Islam v McCarrolls of Moss Vale Pty Ltd

[2023] NSWDC 484

District Court

New South Wales

Medium Neutral Citation:

Islam & Ors v McCarrolls of Moss Vale Pty Ltd & Ors [2023] NSWDC 484

Hearing dates:

14, 17 August 2023, 5 October, 3 November 2023 (written submissions were also received on the application for indemnity costs of the fourth to eighth defendants)

Date of orders:

10 November 2023

Decision date:

10 November 2023

Jurisdiction:

Civil

Before:

Abadee DCJ

Decision:

See paragraph [94]

Catchwords:

CORPORATIONS – director of company in liquidation purports to join the company as a second plaintiff – liquidator declines to bring or carry on proceeding against parties claimed to have contributed to the wrongful repossession of a vehicle owned by the company – company director claims right to sue in relation to vehicle

COURTS – director of company complains against conduct of liquidator before and after appointment – jurisdiction of District Court to adjudicate on complaints

CIVIL PROCEDURE – application for summary dismissal

COSTS – application for indemnity costs based upon non-acceptance of rules offer – application for gross lump sum order

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 98(4)(c)

Corporations Act 2001 (Cth), s 90-5 to 90-20, 90-15(3)(e), 90-15(6)(a), 90-15(5)(a), 477, 598

Judiciary Act 1903 (Cth), s 55N(1)(e)

Privacy Act 1988 (Cth)

Uniform Civil Procedure Rules 2005 (NSW), r 13.4, Part 14, r 20.26, r 42.15A

Cases Cited:

Australian Real Estate Relations Pty Ltd [2023] NSWCA 131

Islam v Australian Real Estate Relations Pty Ltd [2023] NSWCA 47

Islam v Australian Securities & Investments Commission [2023] NSWSC 1188

Islam v Fahim Khan & Ors [2023] NSWDC 478

Islam v Raine & Horne Corp [2023] NSWSC 1184

Islam v Ul Karim [2023] NSWSC 717

Northern Territory v Sangare (2019) 372 ALR 117

Oshlack v Richmond River Council (1998) 193 CLR 72

Ratul v Islam [2023] NSWSC 78

Category:

Principal judgment

Parties:

Md Rajibul Islam (first plaintiff)
Australian Real Estate Relations Pty Ltd (second plaintiff)
Gulf Bridge Finance Pty Ltd (third plaintiff)
McCarrolls of Moss Vale Pty Ltd (first defendant)
Toyota Finance Australia Ltd (second defendant)
Australian Financial Security Authority trading as the Commonwealth of Australia (fourth defendant)
Australian Competition and Consumer Commission (fifth defendant)
Australian Prudential Regulation Authority (sixth defendant)
Australian Securities and Investments Commission (seventh defendant)
Commissioner of Taxation trading as the Commonwealth of Australia (eighth defendant)

Representation:

Md Rajibul Islam (first plaintiff, self-represented)
Farrar Lawyers (1st – 3rd defendants)
Australian Government Solicitor (4th – 8th defendants)

File Number(s):

2023/165594

Publication restriction:

Nil

REASONS FOR JUDGMENT

1. These reasons should be read in conjunction with my reasons in Islam v Fahim Khan & Ors [2023] NSWDC 478, because of the similarity in procedural circumstances affecting both proceedings. Particularly pertinent are the references in that judgment to the Court’s involvement in procuring legal representation of Mr Islam through the Pro Bono panel schemes operated by the NSW Bar Association and Law Society of NSW and the delay that has been caused in procuring such representation; and also Mr Islam’s involvement in serial other proceedings, principally, although not exclusively, in the Supreme Court of New South Wales.

2. Before the Court are applications for summary disposal or strike out of the proceeding.

The parties to the proceeding

Mr Islam’s relationships to the corporate plaintiffs

3. In this proceeding, commenced by summons on 24 May 2023, Mr Islam, and purportedly three other plaintiffs, sued three defendants. The three other plaintiffs purportedly joined were:

Second Plaintiff:    Australian Real Estate Relations Pty Ltd (ARER)

Third Plaintiff:   Gulf Bridge Finance Pty Ltd

Fourth Plaintiff:   Mortgage Plus Australia Pty Ltd

4. There has already been significant litigious history involving the plaintiff and the second plaintiff, (“ARER”), in the Supreme Court of New South Wales. Mr Islam is one of two directors of ARER, a company that has been in liquidation since February 2023. The other director and shareholder was Mr Abu Ratul. Mr David Levi was appointed as liquidator to ARER on 10 February 2023 (Ratul v Islam [2023] NSWSC 78).

5. ARER was wound up on the just and equitable ground in one of two applications that came before Black J (Supreme Court of New South Wales proceeding 2022/277860). The application for winding up was brought by Mr Ratul. Mr Islam and Mr Ratul (and Mr Ratu’s wife, Ms Diba) had been in frequent disputation from about the middle of 2022. The other application was Mr Islam’s personal member’s claim, as a shareholder against Mr Ratul. (Supreme Court of New South Wales proceeding 2022/325554). Mr Islam has tried unsuccessfully to stay the winding up orders against ARER[1] .

   1. Islam v Australian Real Estate Relations Pty Ltd [2023] NSWCA 47 (appeal dismissed: Islam v Australian Real Estate Relations Pty Ltd [2023] NSWCA 131)

6. In relation to Gulf Bridge Finance Pty Ltd, Mr Islam and another person (Sarah Anwar Khan) are directors and Ms Khan is the sole shareholder. As to Mortgage Plus Australia Pty Ltd, Mr Islam is the sole director and majority member of this entity.

The defendants

7. The defendants were identified in the original iteration of the Summons as follows:

First Defendant:   Maserati McCarols Artarmon

Second Defendant:   Toyota Finance Australia

Third Defendant:   David Levi of Levi Consulting

8. The remaining defendants were Commissioners of various federal agencies: the AFSA (fourth defendant), the ACCC (fifth defendant), the APRA (sixth defendant), the ASIC (seventh defendant) and the ATO (eighth defendant).

9. On 14 August 2023, I formalised the record to remove the ATO and AFSA (which were not legal entities capable of being sued) and substitute the Commonwealth of Australia. These defendants may collectively be referred to as the ‘Commonwealth defendants.’

10. Also, the name of the First Defendant was corrected to be McCarrolls of Moss Vale Pty Ltd and the Second Defendant was corrected to be Toyota Finance Australia Ltd.

Other proceedings Mr Islam commenced against some of the parties in this proceeding

11. I also note that it appears that Mr Islam has commenced, or perhaps instigated other proceedings in the Supreme Court of New South Wales against defendants in proceedings that he commenced and instigated in this Court.

12. This included:

1. Proceedings 2023/152394: in which Mr Islam sued the Australian Securities & Investments Commission. This proceeding was summarily dismissed on 6 October 2023[2] ;

2. Proceeding 2023/195738: in which Mr Islam sued Raine & Horne Corp. This proceeding was summarily dismissed on 6 October 2023[3] .

2. Islam v Australian Securities & Investments Commission [2023] NSWSC 1188

3. Islam v Raine & Horne Corp [2023] NSWSC 1184

The proposed actions in the Summons

13. Returning to the Summons, in its original iteration, it was filed on 24 May 2023. In relation to its substantial content, it ran to 12 pages, including a statement of the relief claimed. Within the summons are many factual allegations that are more appropriate to a statement of claim. The Summons is the originating process. No statement of claim was filed, when it should have been.

14. The Summons, as might be expected of one of this length, is prolix and repetitive. So far as it contains factual allegations (of the kind associated with a pleading), it appears from the original iteration of the Summons that Mr Islam wished to contend that:

1. he (personally) entered into a contract with McCarrolls of Moss Vale Pty Ltd to service his car, a Maserati, but the servicing was delayed;

2. the car became repossessed by Toyota Finance Australia Ltd (‘Toyota Finance’). Toyota Finance supplied loan finance without proper checks and was therefore in breach of responsible lending obligations under federal consumer credit legislation. Further it did not follow correct procedure for repossession (presumably of the Maserati);

3. Mr Levi, the liquidator of ARER, did not investigate the affairs of the company (apparently a reference to ARER and otherwise engaged in negligent conduct, fraudulent conduct, misleading or deceptive conduct and in breach of his fiduciary and statutory duties as an officer of ARER. Scattered assertions are made about Mr Levi knowing about a misappropriation of ARER funds (inferentially by Mr Ratul) and doing nothing about it; disclosing, when he was not authorised, confidential information about Mr Islam (in violation of the Privacy Act). It appears that Mr Levi purports to sue Mr Levi on ARER’s behalf;

4. ASIC failed in its responsibility to maintain, facilitate and improve the performance of the financial system. It did not investigate Mr Islam’s complaints. Further, it did not provide adequate oversight of the Australian Financial Complaints Authority (AFCA) in that body’s conduct of Mr Islam’s complaints (against Mr Levi);

5. AFSA failed to investigate complaints despite its obligation to investigate registered trustees (like Mr Levi)

15. In the section of the document titled ‘Relief Claimed’ there appears the following:

“1   Liquidated Damages of the sum of $750,000 to be rewarded.

2.   Future prevention of such behaviour in the interests of all other citizens

3.   Any other orders the Court deems necessary

4.   Costs

5.   Liquidator to be discharge (sic) from his duty immediately

6.   ASIC to investigate Levi Consultings

7.   ASIC, AFSA, ACCC to investigate our claims and provide report to respected court.

8.   ASIC to investigate Toyota Finance in regards to their lodoc funding and all other aspects of writing noncompliant loans and they have failed their licensing obligation

9.   ASIC to pay $1 to plaintiff.

10.   AFSA to pay $1 to plaintiff.

11.   ATO to pay $1 to plaintiff.

12.    David Levi to pay $1 to plaintiff.

13.   Toyota Finance to pay $200,000 victims compensation funds

14.   Toyota Finance to pay $150,000 to plaintiff

15.   Maserati Artarmon to pay $150,000 victims compensation funds’

16.    Maserati Artarmon to pay $249,000 to plaintiff”

16. As was pointed out by some of the defendants, there is nothing in the Summons indicating any role or involvement of the corporate plaintiffs, Gulf Bridge Finance Pty Ltd and Mortgage Plus Australia Pty Ltd.

The notices of motion

17. On 2 June 2023, the Second (ARER) and Third Plaintiffs (Gulf Bridge Finance Pty Ltd) applied to strike out or dismiss the proceedings.

18. On 28 July 2023, the Fourth to Eighth Defendants also applied to have summarily dismissed or struck out the proceedings against those entities.

The delays and circumstances leading to the filing of an amended summons

19. As occurred in the other proceeding, Islam v Khan, on 5 October 2023, the Court directed that Mr Islam file a statement of claim. This was after he had received legal advice from a pro bono solicitor under a referral (made in August 2023) and after I had indicated to Mr Islam (at the mention on 5 October 2023) that in view of the opportunity he had to receive legal advice, his experience in litigation and associated understanding (and indeed Mr Islam’s acknowledgement) that civil litigation is procedurally governed by the Civil Procedure Act 2005 (NSW) and Uniform Civil Procedure Rules 2005 (NSW).

20. The plaintiff received pro bono advice from a well-regarded Sydney law firm. The advice was contained in a letter dated 19 October 2023. Unfortunately, for reasons not now necessary to go into (but through no fault of Mr Islam), Mr Islam did not receive the advice until about 4pm last Friday, 27 October 2023.

21. On the last occasion, Mr Islam had been directed to file and serve a statement of claim by 27 October 2023.

22. After that deadline had expired, on 29 October 2023 (a Sunday), Mr Islam filed an Amended Summons on 29 October 2023 at 7:31am. Although the period of time that Mr Islam had to consider the lawyer’s advice was short, the fact is that Mr Islam did have the opportunity to consider its content when he filed the Amended Summons. Since he had not obtained leave to file an Amended Summons, but had only been directed by the Court to file a statement of claim, the Registry rejected the Amended Summons; treating it as void.

23. From 29 October 2023 until 3 November 2023, Mr Islam did not file a statement of claim in the subsequent period of time he had before the hearing of the applications.

24. Nevertheless, for the purposes of deciding the summary dismissal application, and with Mr Farrer’s consent, the Court had regard to the contents of the Amended Summons (it being Exhibit 1 on the application).

Alteration of parties in the Amended Summons

25. Although the Amended Summons has no other status other than the limited use that I have adverted to, in order to understand Mr Islam’s position, it is pertinent to observe changes to the parties in the Amended Summons in comparison to the original iteration of the Summons.

New (or varied identification of) plaintiffs

26. In the original iteration of the summons, Mr Islam indicated that, as the first plaintiff, he was suing in a personal capacity. In the Amended Summons, Mr Islam indicated that he was also suing in the capacity as trustee for the Gulf Bridge Trust, as first plaintiff. Gulf Bridge Finance Pty Ltd was identified as the Third Plaintiff in the Summons. It was referred to in the Amended Summons as the proposed Fourth Plaintiff. This was a difference from the original summons. He continued to also sue in a personal capacity, as the proposed Third Plaintiff; although there was nothing in the document to explain why he could sue in both an individual capacity and as a trustee for another company.

27. Mortgage Plus Australia Pty Ltd was identified in the Summons as the Fourth Plaintiff. In the Amended Summons it was described as the proposed Second Plaintiff.

28. ARER was described in the Summons as the Second Plaintiff. In the Amended Summons it was referred to as the proposed Fifth Defendant.

A proposed new defendant

29. In the Amended Summons, Mr Tanvir Ahmed was identified as the ‘Fourth Defendant.’ Mr Ahmed was not identified as a defendant in the summons (or the Amended Summons that he had tried to file).

30. In relation to Mr Ahmed’s position, during the course of the hearing that occurred on 3 November, Mr Islam sent to me, through my Associate, email communications which he had sent to and received from Mr Farrar on 2 November 2023, in which Tanvir Ahmed was copied in to the communications. Nevertheless, from the Bar Table, Mr Farrar explained that this related to a separate proceeding; not the one that is before the Court. In any event, as I verbally noted during the argument, there was nothing in the communications of 2 November 2023 which indicated Mr Farrar having received instructions to appear for Tanvir Ahmed who, he said, he had never heard of.

31. Since the Amended Summons has been avoided by the Registry and has been considered only for the purpose of determining the summary dismissal applications, the current position is that no proceeding has, in fact, been commenced against Tanvir Ahmed. At any rate, there is no proof that originating process has been served on him. No order can be made affecting that person’s interests in the present applications.

The withdrawal of proceedings against the Commonwealth defendants

32. By 3 November 2023, when the matter came back before me and, at a stage when Mr Islam had received legal advice, Mr Islam accepted that the proceeding should be dismissed against each of the Commonwealth defendants. When the Court indicated it was inclined to order him to pay the costs of the Commonwealth defendants in this proceeding, Mr Islam made oral submissions in opposition.

33. The legal representative for the Commonwealth defendants, Mr Behringer, indicated that not only did those defendants seek costs orders against Mr Islam: but they also sought an order that they be payable on an indemnity basis. An affidavit was prepared by Mr Behringer (4 October 2023) and an outline of written submissions in relation to that application. The Court was informed that the Commonwealth defendants had supplied copies of these documents to Mr Islam, but Mr Islam indicated that he sought opportunity to respond to the documents. I made some directions to give him that opportunity; along with opportunity for the Commonwealth defendants to give written submissions in reply, which I indicated would be determined ‘on the papers.’ I will return to the costs arguments associated with the withdrawal of the claims against the Commonwealth defendants later in these reasons.

34. For the moment, however, this then, leaves the Court to determine the main application, of the first, second and third defendants, to summarily dismiss Mr Islam’s proceedings against each of them.

The content of the Amended Summons

35. Regrettably, this document continues the pattern of extravagant and generalised assertions, bordering on the scandalous (particularly Mr Levi). Compared to the first iteration of the Summons, this time, there are also propositions of law, with citation of cases and statutes.

Mr Islam’s verbal articulation of his complaints

36. In the light of my difficult deciphering his written complaints against the first, second and third defendants, I asked Mr Islam to identify what they were.

37. Mr Islam complained that the Maserati had been repossessed. He says that McCarrols of Moss Vale Pty Ltd passed on private information about him to Mr Levi. He then asserts that Mr Levi passed on the same information to an entity described as “Power Torque Finance Pty Ltd” – who Mr Islam asserted was a name change from Toyota Finance Australia Ltd. This amounted to breaches of privacy or confidentiality. This is a complaint about entities or persons involved in a breach of privacy. When I asked him what remedy he sought, assuming he had an action on the basis of the asserted fact of a breach of privacy, Mr Islam said that he wanted the return of the Maserati vehicle.

38. Secondly, Mr Islam complained that the financier had repossessed the motor vehicle without giving notice and, therefore the opportunity to rectify any event of default. He denied that there had been any default. He added that he had offered to pay money to have the car returned.

39. Thirdly, Mr Levi, as liquidator of ARER, had acted in a fraudulent way. One example of this was his procuring the employment of a person (who he identified as Tanvir Ahmed) in late 2022. Though he did not expressly say this in his oral submission, I infer that Mr Islam might be referring to what he described in the Amended Summons as Mr Levi’s offer to purchase shares in ARER in November 2022. This was, as I understood Mr Islam to submit, prior to Mr Levi’s appointment as liquidator. When I asked him whether this grievance had been aired in the winding up proceeding in the Supreme Court of New South Wales, Mr Islam said that he currently had on foot an application for special leave to appeal the Court of Appeal’s decision rejecting Mr Islam’s appeal against the winding up.

40. Fourthly, and associated with the third complaint, Mr Levi was said to have acted improperly since his appointment as liquidator. He had manipulated financial statements.

The applicant’s evidence and submissions

41. The first, second and third defendants (hereafter referred to as ‘the Applicants’) relied upon two affidavits. These were from Emily Hills (7 June 2023) and David Levi (7 June 2023). Ms Hills is the Senior Corporate Counsel of Toyota Finance Australia Limited (the second defendant). Mr Levi is, to repeat, the third defendant.

Ms Hills’ evidence

42. Relevantly, Ms Hills annexed to her affidavit the documents which she contended constituted the loan agreement for finance for the motor vehicle that Mr Islam complained had been repossessed.

43. Materially, the agreement indicated that the borrower of finance for the acquisition of a Maserati was ARER. Mr Islam was one of two guarantors (the other being Abu Ratul).

42. Standard terms of the loan agreement were that:

1. an event of default was when the borrower became ‘legally incapacitated’ (cl 10.1(i));

2. being ‘legally incapacitated’ included the borrower lacking full legal capacity and this included being ‘insolvent’) (cl 1.1(j));

3. ‘insolvency’ included winding up (cl 1.1(i)).

Mr Levi’s evidence

45. Mr Levi deposed to being appointed as liquidator of ARER on 13 February 2023.

46. Mr Levi also deposed that he had not given consent to Mr Islam to file, or continue with these proceedings.

47. Mr Farrar, who appeared for the applicants submitted that Mr Islam had no standing to complain about what had occurred to the Maserati vehicle. The action belonged to the liquidator of ARER and since the liquidator’s appointment at least, does not have any authority, even as a past director of ARER, or as a guarantor to the finance arrangement, to sue.

48. In so far as Mr Islam complains about other conduct of the liquidator, his complaints in this proceeding against Mr Levi post-dated Mr Levi’s appointment.

Consideration

49. As indicated in my reasons in Islam v Khan, referred to earlier, applications for summary dismissal are not determined by form, but by substance; although I hasten to add that the inability to prepare a statement of claim according to Part 14 of the UCPR may be symptomatic of a claim that should be dismissed.

50. I referred to the applicable principles relating to summary dismissal applications in Islam v Khan. It is unnecessary to repeat them.

51. I have indicated that the Summons does not indicate any right or interest affecting the two corporate plaintiffs, Gulf Bridge or Mortgage Plus. They are not properly joined and they should be removed as the third and fourth plaintiffs from the proceeding. ARER should not be a plaintiff, as its liquidator did not consent to commence (or carry on) the proceeding (see also paragraph54 below).

52. I have reviewed the amended summons that was recently rejected by the Court registry. This version ran for 24 pages. Unfortunately, it cannot be said that the document represents any material improvement on the original iteration. In its form, it is effectively an amalgam of a statement of relief, a bare reference to causes of action expressed at an immensely high level of generality, and inserts propositions of law, with express citation of certain hallowed decisions. The allegations themselves are of the ‘high wide and handsome’ variety which obscure what it is that Mr Islam is complaining about. Many are serious in nature with the liberal choice of expressions such as misrepresentation, and fraud.

53. The balance of the document contains a litany of grievances that are unintelligible and vague. It is bereft of meaningful content. In Islam v Fahim Khan & Ors [2023] NSWDC 478, I adopted the description of what Harrison J had said with reference to the state of Mr Islam’s pleading in Islam v Raine & Horne Corp [2023] NSWSC 1184 at [12]. The same description is apposite to the summons, and the rejected Amended Summons, that Mr Islam filed in this particular proceeding.

54. As a matter of substance, and conscious as I am of the high threshold for summary dismissal of causes of action, and the high degree of certainty that the Court requires to be satisfied that such order should be made, I am satisfied that (a) the vehicle is owned not by Mr Islam personally (or by Mr Islam as a trustee) but by ARER; (b) ARER is in liquidation; (c) it is Mr Levi, as the liquidator of ARER, who has the exclusive standing to bring or maintain a legal proceeding in the name of the company (per s 477 of the Corporations Act), but (d) has elected not to do so. As to this last matter, I note for completeness, Weinstein J in the Supreme Court had referred to the same legal consequences of liquidation in Islam v Ul Karim [2023] NSWSC 717 at [17]). But still, Mr Islam continued to oppose the defendants’ application.

55. Subject to his complaint about a breach of privacy or confidentiality, Mr Islam has no proprietary interest in the Maserati, without which his effective action in tort for detinue (ie the return of the Maserati to him) must inevitably fail.

56. As to his complaint about breach of privacy or confidentiality, Australian law, as yet, has not developed to the stage where an action for breach of privacy or confidentiality generates a cause of action in common law (tort). Mr Islam did not refer the Court to any statutory right to compensation for any breach of privacy[4] . Even if (contrary to what I have found) he had standing to sue on a breach of contract (entered between the financier with ARER) and although the standard conditions of that arrangement were before the Court (in Ms Hills’ affidavit), he did not cite any contractual term or promise about privacy or confidentiality. No equitable right, or right of restitution, was articulated in any coherent way. Putting aside these legal difficulties, however, there is no clear articulation of the material facts relied upon to establish that privacy or confidentiality was infringed.

    4. The right under s 93 of the Privacy Act 1988 (Cth) is limited (by s 89)

57. In relation to conduct by Mr Levi prior to his appointment, if the point was good, this, in my view, may have provided some basis for the objection to Mr Levi as liquidator or (perhaps remotely) some basis for objecting to the winding up of ARER. That however, is now water under the bridge. This Court has no authority to adjudicate on the correctness or otherwise of Mr Levi’s appointment, or the winding up of the company.

58. In relation to Mr Islam’s complaint about Mr Levi’s conduct since his appointment, the District Court had no jurisdiction to adjudicate upon such complaints. By sections 90-5 to 90-20 of Schedule 2 to the Corporations Act 2001 (Cth) a ‘Court’ has the power to inquire into conduct by a liquidator. Amongst other powers, the Court could make an order in relation to any loss sustained by the company because of a breach of duty by a liquidator (s 90-15(3)(e)), to make good some or all loss (s 90-15(6)(a) and, in the process, consider whether the liquidator has performed his duties and can even make a costs order against the liquidator (s 90-15((5)(a). The District Court, however, is not a “Court” for those purposes. The appropriate forum is the Supreme Court or the Federal Court of Australia. As was pointed out in a not dissimilar context[5] , this is something Mr Islam was also previously made aware about.

    5. Ratul v Islam [2023] NSWSC 78 at [1]

59. Nor does this Court have the jurisdiction to hear any complaint ventilated in his recent affidavit that he has against his former director, Mr Ratul, or even Mr Levi himself (under, for example, s 598 of the Corporations Act). Such action again must be agitated in the Supreme Court or Federal Court.

Further opportunity to plead?

60. Numerous opportunities have been extended to the plaintiff to try to present a complaint in a way that satisfies pleading requirements and facilitate the defendants’ respective understandings of the cases they would have to meet. The last opportunity was for Mr Islam to file and serve a statement of claim. Mr Islam sought to file the functional equivalent, an ‘Amended Summons,’ which the Court registry rejected. Notwithstanding that rejection (for formal reasons), having considered the document, which was prepared after Mr Islam had obtained pro bono legal advice, it would not have sufficed to satisfy the pleading requirements in Part 14 of the Uniform Civil Procedure Rules 2005 (NSW).

61. I am satisfied, however, that each of the bases in Part 13 r 4(a)-(c) have been made out such that the proceeding should be dismissed. In reaching that conclusion, I have concluded that the court process is beyond salvation by the filing of a statement of claim that complies with Part 14 of the UCPR.

62. In reaching that conclusion, I am not oblivious to the circumstance that Mr Islam represents himself and do not question the sincerity of the grievances he expresses. This motion has, however, been around for a long time, has occasioned inconvenience and costs in all of the defendants (without there being any indication that they can realistically be recovered from Mr Islam). Further, as remarked upon at greater length in Islam v Khan, Mr Islam appears unable to abide by pleading rules I am not persuaded that there is any utility in allowing Mr Islam to plead a case. Moreover, whilst acknowledging his status as a self-represented litigant, as indicated in certain parts of these reasons, he appears unable to learn from previous judicial decisions which identify legal prohibitions upon law suits against companies in external administration and their administrators.

63. The proceedings against the applicants on the motions should be summarily dismissed.

64. There is no obvious reason why costs should not follow the event but, if the parties wish to contend to the contrary, they have the facility of applying to set aside or vary the costs orders.

The costs applications of the Commonwealth defendants

Liability to pay costs of the Commonwealth defendants

65. The Commonwealth defendants sought orders that their costs be payable on an indemnity basis. They also applied for a gross lump sum costs order.

66. Anterior to this, however, is the question of liability for costs. On 3 November 2023, Mr Islam resisted any order that he pay the Commonwealth’s costs after consenting to the withdrawal of those proceedings against those defendants.

67. At the hearing on 3 November 2023, Mr Islam submitted that when he commenced the proceedings against those Commonwealth defendants, he was ignorant of his rights or obligations; but from late October 2023 he had effectively been set right from the advice that he had received from the pro bono law firm who advised him. Having received that advice, he did the right think in withdrawing his claims. He pointed out that despite his indication of withdrawing his claims against the Commonwealth defendants (or perhaps some of them) he still believed that they had wronged him: it appeared from the exchange that he contemplated he might bring a later suit against them. At any rate, he submitted that he should not be punished by having a costs order visited upon him.

68. Mr Islam subsequently supplied written submissions on 9 November 2023. This was done without the Court’s leave: the directions that I made on 3 November 2023 were more confined to allowing him the opportunity to respond to the Commonwealth’s defendants’ applications that he pay their costs on an indemnity basis and for a gross lump sum costs order; not on the question of any liability he had on the issue of his liability to pay costs.

69. Be that as it may, having had the opportunity to provide a supplementary submission as to costs, Mr Islam instead made further submissions, in effect, as to why he might be given further opportunity to file a statement of claim.

70. Although the Court would be entitled to disregard those submissions, for completeness, I note that there is nothing in those submissions which alters the conclusions already expressed.

71. These submissions misunderstand the policy rationale for costs orders. Contrary to Mr Islam’s submission, they are not intended to punish the party who withdraws a claim. They are intended, rather, to compensate the party against whom the proceeding is withdrawn for the legal costs incurred to defend the claim until it was withdrawn (Oshlack v Richmond River Council (1998) 193 CLR 72). It is no more relevant that the party withdrawing the claim is ‘ignorant’ or mis-informed about his, her or its rights against a party or parties whom the plaintiff sues than it is relevant that the plaintiff is impecunious[6] . The effect is still the same: the defendants have been put to the expense, proven to be unnecessary, of incurring legal costs.

    6. As to which, see Northern Territory v Sangare (2019) 372 ALR 117 at [32]-[33]

72. No proper basis has been advanced for why costs should not follow the event. Mr Islam is to pay the costs of the proceeding of the fourth to eighth defendants, respectively.

Application for indemnity costs

73. For both of the remaining costs applications, the Commonwealth defendants rely upon an affidavit of Sean Behringer, who is a Senior Lawyer with the Australian Government Solicitor, sworn on 4 October 2023. The Commonwealth defendants bring two costs applications. The first is a partial order for costs to be paid on an indemnity basis.

74. The application for a partial order for indemnity costs is based upon Mr Islam’s lack of acceptance of an offer made pursuant to r 20.26 of the Uniform Civil Procedure Rules 2005 (NSW) (the ‘rules offer’).

75. Such offer was contained in a letter that was emailed to Mr Islam on 28 July 2023. This was the same day that the Commonwealth defendants filed a motion seeking to have the proceeding dismissed or alternatively struck out.

76. In the letter, Mr Behringer explained that the terms of the offer were:

1. Judgment in favour of the Commonwealth defendants;

2. No order as to costs.

77. This is a ‘walk away’ offer.

78. In the same letter, Mr Behringer referred Mr Islam, indirectly, the effect of Part 13.4 of the Uniform Civil Procedure Rules, asserted that the Summons was liable to be dismissed upon any of those grounds, and explained that from the perspective of the Commonwealth defendants, they were offering to forego their entitlement to costs incurred to the date of the offer whilst pointing out that there were likely to be further costs incurred. The letter also explained that if the offer of compromise was regarded as not satisfying the requirements of r 20.26 of the UCPR, it was relied upon as a ‘Calderbank’ letter.

79. The offer complies with r 20.26. That provision contemplates a walk-away offer (r 20.26(3)(a)). By the operation of r 42.15A, subject to the Court’s discretion to otherwise order, the Commonwealth defendants achieved an outcome no less favourable than the terms that were offered to Mr Islam.

80. Having been given the opportunity to make submissions on the Commonwealth defendants’ application for indemnity costs, as indicated earlier, the gist of Mr Islam’s response was non-responsive. He did (and apparently cannot) explain any deficiency in the offer of compromise (as per the requirements of r 20.26 of the Uniform Civil Procedure Rules 2005 (NSW). He did not supply any reasoned basis for inviting the Court to exercise its discretion to alter the operation of r 42.15A(2) of the UCPR.

81. It follows that Mr Islam should pay the costs of the fourth to eighth defendants:

1. up to 28 July 2023, on the ordinary basis;

2. thereafter, on an indemnity basis.

Application for gross lump sum costs order

82. Another part of Mr Behringer’s affidavit concerned this application under s 98(4)(c) of the UCPR.

83. Mr Behringer’s affidavit indicated that he has over 13 years of experience in litigation and dispute resolution.

84. Mr Behringer explained that the AGS invoices professional fees and disbursements in representing the Commonwealth defendants on a special statutory basis (Judiciary Act 1903 (Cth), s 55N(1)(e)). The amounts claimed were exclusive of GST.

85. Mr Behringer set out a table of voluminous correspondence and documentation he deposed to the AGS receiving from Mr Islam. At this point, I would interpolate that it would not come as a surprise if the AGS received voluminous correspondence and documentation from Mr Islam: as noted throughout the hearings of this motion, the Court Registry itself has been inundated with voluminous correspondence and documentation which I have had to parse to ascertain relevance to the motion that had been brought. To return to Mr Behringer’s point, however, his evidence indicates that the AGS had received 2,987 pages of attachments to the date of the affidavit.

86. Mr Behringer then indicated that a costs summary had been prepared on a time-cost basis. Further, the time spent by AGS lawyers was charged only on a costs recovery basis; excluding any profit component.

87. Mr Behringer acknowledged a difficulty in his estimate. Mr Islam had commenced other proceedings against Commonwealth entities. He confessed that it was not always clear as to which proceeding documents or correspondence related to. This evidence is also similar to my experience of having to sift through correspondence and court process that Mr Islam has sent to the Court to determine whether it applies or is relevant to a proceeding before me or some other proceeding.

88. Mr Behringer then performed calculations on the two bases, of the Commonwealth receiving costs on an ordinary basis, or costs partially on an indemnity basis. On the latter basis, the costs were calculated to be $15,683. Those costs were discounted by 25% to factor in any ‘solicitor-client’ component).The work was performed by Zita Rowling (a Senior Executive Lawyer with more than 20 years’ experience) and himself.

89. Mr Behringer set out what is, in effect, a timesheet, based upon categories of work, divided into the work performed before and after the date that the Commonwealth defendants served their rules offer.

90. He also set out the singular disbursement (the filing fee for the motion filed on behalf of the fourth to eighth defendants).

91. Mr Islam did not give evidence or provide submissions on this application when afforded the opportunity to do so.

92. This is not an especially complex piece of litigation, from the perspective of the Commonwealth defendants. Such litigation is apt for the imposition of a gross costs sum. But the absence of that feature does not disqualify this action from being regarded as an appropriate vehicle for such orders. What is more material is the value of orders of that kind saving expense and delay to the successful litigant. As remarked in these reasons and elsewhere Mr Islam strikes me as having a voracious appetite for litigation and I expect that he would probably fight, with some vigour, any costs assessment process (I have also assumed he would not agree to the Commonwealth’s claim, discounted though that is).

93. Noting the significant discount that Mr Behringer has identified, recognising that the costs do not include additional costs which doubtless the Commonwealth defendants have incurred since the date of the application (4 October 2023) and accepting, as I do the plausibility of his calculations, on the broad-brush approach favoured in applications of this, I accede to the Commonwealth defendants’ applications.

Orders

94. For the foregoing reasons:

1. The second, third and fourth plaintiffs are removed pursuant to r 6.29 of the Uniform Civil Procedure Rules 2005 (NSW) and the first plaintiff is to pay those parties’ costs of the proceeding on the ordinary basis.

2. the first plaintiff’s proceedings against the fourth to eighth defendants (incl) are dismissed pursuant to r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW) on the bases that:

1. costs up to 28 July 2023 are payable on the ordinary basis; and

2. costs after 28 July 2023 are payable on an indemnity basis.

3. Pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW), the costs award in order 2 is quantified in the sum of $15,517.

4. the first plaintiff’s proceeding against the first, second and third defendants are dismissed pursuant to r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW).

5. the first plaintiff is to pay the costs of the first, second and third defendants on the ordinary basis.

6. If any application is brought to set aside or vary orders 1 and/or 5, such application should be brought within 14 days.

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Endnotes

Decision last updated: 10 November 2023