Lohe v Gargan
[2000] QSC 140
•22 May 2000
SUPREME COURT OF QUEENSLAND
CITATION: Lohe v Gargan [2000] QSC 140 PARTIES: CONRAD WILHELM LOHE
(applicant)
v
PETER ALEXANDER GARGAN
(respondent)FILE NO: S 1888 of 2000 DIVISION: Trial Division DELIVERED ON: 22 May 2000 DELIVERED AT: Brisbane HEARING DATE: 02 May 2000 JUDGE: Holmes J ORDER: Declaration that Respondent is a vexatious litigant CATCHWORDS: Declaration – s3(1) Vexatious Litigants Act – history of vexatious legal proceedings and summonses COUNSEL: Mr. Flanagan for the Applicant
Respondent in PersonSOLICITORS: Crown Solicitor for the Applicant
Respondent self-represented
HOLMES J: The applicant, the Crown Solicitor, seeks a declaration pursuant to s 3(1) of the Vexatious Litigants Act 1981 that the respondent, Peter Alexander Gargan, is a vexatious litigant.
Section 3(1) of the Vexatious Litigants Act 1981 provides as follows:
“If the Supreme Court or a Judge thereof is satisfied that a person has frequently and without reasonable ground instituted vexatious legal proceedings or procured vexatious subpoena, summonses to a witness, warrants or process to be issued or that any other person acting in concert with such a person has without reasonable ground instituted vexatious legal proceedings or procured vexatious subpoena, summonses to a witness, warrants or process to be issued, the Supreme Court or such Judge may after hearing such person and, if the case require it, such other person, or giving him, her or them an opportunity of being heard, by its, his or her order, declare such person and such other person to be a vexatious litigant.”
The applicant says that the respondent has a history of issuing vexatious legal proceedings and summonses. That history can be traced back, he says, to a Supreme Court action heard in February 1993, in which judgment was delivered against the respondent on 12 March 1993. Because of the importance of that decision it is appropriate to set out the background to it and its findings in some detail.
Supreme Court Action No 101 of 1990
In the action, the respondent’s brother and former partner sought a declaration that the respondent held a parcel of land (which will be referred to as “Lot 491”) on trust for him. Pursuant to a deed of partnership dissolution entered in 1984, a greater parcel of partnership land had been transferred into the respondent’s name, to facilitate what was described in the deed as “bank accommodation”. In February 1987 a joint venture agreement (“the first joint venture agreement”) was entered between the respondent, his brother, and SAM Industries Pty Ltd with a view to freeholding the land for development. In November 1989, a freehold grant was obtained in two titles, as Lot 35 and Lot 491. By a contract made on 23rd July 1990 the respondent sold Lot 35, comprising the land held under one title, to SAM Industries, in order to discharge debts which the trial judge, Thomas J., held were his own, and not those of the former partnership. The contract of sale was subject to existing contracts for the sale of portions of Lot 35 (including a contract with a Mr Mohammed). Those portions were to be excised, with the respondent meeting the costs of excision. A replacement joint venture agreement (“the second joint venture agreement”), which dealt with the use of Lot 35 was entered into on 15th August 1990 by the Respondent, his brother and SAM Industries. The remaining land, Lot 491, was mortgaged by the respondent to raise money for, as Thomas J. found, his own purposes.
The respondent contended that there had been no dissolution of the partnership. A document signed by the parties in November 1990 evinced an agreement to continue in partnership and to take steps towards the eventual dissolution of the partnership. By counter-claim he sought specific performance of that agreement, a declaration to the effect that the partnership had continued since its commencement in 1966, and the taking of an account.
Thomas J. found, however that the partnership had been dissolved; the 1990 document was no more than a settlement proposal. It was a breach of trust for the respondent to sell Lot 35, and to use the proceeds to pay his debts. In respect of Lot 491, he rejected a contention that the land was held subject to a statutory trust imposed by s 23(2) of the Partnership Act, and found that the land was held in trust solely for the plaintiff. He noted that the plaintiff intended to discharge an outstanding partnership debt to Mr W. Jue Sue in full from the proceeds of sale of Lot 491 upon which the dissolution of the partnership would be complete “subject only to the possibility of accounts inter se”. He observed, however, that no application for an account had been made; referring presumably to the fact that there was no account sought in respect of the partnership dissolved, as he had found, in 1984. In accordance with his findings, Thomas J. made a declaration that the respondent held Lot 491 in trust for the plaintiff, his brother, and ordered him to transfer it forthwith. The respondent was also ordered to pay some $60,000 in damages arising out of costs associated with the registration of a caveat on the property and the failure to transfer it at an earlier time so as to enable discharge of the outstanding partnership debt. His counterclaim was dismissed. The respondent did not appeal against that judgment. Ten days later on 22 March 1993 a sequestration order was made against the respondent on a creditor’s petition.
Originating Summons 25 of 1992 and Writ No. 14 of 1992
Prior to the commencement of the trial in action 101 of 1990, the respondent had filed an originating summons seeking rectification of the contract of the sale of Lot 35 to SAM Industries Pty Ltd, and what was described as “confirmation of a caveat” in respect of rights acquired by the respondent and his brother under the second joint venture agreement. That application was adjourned to a date to be fixed, conditional upon the respondent issuing a writ against SAM Industries Pty Ltd within seven days.
Supreme Court Action no. 14 of 1992
On 13 March 1992, the respondent issued a writ seeking specific performance of the contract of sale with SAM Industries, claiming damages, both liquidated and unliquidated, and “entry of a caveat to register instrument of joint venture”. It appears that he delivered a statement of claim, but the action was dismissed by Shepherdson J. when the Official Trustee failed to elect to continue its prosecution. The subject matter of the action appears from a discussion of it in a judgment by Drummond J., set out at paragraph 14 below.
In December 1997, Jones J. made an order that both the originating summons and a summons filed by SAM Industries Pty Ltd be adjourned to a date to be fixed on the basis that the respondent was to pay the costs of SAM Industries Pty Ltd, one Lance Kippin, the respondent’s brother John Gargan, and the Official Trustee in Bankruptcy, all of whom had become respondents to the summons, as had Messrs Nunan and Morton, stipendiary magistrates.
Application No. 4 of 1994
On 12 April 1994 the respondent filed an application, No 4 of 1994, in the Cairns District Registry of this court. There were a number of respondents to the application. They included the Official Trustee, members of the Gargan family, SAM Industries Pty Ltd, AA Mohammed (the purchaser of a portion of Lot 35), WL Jue Sue (partnership creditor) and BM Johnson (who had acted as John Gargan’s solicitor in the action before Thomas J.). That application sought an order that various questions of fact be submitted to a jury for determination. Those questions of fact concerned allegations of negligence as against the Official Trustee and conspiracy against various of the respondents. The application was stayed on 3 May 1994 as against all respondents other than the Official Trustee; and on 22 February 1995 the application so far as it concerned the Official Trustee was transferred to the Federal Court.
Federal Court Applicationin No QB 697 of 1993
In July 1995, the respondent applied to the Federal Court for orders directing the Official Trustee in Bankruptcy to assign to him all choses in action presently vested in the Official Trustee. He also sought an inquiry into the conduct of the Trustee, and an examination of the nature of the debt in respect of which the Sequestration Order against him had been made. The reasons for judgment of Drummond J. in respect of the first of those issues were given on 18 August 1995. It appears that the choses in action which the respondent sought to have re-vested in him included a claim against the Queensland Water Resources Commission, in respect of its refusal to approve a proposal for subdivision, notwithstanding an earlier intimation that it was acceptable; and such rights of challenge to Thomas J.’s decision as might survive; which, as Drummond J. found, were confined to the power to make application for an extension of time for appeal. Drummond J. concluded that the respondent had no prospect of making out a claim for damages against the Queensland Water Resources Commission, and that any prospect of success on appeal against the decision of Thomas J. would be minimal, even assuming an extension of time were not required.
Reference had also been made by the respondent to a possible cause of action against his brother in relation to a horse‑riding business, which entailed reliance on the alleged contract of November 1990, found by Thomas J. to be no more than a settlement proposal. Drummond J. held that the findings of Thomas J, which the respondent was presently estopped from challenging, prevented such reliance, so that any cause of action in this respect was doomed to failure.
The next matter in respect of which the respondent sought to have assigned to him a cause of action related to the second joint venture agreement with SAM Industries. The respondent wished to claim against SAM Industries in respect of an alleged breach of an obligation to transfer back the land subject to the contract with Mr Mohammed, and an alleged breach of a partnership right to continue managing the land. In respect of the latter, he contended that the sale to SAM Industries was a sham, designed merely to give the company security for the debt which the amount paid as purchase price in truth represented. As to the first, Drummond J. held that since the contract of sale between the respondent and SAM Industries was void by virtue of s 8 of the Land Sales Act 1984 (although the subsequent transfer of land to SAM Industries was indefeasible), no cause of action mounted on it could succeed. As to the second complaint, there was nothing to indicate that SAM Industries Pty Ltd was holding Lot 35, as the respondent suggested, only as security for repayment of a loan. Accordingly, there was no cause of action against SAM Industries in respect of its dealings with the property.
Having found that there was no prospect of success in relation to any of the causes of action raised by the respondent, Drummond J. dismissed the application to direct the Official Trustee to assign the respective choses in action to the respondent. The application for an inquiry into the conduct of the Trustee was adjourned, his Honour expressing the view that insofar as it involved complaints about the Trustee’s refusal to pursue the causes of action, it was bound to fail. The respondent’s appeal to the Full Court of the Federal Court, heard on 4 November 1995, was dismissed.
The second part of the application for an inquiry into the conduct of the official trustee was heard by Kiefel J. That application was dismissed on 23 August 1996.
On 7 October 1996 Kiefel J gave judgment in respect of two further matters, the first being the application for the court to examine the basis of the sequestration order and the second being an application to empanel a jury to determine a dispute as between the respondent and the various persons named in initiating application No 4 of 1994, in respect of which leave was also sought to amend to add Kippin Investments Pty Ltd, LL Kippin, CA Marino and W Cochrane as respondents. As against these proposed additional respondents it was alleged that they had misled and deceived the court as constituted by Justice Drummond “for the purposes of defrauding the abovementioned estate”. Kippin Investments had acquired Lot 35 from SAM Industries; Mr Kippin was a director of both companies. It seems from material filed in other applications that Mr Marino and Mr Cochrane were, respectively, solicitor and counsel for SAM Industries. An application was also made seeking to have the orders made by Kiefel J on 23 August 1996 rescinded or varied.
Both applications were dismissed. Her Honour observed that she had no power to reconsider the orders already made, while the orders sought against other respondents for alleged false evidence and fraudulent conduct had already been dealt with on the earlier application and the relevant arguments rejected. The application for a jury hearing was unwarranted. As to the question of annulment, Kiefel J. rejected submissions based on the respondent’s interpretation of the Bankruptcy Act 1966 and the Constitution; the nature of those submissions was not explored in her judgment. It seems, however, that the respondent’s argument entailed a demand for a re-hearing of the dispute between his brother and him heard by Thomas J., which Kiefel J. rejected. She concluded that the respondent had not met the onus of satisfying her that a sequestration order should not have been made.
That decision was appealed. The appeal named as respondents, inter alia, the respondent’s brother John Ernest Gargan, BM Johnson and Francis James Toy. Those parties moved successfully to have the appeal dismissed as against them. Mr Toy, it appears from the judgment of Spender J, given on 24 March 1997, had appeared for a number of parties before Drummond J in July 1995. He seems to have had no other involvement with the matter; and, indeed, Spender J. noted, none of the three parties moving had been parties to or in any way involved in the matters before Kiefel J. Moreover, John Gargan and other members of the Gargan family had initially been named in the application, and had been struck out as respondents by Drummond J.; so that their naming in the appeal contravened his direction.
In the course of giving his reasons for dismissing the appeal as against the three respondents moving, Spender J. referred to an argument he described as “central” to the respondent’s appeal: that because the relation-back period for his bankruptcy commenced on 6th January 1992, prior to the trial and judgment in action 101 of 1990, the effect of the Bankruptcy Act and s.109 of the Constitution was to render the litigation and decision ineffective. The decision of the Full Court of the Federal Court dismissing the appeal is dealt with at paragraph 25 below.
The respondent, meanwhile, had commenced a number of proceedings in the Supreme Court.
Supreme Court Action No 38 of 1996
On 21 March 1996 the respondent filed a writ of summons, No 38 of 1996, in the Cairns District Registry of this court against SAM Industries Pty Ltd and Kippin Investments Pty Ltd. In it he claimed specific performance of the first joint venture agreement) and a declaration that the July 1990 contract of sale to SAM Industries Pty Ltd was void and of no effect. He also sought a declaration that a contract of sale between SAM Industries and Kippin Investments was void, or, alternatively, that Kippin Investments held the land sold on trust for his brother and him. Various consequential orders were sought. The statement of claim makes it clear that the subject matter of the action was a revisiting of the matters pleaded in action No 14 of 1992, the same cause of action which the respondent had sought by application before Drummond J. to have assigned to him.
The defendants applied successfully to have the statement of claim struck out. Derrington J., giving judgment on the application on 12 June 1996, concluded that once the land had been transferred to SAM Industries the plaintiff’s role as registered proprietor and sole trustee of the land, on behalf of either Mr Mohammed or his brother, ended. He had no standing to bring the action on behalf of either of those persons or on behalf of the Official Trustee as trustee of his estate.
Applications for statutory orders of review
On 24 June 1996 the respondent filed two applications for orders of statutory review. The first joined as respondents Derrington J., the Official Trustee, SAM Industries Pty Ltd, Kippin Investments Pty Ltd, Charles Anthony Marino and Wayne Cochrane. It sought review of the decision of Derrington J. to dismiss action No 38 of 1996; review of the conduct of the Official Trustee and his solicitor in opposing the bringing of the action, admitting SAM Industries Pty Ltd’s proof of debt; and failing to avoid the joint venture agreement with it; review of the conduct of SAM Industries Pty Ltd in allegedly misleading the court as to the effect of the first joint venture agreement and the July 1990 contract of sale, for alleged false representations to the Official Trustee, and for alleged fraudulent conversion and appropriation of the property of the respondent and the partnership; and review of the conduct of Charles Anthony Marino in allegedly misleading the court and of aiding SAM Industries Pty Ltd to do likewise. As against Mr Cochrane it was claimed that he had knowingly misrepresented the effect of the contract of sale and had falsely represented to the court that the statement of claim in No 38 of 1996 should be struck out.
The second application was brought against Thomas and Derrington JJ, the Official Trustee, John Ernest Gargan and Barry Michael Johnson. As against Thomas J., the application was to review his decision in action No 101 of 1990 and against Derrington J., to review his striking out of the statement of claim. The application also sought review of the conduct of the Official Trustee in “opposing the lawful bringing of an application”, admitting false proofs of debt in respect of the judgment of Thomas J. (presumably in respect of John Gargan’s claim); the conduct of John Gargan in allegedly misleading the courts in action No 101 of 1990 as to the meaning of the deed of dissolution; and the conduct of Barry Michael Johnson in delivering the statement of claim in action 101 of 1990, representing that the matters before Thomas J. were res judicata and thus persuading the court to dismiss the respondent’s application, and obtaining a mortgage over partnership land. Not surprisingly, notices of motion were filed by a number of the persons named as respondents to have the applications dismissed.
The respondent accepted that the applications were wrongly brought against each of Derrington J. and Thomas J. However, in response to the (clearly correct) submission that none of the respondents had engaged in conduct or made decisions within the meaning of the Judicial Review Act 1991, he argued that what was really sought was review under the Bankruptcy Act 1966. He relied on subsection 37(1) of the Bankruptcy Act, which provides as follows:
“Subject to subsection (2)” [which deals with the making of sequestration and administration orders] “the court may rescind, vary or discharge an order made by it under this Act or may suspend the operation of such an order.”
(That submission paid no regard to the fact that neither of the decisions of which the applicant had sought review were made under the Bankruptcy Act or in the exercise of jurisdiction in bankruptcy.) The respondent also relied on s 178 of the Bankruptcy Act which enables a bankrupt “affected by an act, omission or decision of the trustee” to apply to the Court. (He had, of course, already unsuccessfully sought that inquiry into the Official Trustee’s allegedly negligent conduct of the estate in the application dismissed by Kiefel J.) In the event, the applications were struck out against all respondents, Moynihan J. expressing the view that the proceedings reflected a profound misconception as to the law, since none of the decisions or conduct were amenable to judicial review, and the bankruptcy matters were or had been the subject of proceedings in the Federal Court.
Appeal to the Federal Court QG 181 of 1996
The respondent then appealed the decisions of Moynihan J. dismissing the applications for judicial review and the decisions of Kiefel J., refusing the application for annulment and an inquiry under s 179 of the Bankruptcy Act into the conduct of the Official Trustee, to the Full Court of the Federal Court. As to the appeals against the two decisions of Moynihan J, the court ruled that it had no jurisdiction, but commented that the decision was in any event plainly right for the reasons given by Moynihan J. In respect of the decisions of Kiefel J., the court concluded, firstly that there was no evidence which could lead to a finding that the sequestration order ought not to have been made, and, secondly, that there was no basis for an inquiry into the conduct of the Official Trustee. In addition, it observed, the Trustee was entitled to have regard to the Supreme Court’s decision upon the claims which the respondent pressed; and also to the attitude of the creditors generally in refusing to support an appeal against the decision of Thomas J.
District Court application 37 of 1997
In June 1997 the respondent sought, by a “motion for leave” filed in the District Court, an order directed to LL Kippin to show cause why leave to bring a private information before the court should not be granted. The grounds of that application were set out in an affidavit, and canvassed similar issues to those raised in action No 14 of 1992 argued before Drummond J., and the subject of the attempt at re-litigation in action No 38 of 1996; that is, claims that the partnership had been denied its rights under the second joint venture agreement, that the July 1990 contract of sale was a sham. It went on to assert that the conduct of Kippin Investments to whom the land had been transferred and its director, Mr Kippin, constituted stealing, and that Mr Mohammed had been deprived of his interest and that this constituted fraud. The application was dismissed.
Complaints and summonses
The respondent then brought a number of complaints in the Magistrates Court. In June 1997 he brought two complaints against Mr Kippin, one of which alleged various offences, including false swearing, conversion, fraud and false pretence under the Crimes Act 1914, the Corporations Law 1989 and the Bankruptcy Act. The second complaint alleged an offence of transferring land with intent to defraud a bankrupt estate in breach of s 263(1)(a) of the Bankruptcy Act. All of the alleged offences arose out of the respondent’s dealings with Mr Kippin and SAM Industries in relation to Lot 35, the subsequent litigation and the administration of the respondent’s bankrupt estate.
The complaint against the respondent’s brother is not before me. Both complaints were struck out by the presiding magistrate who in a somewhat brief decision ruled that the respondents did not have standing to proceed under the Bankruptcy Act, and went on to comment that the actions appear to be “an abuse of process, and perhaps vexatious”. Those dismissals were appealed.
On 27 August 1997, the respondent brought a private complaint under s 13 of the Crimes Act against five members of the Gargan family, BM Johnson, FJ Toy, LL Kippin, CA Marino, W Cochrane, B Dowling, SJ Ridgeway, D Turnbull, P Apel, the Official Trustee in Bankruptcy and SAM Industries Pty Ltd, alleging that they had conspired to defeat the execution and enforcement of the Bankruptcy Act and to pervert the course of justice. The allegations concern the conduct of the various matters of litigation already referred to; the lodging of proofs of debt in the bankruptcy, the conduct of SAM Industries in relation to Lot 35; the conduct of the Gargans and Mr Johnson in relation to the horseriding enterprise, the subject of a District Court action, and of one of the choses in action of which the respondent had sought assignment; and in respect of Mr John Gargan and Mr Johnson, the transfer of Lot 491 (pursuant to the order of Thomas J). Nunan SM dismissed the complaints on the basis, firstly, that the respondent did not have the required consent of the Director of Public Prosecutions to commence a conspiracy prosecution and secondly, on the grounds that both prosecutions were frivolous and vexatious, the plaintiff seeking to relitigate matters already dealt with while having committed a number of procedural errors in the process.
In January 1998 the respondent brought a further complaint against SAM Industries Pty Ltd, Kippin Investments Pty Ltd, and Noel Adam, Anthony Morgan and Lance Kippin as directors of SAM Industries. The allegations turned on the transfer by SAM Industries to Kippin Investments of Lot 35 and reiterated the assertion that it was subject to the second joint venture agreement, which it was said, constituted a “valuable security”. That complaint was struck out by Nunan SM on 17 February 1998 on the basis, firstly, that the matters within it were the subject of res judicata, and secondly, that the proceedings were vexatious.
Applications for review to the Supreme Court
In July 1998, the respondent applied to the Supreme Court for orders under s 178 of the Bankruptcy Act requiring the Official Trustee and the alleged beneficiaries of a breach of trust by him, John and Grace Gargan and SAM Industries Pty Ltd, to make good losses occasioned by the alleged breach of trust; an order removing the Official Trustee; various penalties against the Official Trustee and the other respondents; and an annulment of the respondent’s bankruptcy. The statement of claim is expressed as “filed under the Bankruptcy Act 1966 in force on 6 January 1992 by reference to the Acts Interpretation Act 1901 s 8” (the latter section relating to accrued rights). Mr Gargan had, it seems, a view that he had a preserved substantive right to proceed in the Supreme Court notwithstanding the effect of the Bankruptcy Legislation Amendment Act 1996, which vested exclusive jurisdiction in bankruptcy in the Federal Court. That application has not proceeded, Jones J. having disqualified himself from hearing it in October 1998 because of an earlier appearance on behalf of John Gargan.
Refiling of application 4/94
In July 1999 the respondent sought, relying on Re Wakim ex parte McNally (1999) 73 ALJR 839, to re-activate application No 4 of 1994, which had been stayed against all respondents other than the Official Trustee and transferred to the Federal Court so far as the Official Trustee was concerned. The respondent filed a claim and statement of claim under the Uniform Civil Procedure Rules, adding to the originally named defendants the Commonwealth of Australia, the State of Queensland, Kippin Investments Pty Ltd and Ritek Building Systems Pty Ltd. He sought the setting aside of the order made by Byrne J. as having been obtained by fraud; the setting aside of an order made by Thomas J. removing a caveat over the lands subject to litigation; the setting aside of the decision of Derrington J. as erroneous; orders correcting the Register of Titles, and, in the alternative, damages against the State of Queensland; damages against the Official Trustee for interference with the respondent’s contractual rights; and exemplary damages against the Commonwealth for appointing him, as a person of insufficient education and understanding.
The respondent argued that the case involved trust and partnership matters which could not properly be cross-vested to the Federal Court, and that the Federal Court had not in event properly addressed the matters cross-vested to it. Nor had (so the respondent submitted) the Official Trustee any standing to deal with trust or partnership property, so that he personally retained the capacity to bring the application. The matters ought, he contended, to be heard by a jury.
Insofar as the respondent sought a setting aside of the order of Byrne J. transferring the application for an inquiry into the trustee’s conduct to the Federal Court, Williams J. held that there was nothing to indicate that the order was procured by fraud, and that the matter was properly heard in the Federal Court, regardless of the decision in Re Wakim. As to the order of Thomas J., Williams J. noted that the issues in relation to the caveated land had been dealt with by Thomas J in 101 of 1990, and were the subject of action 14 of 1992 dismissed by Shepherdson J in October 1993. In any event, the application to set the order aside had already been determined by dismissal by a consent order in August 1992; and there were, in any case, no apparent merits in the applicant’s claim.
The striking out by Derrington J. of the respondent’s statement of claim in No 38 of 1996 was, Williams J concluded, clearly correct. The applicant had been seeking to re-litigate an issue which had been the subject of the proceedings before Thomas J. in 101 of 1990 and before Drummond J. in the Full Court of the Federal Court. Moreover, the applicant as a bankrupt had no standing to commence the proceedings; and there was no evidence of any fraud in connection with the decision of Derrington J.
By his claim and statement of claim the respondent had sought orders against the State of Queensland requiring alteration of the register of freehold land titles in respect of what had been Lot 35 with an alternative claim and damages. Williams J dismissed those claims as an attempt at introducing a new cause of action. The claim for exemplary damages from the Commonwealth for appointing the Official Trustee in Bankruptcy was struck out as not alleging any viable cause of action, while the claim for damages from the Official Trustee in Bankruptcy was struck out on the basis, firstly, that it was an attempted addition of a new cause of action, and secondly that the claim in relation to the Official Trustee’s conduct was not justiciable in the Supreme Court, and had been dealt with by the Federal Court.
Supreme Court Action No. 3 of 1999
In August 1999 the respondent filed a claim in this court against the Official Trustee in Bankruptcy, John Ernest Gargan, Grace Elaine Gargan, and the State of Queensland. In it, he sought an order setting aside the judgment in action No 101 of 1990 as having been obtained by fraud; orders, premised on the continuing existence of the partnership with his brother, for an account and restoration of title; and damages against the Official Trustee in Bankruptcy for representing that partnership matters were within the jurisdiction of the Federal Court in making a sequestration order, for dealing with partnership property on a Sequestration Order made without jurisdiction, and for interference with contractual relations between the partners.
In September 1999, the respondent sought judgment in default as against the Official Trustee. That application was dismissed by de Jersey CJ on the grounds that the Official Trustee had power to deal with partnership property, and the challenge to the judgment in action 101 of 1990 was doomed to failure.
The Applicant’s Contentions
The applicant contends that all of the proceedings brought in courts of state jurisdiction since April 1994, with the exception of application 4 of 1994 in so far as it sought relief against the Official Trustee, have been vexatious. The respondent has repeatedly sought to re-litigate matters previously decided against him, and joined in those actions solicitors and barristers who have appeared for opposing parties. Reliance is placed on the following passage from the judgment of Fitzgerald P. in Re Cameron (1996) 2 Qd R 218 at 220:
“It is also necessary to decide what makes legal proceedings vexatious. Although there are sometimes statutory indications, the broad test potentially concerns such factors as the 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: see, for example, Attorney-General (N.S.W.) v. Wentworth (1988) 14 N.S.W.L.R. 481; Jonesv. Skyring (1992) 66 A.L.J.R. 810; Jones v. Cusack (1992) 66 A.L.J.R. 815, and Attorney-General (N.S.W.) v. West (N.S.W. Common Law Division No. 16208 of 1992, 19 November 1992.”
The issue is not, the applicant says, whether the respondent has a genuine grievance for which he seeks redress, but whether as a matter of objective fact he has frequently and without reasonable grounds instituted vexatious legal proceedings: Jones v. Skyring (1992) 66 A.L.J.R. 810.
The Respondent’s Contentions
The respondent sought an adjournment of the hearing, arguing, firstly that the High Court had exclusive jurisdiction in his case pursuant to s 38 of the Judiciary Act 1903 because it was a suit by persons suing on behalf of the State against the Commonwealth, and secondly, that a constitutional question was involved requiring the giving of notice to the Attorney‑General under s 78B of the Judiciary Act 1903. He claims to hold a Commonwealth statutory appointment by virtue of s 13 of the Crimes Act 1914, which provides, subject to contrary intention, that “any person” may institute proceedings for a summary or indictable offence. This, the respondent argues, constitutes an offer to members of the public. He had accepted that offer, and the result was a contract between the Crown and himself, creating a statutory appointment in him to act for the Commonwealth. The respondent contends that an inconsistency exists between the Vexatious Litigants Act 1981 and s 13 of the Crimes Act, giving rise to the need to issue s 78B notices.
There is no substance in this argument. A statutory provision which at its highest authorises certain conduct cannot constitute an offer to contract or a promise to be bound; and even if there were a contractual relationship between the respondent and the Commonwealth, that would not equate to a statutory appointment. By no stretch of the imagination can the respondent be said to be sued on behalf of the Commonwealth. Nor is there any inconsistency between the Vexatious Litigants Act 1981 and s 13 of the Crimes Act. There is no basis for an adjournment, nor for concluding that this court is without jurisdiction under the Vexatious Litigants Act.
The respondent further maintains that, having accepted the supposed offer of the Commonwealth made by s 13 of the Crimes Act, all his actions were brought in federal jurisdiction. He seems also by his affidavit to suggest that, since the Official Trustee in Bankruptcy was respondent in three of his actions in the Supreme Court, those matters must be dealt with by the court exercising federal jurisdiction. He characterises the current application, although it is an originating application, as a further step in those actions. Because, Mr Gargan says, the court is exercising federal jurisdiction, the common law applies by virtue of s 80 of the Judiciary Act. At common law he is entitled to trial by jury on this application, and was entitled to trial by jury on previous applications. In addition, s 80 of the Constitution gives a right to trial by jury, as, he argues, does section 259 of the Supreme CourtAct 1995. He says also that the Anti-Discrimination Act 1991 makes it mandatory to treat everyone the same, which, he says, entails trial by jury, and in addition has the effect of repealing, by implication, the Vexatious Litigants Act
In the first instance, the submission that the courts dealing with the various proceedings brought by the respondent have been exercising bankruptcy jurisdiction is clearly wrong. No proceeding was brought before the court in its bankruptcy jurisdiction; and subsequent to the amendment of the Bankruptcy Act in 1996, no proceedings could have been so brought. Section 80 of the Judiciary Act in any event provides for the common law to be modified by the statute law in force in the State in which the court is presiding. There has not in Queensland been a common law right to trial by jury: Matthews v General Accident, Fire and Life Insurance Corporation Ltd [1970] QWN 37; and the situation is at present governed by the Supreme Court Act 1995 and the Uniform Civil Procedure Rules.
Section 259 of the Supreme Court Act, referred to by the respondent, merely defines the duty of the jury; while Rule 472, also cited by the respondent, applies only to proceedings commenced by statement of claim. The present application is properly brought as an application under Rule 10 of the Uniform Civil ProcedureRules and there exists no basis for it to be heard by jury. Mr Gargan is in the same position as any other person against whom an application is brought under the Rules, and he possesses in any event no attribute which could be said to give rise to a prohibited basis of discrimination under s7(1) of the Anti-Discrimination Act 1991. Finally, section 80 of the Constitution gives the right of trial on indictment by jury and has no relevance to any proceedings taken by or against the respondent to date.
The respondent also raised a number of complaints of previous proceedings. He relied on Rule 667(2) of the Uniform Civil Procedure Rules, which enables the setting aside of an order obtained by fraud. In the case of action 101 of 1990, he argued that the delivery of pleadings by his brother claiming that their partnership had dissolved when, according to Mr Gargan, it was not, amounted to such fraud. Other indicators of fraud were the fact that his pleadings in that matter were not addressed, and that an authority was used wrongly against him. In essence, it seems that what Mr Gargan is complaining of is the deciding of the case against him. More generally, the assertions of fraud and false pretences against various parties in relation to action No 101 of 1990 seem to arise from no more than that the party opposing him argued for a contrary position successfully and he did not, as a result, get the orders he sought.
Mr Gargan also contended that the judgment in action no 101 of 1990 was erroneous because no account was ordered. The account sought, however, was premised on a partnership which Thomas J. found not to exist. Similarly, he said, the taking of accounts was crucial in his complaints before stipendiary magistrates relating to the proof of debts in his bankruptcy by his brother and SAM Industries. He relied on s 86 of the Bankruptcy Act, which requires the taking of an account where there are mutual debts between a bankrupt and the person seeking to prove against his estate. He had, he said, unsuccessfully sought review of the decision of the Official Trustee to allow proof of those debts in the Federal Court. However that may be, it is clearly not an exercise within the jurisdiction of this court.
The respondent also mounted an argument that because the sequestration order had been made with relation back to an act of bankruptcy occurring before the judgment of Thomas J. was given, his property had already vested in the Official Trustee; and he was, thus, constructive trustee for the Official Trustee and his representative. Thomas J. had, therefore, no power to make orders against him as representative of the Official Trustee. The simplest answer to that is that Thomas J. found the property in dispute to be held by the respondent on trust for his brother; and trust property does not, by virtue of s 116(2)(a) of the Bankruptcy Act, vest.
The respondent also complained of the reference by Nunan SM to res judicata which, it must be said, was of doubtful relevance to the complaint before him; but that does not of course affect the finding of the magistrate that the proceedings had been launched vexatiously and frivolously.
As to application 4 of 1994, the respondent explained that it had been re‑enlivened in light of Wakim’s case since, in his view, any matters in relation to partnership or trusts could only be dealt with in the State courts. Thus the Official Trustee in Bankruptcy’s functions as trustee could only be supervised by a State court. That is an unduly limited view of the head of power in section 51 (xvii) of the Constitution, and of the jurisdiction conferred by the Bankruptcy Act, and is an argument already dealt with by Williams J and de Jersey J. It suffices to say that I do not consider it has any force.
In relation to application No 13 of 1998, which was adjourned after Jones J disqualified himself, Mr Gargan argued that s 56 of the Judiciary Act conferred jurisdiction on the Supreme Court to hear a claim in contract or tort against the Commonwealth, while s68(1) conferred a criminal jurisdiction on the court. However, the only representative of the Commonwealth in matter of 13 of 1998 was the Official Trustee in Bankruptcy; and as an application for orders under s178 of the BankruptcyAct, it could only be heard in the Federal Court. S 68(1) of the Judiciary Act, dealing as it does with the application of State laws in relation to arrest, custody and procedure to persons charged with Commonwealth offences, provides no support for the proceeding.
In respect of action No 3 of 1999, Mr Gargan pointed out that no defence had been entered and submitted that the current application was no more than a scheme to oust the court’s jurisdiction, to which the court should not be a party. Similarly, action No 4 of 1994 had never been answered and the present application was designed, according to Mr Gargan, to assist the Official Trustee to avoid having to plead. I should say at this point that there is no evidence at all before me that the application to have Mr Gargan declared a vexatious litigant is based on anything other than his repeated use of courts of State jurisdiction in what the applicant contends are vexatious proceedings.
In conclusion, Mr Gargan said he was aggrieved by the fact that the partnership should have been able to pay all its creditors and had been unable to do so; and in his view, his bankruptcy had been used by others to defraud him of his right to have relevant issues decided. A jury would, he said, find that he was trying to address a genuine grievance, and would hold the Official Trustee liable to the damage caused him by the conduct of his estate.
This last statement is, I think, at the heart of the matters giving rise to the application. Mr Gargan has a grievance which he has repeatedly sought to relitigate. His subsequent proceedings can be characterised as re-visiting three areas: the judgment in 101 of 1990 involving the partnership issues; the matter disposed of by Shepherdson J which concerned the allegations against SAM Industries in respect of its dealings with Lot 35; and the conduct of the Official Trustee in its dealings with Mr Gargan’s brother and SAM Industries. In a larger sense, all of these matters can be said to stem from the action in 101 of 1990.
Over time, the grievance has extended to incorporate other persons. Mr Gargan has summonsed members of the legal profession, accusing them of fraud and other misdeeds, apparently for no better reason than that they put a contrary case to his on the instructions of their clients. Many of the proceedings he has sought to mount have been, on their face, insupportable; because they involved non‑existent causes of action (for example the action against the Commonwealth for appointment of the Official Trustee, brought on the new claim in no 4 of 1994); because he had no authority to proceed (as with the conspiracy charges brought under the Crimes Act 1914); or because he was proceeding in a court which had no jurisdiction to hear the matter (as with his repeated attempts since 1996 to have the Supreme Court deal with matters within the bankruptcy jurisdiction of the Federal Court). He has repeatedly put others to the expense of applying to strike out futile applications and actions with, of course, an associated cost to the public purse. It is not to the point that he believes there has been an injustice to him (Jonesv. Skyring (1992) 66 A.L.J.R. 810). The fact, as I find it, is that he has repeatedly launched vexatious proceedings without reasonable ground. The inescapable conclusion is that the application is properly brought and that the declaration ought to be made.
Accordingly, I declare, pursuant to s 31 of the Vexatious Litigants Act 1981, that Peter Alexander Gargan is a vexatious litigant.
Counsel for the applicant had sought to have certain paragraphs of a document described as the respondent’s Outline of Submissions filed on 29th March 2000 struck out as personally insulting to the applicant. In fact there was no document of that description filed on that date; the respondent relied on an affidavit sworn on 27th March 2000 and a facsimile document headed “Matters for Consideration”. Mr Gargan was contacted by my associate and confirmed that he did not seek to file or rely on any such document. Accordingly, it is not necessary to address this issue.
4