Lydiard Financial Services Pty Ltd v Moran

[2003] VSC 65

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

PRACTICE COURT

No. 4250 of 2003

LYDIARD FINANCIAL SERVICES PTY LTD and OTHERS
	Plaintiffs
v.
JOHN MORAN	Defendant

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JUDGE:	MANDIE, J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	5 March 2003
DATE OF JUDGMENT:	5 March 2003
MEDIUM NEUTRAL CITATION:	[2003] VSC 65

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Abuse of Process – application to terminate criminal proceedings in Magistrates’ Court.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr G.H. Garde, Q.C. and Mr S. Marantelli	Wisewoulds
For the Defendant	In person

HIS HONOUR:

1. In this proceeding the defendant has filed a number of charges and summonses in the Magistrates' Court at Ballarat against two solicitors, a member of counsel and a real estate agent, who were all in one way or another involved with the sale of a property which was subject to a first mortgage in favour of the first-named plaintiff.  The other plaintiffs are the persons who are the subject of these charges and summonses filed by the defendant.  There are four conspiracy charges, one against each of the individual plaintiffs.  There are four charges of attempting to pervert the course of justice, one against each of the individual plaintiffs.  There are four charges of obtaining property by deception, again against each of the personal plaintiffs, and, in addition, against one of the solicitors involved there is a charge of obtaining financial advantage by deception by disbursing certain proceeds of sale of the first mortgaged property. 

1. The plaintiffs invoke the inherent jurisdiction of the court to deal with an abuse of process and seek orders that the defendant be ordered to discontinue these charges and that in the meantime he be restrained from proceeding with them, and further orders that he be restrained from bringing like charges.

1. The background to the matter is that there were a number of proceedings in relation to this piece of real estate which was the subject of a mortgage, and that those proceedings were ultimately the subject of terms of settlement reached between, for present purposes, the mortgagee, which was the first plaintiff, and a Mrs Moran, who was the mortgagor and who is now deceased.  The terms of settlement were executed on or about 1 March 1995 and, among other things, they provided for a variation of the first mortgage by increasing the principal amount by $10,000, apparently to capitalise interest that was then due, and there were various other provisions in the terms of settlement including, as I say, this provision for a variation of mortgage and providing that in the event of default the terms could be produced as a consent to judgment for possession of the mortgaged property.  The variation was never registered because certain purported second mortgagees refused to execute it and consequently it could not be registered. 

1. The first mortgagee obtained ex parte from Master Patkin in the County Court a judgment for possession of the mortgaged property under the terms of settlement.  Mrs Moran sought leave to appeal from Beach, J. in this court from Master Patkin’s judgment and that was refused, and subsequently there have been further proceedings which have failed relating to that, but I do not need to go into the history any more than that.

1. Possession of the land was recovered and the property was auctioned.  There was a further proceeding in relation to a caveat before Harper, J. which resulted in the removal of the caveat on or about 25 July 1997, and then the settlement of the sale of the land was completed.  The proceeds were applied, and the evidence shows the details of how the proceeds of sale were applied to principal, interest and various costs related to enforcement and the sale.

1. A number of things are put by the plaintiffs in relation to these charges. The first is that the conspiracy charges are unlawfully brought by the defendant contrary to the provisions of s.321(4) of the Crimes Act.  I have heard no argument to suggest that that proposition is incorrect.  Consequently it would appear that those charges have been unlawfully brought and should not have been brought.  In the absence of approval of the Director of Public Prosecutions, the charges are doomed to failure. 

1. In relation to the four charges relating to the alleged attempt to pervert the course of justice, the charge against the estate agent for perverting the course of justice seems absolutely absurd on its face.  The charges against the lawyers involved, in effect, say that vital facts were not disclosed to the court on a number of relevant occasions, those occasions being the application ex parte to Master Patkin, the subsequent application for leave to appeal from Beach, J., and the application for removal of the caveat before Harper, J.  I am satisfied on the evidence that there were no vital facts, or indeed any relevant facts, which were not disclosed.  The charges of attempting to pervert the course of justice seem to me to be completely misconceived and hopeless.  The evidence, what was before the various courts involved, includes Exhibit DAF.10 to an affidavit of Mr Fawell, which is an affidavit of one of the plaintiffs, Mr Oakley, sworn on 2 December 1996, which disclosed to Master Patkin that a variation of the first mortgage under the terms of settlement had been sent to the second mortgagees and not returned.  So, if that fact were relevant to anything, which I doubt, it was disclosed.  The terms of settlement were also disclosed, and then there is Exhibit RMM.8 to an affidavit of Mr McGirr, which is an affidavit of Mrs Moran, who was the mortgagor, sworn on 14 January 1997, for use before Beach, J., which appears to make full disclosure of the issues said by the defendant to have not been made available to the court.  Again, the matters which are disclosed by Mrs Moran’s affidavit seem to be essentially irrelevant, but, assuming that they are relevant to anything, they were disclosed.  One searches in vain for anything that was not disclosed and can only conclude that these charges are totally misconceived and hopeless.  In addition to that, there is Exhibit RMM.4 to the affidavit of Mr McGirr, which is an affidavit of the defendant himself sworn on 22 July 1997, which was before Harper, J., and I refer in particular to paragraphs 16, 25 and 38 of that affidavit.  In so far as the facts therein referred to relating to the variation of mortgage and the contention that second mortgagees were in possession are in any way relevant to the proceedings which were before the court on that occasion, then they were indeed disclosed by the defendant himself.  I interpolate, going back one step to the affidavit of Mrs Moran of 14 January, that there were exhibits to her affidavit including Exhibits IBM.1, IBM.2 and IBM.5, which are now contained in an Exhibit RMM.3 to one of Mr McGirr’s affidavits which also contain disclosures of matters said to have been vital, and, if they were, then they were disclosed. 

1. So it seems to me that there is nothing at all in these charges of attempting to pervert the course of justice, and it looks, to me, as though these charges are totally hopeless. 

1. The other charges relate to obtaining property by deception or obtaining financial advantage by deception.  On the material before the court, I am unable to identify what this deception is.  On the contrary, the material seems to make clear that there was no deception involved in obtaining the relevant property, namely, possession of the real estate under the first mortgage and what I think Mr Moran, the defendant, considers to be the property in this instance, namely, the proceeds of the sale of that land, which seems to have been perfectly properly distributed pursuant to a valid first mortgage.  Whether one analyses the amount due under the mortgage as being $135,000 plus interest from an earlier date, or $145,000 plus interest from a later date, it appears that there was insufficient available from the proceeds of sale to pay out the obligations under the first mortgage, however calculated, and whether this $10,000 is treated as capitalised interest and part of the principal on the one hand or simply as interest on the original principal sum on the other hand appears to make no relevant difference. 

1. The conclusion on the evidence, I think, is inescapable, that there is no basis whatsoever for these charges of obtaining property by deception or obtaining financial advantage by deception. 

1. The question arises:  what can this court do in those circumstances?  I was referred to Williams v. Spautz (1992) 174 C.L.R. 509. At page 518 of the report, in the judgment of Mason, C.J., Dawson, Toohey and McHugh, JJ., the following passage appears:

“It is well established that Australian superior courts have inherent jurisdiction to stay proceedings which are an abuse of process.”

In the context of that case, it appears that there were committal proceedings in the New South Wales Local Court, in other words, charges laid in a lower court in respect of which the Supreme Court of New South Wales had exercised its inherent jurisdiction.  The High Court reversed the Court of Appeal and allowed the appeal and restored the declarations and orders made by the trial judge in the Supreme Court of New South Wales to the effect that the prosecutions that had been launched in that case were abuses of process, and ordering that those prosecutions be stayed permanently.  It appears from the summary of argument for the respondent that one of the points made was that the Supreme Court had no power to prevent an abuse of process of an inferior court or tribunal, and it is implicit, if not explicit, in the judgment of the High Court that the Supreme Court of New South Wales did have inherent jurisdiction to deal with abuses of process brought in an inferior court or tribunal. 

1. I am fortified in reaching that conclusion by a decision of Bongiorno, J. in National Australia Bank Ltd v. McFarlane, handed down on 29 January of this year and reported at [2003] VSC 19, which exercises that jurisdiction in a case in which apparently the defendant was involved in some way although not a party on the record, and His Honour in that case made interlocutory orders requiring the second defendant in that case to discontinue certain charges brought in the Magistrates' Court and stayed those charges until they were discontinued, and went on to give other interlocutory relief of a kind similar to that which is sought in the current proceeding.  I would, with respect, adopt the principle applied in that decision, that this court has jurisdiction to control abuse of process including criminal proceedings in an inferior court, and, if I may say so with respect, it seems to be supported by High Court authority to which I have just referred. 

1. The decision in Williams v. Spautz relates to a case where, as I understand the report, the proceedings may have had some prima facie basis, but the court was nevertheless constrained to say that it would be correct to stay the proceedings on the basis that if there was an improper purpose which constituted a predominant purpose for bringing the proceedings, then that was a basis for staying them as an abuse of process.  But I do not understand anything in that case to deny the proposition that if criminal proceedings are found to be completely hopeless and in effect vexatious and an abuse of process, they cannot be terminated, whether or not there is some collateral purpose. 

1. In this case, however, the plaintiffs say that there is in addition such a collateral purpose, and they say that it is disclosed in a number of places in the evidence, but most strongly in an affidavit of the defendant sworn on 3 March 2003, paragraph 13, in which he says:

“My action with the charges against the four people charged had to do with the lessons learned from the McFarlane case, and laying the charges first which, if upheld by a jury, would lead to civil action to recover damages.”

It would seem that a purpose, if not the purpose, of Mr Moran bringing these charges is to lead on from that to a civil action to recover damages.  There are other indications in the material that the charges are also designed to put pressure upon the persons concerned.  It is no doubt irrelevant that the concept, that if the charges were upheld by a jury that would lead to civil action to recover damages, is a faulty if not totally incorrect concept.  The question here is whether an improper purpose is disclosed, and I think it is. 

1. It seems to me that this court has jurisdiction to grant the orders sought by the plaintiffs, on the basis that the charges are hopeless or on the basis, which I find, that they have been brought with an improper purpose, or on the dual basis that they are both hopeless and brought with an improper purpose.  I think appropriate orders should be made.  The only doubt that I had was whether, because this is an interlocutory application, there should not be any orders made on a final basis, but I think that these charges are so evidently hopeless and misconceived that they ought to be terminated even on an interlocutory basis, and I notice that Bongiorno, J. took a similar view in National Australia Bank Ltd v. McFarlane.

1. For those reasons, I will make the following orders:

1.That the defendant do discontinue all of the charges and summonses (totalling in all 13 charges) contained in Exhibit DAF.1 to the affidavit of David Andrew Fawell sworn 24 January 2003, being charges and summonses brought by the defendant as informant in the Magistrates' Court at Ballarat and dated either 3 December 2002 or 9 December 2002, and that the stays granted by Beach, J. and Redlich, J. be continued in the meantime.

2.That until the trial and determination of this proceeding the defendant be restrained from laying any further charges against the plaintiffs or any of them or any of their servants and agents in relation to the transactions and events the subject of this proceeding.

It seems to me that the likelihood is that these matters will never get to trial and that this determination today, subject to any appeal to the Court of Appeal and the High Court, will be the final word, notwithstanding that in part I have granted interlocutory injunctions.  I think it is desirable that I should deal with costs on a final basis.  Costs should follow the event.  The case is of the clearest kind.  The defendant should be ordered to pay the costs.

(Discussion ensued re costs.)

I will order the defendant to pay the plaintiffs’ costs of this proceeding to date, (including the costs of this application) on an indemnity basis, such costs to be taxed in default of agreement.

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