Hillier v Martin (No 22)

Case [2025] FCA 507

FEDERAL COURT OF AUSTRALIA

Hillier v Martin (No 22) [2025] FCA 507

File number(s): SAD 113 of 2020
Judgment of: MCELWAINE J
Date of judgment: 19 May 2025

Catchwords:

PRACTICE AND PROCEDURE – interlocutory application by a non-party to set aside interlocutory restraining and other orders which noted undertakings given by respondents- whether applicant lacks standing- whether application proceeds on a misunderstanding-in any event no new facts established to justify reconsideration of earlier orders- application dismissed

PRACTICE AND PROCEDURE – failure to comply with procedural orders for filing of affidavits-very late attempt to rely on substantial additional material-conduct inconsistent with overarching purpose-application refused.

PRACTICE AND PROCEDURE – recusal application for apprehended bias-no factual or legal basis established-application refused.

PRACTICE AND PROCEDURE – where scandalous submissions may constitute contempt in the face of the Court-inappropriate conduct by person who is a lawyer and was once a legal practitioner.
Legislation:

Federal Court of Australia Act 1976 (Cth) ss 37M, 37N

Income Tax Assessment Act 1997 (Cth) s 995-1(1)

Federal Court Rules 2011 (Cth) r 4.01(2)
Cases cited:

Adam P. Brown Male Fashions Pty Ltd v PhilipMorris Inc [1981] HCA 39; (1981) 148 CLR 170

Chanel Ltd v F.W. Woolworth & Co Ltd [1981] 1 W.L.R. 485; [1981] 1 All ER 745

Cutler v Wandsworth Stadium Ltd [1945] 1 All ER 103

Director of Public Prosecutions v Johnson [2002] VSC 597

Hiller v Martin (No 11) [2022] FCA 407

Hillier v Martin (No 10) [2022] FCA 166

Hillier v Martin (No 12) [2022] FCA 952

Hillier v Martin (No 19) [2024] FCA 210

Hillier v Martin (No 4) [2021] FCA 710

Hillier v Martin (No 8) [2021] FCA 1272

Hobart International Airport Pty Ltd v Clarence City Council [2022] HCA 5; (2022) 276 CLR 519

Jenkins v Todd [2016] NTSC 21; (2016) 36 NTLR 203

Martin v Hillier (No 2) [2021] FCA 710

Martin v Hillier [2022] FCA 351

Martin v Registrar Cridland [2025] FCA 45.

Morgan v State of Victoria [2008] VSCA 267; (2008) 22 VR 237

Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) [1998] HCA 30; (1998) 195 CLR 1

Reece v Mckenna; Ex parte Reece [1953] St R Qd 258

Registrar of the Supreme Court of South Australia v Moore-McQuillan [2007] SASC 447

Simmons v Giezekamp [2024] FCA 649
Division: General Division
Registry: South Australia
National Practice Area: Commercial and Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs: 77
Date of hearing: 12 May 2025
Counsel for the Applicant: Mr RJ Whitington KC with Mr G Sykes Bidstrup
Solicitor for the Applicant: Sykes Bidstrup
Counsel for the First Respondent: The First Respondent did not appear
Counsel for the Second Respondent: The Second Respondent did not appear
Counsel for the Third Respondent The Third Respondent did not appear
Counsel for the Fourth, Fifth and Sixth Respondents: Mr T Kentish
Solicitor for the Fourth, Fifth and Sixth Respondents: Gilchrist Connell
 The Interested Person The Interested…

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AGLC
Hillier v Martin (No 22) [2025] FCA 507
Case
[2025] FCA 507
Decision Date

CaseChat Overview and Summary

The case of Hillier v Martin (No 22) before the Federal Court involved an interlocutory application by Mr Martin, a non-party, seeking to set aside interlocutory orders made by Justice Charlesworth. The orders in question were intended to enforce certain undertakings given by the respondents in the primary proceeding. The legal issues that arose from this application centred on whether Mr Martin had standing to bring the application, whether the application was based on a misunderstanding, and whether new facts had been presented that justified reconsideration of the earlier orders. The court examined whether Mr Martin, who was a director of a corporation involved in the case but prohibited from representing it, had the necessary standing to challenge the orders made in the primary proceeding. The court also considered whether the application was made in good faith or if it was based on a misunderstanding of the orders.

The court found that Mr Martin lacked standing to bring the interlocutory application as he was not a party to the proceeding and was prohibited from representing the corporation involved. Furthermore, the application was deemed to be based on a misunderstanding of the orders, and no new facts had been established that would warrant reconsideration of the earlier orders. Consequently, the application was dismissed. Additionally, the court refused Mr Martin's applications for recusal, finding no factual or legal basis for the claim of apprehended bias. The court also addressed the issue of scandalous submissions made by Mr Martin, which were deemed to be inappropriate conduct for a lawyer and potentially contemptuous of the court.

The court's final orders were that the interlocutory application dated 18 February 2025 was dismissed and that the parties would be heard as to costs. This decision underscored the importance of standing and the necessity for applications to be based on a proper understanding of the orders in question. The court's ruling reinforced the principle that interlocutory orders should only be challenged on the basis of new facts or a clear misunderstanding, and not on procedural missteps or unfounded allegations.

Orders

Orders of the court

1. The interlocutory application dated 18 February 2025 is dismissed.

2. I will hear the parties as to costs.

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

Background

Background to the litigation

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Evidence

Evidence Before The Court

Mr Martin was dissatisfied with my ruling. He requested that I grant leave to appeal it. I refused to entertain that application on the basis that properly it is one that should be made to another judge. Eventually, after further argumentative behaviour, Mr Martin addressed his interlocutory application.Evidence and submissions on the interlocutory application Mr Martin’s affidavit sets out evidence and many submissions to found separate contentions in support of his claimed relief. He characterised the orders of Charlesworth J of 29 March 2022, 29 April 2022 and 17 August 2022 as freezing orders. He contends that the orders identify him personally by name and apply to him in his personal capacity. On that basis, he contends that he has standing to bring the interlocutory application. Pausing there, Mr Martin is a director of Operations. Operations does not have an appointed lawyer to act for it in the proceeding. A corporation must not proceed in this Court other than by a lawyer: r 4.01(2) of the Federal Court Rules 2011 (Cth), though in some circumstances that rule may be dispensed with. In this case, Mr Martin has been prohibited from representing Operations: Hillier v Martin (No 8) [2021] FCA 1272. There are six matters that are able to be discerned from Mr Martin’s affidavit on which he relies in support of the orders he seeks. First, there is a proceeding between Operations and the landlord of one of the premises from which it operates part of the business in the District Court of South Australia that was commenced on 6 December 2024. The dispute concerns whether Operations effectively exercised its right to renew a lease. The landlord disputes the lawfulness of the exercise of the option, contending amongst other things that Operations was then in breach of the lease terms. Operations claims declaratory and injunctive relief. The landlord made an application for security for costs. The security application was listed for hearing on 18 February 2025. In anticipation that security might be ordered, Mr Martin contended that it would be unjust if Operations was prevented from providing security for costs by reason of the orders made by Charlesworth J. In his affidavit, he contended that the payment of legal costs falls outside of the terms of permitted expenditure in the ordinary course of the business of Operations. Secondly, Operations has an outstanding taxation liability to the Commissioner of Taxation. Mr Martin has been issued with a Director Penalty Notice. He has paid an amount of $285,000 to the Commissioner “towards payment” of the taxation liability. His affidavit does not disclose the extent of the liability. Thirdly, in combination with the payments that he has made to the Commissioner and “other substantial funds” that he has transferred to Operations or “otherwise paid to unrelated parties on its behalf” he claims to be a creditor of Operations in an amount of approximately $25,000. His evidence does not descend to particularisation as to how that amount has been calculated.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

This proceeding has a regrettably long history, bedevilled by much procedural activity. The originating application was filed on 11 August 2020. Primarily it is an orthodox claim for an account of income, profits and assets for the conduct of trading trusts concerning a fast-food business in Adelaide known as Nordburger. The applicant is Mr James Hillier. Initially, he framed the proceeding only against Mrs Victoria Martin, who is his sister. Her husband is Mr Thomas Martin, who was a partner in a law firm. Mr Martin is not a party to this proceeding. Over time the number of respondents has grown. There are now five in addition to Mrs Martin: Nordburger Operations Pty Ltd, Erik Vari Pty Ltd, Stephen Bradley Williams, Norman Waterhouse Lawyers (a firm) and Norman Waterhouse Lawyers Pty Ltd. Presently, Mrs Martin is a litigant in person. The other parties have the benefit of legal representation. The proceeding has spawned 21 published interlocutory judgments, from several docket judges. Justice Charlesworth was the docket judge from August 2020 to September 2022, until responsibility was allocated to O’Sullivan J who continued until May 2024, when I assumed responsibility. To date there are 233 filed documents, mostly comprising interlocutory applications, affidavits and submissions in support. It has not progressed to the allocation of a hearing date due to unresolved applications by Mrs Martin for leave to appeal interlocutory orders made by O’Sullivan J. There are and have been multiple satellite proceedings. In filing order they commence with SAD 137/2021 - Victoria Martin v James Hillier, an application for leave to appeal Hillier v Martin (No 4) [2021] FCA 710 which was dismissed on 12 August 2021: Martin v Hillier (No 2) [2021] FCA 710. Next SAD 32/2022 - Victoria Martin v James Hillier, an application for leave to appeal Hillier v Martin (No 10) [2022] FCA 166, which was dismissed on 6 April 2022: Martin v Hillier [2022] FCA 351. This was followed by SAD 40/2024 – Victoria Martin v James Hillier, an application for leave to appeal Hillier v Martin (No 19) [2024] FCA 210, which matter is presently reserved for judgment. Finally, there is SAD 223/2024 - Victoria Martin v Registrar Cridland, an application for judicial review of a registrar’s decision to refuse to accept for filing certain amended documents in proceeding SAD 40/2024. Mrs Martin was successful in that application before McDonald J: Martin v Registrar Cridland [2025] FCA 45. The plaintiff’s pleadings have reached the point of the Third Amended Originating Application accepted for filing on 3 November 2022 and the Fifth Amended Statement of Claim filed on 10 August 2023. This is an occasion for reductionism. I am very grateful for the succinct summary of the primary claims (putting aside those against the legal respondents) that Charlesworth J set out in Hillier v Martin (No 12)[2022] FCA 952. Although her Honour was then concerned with the Third Amended Statement of Claim, her summary remains accurate for present purposes to understand the scope of the dispute between Mr Hillier, Mrs Martin and her related corporations. The summary at [13] is (omitting cross-referencing to paragraphs in the pleading then considered):The facts and circumstances pleaded by Mr Hillier in the third amended statement of claim include:1)From 2012 there existed a joint venture agreement between Mr Hillier, Mrs Martin and Mr Andrew Craig on behalf of the third respondent Erik Vari Pty Ltd (hereafter Craig) pursuant to which a hamburger businesses trading under the name Nordburger was established and operated. 2)The parties’ interests in the joint venture are 50% to Mr Hillier, 30% to Craig and 20% to Mrs Martin. 3)Under the terms of the joint venture, the parties were entitled to enjoy the profits of the joint venture according to their shares in the joint venture and Mr Hillier was entitled to participate in the control of the joint venture to the extent of his share. 4)In November 2014 the parties agreed to a variation of their interests in the joint venture including by way of Mr Hillier offering to Mrs Martin a further 10% share as a gift. 5)In March 2015 Heads of Agreement were executed by Mr Hillier, Mrs Martin and Craig confirming matters they had previously discussed as to their ownership interests, reflecting 40% to Mr Hillier, 35% to Mrs Martin and 25% to Craig. The gift offered or made to Mrs Martin has no effect in law or equity because of other pleaded matters, such that Mr Hillier retains a 50% interest. 6)In March 2013 Nordburger Pty Ltd was incorporated. 7)Mrs Martin acquired the legal interest in all of the 100 issued shares on the terms of the joint venture agreement.8)Mrs Martin became the sole director of Nordburger Pty Ltd on 14 March 2013. 9)Mr Hillier made further contributions of money and effort to the Nordburger business in the sum of approximately $342,000, primarily devoted to the establishment of a Nordburger restaurant in Norwood. 10)Mrs Martin made no monetary contribution to the establishment of the Nordburger restaurant in Norwood and has contributed no capital of her own to the joint venture. 11)By virtue of the joint venture agreement, Mrs Martin has been the trustee “of the businesses and other assets and income” of the joint venture for the benefit of herself, Mr Hillier and Craig in accordance with the terms of the joint venture agreement. 12)By virtue of her position as trustee, Mrs Martin has held the shares in Nordburger Pty Ltd and any other corporate entities established by her to conduct the businesses of the joint venture on trust for herself, Mr Hillier and Craig in accordance with the terms of the joint venture agreement. 13)Mrs Martin owes fiduciary duties to Mr Hillier both by virtue of her position as trustee and by virtue of her position as a joint venturer, namely a duty to act in the best interests of Mr Hillier, a duty not to profit from her position as trustee or fiduciary without the informed consent of the other joint venturers, and a duty to avoid a conflict between her own interests and her duties as trustee or fiduciary without the informed consent of the other joint venturers. 14)In addition to the Norwood restaurant, additional restaurants were established at Hindmarsh, Frewville and Chinatown. 15)There have been attempts to establish and document a formal structure for the joint venture in accordance with its terms. In the course of those attempts, Mrs Martin represented to Mr Hillier that he had at least a 40% interests in the joint venture and its assets and businesses, and that she held no more than a 35% interest, and that any interest she had in Nordburger Pty Ltd was held on terms that reflected the ownership interests in the joint venture and its assets and businesses (equity representations). 16)The equity representations embodied a representation that Mr Hillier was entitled to receive payment of a share of the joint venture profits as and when they were derived proportionate to his share in the joint venture, and to participate in the control of the joint venture as and when the occasion arose, with an effective say proportionate to his share in it. 17)In 2016 Mr Hillier executed a document titled “Deed Poll”. Mr Hillier was induced to execute the Deed Poll in circumstances amounting to economic duress, undue influence, unconscionable conduct in equity and within the meaning of the Australian Consumer Law (ACL) and misleading and deceptive conduct such that it is void at law or liable to be set aside. 18)Mr Hillier received payments out of the income of the joint venture, including payments of $4,000 per week between November 2016 and November 2019. The payments were by way of weekly distributions and not pursuant to a consultancy agreement prepared by Nordburger Pty Ltd (upon which the respondents rely). 19)Since 29 April 2016 Mrs Martin has taken or assumed the sole and effective control of the joint venture and its assets and its businesses to the exclusion of Mr Hillier.20)Mrs Martin’s assumption of control constitutes a breach of the joint venture agreement, a breach of trust, a breach of her fiduciary obligations and contraventions of the ACL. 21)Since April 2016, the joint venture has earned profits which have been received and dealt with by Mrs Martin. 22)Mrs Martin has failed to pay Mr Hillier his agreed share of the profits derived from the joint venture since the period she assumed control to his exclusion:. 23)The failure to pay Mr Hillier’s agreed share of profits also constitutes a breach of trust, a breach of fiduciary duties, a departure from the equity representations and contraventions of the ACL:. 24)Mrs Martin has paid or kept to herself the profits of the joint venture in excess of her entitlement. 25)Mrs Martin has paid to herself a salary of $200,000 per annum without providing services to the joint venture commensurate with and justifying such payments. 26)The payments were made in breach of the obligations referred to above and in breach of the ACL. 27)In January 2020 Mrs Martin informed Mr Hillier for the first time that she had restructured the Nordburger business by utilising a trust structure that provided for him as a beneficiary. 28)In response to a request for information Mr Hillier made under the Trustee Act 1936 (SA), he was provided with documentation relating to a new discretionary trust established on 29 October 2019, the Nordburger Holdings Trust (NH Trust). 29)The documentation provided to Mr Hillier records: a)the establishment of a new entity, Nordburger Operations Pty Ltd (a company then wholly owned and controlled by Mrs Martin); b)the appointment of Operations as trustee of the NH Trust on 2 December 2019; c)Mrs Martin transferred intellectual property owned by the joint venture to Operations; and d)Mrs Martin claims to be the ultimate economic owner of the assets purportedly the subject of the NH Trust, which assets are properly the assets of the joint venture.30)The actions recorded in the documents were undertaken by Mrs Martin and were undertaken in breach of the joint venture agreement, breach of trust, and breach of her obligations as a fiduciary. 31)The actions recorded in the documents were of no valid effect on the terms and operations of the joint venture agreement and the joint venture. 32)Mrs Martin’s actions were undertaken at a time when she was the sole director and shareholder of Nordburger Pty Ltd and Operations and their controlling mind.