Sandhurst Trustees Ltd v Gallerie Investments Pty Ltd and Ors No. Scciv-99-995

SANDHURST TRUSTEES LTD v GALLERIE
INVESTMENTS PTY LTD and ORS
[2003] SASC 46
Civil

PERRY J. This is an application[1] in which Dr Finikiotis, one of seven defendants to the proceedings, seeks an order setting aside the order of Bleby J made on 25 October 2002, in which Bleby J dismissed an application by Dr Finikiotis and the defendant Chrissafina Zervos for an extension of time within which to appeal from a Master’s order which in turn dismissed an application for an order for further and better discovery.
[1] FDN 85.
Separately, the plaintiff has brought an application[2] seeking orders:
1.That the application of the defendants Finikiotis and Zervos dated 8 November 2002 be dismissed as frivolous, vexatious or an abuse of process of the Court.
2.That further proceedings in this action by the defendants Finikiotis and Zervos be stayed unless and until the High Court of Australia shall have allowed an appeal by the said defendants against the decision of the Full Court of this Court made on 9 November 2001.
[2] FDN 87.
On 13 February 2003 I made orders disposing of both applications. I intimated that I would publish reasons later.
To put the applications in context, it is necessary to explain some of the history of the matter.
On 13 January 2000 a Master made an order that the plaintiff have summary judgment on its claim for moneys lent. At that stage he was unable to quantify the claim. At the same time, he indicated that various claims which had been pursued by way of a counterclaim in the proceedings would best be pursued by separate proceedings, and he struck out the counterclaim.
Apparently the Master was subsequently satisfied as to the quantum of the judgment to be pronounced. On 14 February 2000 he entered summary judgment against the first, third, fourth and fifth defendants for $4,106,759.38. Dr Finikiotis is the fourth defendant and Chrissafina Zervos the fifth defendant.
The defendants against whom it had been pronounced appealed from the summary judgment. On 13 March 2000, Williams J dismissed the appeal.[3]
[3] See reasons FDN 35.
Since then the matter has had a somewhat chequered history, largely associated with various attempts by Dr Finikiotis to set aside the judgment.
In an ex tempore decision given on 24 October 2000, a Full Court (Doyle CJ, Lander and Wicks JJ) declined to make any order on an application for leave to appeal against the decision of Williams J, on the basis that an appeal against his decision could be brought as of right and no leave was required. However, an extension of time would be required, given the lapse of time since Williams J’s decision.
On 19 February 2001, the defendants Dr Finikiotis and Chrissafina Zervos and certain others of the defendants were declared bankrupt. They remain undischarged bankrupts.
On 14 September 2001, Wicks J dismissed an application for an extension of time for leave to appeal to the Full Court from the decision of Williams J.
In a decision made on 9 November 2001, a differently constituted Full Court, namely Doyle CJ, Perry and Lander JJ, dismissed an application for leave to appeal against the decision of Wicks J. Their refusal to give an extension of time was based upon the view that there was no reasonable prospect of success.
This was in turn based upon two considerations.
In the first place, Dr Finikiotis, being a bankrupt, had no standing to appeal against the judgment entered against him. In the second place, there was no reasonable prospect of success of the proposed appeal on the merits.
Pausing there, it appears to me that at that stage there was and there still is no appeal pending in this Court against the judgment entered against the defendants. The rights of appeal of the defendants against whom the judgment had been entered have been exhausted.
I come now to the circumstances relevant to the present application by Dr Finikiotis.
By an application filed on 12 June 2002[4] he sought an order, inter alia:
“In accordance with the directions given by the Chief Justice conveyed by the associate to the Chief Justice, further and better discovery of documents pertaining to the Sandhurst loans by the plaintiff, particularly details of loan structure with regard to the many financiers, any evaluations, instructions and correspondence between the parties previously not discovered.”
[4] FDN 77.
The application was supported by an affidavit sworn by Dr Finikiotis to which he exhibited a copy of an application for leave or special leave to appeal to the High Court from the judgment of the Full Court to which I have referred made on 9 November 2001. Other material attached to the affidavit indicated, so far as I am able to understand the material, that Dr Finikiotis’ concerns are that the application for summary judgment was “incorrect and misleading” and “was obviously made early to avoid disclosure” of certain important and relevant documents. He described the conduct of the plaintiff in applying for summary judgment as “misleading and deceptive” and in effect, tainted with a fraudulent concealment of relevant documents.
At the heart of these complaints, so far as I can glean from the substantial documentation which he has generated and which has built up in the file, is his assertion that the plaintiff misled him and the other defendants as to the financial viability of a business which was to be operated in the premises which were to be renovated with the assistance of the moneys lent by the plaintiff, which misleading information in turn may be traced back to certain valuations, which he suggested were negligently made, furnished by valuers known as Knight Frank Pty Ltd (“Knight Frank”).
Despite my careful perusal of the documents which he has filed, I am quite unable to make the link between any asserted shortcoming in the Knight Frank valuations, or in the use made of those valuations by the plaintiff, and any possible defence to the claim for moneys lent, or reason to set aside the summary judgment.
At all events, the present application concerns a failed application for discovery, and I turn more particularly to that.
The formal order pronounced by the Master on 26 July 2002 in response to Dr Finikiotis’ application for further and better discovery was in the following terms:
“1.By an application (doc 77) the fourth defendant seeks an order in relation to directions allegedly given by the Chief Justice via his associate in respect of further and better discovery. There is nothing on this file to indicate that any such direction has been given, nor indeed to justify such an order.”
He went on to dismiss the application, with costs against Dr Finikiotis.
Dr Finikiotis then sought from another Master an order giving leave to appeal from the decision of the Master to which I have just referred. It was then pointed out to him that leave to appeal was not necessary, but it would be necessary to obtain an extension of time within which to appeal.
Dr Finikiotis and Chrissafina Zervos accordingly made an application for an extension of time, which was dealt with by Bleby J, who dismissed the application by order made on 25 October 2002.
It is that order which, in his present application,[5] Dr Finikiotis now seeks to set aside.
[5] FDN 85.
It seems to me that the material which Dr Finikiotis has filed in support of his present application is largely a repetition of what he has said again and again in various ways since the entry of the summary judgment against him on 14 February 2000. He repeats, in varying degrees of elaboration, the allegations of fraud and concealment on the part of the plaintiff and alleged shortcomings on the part of Knight Frank in the valuation reports.
On the face of it, that material has nothing to do with any question of discovery. But if I understand Dr Finikiotis correctly, he asserts that there are documents which may support a case which he wishes to make out that the summary judgment originally pronounced in this matter should be set aside on the ground of fraud.
But Dr Finikiotis has not identified any possible basis upon which an action to set aside the judgment on the ground that it was obtained fraudulently, could succeed. Neither has he identified any documents or class of documents which could assist in proving any such case, and which ought properly to be made the subject of discovery.
After all, the plaintiff’s claim was simply for the repayment of moneys lent. There was no challenge to the fact that the moneys were lent, and no challenge to the fact that the moneys were not repaid. The circumstances in which certain valuations of properties which were offered as security for repayment were obtained and utilised by the plaintiff is irrelevant to the cause of action upon which the judgment was entered.
Insofar as the application seeks an order that I set aside an interlocutory order pronounced by another judge, while I suppose that jurisdiction to make such an order might in a proper case be exercised under SCR r 3.04(f), no case has been made out to vary or discharge Bleby J’s order made on 25 October 2002.
In the course of reasons which he pronounced ex tempore for the order which he made, Bleby J observed:
“As I understand it, the defendants have sought special leave from the High Court to appeal against the judgment of the Full Court of the 9 November 2001. Unless the defendants obtain special leave to appeal from the High Court, and their appeal from the High Court ultimately succeeds, and subsequently the Full Court allows the appeal from Williams J, then there is no cause of action left in the current proceedings so far as it concerns the defendants. The action is at an end unless and until the defendants have succeeded in each of those steps.
So far as this court is concerned, the litigation, subject only to the defendant succeeding in all those three steps, is at an end, and the court has no power to make further interlocutory orders in the nature of discovery because the power to make such orders assumes that there is an ongoing action, which is not this case.”
I agree that in the relevant sense the action is at an end, although I suppose that an application to set aside a judgment on the ground that it was fraudulently obtained might nonetheless be entertained, even at this stage, if proper grounds existed for permitting that course. However, the balance of authority is in favour of the view that any such application should be brought in separate proceedings.[6]
[6] See the discussion and authorities noted in Halsbury’s Laws of Australia Vol 20, Part VIII Appeal, paras [325-11255].
Putting that procedural question to one side, neither in any of the affidavits or other material which he has filed, nor in any submissions made before me on the hearing of his application, has Dr Finikiotis been able to identify any possible ground upon which the Court should now interfere with any of the orders which have been made up to now, more particularly the order which is the specific target of his present application.
I turn now to the separate application brought by the plaintiff.
I do not need to deal further with paragraph 1 of the application, which seeks the dismissal of Dr Finikiotis’ application dated 8 November 2002 as, for the reasons which I have given, the application must be dismissed in any event. I add, though, that insofar as the plaintiff seeks dismissal on the ground that the application is “frivolous, vexatious or an abuse of process”, and although I have not used those terms in stating reasons why it must be dismissed, it clearly was an application which deserves that description.
In paragraph 2 of its application, the plaintiff seeks an order that:
“Further proceedings in this action by the defendants Finikiotis and Zervos be stayed unless and until the High Court of Australia shall have allowed an appeal by the said defendants against the decision of the Full Court of this Court made on 9 November 2001.”
In support of that application, an affidavit has been sworn by Mr James Neate, a solicitor in the firm of solicitors acting for the plaintiff. In the affidavit he sets out a chronology of the course of the proceedings, most of the points of which I have already dealt with.
In his affidavit he draws attention to the fact that the two defendants in question are undischarged bankrupts, and as such lack standing to bring any further applications of the nature of those which they seek to pursue. He deposes also in the following terms:
“9.The plaintiff is repetitively being put to irrecoverable costs and expense by meritless applications by the defendants in these and associated proceedings in relation to the same transaction and/or founded on the judgment obtained by the plaintiff in this court.
10.There are numerous orders for costs against the defendants which remain unsatisfied.”
In the affidavit and in the argument presented in support of paragraph 2 of the plaintiff’s application by Mr Howard of counsel who appeared for the plaintiff, the point was made that the defendants Dr Finikiotis and Ms Zervos have demonstrated in the voluminous material which they have filed a constant misconception and misunderstanding of their rights; that they have brought a number of applications which have clearly been without merit or substance; and that they have evinced an intention that they are likely to continue to make applications seeking to re-litigate or re-agitate matters in respect of which the court is, so long as the summary judgment remains, functus officio.
In support of its application for a stay, Mr Howard referred to Oceanic Sun Line Special Shipping Co Inc v Fay,[7] a decision of the High Court of Australia. However, I do not think that that decision is of particular relevance. Although it relates to a stay or dismissal of proceedings, that case concerned a plea of forum non conveniens, a principle which turns on considerations which are not germane to the present proceedings.
[7] (1988) 79 ALR 9.
However, it seems to me that this Court has an inherent jurisdiction to stay the making of any further application by a defendant on appropriate terms where there has been a series of meritless attempts by a defendant to avoid the effect of a judgment.
An authority in point is the decision of the Court of Appeal (UK) in J.S. Grepe v Loam, Bulteel v J. Grepe.[8] In that case, in an action in which judgment had been pronounced against them, a number of unfounded applications were made by defendants by one means or another, either to set the judgment aside or for orders which were described as “in direct contradiction to the directions” of the judgment. All of the applications were dismissed with costs, none of which had been paid.
[8] [1887] 37 Ch D 168.
When the Court of Appeal dismissed a further application to arrest the judgment, counsel for the plaintiffs moved the court in terms which are reported as follows:[9]
“Charles Browne [counsel for the plaintiffs] then stated that several unfounded applications of this kind had been made by the same parties, and asked the Court to make an order to prevent their repetition, as it was impossible to obtain payment of the costs. He referred to an unreported case of Suir v Newton, in which an order had been made guarding against a repetition of such applications without leave of the Court.”
[9] Ibid 169.
In response to that application, the court inserted the following direction in the order which it made:
“That the said Applicants or any of them be not allowed to make any further applications in these actions or either of them to this Court or to the Court below without the leave of this Court being first obtained. And if notice of any such application shall be given without such leave being obtained, the Respondents shall not be required to appear upon such application, and it shall be dismissed without being heard.”
A further illustration of the inherent powers of the court to prevent vexatious litigants needlessly taking up the time of the courts is to be found in the recent decision of Attorney-General v Ebert.[10]
[10] [2002] 2 All ER 789.
In that case, on the application of the Attorney-General, the Queen’s Bench Division made an order barring the respondent, who was a bankrupt who had been declared a vexatious litigant, from entering the Royal Courts of Justice without express permission. In the course of delivering the judgment of the court, Brooke LJ said:[11]
“[35]We accept Mr Keith’s submission that the court’s supervisory role now extends beyond the mere regulation of litigation and of litigants who have submitted themselves to the compulsory jurisdiction of the court. It includes the regulation of the manner in which the court process may in general be utilised. ....... in the exercise of its inherent jurisdiction the court has the power to restrain litigants from wasting the time of court staff and disturbing the orderly conduct of court processes in a completely obsessive pursuit of their own litigation, taking it forward by one unmeritorious application after another and insisting that they should be afforded priority over other litigants.”
[11] Ibid 798.
I am of the view that this is a proper case in which an order should be made restraining both Dr Finikiotis and Chrissafina Zervos from making any further applications within the proceedings without the leave of the court.
It is for these reasons that I made the following orders disposing of the two applications:
“1.That the application by the defendant Dr Efstathios Finikiotis, which I treat as an application by him and the defendant Ms Chrissafina Zervos, filed on 8 November 2002 (FDN 85) be dismissed.
2.On the application by the plaintiff filed on 28 November 2002 (FDN 87) I order that neither the defendant Dr Efstathios Finikiotis nor the defendant Ms Chrissafina Zervos, or either of them, be permitted to make any further application in this action without the leave of this Court first being obtained. If any such application be filed without leave having first been obtained, the application may be dismissed without any hearing in the presence of any party.”
JUDGMENT CITATIONS
LISTED IN ORDER OF APPEARANCE IN JUDGMENT
1.    FDN 85.
2.    FDN 87.
3.    See reasons FDN 35.
4.    FDN 77.
5.    FDN 85.
6.    See the discussion and authorities noted in Halsbury’s Laws of Australia Vol 20, Part VIII Appeal, paras [325-11255].
7. (1988) 79 ALR 9.
8. [1887] 37 Ch D 168.
9.    Ibid 169.
10. [2002] 2 All ER 789.
11.    Ibid 798.

[2003] SASC 46

17 February 2003