Hall v Craig

Case [2022] FCA 1312

FEDERAL COURT OF AUSTRALIA

Hall v Craig [2022] FCA 1312

File number(s): NSD 728 of 2021
Judgment of: PERRY J
Date of judgment: 4 November 2022
Catchwords:

PRACTICE AND PROCEDURE – application for summary dismissal under s 31A, Federal Court of Australia Act 1976 (Cth) and r 26.01, Federal Court Rules2011 (Cth) – where injunction sought under s 232, Australian Consumer Law (ACL) prohibiting enforcement of NCAT eviction order made by consent – where tenant sought declarations of misleading and deceptive conduct and unconscionable conduct under ss 18 and 21, ACL – where tenant alleged breach of s 25, Disability Discrimination Act 1992 (Cth) (DDA) by landlord and property agent – where procedures for redress under DDA established under Australian Human Rights Commission Act 1986 (Cth) – where proceeding has no reasonable prospects of success – where proceeding is frivolous and vexatious, fails to disclose a reasonable cause of action, and constitutes an abuse of process – proceeding summarily dismissed

COSTS – Whether Court ought to exercise discretion to award indemnity costs – where high-level allegations were baseless, vexatious, frivolous and without merit – where respondents offered at an early stage to have the matter discontinued with no order as to costs – where applicant was given express notice of intention to seek indemnity costs – application for indemnity costs granted

Legislation:

Constitution ss 76, 109

Australian Human Rights Commission Act 1986 (Cth) ss 3, 46P, 49PO

Competition and Consumer Act 2010 (Cth) sch 2 (Australian Consumer Law) ss 18, 21, 22, 60, 232

Disability Discrimination Act 1992 (Cth) ss 4, 25

Federal Court of Australia Act 1976 (Cth) s 31A

Federal Court Rules 2011 (Cth) rr 25.01, 26.01

Residential Tenancies Act 2010 (NSW) s 85, 97
Cases cited:

Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (in liq) [2007] FCAFC 146; (2007) 161 FCR 513

Australian Competition and Consumer Commission v Phoenix Institute of Australia Pty Ltd (Subject to Deed of Company Arrangement) [2021] FCA 956

Australian Securities and Investments Commission v Cassimatis [2013] FCA 641; (2013) 220 FCR 256

Brymount Pty Ltd t/as Watson Toyota v Cummins (No 2) [2005] NSWCA 69

Burns v Corbett [2018] HCA 15; (2018) 265 CLR 304

Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801

Fyna Foods Australia Pty Ltd v Cobannah Holdings Pty Ltd (No 2) [2004] FCA 1212

Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435

Picos v Australian Federal Police [2015] FCA 118

Przybylowski v Australian Human Rights Commission (No 2) [2018] FCA 473

Shammas v Canberra Institute of Technology [2014] FCA 71

Wills v Chief Executive Officer of the Australian Skills Quality Authority (Costs) [2022] FCAFC 43

Division: General Division
Registry: New South Wales
National Practice Area: Commercial and Corporations
Sub-area: Regulator and Consumer Protection
Number of paragraphs: 75
Date of last submission: 2 December 2021
Date of hearing: 19 October…

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Details
AGLC
Hall v Craig [2022] FCA 1312
Case
[2022] FCA 1312
Decision Date

CaseChat Overview and Summary

In the case of Hall v Craig, the Federal Court was tasked with addressing an application for summary dismissal brought by Mr Craig, the landlord, and Integrity Real Estate, his property agent, against Mr Hall, a tenant. Mr Hall had filed an application seeking an injunction to prevent the enforcement of an eviction order made by the New South Wales Civil and Administrative Tribunal (NCAT). Mr Hall also sought declarations of misleading and deceptive conduct and unconscionable conduct under the Australian Consumer Law (ACL), as well as alleging breaches of the Disability Discrimination Act 1992 (DDA) by Mr Craig and Integrity Real Estate. The court had to determine whether Mr Hall's application had any reasonable prospects of success, and whether it constituted an abuse of process.

The court found that Mr Hall's application was entirely without merit. The allegations of misleading and deceptive conduct, unconscionable conduct, and breaches under the DDA were dismissed as baseless and frivolous. Additionally, the court held that the application failed to disclose a reasonable cause of action and constituted an abuse of the court process. Consequently, the court granted the respondents' application for summary dismissal, dismissing Mr Hall's amended originating application under section 31A of the Federal Court of Australia Act 1976 (Cth) and rule 26.01 of the Federal Court Rules 2011 (Cth).

Given the wholly unsubstantiated and vexatious nature of Mr Hall's claims, the court exercised its discretion to award indemnity costs to the respondents. The court found that Mr Hall's allegations were not only without merit but also served no legitimate purpose other than to harass the respondents. As a result, Mr Hall was ordered to pay the respondents' costs on an indemnity basis. This decision underscores the importance of ensuring that court proceedings are not used as a vehicle for frivolous or vexatious claims.

ORDERS:
1. The applicant’s application for summary judgment is dismissed.
2. The applicant’s amended originating application is dismissed under s 31A of the Federal Court of Australia Act 1976 (Cth) and r 26.01(1) of the Federal Court Rules 2011 (Cth).
3. The applicant is to pay the respondents’ costs on an indemnity basis.

Orders

Orders of the court

1. The applicant’s application for summary judgment is dismissed.

2. The applicant’s amended originating application is dismissed under s 31A of the Federal Court of Australia Act 1976 (Cth) and r 26.01(1) of the Federal Court Rules 2011 (Cth).

3. The applicant is to pay the respondents’ costs on an indemnity basis.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

In line with these principles, summary dismissal is not necessarily warranted simply because the claim is poorly drafted, as a deficiency of that nature may be addressed by the grant of leave to amend. 3. BACKGROUND Save where I otherwise indicate, the following matters do not appear to be in contention. On or about 24 June 2020, Mr Hall entered into a residential tenancy agreement with respect to the property with Mr Craig via Integrity Real Estate. Integrity Real Estate is Mr Craig’s property agent upon whom he relied to administer the property such as advertising that it is available for lease, preparing the lease agreement, collecting rent, and other similar activities. The lease was initially for a fixed term ending on 23 December 2020. From that date, Mr Hall (and his co-tenant, Chad Monaghan) continued to lease the property from Mr Craig on a periodic tenancy. On 4 March 2021, Integrity Real Estate received a “Tenant Vacating Notice” from Mr Monaghan, indicating that he was moving out and terminating his obligations under the periodic tenancy. The notice indicated that he had in fact moved out of the property on 26 February 2021, and Integrity Real Estate removed Mr Monaghan’s name from the tenancy with effect from 23 March 2021 (being 14 business days after the notice was received). On 30 March 2021, Mr Craig instructed Integrity Real Estate to issue a termination notice in relation to Mr Hall’s tenancy. Integrity Real Estate contends that Mr Craig did not give a reason for wanting to terminate the tenancy. Integrity Real Estate proceeded to issue a termination notice to Mr Hall utilising the “no cause” ground under s 85 of the Residential Tenancies Act 2010 (NSW) (RTA). The period of notice provided to Mr Hall required him to vacate the property by 28 June 2021. On 29 June 2021, Integrity Real Estate lodged an application for possession of the property with the New South Wales Civil and Administrative Tribunal (NCAT) in accordance with instructions from Mr Craig, in whose name and on whose behalf the proceedings were conducted. Mr Craig did not actively participate in the NCAT proceedings. On 29 June 2021, Mr Hall’s mother wrote to Integrity Real Estate referring among other things to Mr Hall’s disability and chronic pain and to an alleged assault on him on 10 June 2021 causing him to suffer fractured ribs and multiple bruises. She also contended that s 85 of the RTA is inconsistent with s 25 of the Disability Discrimination Act 1992 (Cth) (DDA) for the purposes of s 109 of the Constitution. A copy of this letter was annexed to the first Mullins affidavit at annexure LM-2. On 13 July 2021, Integrity Real Estate received Mr Hall’s response to the NCAT proceedings (first Mullins affidavit at annexure LM-3). On 20 July 2021, NCAT made the following consent orders:1.The Residential Tenancy Agreement is terminated in accordance with: s 85 of the Residential Tenancies Act 2010 as the landlord has served a 90 day notice for termination of a periodic agreement.2.The Residential Tenancy Agreement is terminated immediately in possession is to be given to the landlord on the date of termination.3.The order for possession is suspended until 23-Aug-2021.4.The tenant shall pay the landlord a daily occupation fee at the rate of $49.29 per day from the day after the termination, namely 21-Jul-2021 until the date vacant possession is given to the landlord.5.Within 60 days of the date for possession of the premises specified in these orders the landlord may request the relisting of the application to determine the amount of the occupation fee owing.6.The landlord’s agent is to advise the tenant in writing by the delivery of a letter to the premises by 6:00 pm on 20-Jul-2021 of the orders made today.(First Mullins affidavit at [14] and at annexure LM-4.)

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Finally, Mr Hall attacks the respondents’ interlocutory application on the basis that it is “vexatious”, “consists of scandalous misleading or deceptive, diversions from the central cause of action”, failed to identify any reasonable and logical grounds to support their interlocutory case, “is otherwise an abuse of the process of the Court in that it can’t possibly succeed in relation to Applicant’s originating application which consists of the Form 15 and Form 17; neither can be reasonably viewed or considered in isolation from each other”. Contrary to these assertions, I consider that the respondents’ interlocutory application was properly made and must be upheld for the reasons I have already given. 6. THE APPLICANT’S APPLICATION FOR SUMMARY JUDGMENT As I have earlier mentioned, Mr Hall’s application for summary judgment, which was opposed, was not supported by any affidavit. First, while Mr Hall relied upon the fact that the respondents had not filed a defence, that does not establish that the respondents have no reasonable prospects of defending the proceedings. Both respondents are actively defending the proceedings. The filing of a defence was effectively deferred pending the outcome of the respondents’ application for summary dismissal, thereby minimising the potential for wasted costs in circumstances where the respondents alleged that, even taken at its highest, Mr Hall’s application for relief could not reasonably succeed. I also note that the respondents made it clear that they would essentially raise the matters contained in their interlocutory application for summary dismissal as a defence to the originating application and, therefore, they had effectively already disclosed the substance of their defence (respondents’ reply/response submissions (RRRS) at [21]). Secondly, subject to a small number of exceptions, most of the matters raised by Mr Hall in support of his application for summary judgment were relied upon by him in the context of considering the respondents’ interlocutory application for summary dismissal, namely, the alleged conspiracy to pervert the course of justice, the allegations that the respondents are in breach of the ACL and s 25 of the DDA, and the prospect of joining additional parties. I have already found that these contentions have no merit for the reasons earlier set out. Manifestly, therefore, they do not establish that the respondents have no reasonable prospects of defending the proceedings. It follows that Mr Hall’s application for summary judgment should be dismissed.7. THE RESPONDENTS’ APPLICATION FOR INDEMNITY COSTS7.1 Introduction As the respondents have been wholly successful in their application for summary dismissal, and the applicant wholly unsuccessful in his application for summary judgment, there is no basis on which the respondent should be denied their legal costs. Normally, costs are calculated on what is described as a “party and party basis”, which means that the unsuccessful party must pay a portion of the successful party’s legal costs, as agreed or assessed by an independent costs assessor.

Ratio Decidendi

Legal Principle Established

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