FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Scott & Munayallan (No 13) [2023] FedCFamC1F 666
File number: SYC 59 of 2010 Judgment of: HENDERSON J Date of judgment: 11 August 2023 Catchwords: FAMILY LAW – COSTS – Where the respondent filed an Application in a Proceeding seeking damages against the applicant – Where the applicant is a real estate agent and his employer – Where the respondent has been declared a vexatious litigant in the Supreme Court of New South Wales with respect to the applicant and a property – Where the respondent has also been declared a vexatious litigant in this Court – Where the Application in a Proceeding was dismissed on various grounds – Where the applicant seeks costs on an indemnity basis – Circumstances justifying order – Where the Application in a Proceeding was doomed to fail, an abuse of process, and offends common decency – Jurisdiction and generally – Whether section 117 of the Family Law Act 1975 (Cth) applies – Where section 69(4)(d) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) provides the Court power to make an order for costs – Consideration of principles in relation to indemnity costs – Circumstances justify an order for indemnity costs – Order made for indemnity costs in a fixed sum. Legislation: Family Law Act 1975 (Cth) ss 102QB, 117, 117(2A), 117(2A)(a), 117(2A)(b), 117(2A)(c), 117(2A)(e).
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 67, 67(1)(a), 67(1)(b), 68, 69, 69(4)(d), 69(4)(e).
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 1.04(1), 1.31, 1.31(1), 12.13, 12.13(4), 12.17(1)(a).
Vexatious Proceedings Act 2008 (NSW) s 8(7)(b).
Cases cited: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCR 801.
Kohan & Kohan (1993) FLC 92-340; [1992] FamCA 116.
Munayallan & Scott (No 5) [2022] FedCFamC1F 284.
Phillips & Hansford (2020) FLC 93-941; [2020] FamCAFC 28.
Rankin & Rankin (No 3) [2019] FamCAFC 133.
Scott & Munayallan (No 9) [2023] FedCFamC1F 106.
Sfakianakis & Sfakianakis (2019) 59 Fam LR 419; [2019] FamCAFC 54.
Smith & Fields (third party costs) [2013] FamCA 505.
Division: Division 1 First Instance Number of paragraphs: 58 Date of last submissions: 20 February 2023 Date of hearing: In chambers on the papers Place: Sydney Solicitor for the Applicant: Clyde and Co The Respondent: Litigant in person (no submissions received) ORDERS
SYC 59 of 2010 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: AQ REAL ESTATE AND AR PTY LTD
Applicant
AND: MR SCOTT
Respondent
ORDER MADE BY:
HENDERSON J
DATE OF ORDER:
11 AUGUST 2023
THE COURT ORDERS THAT:
1.Pursuant to rule 1.31(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), the requirement for Mr AS and AR Pty Ltd to provide a costs agreement pursuant to rule 12.13(4) is dispensed with.
2.The respondent, Mr Scott, is to pay the costs of the applicant in relation and…
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- Scott & Munayallan (No 13) [2023] FedCFamC1F 666
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CaseChat Overview and Summary
The case of Scott & Munayallan (No 13) involves the plaintiff, Mr Scott, who sought costs from the defendants in the Supreme Court of New South Wales. The plaintiff had a history of making similar claims in different courts, including the Federal Circuit and Family Court of Australia, which were ultimately dismissed. The defendants argued that the plaintiff's claims were an abuse of process, and that the issues pleaded had already been determined in previous proceedings. The court had to decide whether the plaintiff's application for costs was an abuse of process and if it warranted an indemnity costs order.
The court found that the plaintiff's application was an abuse of process and that it was doomed to fail from the outset. The court also found that the issues pleaded had already been determined in previous proceedings, and that the plaintiff's claims were barred by res judicata, issue estoppel, and/or abuse of process. The court held that the plaintiff's conduct was contrary to common decency, and that it was appropriate to make an order for costs on an indemnity basis. The court ordered the plaintiff to pay the defendants' costs in the sum of $7,000.00, to be paid within 28 days.
The court's decision in this case highlights the importance of understanding the legal principles of res judicata, issue estoppel, and abuse of process. It also demonstrates the court's willingness to award indemnity costs where a party's conduct is found to be an abuse of process. This case serves as a reminder to parties that they must be mindful of the consequences of their actions, and that the court will not hesitate to impose costs where appropriate.
The court found that the plaintiff's application was an abuse of process and that it was doomed to fail from the outset. The court also found that the issues pleaded had already been determined in previous proceedings, and that the plaintiff's claims were barred by res judicata, issue estoppel, and/or abuse of process. The court held that the plaintiff's conduct was contrary to common decency, and that it was appropriate to make an order for costs on an indemnity basis. The court ordered the plaintiff to pay the defendants' costs in the sum of $7,000.00, to be paid within 28 days.
The court's decision in this case highlights the importance of understanding the legal principles of res judicata, issue estoppel, and abuse of process. It also demonstrates the court's willingness to award indemnity costs where a party's conduct is found to be an abuse of process. This case serves as a reminder to parties that they must be mindful of the consequences of their actions, and that the court will not hesitate to impose costs where appropriate.
Orders
Orders of the court
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Background
Background to the litigation
These Reasons for Judgment will be delivered contemporaneously with the Reasons for Judgment in the substantive proceedings. It is important that a brief background is provided to explain how this oral application for costs came to fruition.BACKGROUND As it will become apparent, virtually the identical relief sought in the Application dismissed on 20 February 2023 was brought in the Supreme Court of New South Wales by Mr Scott and dismissed with costs by Rothman J in mid-2022. It is appropriate to provide some of the chronology set out by his Honour:10The plaintiff alleges that in 2014 the defendants pressured him into signing a contract of sale for the Property in [Suburb E] and that, against his express instructions, the defendants proceeded to exchange contracts with the purchaser of the property. In particular the plaintiff alleges that the defendants, against instructions, reduced the required deposit of 10% to 5% and dispensed with the cooling off period. On the face of it, given that ultimately, and I use the word “ultimately” with caution, the matter proceeded to be exchanged, it is unclear what, if any, damage would have been, or was, occasioned by a reduction of the deposit and/or the absence of a cooling off period.11The matter has a significant history. By a Statement of Claim in the current proceedings which was filed on 22 September 2021, the plaintiff seeks damages in the amount of $700,000 for “selling the property 700,000 market value (sic)”; it is unclear what is intended by that. The plaintiff further seeks an order, although it is spelled D-R-D-E-R (I assume it is a typographical error) of damages of $1,400,000 for out-of-pocket expenses on the ostensible basis of breach of statutory duty, negligence, breach of fiduciary duties and unconscionable conduct.12The plaintiff was granted leave on three occasions to file an amended Statement of Claim which he has not done. The defendants filed the motion, the subject of this hearing, on 31 January 2022.13It is necessary to deal with previous proceedings involving the plaintiff. The plaintiff was subject to a number of proceedings by the purported purchasers of the Property in [Suburb E], who were [Mr and Ms Phong]. [Mr and Ms Phong] brought proceedings against the plaintiff (in these proceedings) for specific performance of the contract for sale dated […] 2014, which the plaintiff had signed and provided authority to exchange prior thereto but subsequently sought to resile from.14The plaintiff, after the exchange of the contracts with [Mr and Ms Phong], purported to transfer the property to [P Pty Ltd] which his brother and/or sister, perhaps both, was or were the sole directors. The purchasers, [Mr and Ms Phong], then brought proceedings against that company. The proceedings were determined by his Honour Pembroke J of this Court against the plaintiff (in these proceedings) and in favour of the purchasers being [Mr and Ms Phong] […].15In the course of his judgment, Pembroke J made the following findings. First, Pembroke J held that the transfer of the property to the company was fraudulent as its intent I was to cheat [Mr and Ms Phong] of their existing rights to the property. Secondly, the judgment records that the plaintiff in these proceedings made various statements to the defendants in these proceedings affirming his intention to sell the property to the purchasers, but that he appeared to resile from that intention the following day. Apparently, the plaintiff received legal advice at the time that he was bound to the contract with [Mr and Ms Phong], despite his subsequent attitude to the sale to them.16Thirdly, his Honour made clear that a number of emails that the plaintiff proposed to send to the second defendant were, in his Honour’s word, “questionable”, and accepted the second defendant’s evidence that he did not receive them. His Honour found that, even if the emails did exist, the plaintiff’s conduct clearly evinced an intention to sell which gave rise to estoppel to prevent him from denying he was bound by the contract. Fourthly, his Honour made a comment about the plaintiff in the following terms:“I had a considerable opportunity … to form an opinion as to his motives, his honesty and his credibility. The plaintiff represented himself … I gave him every indulgence to explain his actions and every opportunity to justify his conduct. Ultimately, I formed the view that his evidence was unreliable and that his defence is unmeritorious.” […]17Subsequent orders were the subject of submissions and Pembroke J delivered a further judgment ordering that the fraudulent transfer be set aside […]. An appeal against the judgments of his Honour was dismissed […].…23There are a number of aspects of the proceedings which need to be the subject of detailed comment. I have not yet completed the history of proceedings. The plaintiff has filed similar statements of claim against the two defendants in two previous proceedings in the District Court. The first proceedings, which are Annexures A to E of the Affidavit of [Mr BW] in Court Book Tab 3, were commenced by Statement of Claim filed by the plaintiff in the District Court [in] January 2020. [In] February 2020 the defendants filed a motion on notice to dismiss the proceedings. [In] 7 April 2020 the plaintiff filed an amended Statement of Claim. [In] April 2020 Wilson DCJ, as her Honour then was, dismissed the proceedings and struck out the amended Statement of Claim.24The second set of proceedings, which are Annexures F to L in the Affidavit of [Mr BW] at Court Book Tab 3, were commenced by Statement of Claim by the plaintiff in the District Court [in] November 2020. [In] January 2021 the defendants filed a motion on notice to dismiss the proceedings. [In] April 2021 Hatzistergos DCJ of the District Court struck out the Statement of Claim and granted leave for the plaintiff to file an amended Statement of Claim. That judgment is Annexure H to the aforesaid Affidavit of [Mr BW].25[In] May 2021 the plaintiff filed, I hesitate to say somewhat oddly, two Amended Statements of Claim. [In] June 2021 the defendants filed a motion on notice to strike out the amended statements of claim [It was determined by status conference that the plaintiff relied on the first amended Statement of Claim filed]. [In mid] 2021 Coleman DCJ of the District Court struck out the amended Statement of Claim and issued a judgment on costs in favour of the defendants.(As per the original with footnotes inserted)
Evidence
Evidence Before The Court
Mr Scott was to provide written submissions in relation to the quantum of costs by 4.00pm on 17 March 2023, and Mr AS and AR Pty Ltd (“the applicant”) were to reply by 4.00pm on 24 March 2023, if they found it appropriate to do so.THE EVIDENCE The applicant relied upon the following in their submissions in relation to costs:(1)Response to an Application in a Proceeding filed on 8 February 2023;(2)Affidavit of Mr BV (with annexures) filed on 8 February 2023; and(3)A schedule of costs provided to the Court on 20 February 2023. Mr Scott was to provide written submissions in response by 17 March 2023. This has not occurred. This behaviour is not unique in this matter and has occurred previously in the family law proceedings and also in proceedings before Rothman J. The only evidence before me is that submitted by the applicant. The affidavit of Mr BV is more in the form of submissions, but nonetheless, highlights that this Court had no jurisdiction to entertain the Application as filed. There were a multitude of issues with the Application, which was doomed from the outset. Mr BW highlighted that the Application was, in essence, the same relief sought in the Statement of Claim filed and determined by Rothman J on 6 June 2022. The judgment delivered by Rothman J highlights several issues with the Statement of Claim filed in those proceedings, which issues plague the current Application filed by Mr Scott:27The defendant submits that it is difficult – and I think, with respect, they are being kind – to identify a cause of action from the pleadings and the particulars contained in the Statement of Claim. The relief sought is not of the kind which the Court ordinarily would give or should consider giving, in their submission.28Further, the defendant submits that the Statement of Claim filed in these proceedings is a reiteration of the claims that were sought to be made in the first and second proceedings and, if there were one, any subsequent appeal. I hasten to add no appeal has been filed or sought to be filed against the orders of her Honour Wilson DCJ or of the orders of his Honour Coleman J striking out the amended statements of claim in the District Court.29Over and above the foregoing matters the defendants in their motion in these proceedings claim that the issues pleaded have been finally determined in the first and second proceedings, and that any further attempts to allow the plaintiff to bring or amend proceedings in any court are precluded by any one of res judicata, issue estoppel and/or abuse of process, and perhaps all three.30Further, the defendant submits that the matters alleged in the Statement of Claim have already been subject to judgment in this Court. Further, that the Statement of Claim pleaded in these proceedings is barred by the Limitation Act 1969 (NSW). To the extent that the plaintiffs allege a claim in contract or tort, plainly it is out of time.31To the extent that the plaintiffs allege unconscionable conduct, they do not allege in the Statement of Claim any special disability upon which any such unconscionability would be based or could be based.32Further, if, and it is certainly not expressed in the Statement of Claim, a claim for unconscionability were said to be based upon the provisions of the Contract Review Act, that would be out of time. The time limit being, from memory, two years.(As per the original)
Decision
Reasons for decision
It is very clear that this is an exceptional case that warrants costs to be awarded on an indemnity basis.CONCLUSION Adult choices have adult consequences; Mr Scott may not be willing to accept consequences that are contrary to his desires, but this is the reality of life. Another reality of life for Mr Scott is that as the Application was a clear abuse of process, was doomed to fail, and as stated in the ex tempore Reasons dismissing the Application, “[i]t offends all common decency”,[18] it is appropriate that I make an order for costs on an indemnity basis.[18] Scott & Munayallan (No 9) [2023] FedCFamC1F 106 at [10]. I fix these costs payable in the sum of $7,000.00,[19] which being close to the amount sought and it being a reasonable sum in all the circumstances.[19] Pursuant to r 12.17(1)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth). I will make an order that these costs are to be paid within 28 days.
Ratio Decidendi
Legal Principle Established
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