Scott & Munayallan (No 10)
[2023] FedCFamC1F 600
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Scott & Munayallan (No 10) [2023] FedCFamC1F 600
File number: SYC 59 of 2010 Judgment of: HENDERSON J Date of judgment: 20 July 2023 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Summary dismissal – Where the first applicant sought orders against a person acting as a liquidator of a company in liquidation – Where the first applicant sought to appear for the second applicant company – Where the Court moved on its own motion to minimise costs with an intention to hear a summary dismissal application without the appearance of the respondent – Finding on the evidence the first applicant has no standing to bring the application nor appear for the second applicant – Finding further there was no prospect of success in prosecuting the application and it was an abuse of process – No appearance by the applicant on the adjourned hearing date – Application summarily dismissed – No order as to costs. Legislation: Corporations Act 2001 (Cth) ss 471B, 477, 482.
Family Law Act 1975 (Cth) s 45A, 45A(2), 45A(4), 45A(5), 45A(6), 45A(7), 102QB, 102QB(3).
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 46, 67, 67(1)(b).
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 1.18, 2.24, 3.09.
Federal Court (Corporations) Rules 2000 (Cth) r 2.13(1)(a).
Vexatious Proceedings Act 2008 (NSW).
Cases cited: Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106
Australian Securities and Investments Commission v Rich (2006) 235 ALR 587; [2006] NSWSC 826
Bigg v Suzi (1998) FLC 92-799; [1998] FamCA 14
Curtain & Curtain [2022] FedCFamC1A 134
Lindon v Commonwealth (No 2) (1996) 136 ALR 251; [1996] HCA 14
Mohsen & Collings [2020] FamCA 1072
Munayallan & Scott (No 5) [2021] FedCFamC1F 284
Munayallan & Scott (No 6) [2022] FedCFamC1F 345
Pelerman v Pelerman (2000) FLC 93-037; [2000] FamCA 881
Quinn & Lawson [2023] FedCFamC1F 164
Re Australasian Meat Industry Employees' Union (WA Branch); Ex parte Ferguson (1986) 67 ALR 491; [1986] FCA 323
Re Sails Corp Pty Ltd [2021] NSWSC 1241
Reid v Brett [2005] VSC 18
Saracuna & Siddele (No 4) [2023] FedCFamC1F 165
Scott & Munayallan (2021) 62 Fam LR 504; [2021] FamCA 79
Scott & Munayallan [2021] FedCFamC1F 104
Scott & Munayallan (No 3) [2021] FedCFamC1F 121
Smith v New South Wales Bar Association (1992) 176 CLR 256; [1992] HCA 36
Stativa & Stativa [2015] FamCAFC 170
Stephens & Stephens (2009) FLC 93-425; [2009] FamCAFC 240
Division: Division 1 First Instance Number of paragraphs: 72 Date of hearing: 18 July 2023 Place: Sydney The First Applicant: Litigant in person (did not participate) The Second Applicant: Litigant in person (did not participate) Solicitor for the Respondent: ERA Legal, Commercial, Insolvency and Litigation Lawyers (excused from attending) ORDERS
SYC 59 of 2010 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR HATEM
First Applicant
CC PTY LTD
Second Applicant
AND: MR AB IN HIS CAPACITY AS LIQUIDATOR OF I PTY LTD
Respondent
order made by:
HENDERSON J
DATE OF ORDER:
20 JULY 2023
THE COURT ORDERS THAT:
1.The Application in a Proceeding filed by Mr Hatem on 8 May 2023 is summarily dismissed.
2.There be no order as to costs.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Scott & Munayallan has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HENDERSON J:
On 8 May 2023, an Application in a Proceeding (“the Hatem Application”) was filed by Mr Hatem in his own capacity and as a shareholder, creditor and director of I Pty Ltd in liquidation and naming CC Pty Ltd as the second applicant.
Mr AB in his capacity as liquidator of I Pty Ltd was listed as the first respondent and I Pty Ltd as the second respondent.
On 8 June 2023, the Hatem Application was listed to proceed on 13 July 2023 via Microsoft Teams. Upon the filing of an Application in a Proceeding (“the Mr M Application”) on 10 July 2023 by Mr M, I directed Mr Hatem and Mr M to appear in-person on 13 July 2023.
I proposed to hear both the Hatem Application and the Mr M Application at the same time given the commonalty of issues within the two applications. I required Mr M to appear in‑person given he is a party to the substantive proceedings, and despite having lodged a proof of debt, failed to appear to prosecute that debt and it was important that he appear on this occasion.
The Mr M Application was filed by Mr M in his own capacity, but also on behalf of CC Pty Ltd and also:
(1)DD Pty Ltd;
(2)P Pty Ltd;
(3)Mr K Scott and Ms Scott as beneficiaries of the JJ Trust;
(4)Ms AH; and
(5)Ms L.
These five parties and entities, together with Mr M, were the six named applicants in an Interlocutory Process filed in the Supreme Court of New South Wales. In August 2022, an order was made by Black J, noting CC Pty Ltd and the six named applicants, through their counsel, gave undertakings “not to bring an application, interlocutory process or notice of motion, in or substantially in the form” of certain paragraphs contained in the Interlocutory Process. The Interlocutory Process was ultimately dismissed with costs on an indemnity basis.
Mr M seeks to vary these orders and that he, the other five named applicants and CC Pty Ltd, be released from their undertakings.
For completeness, the substantive proceedings are in relation to property adjustment between Ms Munayallan and Mr Scott and finalisation of proceedings transferred from the Supreme Court of New South Wales to this Court.
SHORT HISTORY
I Pty Ltd is in liquidation by an order of Black J made in January 2022, with Mr AB appointed as its liquidator.
Proceedings have continued unabated on this and other issues in the Supreme Court of New South Wales, culminating in an order made by Williams J in May 2023, declaring Mr Scott, Mr M, CC Pty Ltd, DD Pty Ltd, and P Pty Ltd as vexatious litigants, relevantly for these proceedings, in respect of Mr AB in his capacity as liquidator of I Pty Ltd, any current or former employee of AJ Financial Services (the firm Mr AB is employed at), any current and former employee at ERA Legal (Mr AB’s legal representatives), and I Pty Ltd.
INTRODUCTION
On the day of the originally scheduled hearing, being 13 July 2023, the Court received two emails from Mr M at 10.10am and 10.33am. The matter was listed to commence at 11.00am. The email received at 10.10am was as follows:
Dear Associate,
[Mr Hatem] was on this way from from his property in [Town AK] this morning, but his car broken down. He asked me to appear today for both of us. However I am sick and trying to clear myself up to come in.
Can you please adjourn the hearing this morning to 3pm this afternoon or any time on Tuesday 18/07/2023.
I don't have all the other partie’s email address.
(As per the original)
And the email at 10.33am:
Dear Associate,
I ask to appear by telephone this morning, to seek a short adjournment. I am on my way to the doctor later today.
(As per the original)
My Associate sent an email in response at 10.47am as follows:
Dear [Mr M],
You have failed to provide any contact information for yourself on your Application filed with the Court.
You have failed to appear in person at any prior hearing before Her Honour in this Court.
Her Honour requires a medical certificate setting out in detail precisely why you cannot attend court in person today and that certificate is to be provided to Chambers by no later than 2pm today. On that basis only, Her Honour will hear the adjournment application at 2:30pm today, 13 July 2023.
Her Honour will only entertain an adjournment application via video conference on Microsoft Teams.
Please find video conferencing details below and an instructional guide attached.
…
(As per the original)
Upon sending this email, my Associate received an email immediately:
Subject: Do not send emails to this account. This email account is closed. …
(As per the original)
The Court did not receive any communication from Mr Hatem.
The hearing commenced shortly after 11.00am. My Associate called the matter twice and once upon commencement of the hearing, with no appearance was made by either Mr Hatem or Mr M.
I initially dismissed both the Hatem Application and Mr M’s Application for want of prosecution and that I would deliver Reasons for Judgment for dismissing these applications.
The Court had endeavoured to accommodate Mr M’s request but he had failed to provide contact details in his filed material,[1] including a telephone number, and the email address he provided to the Court bounced back with this message in the subject line:
Do not send emails to this account. This email account is closed.
(As per the original)
[1] Contrary to Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 2.24.
Extraordinarily, a further email was received from Mr M at 12.09pm from the same email address which had bounced back, enclosing a medical certificate, which failed to detail his symptoms or his illness upon which a Court could base a decision to adjourn a proceeding. Mr M asked the Court to provide him with telephone dial-in details, as he said:
I don’t to video dialin.
(As per the original)
After Mr M provided, for the first time, his mobile telephone number, I returned to Court to determine whether to hear his adjournment application via telephone link. Upon hearing from Mr M, I set aside my earlier orders, granted an adjournment and listed the matter at 10.00am on 18 July 2023 on the following conditions:
(1)Mr M and Mr Hatem filed a Notice of Address for Service by close of business on 14 July 2023; and
(2)Mr M and Mr Hatem appear in-person on 18 July 2023;
and if these conditions were not fulfilled, then I may dismiss their respective application. I note that Mr M complied with both requirements, albeit the first occurring the morning of the hearing. The Court did not receive any communication from Mr Hatem.
On 18 July 2023 at 7.33am, Mr M emailed my Chambers, seeking the hearing commence at 11.00am, as his “representative” was not available until then. Mr Hatem was carbon copied into this email and did not object. I granted the small delay in the hearing commencing.
When the matter commenced at 11.00am, Mr M appeared and sought he appear on behalf of Mr Hatem. I did not permit this. Although the Court has heard nothing from Mr Hatem since 12 July 2023, he has been included in correspondence for many weeks, including correspondence leading up to and on the day of the hearing. Mr M sought an adjournment on behalf of Mr Hatem, who he said was still having “troubles” with his transportation to Court. This application was refused.
THE HATEM APPLICATION
This application was filed by Mr Hatem in his own capacity and in his capacity as shareholder, creditor and director of I Pty Ltd, and sought orders as follows:
1.That [Mr Hatem] is joint to these proceedings as an defendant and in the capacity as shareholder, creditor and director of [I Pty Ltd].
2.Pursuant to Rule 10.13 of the Federal Circuit and Family Court of Australia Rules 2021 and Rule 39.05Federal Court Rules 2011, that all orders made in proccedings SYC59/2010 on the 12 April 2022 are to be stayed until further orders.
3.That [Mr AB] injunct from dealing with “the Fund” obtained from the proceeds of sale of [J Street], [Suburb E] NSW from the Supreme proceeding Case Number …,Land in … in Strata Plan …, known as [F Street], [Suburb MM] NSW and share protfolio realised from Australia Security Exchange, [OO Bank] account number […93]
4.That the application filed on the 26 October 2022 in proceedings SYC59/2010 to be heard before the applications filed by [Mr AB] 31 August 2022 is concluded.
5.That the proceeding to be re-open until this application, the filed on the 26th October 2022 and the Interlocutory Process filed 30th March 2022, […] is heard.
(As per the original)
The evidence in support was Mr Hatem’s affidavit sworn on 18 April 2023 and filed on 8 May 2023, which is as follows:
1.I [Mr Hatem] am shareholder, creditor and director [I Pty Ltd], I seek under S482 Corporation ACT to terminate the liquidation as the company is solvent.
2.I call to read, the solvency report by [Mr AL] from [AM Financial Services], the affidavits of [Mr M] affirmed 2 November 2022, 9 January 2023, 14 April 2023 and statement which is attached in the exhibit [H001].
(As per the original)
On 11 July 2023, Mr Hatem filed a bundle of documents, containing inter alia:
(1)An affidavit of Mr AN affirmed on 7 June 2023 for proceedings in the Supreme Court of New South Wales;
(2)Affidavits of Mr M, one filed on 14 April 2023 for proceedings in the Supreme Court of New South Wales, and another affirmed on 2 November 2022 for proceedings in the Federal Court of Australia; and
(3)A report prepared by Mr AL of AM Financial Services Report of AM Financial Services dated 31 January 2023 for proceedings in the Federal Court of Australia.
This bundle contained other documents, including transcripts from proceedings in the Land and Environment Court of New South Wales and the New South Wales Court of Appeal, an ex tempore judgment from the Supreme Court of New South Wales, and an affidavit of Mr Scott filed in respect of proceedings in the Supreme Court of New South Wales.
As is the practice in this Court, I did not read all of this material, but instead only read material which appeared relevant to his application and was awaiting Mr Hatem to inform me what other material he sought to rely upon and argue its relevance to issues before me.
Mr Hatem also filed a Minute of Orders sought and written submissions, in which his surname was spelt differently from that in his affidavit.
In passing, I note that an affidavit of Mr M was filed in support of the Hatem Application, despite Mr M having filed his own application with an affidavit in support filed on 6 July 2023.
FINDINGS
The result of Mr AB being appointed the liquidator of I Pty Ltd is that he is ostensibly the only person to act on behalf of I Pty Ltd.[2] There is capacity for the Court to grant leave to a person to commence proceedings against a company in liquidation,[3] but no such leave was sought.
[2] Corporations Act 2001 (Cth) s 477.
[3] Corporations Act 2001 (Cth) s 471B.
Additionally, a corporation must not start or carry on proceedings without a legal representative unless leave is granted by the Court.[4] This is extended to any creditor, contributory or officer of a corporation.[5] No such leave has been sought in respect of either I Pty Ltd or in respect of the orders sought regarding the Application in a Proceeding filed on 22 October 2022 by CC Pty Ltd. The application in respect of I Pty Ltd must fail as no leave has been sought and granted to commence proceedings against that company, which is now in liquidation.
[4] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 3.09.
[5] Federal Court (Corporations) Rules 2000 (Cth) r 2.13(1)(a). See also Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 1.18 for the application of the Federal Court (Corporations) Rules 2000 (Cth).
Secondly, proceedings ostensibly brought on behalf of CC Pty Ltd must also fail as no leave has been sought or granted for Mr Hatem to act on behalf of that company and the application in those respects fail for want of prosecution. This is but the first hurdle.
Additionally, there is no evidence proffered in Mr Hatem’s affidavit nor in the documents in the bundle I did read, being a report of Mr AL of AM Financial Services and Mr M’s affidavit filed on 14 April 2023 to support of any orders he seeks namely:
(1)Evidence to support a stay of orders made 12 April 2022;
(2)Evidence to support the necessity for him to be joined to the proceedings;
(3)Evidence to support any case that the proceedings be re-opened; and
(4)Evidence in support of the injunctions proposed to be made against Mr AB.
For the reasons that follow, the Application is dismissed.
Stay of orders made on 12 April 2022
No appeal has been filed in relation to the orders on 12 April 2022. No leave to appeal out of time has been filed which may support this Court looking at whether a stay of orders made over a year ago should now be considered. There is simply no evidence filed to support a stay being granted and nor was there established any basis for Mr Hatem to seek such an order in his own capacity. Further, none of the relevant indicia outlined by the Full Court of the Family Court of Australia (as it was then known) in Aldridge & Keaton (Stay Appeal)[6] are satisfied to warrant a stay of the orders.
[6] [2009] FamCAFC 106 at [18] (Bryant CJ, Boland and Crisford JJ).
Joinder to the proceedings
The proceeding have closed in that final judgement has been reserved since 20 April 2023. Unless I grant leave to re-open the proceedings, this part of the application is doomed to failure.
Re-opening of the proceedings
The principles relating to when a Court would grant leave to a party to re-open proceedings has been recently reviewed in this Court by Schonell J in Quinn & Lawson,[7] and McClelland DCJ in Saracuna & Siddele (No 4).[8] This leave can only be granted to Mr Hatem in his personal capacity.
[7] [2023] FedCFamC1F 164 (Schonell J).
[8] [2023] FedCFamC1F 165 (McClelland DCJ).
In Smith v New South Wales Bar Association,[9] the plurality of the High Court said the following:
… It has long been the common law that a court may review, correct or alter its judgment at any time until its order has been perfected. … The power is discretionary and, although it exists up until the entry of judgment, it is one that is exercised having regard to the public interest in maintaining the finality of litigation. Thus, if reasons for judgment have been given, the power is only exercised if there is some matter calling for review. And there may be more or less reluctance to exercise the power depending on whether there is an avenue of appeal. It is important that it be understood that these considerations may tend against the reopening of a case, but they are not matters which bear on the nature of the review to be undertaken once the case is re-opened, as this case was.
…
It is again necessary to distinguish between the considerations which may bear on a decision to re-open and the processes involved in reconsideration once a case has been re-opened. If an application is made to re-open on the basis that new or additional evidence is available, it will be relevant, at that stage, to inquire why the evidence was not called at the hearing. If there was a deliberate decision not to call it, ordinarily that will tell decisively against the application. But assuming that that hurdle is passed, different considerations may apply depending on whether the case is simply one in which the hearing is complete, or one in which reasons for judgment have been delivered. It is difficult to see why, in the former situation, the primary consideration should not be that of embarrassment or prejudice to the other side. …[10]
(As per the original with footnotes omitted)
[9] (1992) 176 CLR 256 (Brennan, Deane, Dawson, Toohey and Gaudron JJ).
[10] (1992) 176 CLR 256 at 265–267 (Brennan, Dawson, Toohey and Gaudron JJ, with Deane J agreeing), cited in Quinn & Lawson [2023] FedCFamC1F 164 at [13].
In Reid v Brett,[11] Habersberger J said the following, citing Re Australasian Meat Industry Employees’ Union (WA Branch); Ex parte Ferguson:[12]
[11] [2005] VSC 18 (Habersberger J).
[12] (1986) 67 ALR 491 at 493–494 (Toohey J).
41The criteria governing the exercise of the discretionary power to re-open a case to admit further evidence where the hearing has concluded but judgment has not been delivered have been said to be as follows:
(a) the further evidence is so material that the interests of justice require its admission;
(b) the further evidence, if accepted, would most probably affect the result of the case;
(c) the further evidence could not by reasonable diligence have been discovered earlier; and
(d) no prejudice would ensue to the other party by reason of the late admission of the further evidence.[13]
…
(As per the original with footnotes omitted)
[13] [2005] VSC 18 at [41], cited in Quinn & Lawson [2023] FedCFamC1F 164 at [12].
In Stephens & Stephens,[14] the Full Court of the Family Court of Australia said the following, referring to Australian Securities and Investments Commission v Rich:[15]
[14] (2009) FLC 93-425 (May, Boland and O’Ryan JJ).
[15] (2006) 235 ALR 587 at 593 (Austin J).
273We observe that in Australian Securities and Investments Commission v Rich (2006) 235 ALR 587 Austin J set out at 593 what he described as a "useful statement of relevant discretionary factors" to the exercise of discretion to permit a beginning party in a civil penalty proceeding to adduce further evidence after it had closed its case. The factors included:
•the nature of the proceeding;
•whether the occasion for calling further evidence ought reasonably to have been foreseen;
•the importance of the issue on which the further evidence is sought to be adduced;
•the degree of relevance and probative value of the further evidence;
•the prejudice to the other party;
•the public interest in the timely conclusion of litigation;
•the explanation offered for not having called the evidence.[16]
(As per the original)
[16] (2009) FLC 93-425 at [273], cited in Saracuna & Siddele (No 4) [2023] FedCFamC1F at [5].
The evidence that is said to warrant the hearing be re-opened is the report of Mr AL, in conjunction with material contained in Mr M’s affidavit filed on 14 April 2023 in the Supreme Court of New South Wales.
The report of Mr AL asserts I Pty Ltd was solvent when Black J ordered that I Pty Ltd be wound up in insolvency. At the final hearing, Mr Scott sought this report be received into evidence. Counsel for Mr AB and Ms Munayallan both objected to this tender and I upheld the objection. This may be a point of an appeal but is not cause for re-opening.
The thrust of Mr M’s affidavits is that the list of creditors provided to the Court in these proceedings and tendered as an exhibit by Mr AB “is not accurate and [is] incorrect”. Mr M asserts that some of the creditors listed by Mr AB are in fact debtors to I Pty Ltd. Mr M asserts that this is confirmed “[f]rom information of accurate company records”.
Firstly, there are no “accurate company records” nor documents sourced directly from the Australian Taxation Office attached to Mr M’s affidavit nor to Mr Hatem’s affidavit. Rather there are selected extracts from documents that have been cut-and-pasted into his affidavit.
Secondly, if Mr M and/or Mr Hatem have “accurate company records” that conflict with the documents tendered at the final hearing, they should have been provided to Mr AB forthwith. Further they should have been amongst the documents seized upon his taking possession of the Suburb MM property. If these “accurate company records” are provided to Mr AB and he accepts their authenticity and correctness, he must then approach the Court to correct the debtors of the JJ Trust, resulting in a greater surplus than anticipated.
Thirdly, the admission of the alleged “accurate company records” would not impact on my decision in either the proceedings relating to the winding up of I Pty Ltd nor the proceedings in relation to the JJ Trust, this going only to the surplus of funds available after Mr AB completes his obligations as the liquidator. The way Mr Hatem can have what he says are the “accurate company records” placed before the Court is to provide the source documents to Mr AB.
Fourthly, these documents were in existence at the date of the hearing and Mr M, who apparently has them, and having been joined and given notice of the final hearing, chose not to bring them to the attention of the Court.
Fifthly, I dispute the authenticity of the documents that are cut-and-pasted in Mr M’s affidavit and I question why Mr M has documents that Mr AB should have.
Finally, I find that re-opening the hearing would result in a significant prejudice to Ms Munayallan and to Mr AB, and would further increase the extraordinary costs in relation to the winding up and liquidation of I Pty Ltd and the JJ Trust incurred to date and further delay in delivery of my Reasons for Judgment.
These factors weigh against the re-opening of the hearing.
I find that taking the evidence at its highest, there is no case to warrant the proceedings being re-opened.
Evidence in support of making injunctions against Mr AB
Mr AB is carrying out his obligation as receiver and liquidator of I Pty Ltd and the JJ Trust, pursuant to orders made by Black J in the Supreme Court of New South Wales in January 2022, and in February 2022, respectively.
There is no basis to support the injunctions sought unless the Court was satisfied that the proceedings should be re-opened and the Court is not. To grant the injunctions sought would compromise Mr AB carrying out his legal obligations.
The Hatem Application had no prospect of success at the outset and is an attempt to circumvent the order of Williams J pursuant to the Vexatious Proceedings Act 2008 (NSW), which Mr M and CC Pty Ltd are subject to.
The liquidation of I Pty Ltd has occurred. The JJ Trust is in receivership, and the orders behind those two acts are orders of a superior court, and there is no appeal from either of these orders and they remain in force.
This Court cannot and would not embark upon hearing matters already determined to finality in another superior court. To do so would be improper and offend the rule of law.
The only avenue is to make an application to the High Court, as this Court does not on the evidence have the jurisdiction to interfere, in any way, with the orders made concerning the liquidation of I Pty Ltd and the winding up of the JJ Trust.
DISMISSING THE HATEM APPLICATION SUMMARY SUMMARILY
The law on summary dismissal
Section 45A of the Family Law Act 1975 (Cth) (“the Act”) provides the Court power to summarily dismiss proceedings, with the relevant parts set out below:
45A Summary decrees
…
No reasonable prospect of successfully prosecuting proceedings
(2)The court may make a decree for one party against another in relation to the whole or any part of a proceedings if:
(a)the first party is defending the proceedings or that part of the proceedings; and
(b)the court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceedings or that part of the proceedings.
…
Proceedings that are frivolous, vexatious or an abuse of process
(4)The court may dismiss all or part of proceedings at any stage if it is satisfied that the proceedings or part is frivolous, vexatious or an abuse of process.
(5)To avoid doubt, proceedings or a part of proceedings are not frivolous, vexatious or an abuse of process merely because an application relating to the proceedings or the part is made and later withdrawn.
Costs
(6)If the court makes a decree, or dismisses all or part of proceedings, under this section, the court may make such order as to costs as the court considers just.
Action by court on its own initiative or on application
(7)The court may take action under this section on its own initiative or on application by a party to the proceedings.
…
Such power is also contained in section 46 of the Federal Circuit and Family Court of Australia Act 2021 (Cth).
Recently, in Curtain & Curtain,[17] the Full Court discussed the principles surrounding summary relief, citing Lindon v Commonwealth (No 2),[18] and the cited extract below:
[17] [2022] FedCFamC1A 134 (Aldridge, McGuire and Strum JJ).
[18] (1996) 136 ALR 251 (Kirby J).
1.It is a serious matter to deprive a person of access to the courts of law for it is there that the rule of law is upheld, including against government and other powerful interests. This is why [summary] relief … is rarely and sparingly provided.
2.To secure such relief, the party seeking it must show that it is clear, on the face of the opponent’s documents, that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious.
…
6.The guiding principle is … doing what is just. If it is clear that proceedings within the concept of the pleading under scrutiny are doomed to fail, the court should dismiss the action to protect the defendant from being further troubled, to save the plaintiff from further costs and disappointment and to relieve the court of the burden of further wasted time which could be devoted to the determination of claims which have legal merit.[19]
(As per the original with footnotes omitted)
[19] (1996) 136 ALR 251 at 256.
Further, the exercise of summary dismissal is to be used rarely and sparingly.[20]
[20] Lindon v Commonwealth (No 2) (1996) 136 ALR 251 at 256; Bigg v Suzi (1998) FLC 92-799 at 84,974–84,975 (Barblett DCJ, Lindenmayer and Finn JJ); Pelerman v Pelerman (2000) FLC 93-037 at 87,582 (Ellis, Lindenmayer and Rose JJ); Stativa & Stativa [2015] FamCAFC 170 at [8] (Ainslie-Wallace, Murphy and Aldridge JJ).
Taking Mr Hatem’s evidence at its highest, it does not appear that the factors relating to whether a winding up should be stayed or terminated have been demonstrated.[21]
[21] Re Sails Corp Pty Ltd [2021] NSWSC 1241 at [19] (Black J).
Additionally, Mr Hatem has failed to satisfy the Court that his Application has any prospect of success.
It is clear the Hatem Application has been brought before this Court to circumvent the order of Williams J made in May 2023, given Mr Hatem relies upon, in substance, evidence from Mr M to support his unmeritorious claim and has named CC Pty Ltd as a joint applicant, each of whom are subject to this order.
Further, I have found, consistent with the conduct of Mr Scott in this Court, as well as in the Supreme Court of New South Wales, the Hatem Application has been brought to delay the delivery of my Reasons for Judgment in the substantive proceedings, this being a tactic employed again and again by Mr Scott, ably aided by Mr M and CC Pty Ltd, to the detriment of Ms Munayallan.
The Hatem Application is vexatious, an abuse of process, doomed to fail at the outset, brought for an ulterior motive and utterly devoid of merit.
If this conduct continues, the Court has the power to, of its own motion, make a vexatious proceedings order against a party.[22]
[22] Family Law Act 1975 (Cth) s 102QB(3).
The winding up and receivership of I Pty Ltd and the JJ Trust have occurred and will not be undone. It is time to move forward.
Procedure
In order to minimise further costs and consistent with the overarching purpose of this Court,[23] I proposed to initially determine whether the proceedings should be summarily dismissed and did not require the respondents to the substantive proceedings to appear or respond unless the Court determined it needed to hear from other parties when a later date would be set.
[23] Federal Circuit and Family Court of Australia Act 2021 (Cth) s 67(1)(b).
On 8 June 2023, Mr Hatem and all related parties were informed of this proposed course. No objection was taken by Mr Hatem nor the other parties to this proposed course of action
In Mohsen & Collings,[24] McClelland DCJ ordered that notice be given to the father that he contemplated exercising power under section 45A(7) of the Act so that procedural fairness was afforded to the father.[25] While notice is not a requirement prescribed under section 45A of the Act, notice was given by email sent to Mr Hatem on 8 June 2023 and I am satisfied that notice has been provided and procedural fairness has been afforded to him.
[24] [2020] FamCA 1072 (McClelland DCJ).
[25] [2020] FamCA 1072 at [47].
For completeness, I note the substantive proceedings in this matter involving I Pty Ltd was listed for final hearing commencing on 20 February 2023. There were two distinct aspects of this matter:
(1)The finality of the matrimonial proceedings between Mr Scott and Ms Munayallan; and
(2)The finality of proceedings transferred from the Supreme Court of New South Wales on 14 October 2022, and 21 October 2022;
with both sets of proceedings heard simultaneously. Judgment was reserved on 20 April 2023 after final submissions were received.
Proceedings have been instigated in the Federal Court of Australia on this and other issues, and are outstanding.
On the Courts own motion, and having regard to all the circumstances above, the Hatem Application is dismissed.
CONCLUSION
I make the orders as set out in the forefront of these Reasons for Judgment.
I certify that the preceding seventy-two (72) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Henderson. Associate:
Dated: 20 July 2023
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