Karam v Palmone Shoes Pty Ltd
[2018] VSC 206
•1 May 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2009 09926
| AKRAM KARAM | Plaintiff |
| v | |
| PALMONE SHOES PTY LTD | Defendant |
---
JUDGE: | Ginnane J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF JUDGMENT: | 1 May 2018 |
CASE MAY BE CITED AS: | Karam v Palmone Shoes Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2018] VSC 206 |
---
VEXATIOUS PROCEEDINGS – Extended litigation restraint order – Application to vary or revoke – Application dismissed – Vexatious Proceedings Act 2014 ss 17, 65.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | No parties or practitioners appeared | |
| For the Defendant |
HIS HONOUR:
Mr Karam is subject to an extended litigation restraint order made by J Forrest J on 20 May 2016 (‘the restraint order’) pursuant to s 17 of the Vexatious Proceedings Act 2014 (‘VP Act’).
The order provided that:
(a) Mr Karam must not continue in, or commence any appeal from, proceeding S CI 2009 9926 against Lennon Mazzeo without leave of the Supreme Court.
(b) Mr Karam must not commence any proceeding, including instituting any appeal, against Lennon Mazzeo without leave of the Supreme Court or the Victorian court or tribunal in which the proceeding is commenced for a period of five years.
The history of the litigation is set out in the judgment of J Forrest J.[1]
[1]Karam v Palmone Shoes Pty Ltd (No 3) [2016] VSC 228.
Section 65(1)(a) of the VP Act entitles Mr Karam to apply to the court to vary or revoke the order, if the court gives him leave to do so. Mr Karam seeks the varying or revocation of the extended litigation restraint order.
Mr Karam sought by applications dated 17 February 2017 and affidavits dated 21 February 2017 leave to continue three other applications which arise from proceeding SCI 2009 09926 or are connected to it, namely:
· leave to continue the appeal against the decision of Associate Justice Lansdowne dated 11 August 2015 (S CI 2009 09926), which was an order made for payment out of funds in court to satisfy a solicitor’s lien;
· leave to continue the appeal against the decision of Associate Justice Wood dated 1 September 2015 (S CI 2010 00791); and
· leave to appeal the judgment of Associate Justice Lansdowne dated 22 December 2016 (S CI 2011 03123) which is a negligence action against his former solicitors.
I decided that Mr Karam’s appeal against the order of Associate Justice Wood was not subject to the litigation restraint order and considered and dismissed the appeal.[2] I considered that Mr Karam’s application to vary or revoke the litigation restraint order should be considered next before the other two applications.
[2]Karam v Lennon Mazzeo [2017] VSC 756.
Pursuant to s 66 of the VP Act, I determined Mr Karam’s application without notice to any other party or person. Under s 71, the court may determine the substantive application on the basis of written submissions and I adopted that approach in respect of the leave application.[3] I considered that the substance of Mr Karam’s written applications and affidavit before me provided a sufficient basis upon which to determine this application.
[3]See also Civil Procedure Act 2010 s 49 (h)(i).
However, I gave Mr Karam the opportunity to make further written submissions in support of his application. His response was to submit that I should not determine his application, but that it should be determined by another judge. Mr Karam based that application on his disagreement with my judgment of 12 December 2017 dismissing his appeal against Wood AsJ’s order and an order that I made prior to determining that appeal providing for further affidavits to be filed because he had sought a stay of my orders in the Court of Appeal pending an appeal, which was yet to be determined. I reject Mr Karam’s application. This application has no common issue with Mr Karam’s appeal against Associate Justice Wood’s orders. The fact that I did not accept Mr Karam’s appeal against those orders and made procedural directions with which he did not agree, provide no basis for me not hearing and determining this application.
The restraint order
Justice J Forrest outlined the reasons for making the restraint order against the applicant in Karam v Palmone Shoes Pty Ltd. In part of the judgment, his Honour stated:
It is now necessary to determine whether Mr Karam has frequently commenced or conducted vexatious proceedings. He most certainly has. Mr Karam’s litigation history in relation to his asthma and cancer claims (relevant matters for the purpose of s 17(2) of the [VP] Act) are patently vexatious within the meaning of s 3 of the [2014] Act.
Mr Karam has frequently commenced and prolonged proceedings without any reasonable basis. I am also satisfied that he has done so to delay and cause detriment to many of those who have been involved in the handling of his claims. The following is a snapshot of the criticisms that courts have made of Mr Karam’s litigious forays.
…
Mr Karam’s driving force, it seems, is to right some perceived injustice he has suffered as a result of the 2010 decision of T Forrest J. As far as I can tell, his motives now are to harass, annoy, and cause delay to many who have been involved in that litigation. So far, he has succeeded in causing significant inconvenience and costs to those who acted for him in that proceeding. He has also caused considerable disruption of judicial resources in this State. One of the primary purposes of the [VP] Act is to prevent the wasting of the court’s time. Deserving litigants’ cases have been delayed by Mr Karam’s conduct. It must now be curtailed. Lennon Mazzeo should be free of Mr Karam’s incessant use of court processes to frustrate its ability to realise its lien.[4]
[4]Karam v Palmone Shoes Pty Ltd (No 3) [2016] VSC 228 [32]-[33] and [38].
Mr Karam’s application for leave to vary or revoke the restraint order
Mr Karam’s application identifies many overlapping grounds and in broad terms, they are:
(a) The restraint order contains procedural defects making the issuing of the order illegal. In particular, the order did not state what type of application had been made by Lennon Mazzeo; the order did not provide what date the application was made on; and the order did not refer to the rule of court under which Lennon Mazzeo was entitled to the order.
(b) The restraint order is ‘manifestly in error’ because appeals against the decisions of Lansdowne AsJ and Wood AsJ had been commenced before the making of the order.
(c) The restraint order is illegal because Mr Karam did not appear at the hearing and he had not been notified. He was not given ‘a reasonable time to file his materials’ despite his requests.
(d) The restraint order contains an error of law because it does not contain reasons, and this constitutes a failure in the judicial process.
(e) The restraint order is illegal because Mr Karam applied to have J Forrest J recuse himself.
(f) The restraint order is made in error because Lennon Mazzeo’s application has no grounds, is an abuse of process, is without merit, and the claims in its affidavit dated 19 November 2015 are untrue. In addition, the various claims against Lennon Mazzeo cannot be considered vexatious because they were in relation to different matters, eg, damages claims, costs orders, and the matter before Lansdowne AsJ.
(g) The restraint order violates Mr Karam’s right to a fair hearing under s 24 of the Victorian Charter of Human Rights and Responsibilities Act 2006.
Mr Karam has filed a number of affidavits in support of his applications. In the affidavit that appears to relate to his variation or revocation application, he sets out the events concerning the making of the restraint order against him.
The Vexatious Proceedings Act 2014
The new regime established by the VP Act empowers courts to make litigation restraint orders of varying degrees. There are now three different levels of orders called ‘litigation restraint orders’. Under this tiered system, two orders can be made by application of the party aggrieved by vexatious litigation, an ‘interested party’, or the Attorney-General.[5] The third and most severe restraint order can only be applied for by the Attorney-General, as was the case in the previous regime.
[5]Vexatious Proceedings Act 2014 s 16.
Section 3 of the VP Act defines ‘vexatious proceedings’ and states:
vexatious proceeding includes the following—
(a) a proceeding that is an abuse of the process of a court or tribunal;
(b) a proceeding commenced to harass or annoy, to cause delay or detriment, or for another wrongful purpose;
(c) a proceeding commenced or pursued without reasonable grounds;
(d) a proceeding conducted in a way so as to harass or annoy, cause delay or detriment, or achieve another wrongful purpose;
Pursuant to s 16 of the VP Act, a person with ‘sufficient interest’ can apply to a court for an extended litigation restraint order against a person. That interested party must satisfy two requirements for a court to grant leave to make the application: first, there must be merit in the application; and second, the application must not be an abuse of process.
Section 17 states:
17 Court or VCAT may make extended litigation restraint order
(1) A Court or VCAT may make an extended litigation restraint order against a person if the Court or VCAT is satisfied that the person has frequently commenced or conducted vexatious proceedings—
(a) against a person or other entity; or
(b) in relation to a matter
(2)In determining whether it is satisfied of the matters specified in subsection (1), a Court or VCAT may take into account any matter it considers relevant, including but not limited to any of the following—
(a) a proceeding commenced or conducted by the person, or an entity controlled by the person, in any Australian court or tribunal;
(b) the existence of an order made by an Australian court or tribunal against the person, or an entity controlled by the person, including—
(i) a litigation restraint order; or
(ii) an acting in concert order; or
(iii) a vexatious proceeding order;
(c) any other matter relating to the way in which the person conducts or has conducted litigation.
Section 65(1)(a) of the VP Act allows a person subject to an extended litigation restraint order to apply to the Court for leave to have the litigation restraint order varied or revoked and states:
65 Application for variation or revocation of litigation restraint order
(1) Subject to subsection (2), a person who is subject to a litigation restraint order may apply to vary or revoke the order—
(a) to the Court that made the order with leave of that Court; or
(b) if the order was made by VCAT, to VCAT with leave of VCAT.
(2) A person who is subject to an extended litigation restraint order that relates to intervention order legislation may apply to vary or revoke the order—
(a) if the order was made by the Magistrates' Court, to the Magistrates' Court with leave of that court; or
(b) if the order was made by the Children's Court, to the Children's Court with leave of that court.
(3) This section applies despite anything to the contrary in the litigation restraint order, including an extended litigation restraint order that relates to intervention order legislation.
The VP Act does not contain a test that must be satisfied in order for the restraint order to be revoked, rather, s 69 provides that the court may vary or revoke the restraint order if it ‘considers it is in the interests of justice to do so’. This section confers a wide discretion to be exercised in accordance with the purposes of the VP Act. The phrase ‘in the interests of justice’ is widely expressed. This broad wording permits the court to have regard for matters of fairness and efficiency for litigants beyond those which affect the applicant alone.
In Attorney-General v O’Sullivan[6], where leave had been granted to apply to revoke a general litigation restraint order, Digby J considered the phrase ‘in the interests of justice’ contained in s 69(1)(b) and stated:
[6]Attorney-General v O'Sullivan [2017] VSC 592.
No specified criteria is prescribed by or in respect of s 69(1)(b) of the Vexatious Proceedings Act in relation to the revocation of a general litigation restraint order, beyond the stipulation of that section that to make such an order it is necessary for the Court to be satisfied that it is in the interests of justice to do so.[7]
[7]Ibid [38].
…
In my view the meaning of the phrase ‘in the interests of justice’ in s 69(1)(b) of the Vexatious Proceedings Act is intended by Parliament to encompass broad considerations beyond factors only in respect of a party or even the parties to the proceedings.[8]
[8]Ibid [62].
The phrase ‘in the interests of justice’ is inherently broad and multifaceted and should be given a purposeful and not necessarily a restricted interpretation.
Section 1 of the Vexatious Proceedings Act 2014 refers to the main purpose of the Act as being to reform and consolidate the law relating to vexatious proceedings in a way that balances individual rights of access to the courts with the public interest in an efficient and effective justice system.
Accordingly, in my view considerations which are relevant on an application such as is this encompass and extend to public interests in addition to private ones, including considerations in relation to:
(a) the person the subject of the application;
(b) persons against whom a person referred to in the last preceding paragraph might be minded to commence unmeritorious proceedings;
(c) other litigants, whose interests may be adversely affected if scarce judicial and quasi-judicial resources are diverted from meritorious proceedings to unmeritorious proceedings;
(d) judicial and quasi-judicial officers, who may be required to spend significant and energy conducting oral hearings and drafting reasons for judgment in unmeritorious proceedings; and
(e) the wider community, which has an interest in the efficient and cost-effective operation of this State’s judicial and quasi-judicial tribunals.
Further, it is ordinarily necessary for an applicant under s 69(1)(b) of the Vexatious Proceedings Act to establish to the court’s satisfaction that for some cogent reason, or reasons, he or she will not continue the conduct which justified the order which they seek to revoke. Section 69(1)(b) also requires the applicant to establish a case sufficient to satisfy the Court that the subject Order should be revoked in the interest of justice.[9]
[9]Ibid [63]-[66].
Regard must be had to the introduction of the requirement of applying for leave before an application to vary or revoke a restraint order can be considered. Under s 65, an application for leave can be made notwithstanding that the terms of the litigation restraint order would otherwise restrain the person from making the application. The significance of this is that the applicant, in applying for leave, must demonstrate reasons why leave should be granted before their application to vary or revoke the order will be fully considered. Presumably, this higher threshold of having to apply for leave in the first instance is intended to preserve judicial resources that would otherwise be spent on considering applications to vary or revoke restraint orders, which may involve reconsideration of the applicant’s entire litigation history.
I consider that in many instances, an applicant for leave to vary or revoke a restraint order made under s 65 of the VP Act must demonstrate: first, that there is a change in the applicant’s relevant circumstances so that the issues that he wishes to raise with the court are materially different from the circumstances that gave rise to the restraint order; and secondly, that, those changed circumstances provide some basis for a conclusion that it would be in the interests of justice to vary or revoke the extended litigation restraint order.
Conclusion on application to vary or revoke the restraint order
Mr Karam has failed to demonstrate a change in his relevant circumstances to justify granting him leave to apply to vary or revoke the litigation restraint order.
Mr Karam’s application does not demonstrate any basis for a contention that it is in the interests of justice that the restraint order be varied or revoked. His grounds are almost entirely framed as an attack on the order itself, they are in the nature of appeal grounds. But they are not grounds to vary or revoke the order. I do not consider that an application to vary or revoke a restraint order can be the occasion for arguing matters that could have been put on an application to appeal the litigation restraint order and which do not reveal any relevant change of circumstances. An application for leave to vary or revoke a litigation restraint order under s 69 of the VP Act is not a chance to appeal against the merits of making the restraint order.
I consider that Mr Karam’s grounds lack substance in any event. For the sake of completeness, I will briefly state why that is the case in respect of his main grounds.
Ground 1 alleges that the restraint order is ‘illegal’ due to procedural impropriety. But, the order was made in response to the amended summons by Lennon Mazzeo, filed with the Prothonotary’s Office on 7 April 2016 stating that it relied on s 16 of the VP Act. So far as ground 1.2 is concerned, the reasons for the making of the litigation restraint order were provided in the judgment of 20 May 2016.[10]
[10]Karam v Palmone Shoes Pty Ltd (No. 3) [2016] VSC 228.
Ground 1.3 alleges that the order is illegal because: (i) it was made in Mr Karam’s absence; and (ii) he had not been notified of ‘the hearing’ and did not have reasonable time to file materials. The following evidence demonstrates that Mr Karam was aware and on notice of both the 5 April and 19 April 2016 hearings.
First, an email dated 8 March 2016 sent by the Associate to Daly AsJ, to Mr Karam’s email address advised him of the hearing before J Forrest J on 5 April 2016. Mr Karam did not attend that hearing and in his absence, his Honour made orders for the matter to be heard on 19 April 2016.
On 15 April 2016, Mr Karam submitted to the court a document titled ‘Application [for] given a reasonable time to file my materials’. In this document, Mr Karam acknowledged that he has been advised of the hearing on 19 April 2016, but that he did not receive notice of this hearing and of Lennon Mazzeo’s amended summons until 11 April 2016.
Mr Karam asserts that he did not have reasonable time to file his materials in response to the amended summons dated 23 March 2016 because, as he stated in his ‘application [for] given reasonable time to file my materials’, he did not receive the amended summons until 11 April 2016. I do consider that he was given a reasonable time to file materials. On 28 March 2016, Mr Karam sent a handwritten letter to Lennon Mazzeo stating that he rejected the receipt of the amended summons dated 23 March 2016. In addition, the amended summons is, in substance, similar to the original summons dated 19 November 2015 insofar as both summons are applications to the court for a litigation restraint order against Mr Karam. I therefore do not accept that Mr Karam did not have sufficient notice of the 5 April 2016 or the 19 April 2016 hearings. I also reject Mr Karam’s assertion that he did not have sufficient time to file materials in preparation for the 19 April 2016 hearing.
In response to ground 2, the application by Lennon Mazzeo, which included its affidavit dated 19 November 2015 was expressly found by J Forrest J in his reasons not to be an abuse of process.[11] His Honour referred to the many proceedings that Mr Karam had commenced and the findings of the courts that they lacked merit. He said that Mr Karam ‘has frequently commenced and prolonged proceedings without any reasonable basis’.[12] Mr Karam’s lengthy submissions in support of this ground reargue points that could have been put to J Forrest J or on appeal. They are not a ground for revoking the restraint order. Mr Karam is not prevented from seeking leave to pursue other proceedings, including his appeals against Associate Justice Lansdowne’s orders.
[11]Ibid [32].
[12]Ibid [33].
I do not accept that the restraint order violates s 24 of the Victorian Charter of Human Rights and Responsibilities 2006. Section 24 of the Charter includes a right of access to the court, but this right is not absolute and is subject to reasonable constraints aimed at achieving legitimate purposes. The purpose of empowering courts to make litigation restraint orders is to restrict the access of vexatious litigants to the courts so as to prevent the overuse of court services by a few, with the consequent unavailability and cost consequences for the community and other litigants.
Mr Karam is subject to an extended litigation restraint order, or what might be called a second tier restraint order. As stated, that order does not prevent him from commencing proceedings in matters that are unrelated to proceeding S CI 2009 09926. I addition, the order can be revoked or varied upon leave being granted if Mr Karam can demonstrate that it is in the interests of justice to do so. But, Mr Karam has not demonstrated that there is any new evidence or any other reason to revoke the order. Rather, he wishes to have the order revoked so that he can continue the conduct which the order was made to prevent.
In summary, Mr Karam’s grounds for his application are in the main challenges to the extended litigation restraint order, which might have been argued on an appeal from that order. They do not provide a basis for granting leave to apply to have the order varied or revoked.
Conclusion
Mr Karam’s application that this application to vary or revoke the extended litigation restraint order be heard and determined by another judge is dismissed.
Secondly, Mr Karam’s application for leave to vary or revoke the extended litigation restraint order made 20 May 2016 is dismissed.
The Court will give directions for Mr Karam’s two remaining applications to be considered and determined.
3
0