Liprini v Liprini
[2012] FMCA 666
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| LIPRINI v LIPRINI & ANOR | [2012] FMCA 666 |
| BANKRUPTCY – Second annulment application and application for a stay – application by trustee in bankruptcy for summary dismissal – application to declare bankrupt a vexatious litigant. |
| Bankruptcy Act 1966 (Cth), ss.40, 52, 153B former Federal Court Rules, O.20, r.2, O.21 |
| Attorney General of NSW v Wilson [2010] NSWSC 1008 Boothe (Trustee), in the matter of Malan (Bankrupt) v Malan [2000] FCA 685 Cambridge Consolidated NL v Zephyr Minerals NL and Others (1999) 88 FCR 147; [1999] FCA 224 Sandell v Porter and Another (1966) 115 CLR 666; [1966] HCA 28 Singh v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Another (2011) 282 ALR 56; [2011] FCA 833 |
| Applicant: | ALLAN STEPHEN LIPRINI |
| First Respondent: | KEVIN LIPRINI |
| Second Respondent: | SCOTT PASCOE |
| File Number: | SYG 2522 of 2011 |
| Judgment of: | Barnes FM |
| Hearing date: | 29 March 2012 |
| Date of Last Submission: | 19 July 2012 |
| Delivered at: | Sydney |
| Delivered on: | 3 August 2012 |
REPRESENTATION
| Applicant: | In person |
| First Respondent: | No appearance |
| Solicitors for the Second Respondent: | Farrar Lawyers |
ORDERS
The annulment application made by Dr Liprini on 7 November 2011 is dismissed pursuant to r.13.10 of the Federal Magistrates Court Rules.
Dr Liprini’s application for a stay is dismissed.
The applicant, Dr Liprini, be and is hereby declared to be a vexatious litigant pursuant to r.13.11 of the Federal Magistrates Court Rules and:
(a)any proceedings instituted by Dr Liprini may not be continued without leave of the Court;
(b)Dr Liprini may not institute a proceeding without leave of the Court.
The Trustee’s costs be paid from the bankrupt estate of Dr Liprini.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2522 of 2011
| ALLAN STEPHEN LIPRINI |
Applicant
And
| KEVIN LIPRINI |
First Respondent
| SCOTT PASCOE |
Second Respondent
REASONS FOR JUDGMENT
These Proceedings
On 3 September 2010 a sequestration order was made against the estate of Dr Allan Liprini (see Liprini v Liprini [2010] FMCA 687). On 7 November 2011 Dr Liprini commenced proceedings seeking an annulment of his bankruptcy and other ancillary orders, including a “Recommendation for investigation/prosecution by DPP”. He also sought a stay “of all activities either under way or contemplated by the respondents, other parties or their representatives, from the date of this filing until resulting orders are entered”. The first respondent, Mr Kevin Liprini, was the petitioning creditor. He is Dr Liprini’s brother. The second respondent, Mr Scott Pascoe, was appointed as Dr Liprini’s trustee in bankruptcy (the Trustee).
On 11 November 2011, the Trustee filed an interim application seeking an order that Dr Liprini’s application for annulment be summarily dismissed with costs.
The matter came before a registrar of the court on 6 December 2011 and was referred to Lloyd-Jones FM. On that day the solicitor for the trustee made an oral application that Dr Liprini’s application for annulment of his bankruptcy should be stayed as a result of orders made in the New South Wales Supreme Court by Adamson J on 5 December 2011 (see Pascoe v Liprini [2011] NSWSC 1484). Adamson J made orders pursuant to the Vexatious Proceedings Act 2008 (NSW) prohibiting Dr Liprini from instituting proceedings in New South Wales without leave of the court and ordered that all proceedings in New South Wales already instituted by Dr Liprini be stayed. On 22 December 2011 Lloyd-Jones FM dismissed Mr Pascoe’s application (see Liprini v Liprini & Anor [2011] FMCA 1029) on the basis that orders under the Vexatious Proceedings Act had no effect in this court. It appears that no orders were made in relation to Dr Liprini’s interim application for a stay.
In the meantime, on 14 December 2011 Mr Pascoe filed the amended interim application that is the subject of these proceedings in which he sought the following orders:
1. An order that [Dr Liprini]’s application for an annulment filed 7 November 2011 be summarily dismissed pursuant to Regulation 13.10 of the Federal Magistrates Court Rules 2001 (Cth) (Rules).
2. An order pursuant to Regulation 13.11 of the Rules, that the respondent, Dr Allan Stephen Liprini, may not continue these proceedings without leave of the Court.
3. An order pursuant to Regulation 13.11 of the Rules, that the respondent, Dr Allan Stephen Liprini, may not institute any proceedings without leave of the Court.
4. An order that the respondent pay the applicant’s costs of the proceedings.
5. Such further or other order.
The matter again came before the Registrar on 20 February 2012 and was referred to me as Duty Federal Magistrate in the absence of Lloyd-Jones FM on leave. I gave each of the parties the opportunity to file affidavit evidence and written submissions in relation to both the Trustee’s amended interim application and Dr Liprini’s application for a stay, as it was not clear whether that application had been determined, although it was apparent that no stay had been granted. Mr Pascoe filed further affidavit evidence and written submissions. However Dr Liprini filed a further application in a case and a supporting affidavit on 23 March 2012 seeking a stay of administration of his estate “until full resolution” of what he described as a “disputed sequestration order” made by Smith FM on 3 September 2010 (see Liprini v Liprini [2010] FMCA 687). He did not file any affidavit evidence or submissions in relation to Mr Pascoe’s amended interim application prior to the hearing date.
In support of his amended interim application the Trustee relied on affidavits sworn by David Matthew Farrar on 11 November 2011 (and Exhibit DMF1) and by Mr Pascoe on 12 March 2012 and Exhibit SDP1 referred to in that affidavit and an affidavit of Mirjana Pavlovic affirmed on 29 March 2012. The fax filed copy of the affidavit sworn on 12 March 2012 was indistinct in part. A further copy was filed on 3 April 2012.
Dr Liprini relied on his application of 7 November 2011, the application in a case filed on 23 March 2012 and affidavits affirmed by him on 7 November 2011, 14 December 2011, 22 December 2011 and 23 March 2012. He was also given leave to rely on the content of an unsworn affidavit dated 27 (and also 29) March 2012 which he adopted under oath.
Much of Dr Liprini’s affidavit evidence was inadmissible, in the form of conclusion or submissions. He raised and repeated unsupported allegations of fraud on the part of his brother, various legal practitioners and others. Some of the allegations can be characterised as scandalous. However, insofar as parts of Dr Liprini’s affidavits can be seen as amounting to submissions relevant to the issues before the court, I have had regard to them as such.
At the hearing Dr Liprini (who had not filed pre-hearing submissions) told the court that he had not been able to prepare properly because he had been disrupted in his life, cut off from resources and his ex-wife had died. He unsuccessfully sought an adjournment of the hearing on the basis of 2009 and 2010 medical certificates. He did not address the substance of his application in oral submissions. Dr Liprini was given the opportunity to file post-hearing written submissions in relation to all the issues before the court. He did not do so within the time allowed. Mr Pascoe filed post-hearing written submissions. Dr Liprini did not file submissions in reply within the time allowed. However on 16 July 2012 he filed a document of over 100 pages. A further document described as “Addendum to Final “Submissions”” was filed on 19 July 2012. Notwithstanding that these documents were filed out of time the Trustee did not object to my having regard to them insofar as they can be characterised as submissions in relation to these proceedings.
For the reasons that follow, I am satisfied that the proceedings should be summarily dismissed pursuant to r.13.10 of the Federal Magistrates Court Rules and that orders should be made in relation to Dr Liprini under r.13.11. There is no basis for a stay in the circumstances.
Background to the proceedings
The present proceedings have their genesis in Supreme Court proceedings commenced against Dr Liprini by his brother Kevin Liprini under the Family Provision Act 1982 (NSW) concerning the estate of their father (no. 3790 of 2006) (the FPA proceedings). Dr Liprini was the executor of the estate of their father who died in 2005.
In Liprini v Liprini [2010] FMCA 687 Smith FM summarised what occurred in those proceedings as follows (at [13]–[14]):
…Under their father’s will, his estate went in substance to their mother, and thereafter to Dr Liprini. After the commencement of the proceedings, their mother died on 26 November 2006. By that time, it appears that the father’s estate had been substantially distributed. The mother’s death had the effect of vesting Dr Liprini’s remainder interest in his father’s estate. He also inherited further substantial property from his mother under her will. There are suggestions in the evidence, that correspondence from Kevin Liprini after their mother’s death foreshadowed an intention by him to make a further claim for family provision in relation to the mother’s estate. However, no such claim was ever commenced.
On 6 December 2007, Dr Liprini was present at meetings with his then solicitor and barrister, in the course of a proceeding which was subsequently referred to as a ‘mediation’ conducted to explore settlement of the Family Provision Act proceedings. I infer that this was an expected, if not mandatory, occurrence in the case management of Family Provision Act matters in the Supreme Court, and it appears to have been presided over by a registrar or former judge. Both parties appear to have been represented by counsel and solicitors on that occasion, and the negotiations were conducted by them, without Dr Liprini meeting his brother.
On 6 December 2007 consent orders in the FPA proceedings were signed by counsel for each party at the end of the mediation in the following terms (at [15]):
(1) Order under section 7 of the Family Provision Act that provision be made in favour of the plaintiff out of the estate of the late James Natale Liprini in the sum of $750,000;
(2) That the plaintiff’s costs agreed in the sum of $20,000 be paid out of the estate of the late James Natale Liprini, and
(3) Order that the defendant’s costs be paid out of the estate of the late James Natale Liprini on an indemnity basis.
The Court notes:
A. The above orders were signed by the parties in contemplation of a claim by the plaintiff against his mother’s estate under section 7 of the Family Provision Act. The plaintiff agrees to execute a deed, if called upon to do so, releasing the defendant (as executor of the estate of his late mother) from any claim under section 7 of the Family Provision Act.
Relevantly, in 2008 Mr Liprini commenced further proceedings in the Supreme Court (no. 2468 of 2008) seeking orders and declarations requiring Dr Liprini to pay him the money the subject of the consent orders in the FPA proceedings. On 10 July 2009 Nicholas J ordered that Dr Liprini pay Mr Liprini the sum of $770,000. It is that judgment that formed the basis for the bankruptcy notice and creditor’s petition presented by Mr Liprini.
It appears from the subsequent litigation involving Dr Liprini, which is discussed further below, that Dr Liprini was committed to opposing his brother receiving any provision from their parents’ estate notwithstanding the 2007 consent orders. He has contended that his brother has engaged in fraudulent conduct. He has also taken issue with the conduct of various legal practitioners who acted for him, as well as his trustee in bankruptcy.
On 3 September 2010 Smith FM made a sequestration order against Dr Liprini (see Liprini v Liprini [2010] FMCA 687).
Dr Liprini commenced two sets of proceedings in the Federal Court (no. NSD1237 of 2010 and no. NSD1238 of 2010) involving two notices of appeal and also two notices of motion seeking a stay of proceedings under the sequestration order. On 8 October 2010 Jagot J found that the notices of appeal did not disclose any arguable ground and that the balance of convenience did not weigh in favour of the granting of a stay, and dismissed both notices of motion (see Liprini v Liprini [2010] FCA 1117). On 19 November 2010 Emmett J ordered that the appeals be dismissed with costs (see Liprini v Liprini (No 2) [2010] FCA 1495) in circumstances where Mr Liprini had been given leave to file and serve a notice of motion for summary dismissal and Dr Liprini did not appear at the hearing. His Honour concluded that in the absence of any arguable ground of appeal there was no prospect of success in either appeal (at [9]).
On 16 December 2010, Dr Liprini commenced further proceedings in this court seeking various injunctive remedies against parties including Mr Pascoe. Those proceedings were dismissed by Raphael FM on 22 December 2010.
On 1 April 2011, Dr Liprini filed an application seeking annulment of his bankruptcy. He also sought an interim stay of his bankruptcy pending determination of the application for annulment. It appears that no interim stay was granted. On 17 May 2011 Driver FM dismissed the application for an annulment (see Liprini v Liprini & Anor [2011] FMCA 359).
On 7 June 2011 Dr Liprini filed a notice of appeal and a notice of motion in the Federal Court seeking a stay of the orders of Driver FM. The notice of motion was dismissed on 22 June 2011 by Jacobson J (see Liprini v Liprini [2011] FCA 722). His Honour saw “nothing which [gave] rise to any ability on [his] part to grant a stay of the orders made by Driver FM” (who had refused to annul the bankruptcy) (at [2]). There was, in effect, “nothing to stay” (at [5]). Jacobson J recorded that Dr Liprini made serious allegations “which were at the moment nothing more than unsupported assertions without any evidentiary basis” against his trustee in bankruptcy, Mr Pascoe.
On 16 September 2011 Dr Liprini filed a further interlocutory application in the Federal Court seeking a stay of the administration of his bankruptcy pending determination of the appeal and also return and preservation of property. That application was dismissed by Yates J (see Liprini v Liprini (No 2) [2011] FCA 1150). His Honour found that the evidence adduced by Dr Liprini revealed no proper basis for such a stay.
On 7 November 2011 Yates J ordered that the appeal be dismissed. Insofar as Dr Liprini contends that he discontinued the appeal, a copy of the orders of Yates J is in evidence before the court.
On the same day, 7 November 2011, Dr Liprini filed the fresh application for an annulment that is the subject of the trustee’s summary dismissal application.
Summary Dismissal
Rule 13.10 of the Federal Magistrates Court Rules is as follows:
The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:
(a) the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or
(b) the proceeding or claim for relief is frivolous or vexatious; or;
(c) the proceeding or claim for relief is an abuse of the process of the Court.
Paragraph 13.10(a) of r.13.10 reflects s.17A of the Federal Magistrates Act 1999 (Cth) (the FMA) which provides a less stringent test for summary judgment than that previously applicable (see the Explanatory Memorandum to Act No 137 of 2005 which introduced s.17A at [31] – [35]). An identical amendment was inserted into the Federal Court of Australia Act 1976 (Cth) and the Judiciary Act 1903 (Cth) to provide a uniform approach in the High Court, the Federal Court, and this court. Under s.17A(2) the court may give judgment for a party defending the proceedings if “satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding”. A proceeding or part of a proceeding need not be hopeless or bound to fail for it to have no reasonable prospect of success (s.17A(3)).
The Trustee relied on r.13.10 and submitted that each of subrules (a), (b) and (c) of r.13.10 was applicable in respect of Dr Liprini’s substantive application filed on 7 November 2011.
The final orders sought by Dr Liprini in the proceedings commenced in this court on 7 November 2011 are as follows:
1. …Annulment of Bankruptcy No 7117/10/09 as a result of the sequestration order written by Federal Magistrate Smith on 3rd September 2010 in the Federal Magistrates Court in Sydney. Under Rule [82,310.15] of the Bankruptcy Act 1966.
2. Reversal of all costs orders made in association with all related Bankruptcy matters.*
3. Recommendation for investigation/prosecution by DPP.
An asterisk has been inserted after order two with the words, “may require specific bankruptcy jurisdiction otherwise all related FCA and FMC matters/proceedings”.
It is not in dispute that this court has power to annul a bankruptcy under s.153B of the Bankruptcy Act 1966 (Cth) if (relevantly) the court is satisfied that a sequestration order ought not to have been made. Dr Liprini has already unsuccessfully sought an annulment of his bankruptcy. He unsuccessfully appealed to the Federal Court. He commenced these proceedings on the day his appeal was dismissed.
Grounds relied on by Dr Liprini
It is apparent from his affidavit of 7 November 2011 that Dr Liprini seeks to rely on seven grounds in support of his present annulment application, including the grounds that were understood by Driver FM to be the grounds relied upon in the original application for an annulment. Dr Liprini seeks to rely on those grounds on the basis that there was no opportunity to have them all considered in his original application.
The grounds of the first annulment application were described by Driver FM as:
(i) Fraudulent concealment of Notice of Intention to Distribute being inserted in SMH newspaper on 2nd April 2005.
(ii) Fraudulent absence of Kevin Liprini from fraudulent originating process on 6th December 2007.
(iii) Failure of Kevin Liprini to produce banking statement by ORDER OF THE COURT on 9th July 2009 filed and served by Neil Lyon, my legal advisor at that time.
(iv) Highly vexatious nature of all the litigation by the respondent Kevin Liprini. (Liprini v Liprini & Anor [2011] FMCA 359 at [2]).
In the present annulment application Dr Liprini seeks to raise aspects of those grounds worded as follows in his affidavit of 7 November 2011:
(a) the non-compliance of my brother to produce to the court documents the (sic) show the full extent of his wealth, in particular that he had failed to do this on several occasions by court order including that which specified the production to occur on 9th July 2009.
(b) The non appearance of my brother at the originating process of 6th December 2007 but which is claimed both by himself as well as his solicitor, Michael Sommerville in sworn affidavits filed in Court.
(c) The evidence that is proof of the consistently vexatious intent of my brother through his litigation and by association the litigation of those associated with him that was not available nor before Smith F M on the 3rd September 2010 as well as additional material of a similar nature not provided in my earlier Annulment Application.
In addition, Dr Liprini stated in his affidavit of 7 November 2011 that he wished to rely on new grounds said to be based on evidence that was “not available or before” Smith FM in support of his annulment application. He contended that “each ground would have sufficed for Smith FM to decide not to make the sequestration order”. These grounds are as follows:
(i) I was clearly not insolvent at the time of Smith F M making the sequestration order. The report by the trustee submitted for the initial Annulment Application SYG617/2011 adequately demonstrates this.
(ii) In his judgement (sic) Smith F M, in error, says that upon her death my mother’s deceased estate became vested in my father’s deceased estate. I will provide prima facie evidence that as Executor of both estates I never both intended nor gave my authority for that to happen. “ÍF” and that is strongly denied, I was considered personally liable for any late claims made on my father’s deceased estate, there is absolutely no personal liability for any late claims made on my mother’;s (sic) deceased estate and certainly no personal liability to any claim that was not made on it.
(iii) “SLIDING DOORS DECEPTION” In association with (ii) an assumption was made by Nicholas J where Smith F M refers to it in his judgement (sic), that I had attended a meeting on 6th December 2007 fully appraised of the nature of that meeting as being both order by the court as well as for the express purpose of negotiating an agreed amount of money to be paid out of my father’s deceased estate to settle the Family Provision claim that my brother had filed in July 2006. I will also provide prima facie evidence similarly as in (ii). The only meeting that I had intended to go to but cancelled due to illness was to be present when a letter to my brother was handed to his legal representative to pass on to him. Smith F M makes reference to the person that was given the responsibility to pass on that letter and that letter gives validity to a completely separate “meeting” that I did not attend in the morning of the same day. The prima facie evidence in support of this has never been presented to the court and definitely was not before Smith F M on the 3rd September 2011.
(iv) Pre-dating all of the above is the evidence mooted in my initial Annulment Application that only emerged in October 2010, after the sequestration order had been made and concerns the SMH newspaper advertisement that had been placed by James Kelly on 2nd April 2005, 4 ½ years before the sequestration order and which was closely followed by admission in a letter or as I claim, only verbally, that he advised me that it would be expedient to NOT place an advertisement in the newspaper as a notice of intention to distribute my father’s deceased estate following the grant of Probate. I am going to submit a number of arguments that are indicative of criminal intent to defraud my father’s estate and more likely my mother’s estate as well if and when a claim had been made on it.
The sequestration order
It is relevant to the summary dismissal application to consider the judgment of Smith FM of 3 September 2010. His Honour dismissed Dr Liprini’s application to set aside the bankruptcy notice that formed the basis for the creditor’s petition and also made a sequestration order against his estate. The bankruptcy notice was based on the judgment of Nicholas J of the New South Wales Supreme Court made on 10 July 2009 ordering Dr Liprini to pay Mr Liprini $770,000 (see Liprini v Liprini (unreported, Supreme Court of New South Wales, Nicholas J, No 2468 of 2008, 10 July 2009)). The petition relied on a debt of over $850,000 claimed to be due to Mr Liprini by Dr Liprini from his personal estate by reason of the orders made by Nicholas J plus accrued interest.
Smith FM had adjourned the hearing to allow an unsuccessful appeal by Dr Liprini to be pursued in the Supreme Court as discussed further below.
In opposition to the creditor’s petition Dr Liprini relied on the ground that in truth and reality he did not owe any money to his brother and what Smith FM described as “related reasons for opposing the petition” (at [11] – [12]). Smith FM was not persuaded that Dr Liprini had established any sufficient ground for going behind the judgments of the Supreme Court or for doubting that they imposed personal liability upon him (at [12]).
In addition to setting out the background to the consent orders made on 6 December 2007, Smith FM described Dr Liprini’s subsequent dissatisfaction with the settlement and other complaints he made in this respect, including that “he was misled by his then lawyers about the mediation being a compulsory event” and “how he was induced to attend”, that “his health rendered his consent to the settlement suspect” and that he believed that his brother was not in attendance at the mediation. His Honour saw Dr Liprini’s contentions as amounting to a suggestion that “his consent was procured by fraud or serious professional misconduct on the part of his legal representatives” (at [21]), but saw little or no support for such contentions in the evidence presented to the court. His Honour found (at [21]) that there was “insufficient substance … shown in relation to those allegations to provide grounds for declining to accept the prima facie indebtedness arising from the judgments relied upon” by Mr Liprini, and “no substance for an allegation of complicity” by Mr Liprini or his solicitors or counsel such as to vitiate the consent orders of 6 December 2007.
The “assessment of the absence of any substantial evidentiary foundation for going behind the Supreme Court judgments” was said to have been “assisted by Dr Liprini’s failure in subsequent years to properly present and pursue his challenge to the consent orders” (at [22]). In that context Smith FM referred to what he described as the “belated applications” to challenge the orders in the Supreme Court by way of a notice of motion filed on 10 August 2010, the prospects of which his Honour saw as being “slim or nonexistent” (at [22]). Smith FM concluded that the evidence presented did not show sufficient reason to go behind the orders on the principles in Wren v Mahony (1972) 126 CLR 212; [1972] HCA 5 and Wolff v Donovan (1991) 29 FCR 480; [1991] FCA 222. In reaching this conclusion Smith FM had regard to principles upon which consent orders may be set aside and the absence of evidence addressing such issues.
Nor did his Honour see sufficient substance in the material before the court to go behind the subsequent judgment of Nicholas J. His Honour had regard to Dr Liprini’s claims to have been frustrated in his efforts to challenge the consent orders, which he contended gave rise to additional reasons to set aside the bankruptcy notice or dismiss the petition. Smith FM described the proceedings before Nicholas J as proceedings intended to “achieve enforceable orders against Dr Liprini personally” (at [30]). He noted the absence of any counter-claim by Dr Liprini challenging the consent orders (whether on grounds of fraud or any contractual basis) and the refusal of Nicholas J to adjourn the hearing in order to give Dr Liprini an opportunity to challenge the orders on some ground of incapacity referable to his state of health at the time of the orders.
Smith FM also saw little prospect of any successful claims being pursued against the lawyers who had acted for Dr Liprini in the proceedings before Nicholas J, finding no sufficient basis was shown for such claims to cause him to consider a further adjournment and no basis in such claims to decline to make a sequestration order or to go behind the judgment of Nicholas J.
In declining to go behind the judgment of Nicholas J Smith FM also had regard to the subsequent efforts by Dr Liprini to appeal, including the summary dismissal of proceedings in the New South Wales Court of Appeal by Allsop P in the absence of identification of any coherent basis for attack in relation to the discretion exercised by Nicholas J to refuse an adjournment or the orders that were made (see Liprini v Liprini [2010] NSWCA 126), and the refusal of Dr Liprini’s application for review of the decision of Allsop P by the Court of Appeal Liprini v Liprini (unreported, New South Wales Court of Appeal, Beazley, Giles JJA and Handley AJA, No 298526 of 2009, 28 June 2010)).
Smith FM saw Dr Liprini’s prospects of successfully reinstating any appeal from the orders of Nicholas J as remote and was not satisfied that any prospects of further appeal could be described as based on genuine and arguable grounds. His Honour declined to go behind either of the judgments of the Supreme Court and also declined a further adjournment of the petition.
In all the circumstances Smith FM was not satisfied that there were discretionary reasons for declining to make the sequestration order under s.52(2)(b) of the Bankruptcy Act arising from the circumstances of the mediation pointed to by Dr Liprini in the absence of material showing that he had claims that deserved to be litigated further against Mr Liprini or any other persons, including Dr Liprini’s own legal representatives.
His Honour took into account Dr Liprini’s wish to continue to litigate in relation to the consent orders and other litigation then on foot but did not consider that it provided a sufficient reason for declining to make a sequestration order. He also had regard to Dr Liprini’s evidence about his health and state of mind.
Smith FM considered in some detail an issue he had raised as to whether the order relied on to support the petition was one made against Dr Liprini personally and concluded that it was (at [33]–[39]), notwithstanding the absence of any arguments from Dr Liprini in relation to that issue.
Finally, I note that Smith FM expressed concern that Dr Liprini had presented to the court no evidence of his financial position in particular as to his ability to pay the claims he had been resisting and referred to his failure to oppose the petition on the ground of an ability to pay his debts in terms of s.52(2)(a) of the Bankruptcy Act. In such situation his Honour had regard to the prima facie entitlement of the creditor to seek enforcement of the orders of the Supreme Court by way of a sequestration order.
The first annulment application
As indicated above, after Dr Liprini unsuccessfully sought to appeal against the sequestration order and sought injunctive remedies against the Trustee, he filed an annulment application in this court on 11 April 2011. The annulment application was dismissed by Driver FM on 17 May 2011. His decision is of particular relevance in relation to the contention that the present proceedings are an abuse of process or vexatious. Driver FM stated that some of the relief sought by Dr Liprini would be beyond the jurisdiction of the court. The application did not set out the grounds in support although it was supported by three affidavits. The grounds identified by Driver FM are set out above at [30].
Driver FM set out the facts behind Dr Liprini’s liability under the judgment of Nicholas J, the matters considered by Smith FM and on appeal from the judgment of Smith FM. His Honour found (at [8]) that there was “nothing new” in the application for annulment as advanced by Dr Liprini.
His Honour was of the view that “the only basis on which it might have been argued that an annulment order should be made [related to whether] Dr Liprini might hypothetically be solvent and may have been solvent at the time the sequestration order was made” (at [8]). Driver FM addressed this issue notwithstanding that it was not a ground raised by Dr Liprini. In that context Driver FM had regard to the interest that Dr Liprini had prior to bankruptcy in two pieces of real estate and the possibility disclosed in the report of the Trustee that the administration of his estate could result in a surplus of assets over liabilities (at [8]). His Honour noted that the Trustee had expressed the view that, having regard to the necessary steps in the sale of real estate, at the time of his bankruptcy Dr Liprini did not have available sufficient funds to pay his debts as they fell due and that he was therefore insolvent (at [9]).
Driver FM observed that solvency could be proved by establishing an ability to realise funds to discharge debts within a reasonable time. However it had not been argued by Dr Liprini before Smith FM or on the annulment application before Driver FM that he could have realised assets to discharge his debts within a reasonable time. Rather, he had argued that he was not indebted to the petitioning creditor at all (at [9]). Driver FM found that there was no evidence before him that at the time of sequestration order Dr Liprini had the capacity to borrow funds on the security of his real estate in order to discharge his debts within reasonable time and that there was no proper basis on which the court could reach a different view of solvency to that of the Trustee as expressed in his report to the court (at [9]).
Driver FM was satisfied that Dr Liprini had “failed to demonstrate a reason for the Court to disturb the sequestration order” and that “the sequestration order was properly made” (at [12]). As outlined above, Dr Liprini unsuccessfully sought to appeal from the decision of Driver FM.
Applicable principles
Mr Pascoe contended that the law in relation to summary dismissal in a case such as the present was illustrated by the approach taken in two decisions in the bankruptcy context. In Boothe (Trustee), in the matter of Malan (Bankrupt) v Malan [2000] FCA 685, after a bankrupt had unsuccessfully sought an annulment of his bankruptcy he filed a further annulment application. Branson J found that all the matters that the applicant sought to rely on had in substance been agitated in the earlier proceedings. Her Honour stated at [13]:
As the Full Court of this Court said in Wilson v The Commonwealth of Australia [1999] FCA 1308 at paragraphs 11-12:
"An attempt to litigate in the Court a dispute or issue which has earlier been resolved in other litigation in this or another court may, according to the circumstances, constitute an abuse of process even if not attracting the doctrines of res judicata or issue estoppel: Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275 at 279 per French J; Walton v Gardiner [1992] HCA 12; (1992-1993) 177 CLR 378, 393; Rogers v The Queen [1994] HCA 42; (1994) 181 CLR 251.
In Hunter v Chief Constable [1982] AC 529 at 542 Lord Diplock said that the applicable principle is simply and clearly stated in passages which his Lordship extracted from the judgment of A L Smith LJ in Stephenson v Garnett [1898] 1 QB 677, 680-681 and the speech of Lord Halsbury LC in Reichel v Magrath (1889) 14 App Cas 665, 668. The extract from the judgment of A L Smith LJ was:
... the court ought to be slow to strike out a statement of claim or defence, and to dismiss an action as frivolous and vexatious, yet it ought to do so when, as here, it has been shewn that the identical question sought to be raised has been already decided by a competent court.
The passage from Lord Halsbury's speech was:
... I think it would be a scandal to the administration of justice if, the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same case again."
In Boothe the second annulment application was dismissed as disclosing no reasonable cause of action and as constituting an abuse of the process of the court under former rule O.20 r.2 of the Federal Court Rules.
Similarly in this case it was submitted that, in circumstances where Dr Liprini had previously unsuccessfully sought an annulment of his bankruptcy and had also unsuccessfully appealed to the Federal Court in relation to the dismissal of that application, the present proceedings could be characterised as an abuse of process, as vexatious and that Dr Liprini had no reasonable prospects of successfully prosecuting the proceeding.
Further, in Re Prowse, Ex parte the Debtor (1981) 39 ALR 639; (1981) 57 FLR 257, White J of the Court of Insolvency of South Australia considered a bankrupt’s second application for discharge within eight months. His Honour observed that the application relied on substantially the same evidence as had been relied on in relation to the earlier application. There had been a full hearing of the first application. White J found that although the bankrupt wished to supplement his previous evidence with further evidence, such evidence could have been called in the first application and there had been no change in circumstances.
Relevantly, his Honour stated at 641 that “repeated applications on the same or very similar or patched up similar facts would constitute an abuse of the process of the court” and continued, at 641-642:
The policy of the law that there must be an end to litigation does not apply with the same force in jurisdictions like bankruptcy or custody where it is contemplated that successive orders will be made and previous orders will be varied or discharged. However, one aspect of that policy does apply, namely, that an application, whether of a final or interim nature, having been once litigated and adjudicated upon, should not be reopened for the purpose of calling other evidence, unless that other evidence enjoys the qualities of genuine “fresh evidence”. The first quality of “fresh evidence” is whether it has come to the knowledge of the party seeking to reopen the case and to tender it, since “the period when he could have made use of it in the suit” and could not with reasonable diligence have been discovered sooner. Orchard v Orchard (1972) 3 SASR 89 at 989; Ventura v Sustek (1976) 14 SASR 395 at 399; Ladd v Marshall (1954) 1 WLR 1489 at 1491. It is not necessary for me to discuss the other two qualities of fresh evidence. This bankrupt did not intend to call fresh evidence as such. He wanted to re-litigate more effectively an application which he chose initially to litigate and conclude ineffectively. In other words, he wanted “a second bite of the same cherry”, a course contrary to the long-established and sensible policy of the law”.
As the Trustee submitted, the remarks of White J are relevant insofar as Dr Liprini in effect seeks to re-litigate an application that has already been determined.
It is also appropriate to note generally the remarks of French CJ and Gummow J in Spencer v The Commonwealth of Australia (2010) 241 CLR 118; [2010] HCA 28 in relation to summary dismissal. As their Honours observed at [24] the exercise of such powers “must always be attended with caution”. I have borne in mind their Honours remarks in that respect and also the discussion by the High Court of what must be demonstrated to establish “no reasonable prospect” of success. The caution that “the power to dismiss an action summarily is not to be exercised lightly” (also see Hayne, Crennan, Kiefel and Bell JJ at [60]) is of particular relevance in the bankruptcy context, having regard to the remarks of White J in Re Prowse about the nature of the bankruptcy jurisdiction.
I have also borne in mind the width of the concept “abuse of process”. What amounts to an abuse of process of the court is “insusceptible of a formulation comprising closed categories” as stated in Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256; [2006] HCA 27, although it is clear that the concept extends to proceedings that are “seriously and unfairly burdensome, prejudicial or damaging”, or “productive of serious and unjustified trouble and harassment”. (see Jeffery & Katauskas Pty Limited v SST Consulting Pty Ltd and Others (2009) 239 CLR 75; [2009] HCA 43 at [28] and also see Michael Wilson & Partners Limited v Nicholls and Others (2011) 244 CLR 427; [2011] HCA 48 and Moti v The Queen (2011) 86 ALJR 117; [2011] HCA 50).
Roden J considered the scope of the concept of a vexatious proceeding in Attorney-General v Wentworth (1988) 14 NSWLR 481 (adopted by the Full Court of the Federal Court in von Reisner v Commonwealth and Another (2009) 177 FCR 531; [2009] FCAFC 97). The concept of “vexatious” includes, but extends beyond, proceedings instituted with the intention of annoying or embarrassing the respondent and proceedings brought for collateral purposes. It includes circumstances where the proceeding is so obviously untenable or manifestly groundless as to be utterly hopeless, irrespective of the motive of the litigant. This last category of vexatious proceeding is to be considered purely on an objective basis (see Attorney-General v Wentworth at 488–491, von Reisner at [28] and also Jones v Skyring (1992) 66 ALJR 810; [1992] HCA 39, Soden v Kowalski [2011] FCA 318 and Kowalski v Mitsubishi Motors Australia Ltd and Others (2011) 198 FCR 153; [2011] FCAFC 159).
Consideration of the grounds relied on by Dr Liprini
Grounds (a) – (c) seek to reagitate matters already agitated in the earlier annulment proceedings. Insofar as Dr Liprini asserts that additional evidence is relied on that was not before Smith FM or Driver FM (which is said to be contained in or annexed to subsequent affidavits) the affidavits before the court on those past occasions are not in evidence in these proceedings, except insofar as such evidence is included in Dr Liprini’s fresh affidavits. In any event, it has not been established that evidence that predates Dr Liprini’s previous annulment application could not have been before Driver FM. There is no evidence of a relevant change in circumstances, no clear explanation as to precisely what evidence was not before Smith FM or Driver FM or why it was not previously before the court or how it goes to establish that the sequestration order ought not to have been made. It has not been established that the evidence Dr Liprini now wishes to rely on could not have been relied on in the earlier proceedings. Later evidence as to the value of real estate is not relevant to these grounds. In effect, Dr Liprini seeks to bring a second annulment application on “patched up” similar facts (see Re Prowse at 641) in an effort to re-litigate the application he initially litigated ineffectively (Re Prowse at 642). His attempt to do so constitutes an abuse of process and is vexatious.
Further, the assertion (in ground (a)) that Mr Liprini failed to produce documents in 2009 Supreme Court proceedings 2468 of 2008 (the proceedings before Nicholas J in which the orders that formed the basis for the bankruptcy notice and creditor’s petition were made) repeats the claim unsuccessfully made before Driver FM. Neither that claim nor the further claim that Mr Liprini otherwise failed to produce evidence of his wealth in proceedings between the brothers is not, either alone or in combination with all the other issues and material relied on by Dr Liprini, such as to demonstrate even an arguable basis for a contention that the court should go behind the judgment of Nicholas J to determine whether there is in truth and reality a debt due to Mr Liprini or otherwise a basis on which the sequestration order should not have been made. Moreover, the issue of whether to go behind the judgment of Nicholas J was considered in detail by Smith FM. Dr Liprini’s attempt to re-litigate this issue based on evidence which (even if it was not before Smith FM as Dr Liprini suggested) predated the bankruptcy is a further abuse of process, is vexatious and has no reasonable prospects of success (see Wilson v The Commonwealth and Re Boothe).
Dr Liprini’s claims in grounds (b) and (c) about the alleged non-appearance of his brother at the mediation on 6 December 2007 and the allegation that his brother and others have consistently and intentionally engaged in vexatious litigation were also raised before Smith FM and were considered by Driver FM. Driver FM saw nothing new in Dr Liprini’s claims in this respect. Insofar as Dr Liprini seeks to raise in substance the grounds previously relied on, these matters have already been litigated and determined. It is an abuse of process to seek to raise these grounds again in circumstances where there has not been shown to be fresh evidence before the court such as to warrant a second annulment application (see Re Boothe and Wilson v The Commonwealth and Re Prowse). Even if material is now provided that was not before Driver FM (as Dr Liprini asserts) the attempt to re-litigate the same issues is an abuse of process and has no reasonable prospects of success.
The evidence in relation to the assertions, and the allegations of fraud on the part of Mr Liprini and others, in particular legal practitioners who previously acted for Dr Liprini, insofar as it is admissible, does not establish an evidentiary foundation to challenge either the 2007 consent orders or the 2009 judgment of Nicholas J that was the basis for the bankruptcy notice. Dr Liprini’s prospects of successfully seeking an annulment of his bankruptcy on this basis can be said to be no more than “fanciful”. His grievances about the circumstances in which the consent orders were made and the claims about fraudulent conduct do not as a matter of fact or law provide any foundation for his annulment application.
I have considered the four grounds which Dr Liprini characterises as new grounds. His affidavit of 14 December 2011 primarily addressed ground (i) (solvency) which was also partly addressed in his two affidavits of March 2012. His affidavit of 22 December 2011 was apparently intended to address grounds (ii), (iii) and (iv). The broader allegation of fraud on the part of his brother and various legal practitioners was addressed in much of his evidence, albeit his main claims in that respect are no more than unsubstantiated assertions.
It is relevant to the asserted “new” grounds to have regard to the circumstances in which the debt that formed the basis for the bankruptcy notice and creditor’s petition arose. As indicated, that debt was claimed to be due to the petitioning creditor, Kevin Liprini by reason of orders made by Nicholas J in the Supreme Court of New South Wales on 10 July 2009 in proceedings no. 2468 of 2008, plus interest.
According to Nicholas J, the FPA proceedings were mediated before a registrar of the Supreme Court on 6 December 2007. All parties were represented by lawyers, including counsel, at the mediation. Dr Liprini’s concern about whether or not his brother was present at the mediation was raised before Smith FM, as were his present concerns about whether he was misled, the impact of his health on his consent to the settlement of those proceedings and, more generally, whether his consent was procured by fraud or professional misconduct on the part of his lawyers. Notwithstanding that he now seeks to elaborate on such claims. Settlement was reached on 6 December 2007. Short minutes of order signed by counsel for each party recorded an agreement that provision should be made for Mr Liprini out of the estate of his late father in the sum of $750,000 together with costs of $20,000. There was a notation that the orders were signed in contemplation of a claim by Mr Liprini against his mother’s estate. Mr Liprini agreed to execute a deed if called upon to do so releasing Dr Liprini as executor of the estate of their late mother from any claim under s.7 of the Family Provision Act in relation to their mother’s estate. Nicholas J pointed out that those orders may be taken to have been entered when they were recorded in the court’s computerised record.
Although demands for payment were made, no sum was paid to Mr Liprini. Mr Liprini then commenced proceedings in the Supreme Court seeking, in effect, to give effect to or enforce the orders made on 6 December 2007. Contrary to the suggestion now made by Dr Liprini, there is no evidence that Mr Liprini’s attempts to enforce the consent orders was vexatious.
Nicholas J was satisfied that Mr Liprini was entitled to the relief claimed. His Honour ordered that Dr Liprini pay Mr Liprini the settlement sum of $770,000, and made a declaration that Dr Liprini was personally liable for this amount.
Dr Liprini unsuccessfully appealed against the decision of Nicholas J. On 24 May 2010, Allsop P made orders dismissing the notice of appeal. His Honour saw no basis for considering that the appeal had any real prospects of success. Dr Liprini also unsuccessfully sought a review of the decision of Allsop P.
On 10 August 2010, Dr Liprini filed a notice of motion in the Supreme Court seeking to have the consent orders set aside. That notice of motion was dismissed on 20 May 2011.
Further, on 9 December 2010, Dr Liprini sought to file another notice of appeal against the decisions of Nicholas J and Allsop P alleging criminal fraud. Leave to file the notice of appeal was refused on 21 March 2011. The Registrar of the Supreme Court was of the view that without an extension of time having been granted the notice of appeal was out of time and brought without leave. In other words, Dr Liprini has had and has taken the opportunity to seek to challenge or to have the judgment that formed the basis for the creditor’s petition set aside.
In considering “new” grounds (ii), (iii) and (iv), I have borne in mind that Dr Liprini’s concerns about the conduct of his former legal representatives, the motivation of his brother and whether he attended the Supreme Court mediation proceedings at which consent orders were made were raised before Driver FM as well as before Smith FM. The substance of his claim that his consent to the orders in the proceedings that formed the basis for the creditor’s petition was procured by fraud or serious professional misconduct on the part of his legal representatives was also raised before Smith FM and Driver FM. As indicated, Smith FM found that the evidence presented to the court did not provide sufficient reason to go behind the consent orders or the judgment of Nicholas J having regard to the principles in Wren v Mahony and Wolff v Donovan. Driver FM saw no basis for an annulment on the grounds raised in Dr Liprini’s claims about his brother’s conduct.
In effect, Dr Liprini seeks to re-agitate the issue of whether the court should go behind the judgment that formed the basis for the creditor’s petition. Now, as then, the evidence before the court does not provide a foundation for Dr Liprini’s contentions in relation to his brother and his legal practitioners. Insofar as Dr Liprini focuses upon concerns and grievances about his various legal representatives and endeavoured to put evidence before the court in that respect, as Smith FM pointed out, this does not address principles upon which orders may be set aside. Nor do such assertions provide a sufficient basis to go behind the judgment of Nicholas J.
The grounds relied on and the evidence before the court are not such as to show an arguable case of sufficient reason to go behind the consent orders or the orders of Nicholas J that formed the basis for the bankruptcy notice and creditor’s petition. Insofar as Dr Liprini seeks to go behind the judgment that the creditor’s petition is based on as the basis for an annulment application he has no reasonable prospects of success.
Furthermore, while the precise formulation of these claims may have changed, in substance Dr Liprini seeks to re-litigate on very similar or “patched-up” facts. These matters have already been determined. Such an attempt to re-litigate is an abuse of process (Re Prowse).
In his affidavit of 22 December 2011 Dr Liprini retreated from and apparently abandoned ground (ii) at least in part, on the basis that he had erred in his understanding of the decision of Smith FM. Insofar as he maintains any contention that he was not personally liable for the debt to his brother, that issue was determined by Smith FM. The attempt to revisit it is an abuse of process and vexatious. Furthermore, there is no evidence to support the claims he makes in that respect such as to provide any basis to go behind the judgment of Nicholas J in the context of an annulment application.
Ground (iii) takes particular issue with the account in the judgment of Smith FM of the circumstances of the mediation on 6 December 2007. In effect, Dr Liprini has put before the court assertions about the conduct of his brother and former legal practitioners apparently in support of the proposition that the creditor’s petition was an abuse of process, on the basis that his brother and various legal practitioners who previously acted for Dr Liprini were engaged in a deliberate intention to defraud him.
I have had regard to all the affidavits filed by Dr Liprini. Much of the affidavit evidence of Dr Liprini is repetitive, consists of assertions or is otherwise such that its relevance is not clear. He has not established that there is any fresh evidence not previously available at the time of the earlier proceedings or that could not have been discovered sooner with reasonable diligence. Further, even if Dr Liprini’s affidavits filed in these proceedings contain material not before Smith FM or Driver FM, he essentially seeks to re-agitate a “patched up” case involving an assertion of fraud that was considered by Driver FM. All of the “evidence” in this respect pre-dates the previous annulment application.
While it also appears that he intends to assert that on this basis the court should go behind the judgment founding the bankruptcy notice and the creditor’s petition, there is no proper basis in the evidence before the court to warrant re-visiting this issue in circumstances where Smith FM considered whether to go behind the judgment of Nicholas J. Driver FM also considered such claims and saw nothing “new” in Dr Liprini’s contentions in that respect. The attempt to re-litigate this issue is an abuse of process and vexatious in circumstances where it has not been established that there is fresh evidence not previously available.
Further, insofar as Dr Liprini alleges (in ground (iv)) criminal intent to defraud the estates of either or both his parents based on his former solicitor’s advice about the need for an advertisement of notice of intention to distribute his father’s estate, this reiterates and develops his contentions before Driver FM. Even if the advice from Dr Liprini’s former solicitor was not before Driver FM (as appears to be contended), these concerns do not establish any arguable basis on which to go behind the judgment of Nicholas J and otherwise have no reasonable prospects of success as the basis for an annulment application.
That leaves what Driver FM saw as the only basis on which it might have been argued that an annulment order should be made (at [8]), that is, the issue of whether Dr Liprini was solvent at the time of the making of the sequestration order as he now contends (described as ground (i) in Dr Liprini’s affidavit of 7 November 2011). If a bankrupt can adduce evidence that he was solvent that would be a cogent ground for annulling a bankruptcy (subject to any discretionary factors weighing against making the order).
In making the sequestration order Smith FM expressed concern about the absence of any evidence from Dr Liprini about his financial position and noted that he had not opposed the creditor’s petition on the ground of ability to pay his debts within s.52(2)(a) of the Bankruptcy Act.
Driver FM had regard to the fact that the report of the Trustee disclosed that it was possible that the administration of the estate could result in a surplus of assets over liabilities, but observed that Dr Liprini had not argued that he could have realised assets to discharge his debts within a reasonable time (at [9]).
Dr Liprini now asserts that he could have realised assets to discharge his debts within a reasonable time or borrowed funds on security of real estate in order to discharge his debts within a reasonable time. In ground (i) he asserted that the report by the Trustee submitted for the first annulment application “adequately demonstrates this”. That issue has already been considered by Driver FM on the basis of the Trustee’s report. However there is no cogent evidence before the court to support the proposition that Dr Liprini had the capacity to borrow funds on the security of real estate in order to discharge his debts within a reasonable time at the time of the sequestration order. Dr Liprini appears to rely in substance on the fact that the Trustee’s report before Driver FM suggested an excess of assets over liabilities and an expected dividend of 100 cents in the dollar in his bankrupt estate and assertions about the amount that would have to be borrowed compared with the value of his real estate in relation to which he does put some evidence before the court. However it is well-established that it is not sufficient for a debtor to establish merely that he has assets exceeding liabilities in value that are not presently available or realisable sufficiently to be able to pay his debts. It is open to a debtor to rely on a capacity to borrow money to pay his debts. There is now an assertion by Dr Liprini (in particular in his affidavit of 22 December 2011) that funds could have been borrowed and secured on the two properties in his name. However this is no more than a claim of a hypothetical ability to borrow based on the amount of the debts and value of the properties. There is no proper evidence from Dr Liprini of any capacity to pay for, secure or otherwise satisfy any new debt or debts that would then have arisen. The bankrupt bears the onus of establishing that he is in a position to pay all the debts he owes within a reasonable time. Where a bankrupt seeks to rely on a capacity to borrow money to pay such debts, he or she must establish not only that he or she has assets capable of sourcing or raising the moneys sought to be borrowed by sale or by mortgage or pledge within a reasonably short time (Sandell v Porter and Another (1966) 115 CLR 666; [1966] HCA 28) but also “a capacity to pay for, to secure or otherwise satisfy the [new] debt” in order to “discharge the onus that the debtor is able to pay his debts” (see Re Elwyn John Capel; Ex Parte: Caram Finance Australia Ltd (formerly called Marac Finance Australia Ltd) [1998] FCA 372. Otherwise, as pointed out in International Alpaca Management Limited v Ensor [1999] FCA 72, the debtor would simply be substituting one debt he could not pay for another.
Despite ample opportunity to do so Dr Liprini has not adduced evidence to show that he has a reasonable prospect of successfully establishing solvency for the purposes of his annulment application. He has not raised any fresh cogent evidence in support of his contention that he is solvent beyond that considered by Driver FM. Dr Liprini has had several opportunities to put evidence before the court in support of his annulment application. It may be that his focus on his concerns about the alleged conduct of his brother and various legal practitioners has absorbed his attention. Nonetheless, the evidence before the court is not such as to establish that Dr Liprini has a reasonable prospect of successfully demonstrating solvency such as to establish that the sequestration order ought not to have been made.
Furthermore, Dr Liprini did not adduce cogent evidence in this respect on the hearing of the creditor’s petition or before Driver FM (and there is no evidence that he sought to do so on any of the appeals). This is not a case in which it can be said that fresh evidence about Dr Liprini’s financial situation at the time of the sequestration order has subsequently come to his knowledge. In essence he seeks to re-agitate an issue considered by Driver FM (essentially without relevant cogent additional evidence) in circumstances where Smith FM had raised the issue of solvency in his judgment. Driver FM considered whether Dr Liprini could have realised assets or borrowed funds to discharge his debts within a reasonable time. However then, as now, there was no evidence that Dr Liprini had the capacity to borrow funds on the security of his real estate and to satisfy such a debt in order to discharge his debts within a reasonable time and no proper basis on which the court could be satisfied that the sequestration order should not have been made.
Insofar as Dr Liprini relies on an express contention of solvency, notwithstanding that he now appears to appreciate that there may have been arguments open to him had he put evidence before the court in relation to an ability to realise funds to discharge his debts within a reasonable time or to borrow funds on the security of real estate at the time the sequestration order was made, he has not put such evidence before the court. His assertions about a capacity to borrow with loans secured on properties based on their value does not suffice. In these circumstances the hypothetical argument in this respect is not such as to have any reasonable prospect of success.
I would not, in the context of the bankruptcy jurisdiction, necessarily categorise any second annulment application as an abuse of process. If there was sufficient evidence going to show solvency in the relevant sense (rather than merely an excess of assets over liabilities, assertions about the evidence before Driver FM and about a theoretical borrowing capacity based on the value of the real estate) it may be that it would not be appropriate to summarily dismiss a second annulment application (notwithstanding that it could be seen as an attempt to re-litigate more effectively a matter already determined). However that is not the case. In the absence of such evidence and having regard to the lack of an arguable basis for the grounds relied upon and the reiteration of issues already determined I am of the view that this ground has no reasonable prospects of success.
Dr Liprini has no reasonable prospect of successfully prosecuting any of the bases for the present annulment application on the evidence before the court within r.13.10(a). Further, in all the circumstances, his attempts to re-litigate more effectively matters already litigated in this court and in the Federal Court in the absence of genuine fresh evidence or a relevant change in circumstances is an abuse of process within r.13.10(c) and vexatious within r.13.10(b) of the Federal Magistrates Court Rules.
I note in relation to the other final orders sought by Dr Liprini that this court does not have jurisdiction to reverse costs orders made by other courts. There is no jurisdictional basis for the court to make an order in the form of a recommendation for investigation or prosecution by the DPP. Dr Liprini has no reasonable prospect of successfully prosecuting the claims sought in paragraphs two and three of the application.
The annulment application should be summarily dismissed.
The stay application
Dr Liprini’s application for a stay pending determination of his annulment application cannot succeed as there will be no proceedings on foot and no other basis for such an order has been established.
In any event, to the extent that Dr Liprini sought an interim stay pending determination of his substantive application, that was sought in his originating application filed on 7 November 2011 and no stay was granted. To the extent that he sought to make a further interim application for a stay the time had passed for such a stay to be granted (and furthermore in the absence of an arguable case or triable issue arising there would be no basis for such a stay).
At the time of the hearing Dr Liprini sought an adjournment. His adjournment application was refused. He did not address the substance of his application for a stay at the hearing, despite being given the opportunity to do so. He was given the opportunity to file post-hearing submissions, but did not do so within the time allowed.
Insofar as he now (in the documents filed without leave after the time for post-hearing submissions) takes issue with the failure of the court to order a stay of some kind at the time of the hearing his concerns in that respect do not establish a basis on which a stay of the nature sought could or should be ordered.
To the extent that Dr Liprini seeks to obtain a stay generally of the bankruptcy administration and any legal process against him unconnected with any substantive application to this court, it has not been established that this court has jurisdiction to grant such a stay. His application for a stay should be dismissed.
Vexatious proceedings
Rule 13.11 of the Federal Magistrates Court Rules is relevantly as follows.
(1) If the court is satisfied that a person has instituted a vexatious proceeding and the Court is satisfied that the person has habitually, persistently and without reasonable grounds instituted other vexatious proceedings in the Court or any other Australian court (whether against the same person or against different persons), the Court may order:
(a) that any proceeding instituted by the person may not be continued without leave of the Court; and
(b) that the person may not institute a proceeding without leave of the court.
(2) An order under subrule (1) may be made:
(a) on the application of a person against whom the person mentioned in subrule (1) has instituted or conducted vexatious proceedings; or
(b) on the application of a person who has sufficient interest in the matter; or
...
(3) If a person (a vexatious litigant) habitually and persistently and without reasonable grounds institutes vexatious proceedings in the Court against another person (the person aggrieved), the Court may, on application of the person aggrieved, order:
(a) that any proceeding instituted by the vexatious litigant against the person aggrieved may not be continued without the leave of the Court; and
(b) that the vexatious litigant may not institute any proceeding against the person aggrieved without leave of the Court.
(4) A person seeking an order under this rule must file an application.
...
Following the decision of Lloyd-Jones FM to the effect that the orders made by Adamson J against Dr Liprini under the New South Wales Vexatious Proceedings Act are of no effect in this court, the Trustee sought an order under r.13.11(1) in relation to Dr Liprini.
It was contended that the court could be satisfied not only that these proceedings are vexatious proceedings, but also that Dr Liprini has habitually, persistently and without reasonable grounds, instituted other vexatious proceedings in this or other courts. The Trustee provided a list of proceedings in which Dr Liprini has been involved in various courts that were said to be vexatious proceedings instituted by him or that may otherwise be relevant to the exercise of the discretion under r.13.11. They are as follows:
1)Supreme Court of New South Wales, FPA proceedings commenced on 18 July 2006 by Mr Liprini against Dr Liprini – no. 2006/257690 (formerly 3790/2006).
2)Supreme Court of New South Wales, notice of motion filed by Mr Liprini on 3 March 2008 against Dr Liprini alleging contempt –no. 2006/257690 (formerly 3790/2006).
3)Supreme Court of New South Wales, proceedings commenced in 2008 by Mr Liprini against Dr Liprini which resulted in the orders of Nicholas J that formed the basis for the bankruptcy notice – no. 2008/2468.
4)New South Wales Court of Appeal, notice of appeal in relation to the third proceedings filed on 8 October 2009 by Dr Liprini – no. 2009/40371.
5)New South Wales Court of Appeal, notice of motion filed on 26 May 2010 by Dr Liprini seeking review of the decision of Allsop P in the fourth proceedings – no. 2009/298458.
6)New South Wales Court of Appeal, notice of motion seeking leave to issue a subpoena filed by Dr Liprini on 28 June 2010 – no. 2009/298526.
7)New South Wales Court of Appeal, notice of motion to set aside consent orders in the first proceedings filed by Dr Liprini on 2 July 2010 in the fourth proceedings – no. 2009/40371.
8)Supreme Court of New South Wales, notice of motion to set aside orders filed on 10 August 2010 by Dr Liprini in the first proceedings – no. 2006/257690.
9)Federal Magistrates Court of Australia, application to set aside a bankruptcy notice filed on 3 November 2009 by Dr Liprini – no. SYG2674/2009.
10)Federal Magistrates Court of Australia, application to set aside a bankruptcy notice filed on 3 November 2009 by Dr Liprini – no. SYG2675/2009.
11) Federal Magistrates Court of Australia, creditor’s petition presented on 15 January 2010 by Mr Liprini against Dr Liprini – no. SYG66/2010.
12)Federal Court of Australia, two notices of appeal filed by Dr Liprini on 22 September 2010 – no. NSD1237/2010 and no. NSD 1238/2010.
13) Federal Court of Australia, two notices of motion seeking a stay filed on 22 September 2010 by Dr Liprini – no. NSD1237/2010 and no. NSD 1238/2010.
14)New South Wales Court of Appeal, Notices of Appeal in relation to the third and fourth proceedings filed on 9 December 2010 by Dr Liprini – no. 2009/298526.
15) Federal Magistrates Court of Australia, application in a case seeking interim injunction filed on 16 December 2010 by Dr Liprini in the creditor’s petition proceedings – no. SYG66/2010.
16) Federal Magistrates Court of Australia annulment application filed on 11 April 2011 by Dr Liprini – no. SYG617/2011.
17) Federal Court of Australia, Notice of Appeal filed in relation to the sixteenth proceedings on 26 May 2011 by Dr Liprini – no. NSD735/2011.
18) Federal Court of Australia, Notice of Motion seeking stay filed on 7 June 2011 by Dr Liprini – no. NSD735/2011.
19)Federal Court of Australia, Further Application for a stay filed by Dr Liprini on 16 September 2011 – no. NSD735 of 2011.
20)Federal Magistrates Court, second annulment application filed by Dr Liprini on 7 November 2011 – no. SYG2522/2011.
21) District Court of New South Wales, notice of motion filed on 30 July 2010 by Dr Liprini in relation to judgment for costs obtained by Dr Liprini’s former solicitor – no. 2010/106749.
22) Supreme Court of New South Wales, professional negligence proceedings commenced in 2010 by Dr Liprini against his former solicitor – no. 2010/32289.
23) New South Wales Court of Appeal, Notice of Appeal filed in 2010 by Dr Liprini in relation to the twenty first proceedings – no. 2010/331724.
24) New South Wales Supreme Court, Notice of Motion seeking a Mareva order filed by Dr Liprini on 26 August 2011 – no. 2011/178104
25)New South Wales Supreme Court, proceedings commenced by the Trustee in 2011 seeking that Dr Liprini be declared a vexatious litigant – no. 2011/201820.
26) New South Wales Court of Appeal, Notice of Intention to Appeal filed by Dr Liprini in relation to twenty fifth proceedings.
27)New South Wales Supreme Court, application for leave to seek a stay of a writ of possession filed by Dr Liprini on 8 March 2012 – no. 2012/201820.
28)New South Wales Supreme Court, application for a stay of the writ of possession filed by Dr Liprini on 24 March 2012 – no. 2011/178104.
Reliance was placed on the principles considered by Roden J in Attorney-General v Wentworth in relation to the test for determining whether proceedings are vexatious. His Honour there stated at 491:
It seems then that litigation may properly be regarded as vexatious for present purposes on either objective or subjective grounds. I believe that the test may be expressed in the following terms:
1.Proceedings are vexatious if they are instituted with the intention of annoying or embarrassing the person against whom they are brought.
2.They are vexatious if they are brought for collateral purposes, and not for the purpose of having the court adjudicate on the issues to which they give rise.
3.They are also to be properly regarded as vexatious if, irrespective of the motive of the litigant, they are so obviously untenable or manifestly groundless as to be utterly hopeless.
As Fitzgerald P stated in Re Cameron (1996) 2 Qd R 218 at 220; [1996] QCA 37:
Although there are sometimes statutory indications, the broad test potentially concerns such factors as legitimacy or otherwise of the motives of the person against whom the order is sought, the existence or lack of reasonable grounds for the claims sought to be made, repetition of similar allegations or arguments to those which have already been rejected, compliance with or disregard of the court’s practices, procedures and rulings, persistent attempts to use the court’s processes to circumvent its decisions or other abuse of process, the wastage of public resources, and funds, and the harassment of those who are the subject of the litigation which lacks reasonable basis…
I have also had regard to the observations of Adamson J in Pascoe v Liprini [2011] NSWSC 1484, while bearing in mind the differences between r.13.11 and the New South Wales legislation. The concept of vexatious litigation in the context of former Order 21 of the Federal Court Rules was discussed by Stone J in Soden v Kowalski and approved and summarised by the Full Court of the Federal Court in Kowalski v Mitsubishi Motors Australia Ltd at [57]-[68]. Such discussion is relevant in relation to the similarly worded r.13.11 of the Federal Magistrates Court Rules.
As Stone J pointed out in Soden v Kowalski [2011] FCA 318 at [45]:
The wording of rules 2 and 3 of O 21 suggest that a “vexatious proceeding” has some quality beyond being brought “habitually, persistently and without reasonable grounds”. In Jones v Skyring [1992] HCA 39; (1992) 109 ALR 303 at 309, Toohey J commented that whatever that quality is, the test for a vexatious proceeding is not simply subjective nor is it whether the proceeding has been instituted vexatiously, maliciously or in bad faith. Similarly it is not to the point that the litigant genuinely believes in the merit of the claim or claims being pursued; see also Re Vernazza [1960] 1 QB 197 at 208.
Relevantly, her Honour continued at [46] – [51]:
In Attorney-General v Wentworth (1988) 14 NSWLR 481, Roden J gave detailed consideration to the authorities and to the questions of law relevant to a declaration that a person is a vexatious litigant. His Honour’s analysis was in the context of s 84 of the Supreme Court Act 1970 (NSW) however, in relation to the nature of vexatious proceedings, s 84 is not materially different to The Federal Court Rules under consideration here.
…
Although the respondent must have “instituted” vexatious proceedings, as Roden J pointed out, vexatiousness is a quality of the proceedings rather than the respondent’s intention so that “the question is not whether they have been instituted vexatiously but whether the legal proceedings are in fact vexatious”; Re Vernazza [1960] 1 QB 197 at 208 per Ormerod LJ. The intention to harass, embarrass or annoy may be a factor, even the precipitating factor, in an applicant’s decision to institute a proceeding and yet that proceeding may involve a legitimate claim. Nevertheless such an intention may be a powerful indicator that a proceeding is vexatious because groundless, but it cannot be determinative. In Attorney-General v Collier [2001] NZAR 137 at [40] the Full Court made this point saying:
Although in many cases it may not be possible to decide whether litigation is wholly without merit until it is determined, a successful strike-out application by the defendant, at least where not based upon technical points (such as Limitation Act defences or error in the form of proceedings not known to the plaintiff) may be reliable evidence in the circumstances of vexatiousness.
This is consistent with the observations of Toohey J in Jones v Skyring: see [45] above. In Brogden v Attorney-General [2001] NZCA 208; [2001] NZAR 809 at [22] the New Zealand Court of Appeal made similar observation and observed that ultimately the test is whether “the various proceedings have been conducted by the litigant in a manner which properly attracts that epithet”.
The concept of a vexatious proceeding is relevant to an application to dismiss a single proceeding pursuant to O 20 r 4 or r 5 which provide that the Court may stay or dismiss generally a proceeding or claim that is “frivolous or vexatious”. I see no reason why “vexatious” in these rules should bear a different meaning to the meaning it bears O 21 r 1 and r 2. For practical purposes, the test of whether a proceeding is vexatious is whether it is, in Roden J’s words, “so obviously untenable or manifestly groundless as to be utterly hopeless”.
In Gallo v The Honourable the Attorney-General, Supreme Court of Victoria, 4 September 1984, (unreported) Starke J referring, at 11, to ‘vexatious’ as “an omnibus expression”, said that the expression includes,
... proceedings which are scandalous which disclose no reasonable cause of action, which are oppressive, which are embarrassing, or which are an abuse of the process of the court. All of such and similar proceedings, in my opinion, fall within the meaning of the word 'vexatious' in the statute.
In Attorney-General for the State of Victoria v Horvath, Senior [2001] VSC 269 at [28], Ashley J helpfully addressed practical issues of application:
It is one thing to know what the word “vexatious” means. It is another thing to apply s. 21(2) to the circumstances of a particular case. In the latter task the following matters are, according to the authorities, relevant: first, where an order has been made dismissing an action as frivolous or vexatious, or striking a pleading out, it is not for a court considering a s. 21 application to go behind the order and go into the merits of the argument as a court of appeal would do. Second, findings which are required do not depend on viva voce evidence or credibility of witnesses. The critical evidence is to be found in court files - documents, judgments, orders and reasons. For that reason, any hearsay material contained in an affidavit in support of an application, even though objectionable, should be treated simply as a distraction, and ignored. Third, the question is not whether the manner in which a proceeding is conducted is vexatious; it is whether, having regard to its nature and substance it should be so characterised. Fourth, and this is a more general proposition with respect to s. 21, in determining whether the Attorney-General has made out a case, the court is not concerned with a minute individual examination of each proceeding. It must consider the overall impression created by the number of proceedings, their general character and their results.
[Footnotes omitted; emphasis added]
It was open to Dr Liprini to seek an annulment of a sequestration order and, having regard to the Trustee’s report about his financial affairs, to seek to do so on the basis that he was solvent. Instead Dr Liprini continued to agitate the same issues previous agitated in earlier proceedings. In effect, Driver FM alerted Dr Liprini that if he continued to do so it may be necessary to consider whether orders should be made of the nature now sought.
Having regard to the fact that Dr Liprini was self-represented before Driver FM and the relevance of solvency, on balance I am not satisfied that the first annulment application should be regarded as so obviously untenable or manifestly groundless as to be utterly hopeless and vexatious. Nor am I satisfied that it was instituted with the intention of annoying or embarrassing the respondent or for collateral purposes. These proceedings are nonetheless relevant to the exercise of the court’s discretion as part of all the circumstances.
Notice of Appeal against the decision of Driver FM and Application for a Stay
By notice of appeal filed in the Federal Court on 26 May 2011 in proceedings NSD735 of 2011, Dr Liprini appealed against the decision of Driver FM (the seventeenth proceedings). Although the Trustee had been named as the second respondent at first instance, he was not listed as a party to the appeal. Dr Liprini also filed a notice of motion in the Federal Court seeking a stay of the orders made by Driver FM until determination of his appeal (the eighteenth proceedings). He named a number of parties, including Mr Liprini and the Trustee, as respondents.
On 22 June 2011 Jacobson J dismissed the notice of motion seeking a stay, but granted Dr Liprini leave to file in court a notice of motion amending his notice of appeal so as to join the Trustee as a respondent. Relevantly, his Honour had regard to the fact that Driver FM had refused to annul the bankruptcy and stated at [2]:
It therefore seems to me that there is nothing which gives rise to any ability on my part to grant a stay of the orders made by Driver FM.
Furthermore, Jacobson J went on to find (at [3]) that the affidavit relied on by Dr Liprini in which he alleged serious matters against Mr Pascoe “contains unsupported allegations of dishonesty and serious impropriety against Mr Pascoe. Those allegations are not supported by evidence and amount to no more than bald assertions made against the trustee”.
His Honour found that the motion was incompetent because there was nothing to stop and anything which Dr Liprini wished to raise was a matter which could only be raised on the appeal (although he made no comment as to whether the issues Dr Liprini wished to canvas were, in fact, properly the subject of the appeal beyond observing that, at the time, the allegations were no more than unsupported assertions without evidentiary basis).
Such an application was flawed. It repeated offensive and scandalous material that was relied on in these proceedings and in other proceedings. These proceedings were obviously untenable, manifestly groundless and vexatious and brought without reasonable grounds.
Further application for a stay
On 16 September 2011 Dr Liprini filed a further application in the same proceedings in the Federal Court (NSD735 of 2011) seeking a stay of the bankruptcy administration and preservation and other orders in relation to personal property claimed to be owned by him (the nineteenth proceedings). Such an application was the institution of an incidental proceeding.
On 7 October 2011 Yates J dismissed that interim application (see Liprini v Liprini (No 2) [2011] FCA 1150). Yates J referred to the earlier stay application that had been dismissed by Jacobson J who had noted the serious allegations made without supporting evidence against the Trustee. Dr Liprini relied on an affidavit alleging, among other things, that Mr Pascoe had acted in breach of his duty, apparently by authorising the removal of goods from the Helensburgh property which formed part of Dr Liprini’s bankrupt estate, of which Mr Pascoe, as trustee of Dr Liprini’s bankrupt estate, was the registered proprietor and was in the process of selling.
Yates J referred to the fact that the Trustee had given notice to Dr Liprini of his intention to sell the property, noted the presence of goods on the property and advised that unless they were removed within 14 days, they would be removed by the trustee and taken to a waste disposal facility. His Honour observed that it appeared that Dr Liprini took no steps to remove the goods from the property or to make alternative arrangements and that the goods had been taken from the property. The solicitor for Mr Pascoe had advised that they had been destroyed (at [8] – [11]).
Yates J accepted that the goods had been disposed of and saw no rational reason why, in light of the advice from the Trustee solicitor to Dr Liprini giving him notice, the Trustee would misinform the court about the fate of the goods after their removal from the property and “presumably, secret them at some other location” (at [11]).
His Honour rejected as inadmissible a large number of paragraphs in Dr Liprini’s affidavit “substantially on the ground that they did not contain admissible evidence, but merely argumentative assertions” (at [12]), but found that even treating these as submissions, they remained as mere arguments or assertions largely unsupported by evidence of primary facts with questionable relevance to the relief sought in the interlocutory application (at [12]).
While acknowledging that Dr Liprini felt a sense of injustice arising from the circumstances leading to his bankruptcy, his lack of success in various proceedings in various courts and his view that issues had been ignored by the Courts and also that he felt a significant degree of animosity towards his brother and, apparently, towards Mr Pascoe, Yates J found that the evidence adduced on the interlocutory application revealed no proper basis for the stay sought (at [15]).
His Honour found that it was far from clear on the evidence that Mr Pascoe had acted in breach of any duty to Dr Liprini, but that if he had it would be necessary for Dr Liprini to articulate and bring a proper claim on proper evidence rather than proceeding by filing an interlocutory application in the appeal proceedings. His Honour also found that the balance of convenience told against the granting of the relief of interim restoration of goods that had already been disposed of as waste and that the complaints about the way Mr Pascoe handled this aspect of the administration of Dr Liprini’s bankrupt estate did not provide a proper basis for staying the continued administration of that estate (at [15]).
His Honour had regard to the fact that the Federal Court has a discretionary power to order that the operation of a sequestration order be stayed providing that a notice of appeal had been filed. Notwithstanding that Dr Liprini did not seek to address him on that issue, Yates J had regard to the notice of appeal which, in substance, appeared to rely on a contention that the presiding Federal Magistrate had failed to read a particular affidavit placed before the court. His Honour was of the view that, at that time, in the absence of assistance on the matter, he was unable to conclude one way or the other whether this raised an arguable ground of appeal, although he observed that the reasons for decision of the Federal Magistrate appeared to record affidavit evidence which corresponded with the affidavits referred to in the notice of appeal. In any event, his Honour found that the balance of convenience did not favour the granting of a stay as the appeal was to be heard in the very near future.
I am of the view that this application seeking a further stay was vexatious and instituted without reasonable grounds. Dr Liprini made unfounded allegations against the Trustee and sought to thwart the performance of his duties as trustee under the Bankruptcy Act which necessarily involved sale of the Helensburgh property in circumstances where Dr Liprini had taken no steps to make arrangements in relation to the disposal of goods on the property. The proceedings again sought to bring a collateral challenge to the sequestration order. I am satisfied that they were an abuse of process, were made without reasonable grounds, and were conducted in such a manner as to harass the Trustee, involving as they did unsubstantiated allegations of impropriety. In the absence of the articulation of a proper claim on proper evidence the proceedings were manifestly groundless and hence vexatious.
The appeal against the annulment application itself was heard on 7 November 2011. Yates J dismissed the appeal in circumstances where Dr Liprini foreshadowed an intended discontinuance. Such proceedings were obviously untenable in the absence of proper grounds and were, as Adamson J put it (at [58]), vexatious “from the outset” and without reasonable grounds. I agree with her Honour’s reasoning in this respect.
These proceedings
On the same day, 7 November 2011, Dr Liprini commenced the present proceedings in this court, again seeking a stay of the administration of his bankruptcy and annulment (the twentieth proceedings). For the reasons given above, I am satisfied that the present proceedings can also properly be characterised as vexatious proceedings.
Notice of motion to set aside a judgment filed in the District Court
In the meantime, Dr Liprini instituted other proceedings in the District Court of New South Wales. On 30 July 2010 he filed a notice of motion seeking to set aside a judgment obtained by Mr Lyon (the solicitor who had acted for him in the proceedings before Nicholas J) upon registration of a certificate as to determination of costs (proceedings no. 2010/1067490: the twenty first proceedings).
On 15 September 2010 Truss DCJ dismissed the notice of motion with costs (Liprini v Liprini (unreported, District Court of New South Wales, Truss DCJ, No. 1067490 of 2010, 15 September 2010)). As Adamson J observed in Pascoe v Liprini at [65], in proceeding in this manner Dr Liprini acted in “total disregard” for the statutory framework created by the Legal Profession Act 2004 (NSW) for regulation of legal costs. He did not seek to appeal against the decision of the Costs Review Panel (and see s.382(2) of the Legal Profession Act).
Furthermore, Truss DCJ found that none of the bases for the court to set aside or vary a judgment were applicable. Her Honour addressed Dr Liprini’s contention that the basis for his application was fraud. Relevantly, her Honour reached the view that Dr Liprini was by the proceedings in the District Court seeking to impugn the orders made in the Supreme Court in the proceedings arising out of Dr Liprini’s dispute with his brother, notwithstanding that the judgment in issue was a judgment entered in the District Court on the basis of a certificate of costs issued by the review panel, not the orders made in the Supreme Court in the proceedings involving Dr Liprini’s brother. Her Honour concluded that Dr Liprini had failed to establish any ground on which the judgment obtained by Mr Lyon ought to be set aside and dismissed his notice of motion with costs.
As indicated, Dr Liprini failed to follow the procedure provided for in the Legal Profession Act for review of a decision of the Costs Review Panel. He had no reasonable ground for his application. His allegation of fraud against Mr Lyon was found to be completely unfounded and ill-directed, given that it related to the original proceedings in the New South Wales Supreme Court involving Dr Liprini and his brother and the fact that there was no evidence of any fraud on Mr Lyon’s part leading to the certificate of costs upon which the judgment was entered. Dr Liprini sought to impugn the decision of the Supreme Court and to re-agitate issues already determined. The notice of motion was manifestly groundless and a vexatious proceeding instituted without reasonable grounds.
Negligence proceedings against former solicitor
Dr Liprini also instituted proceedings in the New South Wales Supreme Court (no. 32289 of 2010) against Mr Lyon alleging professional negligence (the twenty second proceedings). These proceedings were discontinued on 1 November 2010. Properly, given the absence of evidence about such proceedings before the court, the Trustee did not contend that those proceedings were vexatious and I have not had regard to them in relation to the application under r.13.11.
Appeal against judgment of District Court
Similarly, in the absence of further evidence it was not contended that Dr Liprini’s appeal against the District Court judgment ordering him to pay Mr Lyon’s costs was vexatious (proceedings no. 331724 of 2010 in the New South Wales Court of Appeal: the twenty third proceedings). Those proceedings were discontinued on 1 November 2010.
Notice of motion seeking a Mareva order against the Trustee
By notice of motion filed with leave of the Supreme Court on 26 August 2011 in New South Wales Supreme Court proceedings no. 2011/178104 Dr Liprini sought what he described as a Mareva order to apply to the whole of his estate and a mandatory injunction allowing him unrestricted access to continue residing at two separate addresses (the twenty fourth proceedings). Mr Pascoe contended that this was a further institution of vexatious proceedings.
The application was dismissed by Ward J (see Pascoe v Liprini (unreported, Supreme Court of New South Wales, Equity Division, Ward J, 26 August 2011)).
As Ward J noted at [2], at the time of those proceedings, proceedings in the Supreme Court had been commenced by the trustee in bankruptcy, Mr Pascoe, seeking a possession order in relation to one of the properties the subject of the application for a mandatory injunction. Her Honour pointed out that the Supreme Court was not a court exercising bankruptcy jurisdiction and suggested (at [4]) that any issues Dr Liprini had in relation to the making of the sequestration order were matters that had to be raised in the Federal Court by way of appeal, not the Supreme Court.
Her Honour observed that there had been a failure by Dr Liprini to comply with the Supreme Court Practice Note in relation to Mareva injunctions, but in any event found nothing in the material before her from which she could form the view that the trustee in bankruptcy was seeking to remove assets from the jurisdiction or improperly deal with assets vested in him pursuant to an order of another court. Ward J was not satisfied there was a basis for the ground of a Mareva order (at [7]).
In relation to the application for a mandatory injunction allowing Dr Liprini unrestricted access to the premises, her Honour pointed out that those premises had vested in the trustee in bankruptcy and that issues in relation to the making of the sequestration order were matters that were at that time before the Federal Court. Ward J did not see it as “appropriate” for the Supreme Court to interfere with the conduct of the bankruptcy administration by the trustee in bankruptcy (at [9]). Furthermore, her Honour found no evidence to establish the basis for a serious question to be tried in the allegations Dr Liprini raised about the circumstances that led to the making of the bankruptcy order and his claim that he was a victim of criminal fraud to support the grant of a mandatory injunction to allow him unrestricted access to the premises. Ward J also addressed allegations made by Dr Liprini taking issue with the conduct of the trustee.
Dr Liprini had made substantially the same application in the Federal Court in the stay application that was dismissed on 22 June 2011 discussed above. Insofar as Dr Liprini sought a stay of his bankruptcy, that was, as her Honour indicated, a matter for the Federal Court or the Federal Magistrates Court. Aside from the jurisdictional difficulty facing Dr Liprini in the Supreme Court, there was no credible evidence to support the application. In all the circumstances, I am satisfied that these proceedings were manifestly untenable and vexatious proceedings brought without reasonable grounds.
The vexatious litigant proceedings
For the sake of completeness I note that the Trustee commenced proceedings 201820 of 2011 in the New South Wales Supreme Court against Dr Liprini seeking orders under the Vexatious Proceedings Act to prevent further actions being commenced in New South Wales without leave of the court (the twenty fifth proceedings). As indicated above, that application was heard by Adamson J and in Pascoe v Liprini [2011] NSWSC 1484 her Honour made orders pursuant to the Vexatious Proceedings Act that prohibited Dr Liprini from instituting proceedings in New South Wales without leave of the court and staying proceedings already instituted by him. This decision forms part of the context relevant to the exercise of the court’s discretion in these proceedings.
Appeal in relation to vexatious litigant proceedings
Dr Liprini filed a notice of intention to appeal in the New South Wales Court of Appeal against the decision of Adamson J (the twenty sixth proceedings). However he did not seek the necessary leave to appeal. It was open to Dr Liprini to seek leave to appeal. I am not persuaded that his failure to follow the correct procedure of itself renders the proceedings vexatious. There is no evidence before this court as to the fate of such proceedings and in these circumstances I have not had regard to these proceedings in relation to r.13.11.
Application for leave to seek stay of a writ of possession
On 8 March 2012 Dr Liprini applied for leave to institute proceedings for a stay of a writ of possession in the New South Wales Supreme Court (the twenty seventh proceedings). Ball J dismissed the application for leave on the basis that it seemed clear that Dr Liprini was “unable to offer any real ground for stay of execution of the writ of proceedings”. It is not clear whether an application for leave constitutes the institution of proceedings. I was not addressed on this issue and on that basis have not considered the leave application as the institution of proceedings for the purposes of r.13.11. However the judgment of Ball J is in evidence before the court. Dr Liprini’s failure to articulate arguable grounds is relevant to the exercise of the discretion under r.13.11.
Application for a stay of the writ of possession
After the hearing, the Trustee drew to the attention of the court an additional proceeding not known to him at the time of the hearing (the twenty eighth proceedings). Dr Liprini had the opportunity to reply to the Trustee’s written submissions. I consider in all the circumstances that it is appropriate to grant leave to the Trustee to rely on this further evidence in connection with the application under r.13.11. Relevantly, as is apparent from the judgment of White J (see Pascoe v Liprini [2012] NSWSC 345), on Saturday, 24 March 2012 Dr Liprini sought a stay of the writ of possession issued on 8 March 2012, by which he was required to give up possession of a property at Sylvania Waters to Mr Pascoe, as his trustee in bankruptcy. He had not obtained leave to institute such proceedings in the Supreme Court.
According to White J, Dr Liprini sought the stay of the writ on the basis that he had an application pending in this court for annulment. He claimed that he had “been made bankrupt as the result of criminal behaviour on the part of his brother, the solicitors who acted for him [previously] and the trustee in bankruptcy” (at [3]) and that if he was required to vacate the property he would “lose personal possessions including papers which are necessary for him to continue various pieces of litigation”(at [4]). He informed White J that he had earlier made the same application for a stay of the writ of possession to Ball J which was dismissed on 8 March 2012 (at [5]). His Honour ascertained from the reasons of Ball J that Adamson J had made the vexatious litigant order on 5 December 2011 and also, relevant to the stay application, that on 1 April 2011 Dr Liprini had sought a stay of the bankruptcy administration and annulment of the sequestration order which was dismissed on 17 May 2011 and that on 16 September 2011 he had filed a further application in the Federal Court seeking a stay of the bankruptcy administration and preservation and other orders in relation to personal property that was dismissed by Yates J on 7 October 2011 in proceedings which Adamson J had found were vexatious (at [6] – [8]).
White J found that even if the same application had not been made and rejected by Ball J no proper basis had been put forward as to why he should stay the writ of possession. In the absence of any material change of circumstances, his Honour found that the fresh application was an abuse of process. It had been made in circumstances where the required leave had not been sought. His Honour was of the view that the fact that the application was made ex parte on a Saturday only added to the abuse (at [9]).
I am satisfied that the application to White J (which was an application for a stay and not simply for leave) was manifestly groundless and vexatious. It was in substance a duplication of the earlier application that had been dismissed and was an abuse of process in circumstances where Dr Liprini had failed to seek the necessary leave. It was made without reasonable grounds.
Conclusion
On the basis of the findings above I am satisfied that Dr Liprini has habitually, persistently and without reasonable grounds instituted vexatious proceedings in Australian courts in addition to the present proceedings. I have borne in mind the distinction between whether a particular proceeding is vexatious and whether a particular litigant has habitually and persistently instituted such a proceeding as considered in Kowalski at [65] (and see [66] in relation to the absence of reasonable grounds). Of particular relevance in this case are the remarks of the New Zealand Court of Appeal in Brogden v Attorney-General [2001] NZCA 208; [2001] NZAR 809 at [21] cited with approval by Stone J in Kowalski at [67] and by Bromberg J in Singh at [19] as set out at [103] above.
As can be seen from the summary of proceedings instituted by Dr Liprini, not only were the proceedings numerous, but they also clearly represented repeated attempts to re-litigate issues already determined against Dr Liprini and were accompanied by scandalous allegations which Dr Liprini had no prospect of substantiating.
Dr Liprini repeatedly engaged in similar applications in different courts (in particular for a stay). This suggests that he does not accept an inability in law to further challenge decisions that have been the subject of unsuccessful challenge. His allegations of fraud involve a range of persons. Some of the proceedings instituted by him (notably the appeals against the decision of Nicholas J and against the sequestration order) have been struck out.
I am satisfied, based on the number, character, lack of reasonable grounds and way in which the proceedings instituted by Dr Liprini have been conducted, that he habitually, persistently and without reasonable grounds instituted such other vexatious proceedings in this court, in the Federal Court, in the Supreme Court, the Court of Appeal, and the District Court. In these circumstances, the court has the power to make an order under r.13.11(1).
It is necessary for the court to determine whether to exercise the discretion to make the orders sought. Dr Liprini has been given the opportunity to be heard in relation to this application. He has filed numerous affidavits and had the opportunity to make oral and written submissions. He was also given the opportunity to seek to inspect the transcript of the hearing. Dr Liprini did not take the opportunity to file post-hearing written submissions in the time provided for in orders. The fact that he did not avail himself of this opportunity does not mean that he was not accorded procedural fairness or deprive the court of the power to make an order under r.13.11 of the Federal Magistrates Court Rules. I have considered the material filed out of time by Dr Liprini on 16 and 19 July 2012 insofar as it consists of submissions.
In all the circumstances I am of the view that it is appropriate to exercise my discretion to make orders under r.13.11(1) that Dr Liprini may not institute a proceeding in this court without leave of the court and that any proceeding instituted by him may not be continued without leave of the court (to allow for the possibility that there are proceedings of which I am not aware). Dr Liprini has brought a considerable number of proceedings, particularly against his brother and against the Trustee in circumstances which show an inability or a refusal on his part to accept finality in litigation and which involve repeated attempts to re-litigate the same matters or to prosecute the same complaints in slightly different forms or in different forums. Putting aside his motivation and beliefs, I am satisfied that, viewed objectively, such proceedings are vexatious. Further, he has made serious allegations against the Trustee and others without any apparent evidentiary foundation. His proceedings against Mr Pascoe as trustee of his bankrupt estate have impeded Mr Pascoe in performing his statutory role and, regrettably, will also have served to reduce any surplus which may otherwise have been available to him following the administration of his bankrupt estate.
Even if taken in isolation some of the proceedings instituted by Dr Liprini cannot be characterised as vexatious, the extent to which there was a consistent absence of arguable grounds raised by Dr Liprini, his reiteration of issues already determined and the making of unsubstantiated assertions is relevant to the exercise of the discretion.
Dr Liprini has abused the process of this and other courts in asserting his rights in circumstances where he has no reasonable grounds or evidence to support his complaints. He has also re-litigated issues on which he has not had success on earlier occasions. The evidence is not such as to indicate that Dr Liprini has sufficient insight into his behaviour as to give me confidence that he will not persist in bringing vexatious proceedings in the future (see Gargan at [12] per Perram J). In particular, his action in seeking a stay in the Supreme Court notwithstanding the orders of Adamson J, suggests a lack of insight. There is a greater prospect that he would bring further proceedings in the absence of such an order. Orders should be made as sought by Mr Pascoe with costs.
I note that this will not prevent Dr Liprini from enforcing any legitimate claims that he has a right to pursue on a proper evidentiary basis, because if he has such legitimate claims he can seek the leave of the court to commence proceedings.
I certify that the preceding two hundred and twenty-five (225) paragraphs are a true copy of the reasons for judgment of Barnes FM
Date: 3 August 2012
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