of Termination of the Deed is not itself a letter of termination. There was no document before me which purports to be the actual letter of termination and no evidence that it was sent to all parties to the Deed of Settlement.
[56] Affidavit of Andrew Morton Garrett sworn 30 April 2007, [15].
[57] Ibid at AMG 9.
There is yet another version of the “termination” which is contained in a letter written by Mr Garrett to FWE’s solicitors on 11 October 2006 and a letter to FWE on 2 November 2006, being more contemporary documentation. In the letter of 11 October 2006 Mr Garrett states that there was a “termination of the BBWE Deed of Settlement by me on 21 July 2006”.[58] The letter of 2 November 2006 states that “I have terminated the BBWE Deed of Settlement in my capacity as Trustee of the Andrew Garrett Family Trust No 3; effective the 21st July 2006”. [59]
[58] Affidavit of Benjamin Donald Davidson dated June 2007, BDD-1.
[59] Ibid.
There are therefore various assertions by Mr Garrett as to which trust and in what capacity he terminated the Deed of Settlement. Bearing in mind that the AGFT No 3 was not a party to the Deed of Settlement and there is a highly questionable chain of connection between the GFT and the AGFT No 3, I am not satisfied that Mr Garrett was able unilaterally to act on behalf of any of the trusts.
Mr Garrett submitted that the Attorney-General, by referring primarily to the decisions made on each application instead of the applications themselves, had taken a superficial view of his applications without exploring the merits of each. Whilst he acknowledged that the authorities indicate it is enough to look at the nature of the decisions, Mr Garrett submitted that the decisions themselves did not necessarily resolve all of the issues which he sought to agitate. He submitted that I was unable to make a proper assessment on the submissions of the Attorney-General, as to whether the applications were attempts by him to re-litigate or whether they were attempts to re-open matters to put further evidence before the Court.[226]
[226] T 195.
In respect of these arguments, I reject them. It is not correct for Mr Garrett to assert that he has only instituted one action in his entire life, being Action 2244 of 1996. The Attorney-General’s application alone indicates that Mr Garrett was the instigator of Actions 127 of 2004, 78 of 2005, 145 of 2005, 257 of 2005, 422 of 2005, 423 of 2005, 1443 of 2005, 590 of 2006, 7132 of 2006, 7624 of 2006, 7625 of 2006 and 780 of 2007. This is quite apart from the numerous proceedings issued by Mr Garrett in which he has sought unconnected substantive relief within actions commenced by others, in order to achieve the same end as if it had been an originating action by him, without the need for the payment of the court fees associated with an originating action.
Whilst being unrepresented may initially have hindered Mr Garrett in his understanding of court processes and court procedures, this did not continue for long. Further, it does not explain his refusal to accept decisions against him and his frequent efforts to either repeat the action or to make creative efforts to try and circumvent possible impediments in order to pursue litigation.
In relation to his submission that he has not been seeking to re-litigate, but was instead endeavouring to obtain further evidence by way of discovery, I reject that this argument demonstrates that he was not seeking to re-litigate. It is a circular submission. He was seeking discovery in circumstances which amounted to an abuse of the court process in order to try and find other means of re-litigating an adverse decision against him. This is another form of seeking to re-litigate.
I have also read his 70 page written outline of argument, which canvasses a range of matters, including alleged unacceptable conduct of members of the judiciary; a failure of the Court to “investigate”; alleged conduct against legal practitioners, accusing them of manipulating and swearing false testimony; alleged misrepresentation of arguments by counsel; various submissions concerned with company loans, Springwood Park and matters related to bill facilities. None of the matters contained in that document have persuaded me that the conclusions I have reached on the individual proceedings are in error.
As a result of my findings, I have concluded that 32 proceedings in the Supreme Court, four proceedings in the District Court and four proceedings in the Magistrates Court instituted by Mr Garrett, amounted to vexatious proceedings within the meaning of s 39 of the Act. The period of time over which these proceedings were instituted was from 20 August 2004 to 19 December 2007. The various grounds upon which I have concluded they were vexatious proceedings include being an abuse of process of the Court, re‑litigation of matters decided already by a court, instituting proceedings without reasonable ground or utterly hopeless grounds, numerous attempts by Mr Garrett to find other legal entities by which to take action to agitate his own personal concerns; and also proceedings instituted for the purpose of annoying and harassing named litigants who were often non-parties to the action in which proceedings have been instituted. In my view, these matters alone would have been sufficient for me to conclude that Mr Garrett has persistently instituted vexatious proceedings within the meaning of s 39. This conclusion is fortified when seen in the context of other proceedings issued by him in the Federal Court.
Federal Court Proceedings
The Attorney-General submitted that proceedings instituted by Mr Garrett in other jurisdictions (particularly, the Federal Court and the Federal Magistrates Court) were relevant to his application to have Mr Garrett declared a vexatious litigant because they provided important background context to the proceedings instituted by Mr Garrett in the State courts. It was also submitted that the subject matter of the Federal Court and Federal Magistrates Court proceedings made it abundantly clear that Mr Garrett was attempting to re-litigate matters determined by State courts. This was suggested to be relevant to the exercise of my discretion on this application.
Ms Rusalen, on behalf of the Attorney-General, deposed that Mr Garrett is or was involved in 15 Federal Court actions, and six actions in the Federal Magistrates Court. The total number of parties involved in the 21 actions by virtue of proceedings issued by Mr Garrett is 91. Within this total, the following parties were included:
·The insolvency practitioners, and the insolvency firms, charged with the administration of Mr and Mrs Garrett’s bankrupt estate;
·Legal practitioners and law firms representing various parties with whom Mr Garrett was involved in litigation, including the legal practitioners representing the insolvency practitioners referred to above;
·Members of Parliament, including the Honourable Michael Rann, Premier of South Australia;
·Members of the judiciary; and
·The Deputy Commissioner of Taxation.
Whilst I will not endeavour to comment on each proceeding instituted by Mr Garrett in the Federal Court, I will make the following observations. In the course of the 21 actions, at least 20 proceedings instituted by Mr Garrett in the actions were dismissed, struck-out or refused. Reasons were published for the majority of these decisions, and within these reasons the proceedings instituted by Mr Garrett are described, inter alia, as “hopelessly misconceived”,[227] “incoherent”,[228] “embarrassing”,[229] “vexatious”,[230] “ostensibly untenable”[231] and as having “no reasonable prospect of success”.[232]
[227] Garrett v Macks [2006] FCA 601 [12] per Lander J.
[228] Garrett v Tseng [2007] FCA 93, [41] per Lander J.
[229] Garrett v Foster’s Wine Estates Ltd [2007] FCA 253, [17] per Finn J.
[230] Garrett v Rann [2007] FCA 528 [5] per Mansfield J.
[231] Garrett v National Australia Bank [2007] FCA 530 per Mansfield J.
[232] Garrett v Westpac Banking Corporation [2007] FCA 439, [25] per Finn J.
The majority of the proceedings instituted in the Federal Court and the Federal Magistrates Court appear to primarily concern the bankruptcy of Mr Garrett and Mrs Garrett. Mr Garrett instituted proceedings against nearly all parties involved in the steps leading to the respective sequestration orders and the administration of each estate, alleging among other things that the administration of the estates was incompetent. This is similar in pattern to the institution of proceedings in the state jurisdiction against solicitors and other non-parties to primary actions, making accusations about incompetence and alleged criminal conduct. There have also been attempts to use corporate entities in order to air his grievances when he could no longer institute proceedings in his own name.
There were, however, three actions in the Federal Court which were more directly related to the proceedings in the State jurisdictions, namely Action Number SAD 12/2007, and further, Action Number SAD 29/2005 and Action Number SAD 5/2006 concerning the income stream paid by FWE. I have specifically discussed these three actions and their relevance at [100] to [104] and [107] to [109].
In summary, the proceedings in the Federal Court fortify my conclusion that the institution of proceedings in the State jurisdiction have been not only vexatious, but persistently vexatious. There are similar patterns of behaviour in both jurisdictions.
Application by FWE
I now turn to the s 39 application made by FWE. FWE sought a declaration that Mr Garrett had persistently instituted vexatious proceedings and sought two orders, namely an injunction preventing Mr Garrett from instituting directly or indirectly any proceedings against FWE or any related body corporate, employee, agent, or advisor of FWE without leave of the Supreme Court. Second, an order permanently staying Action 2244 of 1996.
As previously discussed, the earlier declaration made by Anderson J, pursuant to s 39, in Andrew Garrett Wine Resorts Pty Ltd & Anor v National Australia Bank Ltd and Other Actions[233] was a declaration in a matter inter partes and does not bind Mr Garrett in respect of this current application. It is therefore still necessary for me to address the question of whether Mr Garrett has persistently instituted vexatious proceedings on the application made by FWE and the evidence which was placed before me.
[233] (2007) 248 LSJS 349.
In relation to the making of a declaration, FWE sought to rely on the same material and evidence which was adduced by the Attorney-General in his application pursuant to s 39. The conclusion that I reached that a declaration should be made in respect of the Attorney-General’s application is therefore relevant in deciding whether the declaration should also be made in respect of the FWE application.
When considering the FWE application I also note that the granting of the orders sought by the Attorney-General pursuant to s 39 would also protect FWE and related parties if any proceedings were sought to be instituted by Mr Garrett in the future. However, it would in my view still be appropriate to separately consider whether FWE and related parties should be the subject of a discrete order in the event of a situation occurring where the orders sought by the Attorney-General are either inappropriate or should be modified. They are by their nature very general orders.
As to the order sought by FWE for a permanent stay of Action 2244 of 1996, the orders sought to be made in the Attorney-General’s action do not include the stay of Action 2244 of 1996. However, an order dismissing the application by Mr Garrett to re-open Action 2244 of 1996 will mean that that action remains finalised. In that case, a stay would not be technically required, as any application made by Mr Garrett to re-open would be caught by the Attorney-General’s orders prohibiting future proceedings being instituted by him. Despite this, as a precaution, I again consider it appropriate to consider whether a stay should be granted in all of the circumstances of the FWE application for the reasons expressed above.
In support of its application for declaration and orders, FWE relied on the evidence adduced in the Attorney-General’s action, as well as evidence specific to FWE, in particular, two proceedings in Action 2244 of 1996. The first is Mr Garrett’s application of 30 April 2007 to re-open the action, which I have already dealt with, and found to be the institution of vexatious proceedings. The second is an application dated 27 May 2007, and a related affidavit sworn by Mr Garrett in support of such an application on 28 May 2007.[234] Both documents were served on solicitors for FWE.
[234] Affidavit of Andrew Morton Garrett sworn 28 March 2007 as contained in the Affidavit of Jessamine Clare Lumley sworn 27 June 2007 at JCL-1, tab 16.
The application dated 27 May 2007 is described as being a “Notice for Specific Directions, Application to re-open”. Within that, there is a “Notice for Specific Directions, Application for Discovery & Joinder of the Andrew Garrett Group Pty Ltd and Suntory (Australia) Pty Ltd”.
The Notice for Specific Directions states that the Notice is addressed, inter alia, to FWE and the Registrar of Trademarks. It states that, “The 2nd Plaintiff, Andrew Morton Garrettãâ (sole trustee of the Garrett Family Trust) intends to apply for the following orders or directions”. Those directions sought included that the Andrew Garrett Group Pty Ltd be joined as a third plaintiff and that Andrew Morton Garrett©® be granted leave to appear on behalf of that group. It also sought an order that Suntory (Australia) Pty Ltd be joined as a fourth defendant and an order setting aside the Asset Sale Agreement dated 19 January 1995 executed between The Wine Company Pty Ltd, FWE and Suntory (Australia) Pty Ltd.
Although that application was served on FWE, there is no evidence that it was lodged by Mr Garrett at the Supreme Court Registry for filing.
In relation to the affidavit which relates to that application, there is no evidence that this affidavit was lodged for filing in the Supreme Court Registry at that time, but the affidavit became the subject of a later application made by Mr Garrett on 5 November 2007. That document was headed “Application for leave to file & serve this application to file and serve the document FDN 49 & the affidavit of AMG dated 28 May 2007”. Thus, the affidavit of 28 May 2007, albeit overtly connected to another application which was never filed, became the specific subject matter of another application of Mr Garrett on 5 November 2007.
Reverting to the application dated 27 May 2007. As there was no known attempt by Mr Garrett to file that in the Supreme Court, in my view it would not amount to an institution of proceedings. However, the affidavit of 28 May 2007 was the subject matter of an application which was lodged by Mr Garrett on 5 November 2007.
The application of 5 November 2007, together with the accompanying affidavit of 28 May 2007, was lodged for filing by Mr Garrett at the Registry and was referred to me pursuant to Rule 53(2) of the 2006 Rules. In my reasons for decision of 8 November 2007, I found that the application and its accompanying material amounted to an abuse of the Court’s process and I directed that it be rejected pursuant to Rule 53(3). In the course of those reasons I referred to the fact that there was no record of any application of 28 May 2007. I also indicated that the material contained in that affidavit was irrelevant to Action 2244 of 1996 and that the application for joinder of the parties referred to in the affidavit was not a live issue to the application dated 5 November 2007.
Looking at the affidavit of 28 May 2007 in the context of the current proceedings, there are a number of additional reasons as to why that application and the accompanying affidavit amount, in my view, to the institution of vexatious proceedings. The most obvious being that the application of 5 November 2007, together with the content of its accompanying affidavit of 28 May 2007, was a further attempt by Mr Garrett to re-litigate issues which had already been determined in the Federal Court by Finn J in Garrett v Fosters Wines Estates Ltd.[235]As indicated earlier in my reasons, Mr Garrett sought to act in a number of different capacities and sought to set aside the Asset Sale Agreement, being the same subject matter as contained in the affidavit of 28 May 2007. Similar to matters raised before Finn J, the affidavit alleged that the sale agreement was “under-value, not commercial and was not in the best interests of the company”.[236] There were also allegations about oppression of interests and breach of the Corporations Act 2001 (Cth) by various directors.
[235] (2007) FCA 253, handed down on 2 March 2007 in Action Number SAD 12/2007.
[236] Affidavit of Andrew Morton Garrett sworn 28 March 2007, [4] as contained in the Affidavit of Jessamine Clare Lumley sworn 27 June 2007 at JCL-1, tab 16.
In short, as a result of findings made by Finn J, it was obvious that Mr Garrett was not competent in any of his capacities to prosecute matters adverted to in the affidavit of 28 May 2007, and it was yet another attempt to try and raise those same matters in the course of Action 2244 of 1996. I therefore conclude that the attempted filing of the affidavit dated 28 May 2007, which was dealt with pursuant to Rule 53(2) of the 2006 Rules, was the institution of vexatious proceedings by Mr Garrett against FWE and other parties.
Mr Livesey also submitted that not only were the proceedings brought without reasonable ground, they were instituted to harass and annoy.[237] To support this allegation, FWE relied on an affidavit of Benjamin Davidson, a partner of Corrs Chambers Westgarth, sworn on 22 February 2007. [238] In his affidavit, Mr Davidson describes an occasion, at a meeting on 29 November 2006, where Mr Garrett verbally threatened him with proceedings in an effort to force FWE into selling various assets. Following this confrontation, Mr Garrett subsequently instituted the Federal Court proceedings before Finn J, where, on Mr Livesey’s submission, Mr Garrett sought to make good the threat he had made at the meeting.[239]
[237] T 368.
[238] Contained in the affidavit of Jessamine Clare Lumley sworn 27 June 2007 at JCL-1, tab 13.
[239] T 427
Mr Livesey also drew my attention to a number of emails sent by Mr Garrett to Mr Hudson of the Fosters Group in April and May 2007.[240] Within these emails, Mr Garrett clearly demonstrates his anger and frustration towards FWE with the use of abusive and threatening language.[241] Mr Livesey submitted that Mr Garrett’s intention in sending emails of this nature was to increase pressure on FWE in order to force acceptance of his demands.
[240] See emails contained in the Affidavit of Jessamine Clare Lumley sworn 27 June 2007 at JCL-1, tab 14 and 15.
[241] Ibid.
The attitude displayed by Mr Garrett, in the material adverted to by FWE, reinforces my conclusion that Mr Garrett is using litigation as a means of venting his anger about what he perceives to be injustices. It also provides an explanation for his continued issuing of proceedings.
Whether proceedings were instituted “persistently”
As to whether Mr Garrett has instituted proceedings “persistently” for the purposes of s 39, I note that FWE relies on the evidence tendered in Action 1342 of 2007 as well as only two proceedings in which it was directly involved. This in itself, however, will not prevent the application from meeting the requirement of being persistent. Bleby J, in Mitsubishi Motors Australia Ltd v Kowalski,[242] adopted the following comments of the New Zealand Court of Appeal in Brogden v Attorney-General [2001] NZCA 208; [2001] NZAR 809 at [21]:[243]
What constitutes institution of such proceedings ‘persistently’ will not depend merely on the number of them but, just as importantly, on their character, their lack of any reasonable ground and the way in which they have been conducted. A litigant may be said to be persisting in litigating though the number of separate proceedings he or she brings is quite small if those proceedings clearly represent an attempt to re-litigate an issue already conclusively determined against that person, particularly if this is accompanied by extravagant or scandalous allegations which the litigant has no prospect of substantiating or justifying. The Court may also take into account the development of a pattern of behaviour involving a failure to accept an inability in law to further challenge decisions in respect of which the appeal process has been exhausted, or attacking a range of defendants drawn into the widening circle of litigation solely because of an association with a defendant against whom a prior proceeding has failed.
[242] [2005] SASC 154.
[243] Ibid, [277].
In adopting this approach, Bleby J noted that:[244]
The defendant has demonstrated his unwillingness or inability to accept decisions on his claims for compensation which have been conclusively and repeatedly determined against him.
I consider that Mr Garrett has demonstrated a similar attitude in relation to his proceedings. Having had issues determined by the Federal Court, Mr Garrett has attempted to resurrect the very same issues in the applications he has filed, or attempted to file, in these proceedings.
I am therefore satisfied that in the FWE application Mr Garrett has, on the evidence before me, persistently instituted vexatious proceedings and that a declaration should be made. I also consider that the orders sought by FWE should be made for the reasons discussed above.
Orders
Accordingly, for the reasons I have given, I make the following orders.
Action 2244 of 1996
1Leave to Mr Garrett to stand in his capacity as trustee of the Garrett Family Trust is refused.
2The application to re-open Action 2244 of 1996 is dismissed.
3The application by Foster’s Wine Estates Limited is allowed.
4I declare that Andrew Morton Garrett has persistently instituted vexatious proceedings as defined by section 39(1) of the Supreme Court Act 1935.
5Mr Garrett is hereby prohibited from:
a.instituting in his own name; or
b.causing others to institute; or
c.being concerned, whether directly or indirectly, in the institution of
any proceedings in any Court of the State of South Australia against Foster’s Wine Estates Limited, Foster’s Brewing Group Limited, or any related body corporate, employee, agent or adviser of Foster’s Wine Estates Limited and Foster’s Brewing Group Limited without the leave of this Court.
6Action 2244 of 1996 is permanently stayed.
Action 1342 of 2007
7The application by the Attorney-General is allowed.
8I declare that Andrew Morton Garrett has persistently instituted vexatious proceedings as defined by section 39(1) of the Supreme Court Act 1935.
9Mr Garrett is hereby prohibited from:
a.instituting in his own name; or
b.causing others to institute; or
c.being concerned, whether directly or indirectly, in the institution of
any proceedings in any Court of the State of South Australia without the leave of this Court.
I will hear the parties as to costs.
- AGLC
- Garrett v Mildara Blass Ltd [2009] SASC 19
- Case
- [2009] SASC 19
- Decision Date
CaseChat Overview and Summary
The court was required to determine the legal nature of the declaration made by Anderson J and its ongoing applicability. This involved examining the precedent set by Hope JA and the broader legal principles concerning judgments in rem and in personam. The court had to consider whether the declaration and subsequent orders made under section 39 were of a public nature, as suggested by the requirement for publication in the Government Gazette. Mr. Livesey contended that the declaration and orders were still in force, as they were not limited to the specific proceedings in which they were made but had a wider applicability.
The court, however, found that the declaration and orders made by Anderson J did not retain their force and effect over time, even if they were initially considered judgments in rem. The court distinguished between the binding effect of such declarations and the specific circumstances under which they were made. The court emphasised that the declaration was contingent on the persistence of vexatious proceedings at the time it was made. As the circumstances had changed, and no ongoing vexatious proceedings were present, the declaration and orders were no longer applicable. The court concluded that there was a need to again make a declaration regarding Mr. Garrett’s conduct in relation to the proceedings brought by FWE and the Attorney-General, as the original declaration was not sufficient to address the current situation.
The court's decision effectively nullified the continued applicability of the previous declaration and orders, requiring a fresh assessment of Mr. Garrett's conduct in the context of the new proceedings. This decision underscored the importance of considering the temporal and circumstantial context of declarations made under section 39 of the Supreme Court Act.
Orders
Orders of the court
Full text does not contain this section.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
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