SCVG & Estate of KLD (No 10)
[2023] FedCFamC1F 810
•22 September 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
SCVG & Estate of KLD (No 10) [2023] FedCFamC1F 810
File number(s): SYC 4380 of 2008
SYC 5956 of 2016Judgment of: GILL J Date of judgment: 22 September 2023 Catchwords: FAMILY LAW – COSTS – Where the respondent seeks costs in relation to a number of proceedings initiated by the applicant – Complete lack of success – Vexatious nature of proceedings – Completely unmeritorious – Abuse of process – Where indemnity costs should be awarded – Where party/party costs should be awarded – Quantification of costs – No costs to be awarded where costs already dealt with – Security for costs.
FAMILY LAW – VEXATIOUS LITIGANT – Where there has been an unrelenting pursuit of the respondent – Where the proceedings demonstrate a refusal to understand the principles of finality – Where there is no expectation the proceedings will end absent intervention – Recognition of s 102QE as an extreme remedy – Where relief pursuant to s 102QE is justified to protect the applicants and the court from further abuse of court processes.
Legislation: Family Law Act 1975 (Cth) – ss 102QB, 102QE, 117
Federal Circuit and Family Court (Family Law) Rules 2021 - 12.17
Cases cited: Colgate Palmolive Co and Another v Cussons Pty Ltd (1993) 118 ALR 248
Idoport Pty Ltd v National Australia Bank Ltd & Ors, Idoport Pty Ltd v Donald Robert Argus [2007] NSWSC 23
Kohan
Munday v Bowman (1997) 22 FamLR 321
Paxton & Child Support Registrar (Costs) [2016] FAMCAFC 158
Quickley & Pelissier [2016] FamCAFC 124
Rilak & Tsocas [2020] FamCA 49
SCVG & the Estate of KLD (No 5) [2022] FedCFamC1F 818
Division: Division 1 First Instance Number of paragraphs: 132 Date of hearing: 13 & 14 September 2023 Place: Canberra Solicitor for the Applicant: Litigant in Person Counsel for the First Respondent: Mr Cox, SC, with Ms Seric Solicitor for the First Respondent: Macphillamy’s Solicitor for the Second Respondent: Mr Eskerie, Sparke Helmore ORDERS
SYC 4380 of 2008
SYC 5956 of 2016FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR SCVG
Applicant
AND: ESTATE OF MS KLD
First Respondent
CHILD SUPPORT REGISTRAR
Second Respondent
ORDER MADE BY:
GILL J
DATE OF ORDER:
22 SEPTEMBER 2023
THE COURT ORDERS THAT:
1.Within 90 days of these orders MR SCVG pay to the Estate of the Late Ms KLD, in accordance with written direction given by the solicitors for the Estate of the Late Ms KLD, the following costs:
(a)Of and incidental to the proceedings concluded on 10 February 2022 being the subject of the final judgment delivered on 26 October 2022 on an indemnity basis fixed in the sum of $664,760.19;
(b)Of and incidental to Mr SCVG’s application filed on 16 December 2022 on an indemnity basis fixed in the sum of $2,820;
(c)Of and incidental to the proceedings heard on 13 and 14 September 2023 on a party-party basis fixed in the sum of $118,398.23;
(d)Of and incidental to the judgment of Judge Scarlett dated 30 April 2015 on a party-party basis fixed in the sum of $12,167;
(e)Of and incidental to the judgments of the Full Court of 24 May 2017 in relation to Mr SCVG’s Notice of Appeal filed 28 May 2015 in EAA75/2015 on a party-party basis fixed in the sum of $38,309.29;
(f)Of and incidental to the judgments of the Full Court of 24 May 2017 in relation to Mr SCVG’s Notice of Appeal filed 15 September 2015 in EAA156/2015 on a party-party basis fixed in the sum of $14,872.17;
(g)Of and incidental to the judgments of the Full Court of 24 May 2017 in relation to Mr SCVG’s Notice of Appeal filed 7 April 2016 in EAA51/2016 on a party-party basis fixed in the sum of $17,873.30;
(h)Of and incidental to the judgment of Justice Gill dated 5 February 2020 in relation to Mr SCVG’s application in a case filed 16 October 2017 on a party-party basis fixed in the sum of $10,157.43;
(i)Of and incidental to the judgment of Justice Gill dated 5 February 2020 in relation to Mr SCVG’s application in a case filed 27 October 2017 on a party-party basis fixed in the sum of and $1,366.11;
2.The application by the Estate of the Late Ms KLD for costs in relation to the judgment of Justice Gill dated 18 August 2017 regarding Mr SCVG’s application in a case filed 4 August 2017 is dismissed.
3.For the purpose of partially complying with Order 1(a) above the security of $45,000 held in the trust account of the solicitor for the Estate of the Late Ms KLD pursuant to orders of 8 August 2018 is to be released to the Estate of the Late Ms KLD within 7 days.
4.Within 90 days of these orders MR SCVG pay to the Child Support Registrar, in accordance with written direction given by the solicitors for the Child Support Registrar, the costs of and incidental to the proceedings SYC5956/2016 fixed in the sum of $50,000.
5.Pursuant to s 102QB of the Family Law Act 1975 (Cth) Mr SCVG is prohibited from instituting proceedings under the Family Law Act 1975 (Cth) in a court having jurisdiction under the Act against or in relation to Mr Draper and/or Ms Eaton and/or the Estate of the Late Ms KLD.
6.All outstanding applications on files SYC 4380 of 2008 and SYC 5956 of 2016 are otherwise dismissed and finalised.
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 a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
GILL J
BACKGROUND TO THE PROCEEDINGS
These proceedings concern unresolved costs disputes whereby the Estate, and the Child Support Registrar, pursue costs from Mr SCVG, and where the Estate pursues vexatious proceedings orders against Mr SCVG.
In general terms these occur against an immediate background of the dismissal of Mr SCVG’s application to set aside a number of judgments on the basis that they were procured by fraud (see SCVG & the Estate of KLD (No 5) [2022] FedCFamC1F 818), and a broader background of generally unsuccessful and unceasing litigation pursued by Mr SCVG against the late Ms KLD and now her estate.
The proceedings
The main subject of the current applications are the primary proceedings, unsuccessfully prosecuted by Mr SCVG, constituted by SYC4380/2008 (“2008 proceedings”) and SYC5956/2016 (“2016 proceedings”).
In general terms these concerned applications:
(a)To set aside orders as to costs made by Cronin J on 20 August 2015, as related to the final resolution of the parenting proceedings, on the basis that the judgment was procured by fraud (“the Cronin matter”);
(b)To set aside orders of Judge Scarlett of 15 April 2015, relating to the review of an SSAT determination regarding Child Support, on the basis that the judgment was procured by fraud (“the Scarlett matter”);
(c)To vary child support payable for the period 15 July 2011 to 3 December 2015, on the basis that it was procured by fraud (“the CSA matter”);
(d)To set aside a judgment of 14 September 2017 dismissing the applications for review of costs assessments made by a Registrar on 27 July 2017, (amended 31 August 2017), a Registrar on 15 May 2017, and a Registrar on 25 June 2017 on the basis that the dismissal was procured by fraud (“the email fraud”).
The Estate seeks its costs in relation to the primary proceedings, including in relation to various applications both pre and post-dating the delivery of the primary judgment.
A number of other, miscellaneous, proceedings have been consolidated for determination along with the primary proceedings, for the determination of unresolved costs issues. These are:
(a)Costs reserved on 5 February 2020. This involved a suite of applications brought by Mr SCVG, as follows:
(i)Application of 16 October 2017 – to set aside orders of 14 September 2017 that dismissed applications filed by Mr SCVG on
(A)31 May 2017 to set aside cost assessment orders made by the Registrar on 15 May 2017;
(B)14 August 2017 to review or set aside cost assessment orders of the Registrar of 25 June 2017; and
(C)21 August 2017 to review a costs assessment notice of the Registrar;
(ii)Application of 27 October 2017;
(iii)Application in a case of 9 May 2018; and
(iv)Second Application in a case of 9 May 2018.
(b)Costs in relation to the judgment of Judge Scarlett dated 30 April 2015. This relates to unresolved costs following the delivery of the judgment that was the subject of the Scarlett matter;
(c)Quantification of costs in relation to the judgment of Thackray ACJ, May & Ryan JJ dated 24 May 2017. In this case the Full Court has ordered that Mr SCVG pay the costs of Ms KLD, but those costs have not as yet been quantified.
The following table sets out a summary of the various judgments for which costs are pursued by the Estate, the basis for determination of the amounts, and of the dollar amount claimed.
Table 1
Judgment Application Costs Sought Basis Judgment of Judge Scarlett dated 30 April 2015 First day of hearing $13,126.00 Party/party Second day of hearing $7,425.30 Indemnity Judgment of Thackray ACJ, May & Ryan JJ dated 24 May 2017 Mr SCVG’s Notice of Appeal filed 28 May 2015 EAA75/2015 $38,309.29 Party/party Mr SCVG’s Notice of Appeal filed 15 September 2015 EAA156/2015 $14,782.17 Party/party Mr SCVG’s Notice of Appeal filed 7 April 2016 EAA51/2016 $17,873.30 Party/party Judgment of Justice Gill dated 18 August 2017 Mr SCVG’s Application in a Case filed 4 August 2017 $14,225.00[1] Indemnity Judgment of Justice Gill dated 5 February 2020 Mr SCVG’s Application in a Case filed 16 October 2017 $15,492.87 Party/party Mr SCVG’s Application in a Case filed 27 October 2017 $2,337.77 Party/party Judgment of Justice Gill dated 26 October 2022 Mr SCVG’s Applications filed 25 October 2022 $662,395.77 Indemnity Judgment of Justice Gill dated 20 December 2022 Mr SCVG’s Applications filed 16 December 2022 $2,820.00[2] Indemnity Costs in relation to hearing of this costs application $203,431.84[3] Indemnity Total Costs $992,219.31 [1] Respondent’s submissions filed 17 April 2023 [90].
[2] Affidavit of Mr Draper filed 11 September 2023 [21].
[3] Affidavit of Mr AE filed 12 September 2023, annexure A.
The Registrar of the Child Support Agency (“the CSA”) pursues a narrower application for costs. She asserts that she has incurred party/party costs in excess of $70,000, but that her claim for costs is limited to the fixed amount of $50,000.[4]
[4] CSA affidavit 23 November 2022 [12]; [14]-[15].
Both the Estate and the Registrar seek that the costs be quantified in a specific amount in order to curtail further dispute, litigation, cost and delay.
PRINCIPLES AS TO COSTS
There are three contentious aspects of the costs pursued. The first is as to whether an order ought to be made that Mr SCVG is liable for the costs of the Registrar or the Estate in relation to each of the claims set out above. He disputes that he should be held so liable and contends that the Draper family should be liable. The second is the basis on which costs ought to be awarded, the Estate pursuing, in relation to a number of claims, that Mr SCVG meet its costs on an indemnity basis. The third is, on whichever basis costs are awarded, their quantification.
Principles concerning liability to pay costs
As to the first aspect, s 117 of the Family Law Act 1975 (Cth) (“the Act”) sets out the default position that each party bears their own costs, subject to circumstances justifying otherwise. The precondition to making an order for costs is the finding that there are circumstances justifying the making of an order for costs. Once these are found, the default position yields to the court’s discretion to award costs as it considers just. The relevant considerations to assess the circumstances are set out at s 117(2A) as follows:
In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g)such other matters as the court considers relevant.
Of these considerations, those emphasised by the parties were the financial circumstances, conduct, whether Mr SCVG can be considered to have been wholly unsuccessful, whether an offer in writing has been made to settle the proceedings that bears upon the costs issue, and any other matters.
Lack of success and conduct are conveniently dealt with in the context of each of the applications. The financial circumstances and the offers made are set out here.
Financial circumstances
The financial circumstances were a matter of contest. In considering the contest, it is appropriate to take heed of what was said in Browne & Greene [2002] FamCA 791 at [26]:
What the Court needs to ascertain is a broad overview of the financial circumstances of the parties if it does not already have that broad overview. The costs application is not the time for conducting a wholesale examination into every aspect of the parties’ financial circumstances.
Mr SCVG raised his circumstances as bearing upon whether an order ought to be made against him, asserting that his expenses exceed his income, and further, asserting limited equity in his home of YY Street, Suburb ZZ. He asserted a value of $2.2 million with an equity of $600,000. Mr SCVG has retired and asserts that his financial resources are limited to draws upon superannuation, and a pension from his former employer.
Both of these matters are contested by the Estate.
Evidence was called from a Mr AG, a person with expertise in the valuation of real estate.
Mr AG’s valuation was limited to a kerbside valuation, being without an inspection of the home, and based on other sales assessed by Mr AG to be appropriate comparatives. Mr AG sets out ample qualifications, the material relied upon, his approach and application of his expertise to arrive at a value of $4.5 million. He accepts some limitation in his assessment.
Despite the limitations disclosed in his approach, the methodology, identification of underlying factors, degree of expertise, and demonstration of the application of such is sufficient to provide a robust basis upon which to conclude that the value of the Suburb ZZ property approximates $4.5 million rather than the $2.2 million volunteered by Mr SCVG.
Further challenge was made to the proposition that Mr SCVG’s resources are otherwise limited in the manner described by him. In particular it was asserted that the level of borrowing maintained by Mr SCVG required a capacity to service that exceeds the income disclosed by Mr SCVG.
The particular attack related to interest payments made by Mr SCVG, as evidenced by his Westpac records at Exhibit E8. They disclose that at present he is making interest payments in relation to various loan accounts in excess of approximately $1,100 per week. In terms of income Mr SCVG receives a pension related to his previous employment of approximately $50,000 per year, and payments from his superannuation fund.
Mr SCVG appeared to accept that he had not disclosed the account into which his pension payments are made, although he identified an account in his oral evidence.
Mr SCVG explained that his receipts include sales in relation to underlying assets held as his superannuation. He further explained that the interest rate had only recently increased to the current level.
A second attack related to Mr SCVG’s sale of AH Bonds in April 2021. His evidence was that he paid the receipts of the sales into the AD Fund. He was challenged in this evidence on the basis that he had, prior to the disposal of the AH bonds, already invested $340,000 into the AD Fund. Mr SCVG said that he must have misspoken, and alleged that counsel was attempting to trick him as to the dates. He also asserted that the sale of the AH bonds had in part been used to assist his son. He denied that he has another account into which the proceeds of the sale of the AH Bonds were paid.
On balance, despite the matters pursued in cross examination of Mr SCVG, I am unable to determine that Mr SCVG’s financial circumstances are significantly other than what he has described, save as to the value of his Suburb ZZ residence, for which I accept the value to be approximately $4.5million. This leaves equity, based upon Mr SCVG’s assertion of $600,000 as against a value of $2.2 million, as approximately $2.9 million.
In considering this issue, whilst the limited financial resources of Mr SCVG are a relevant consideration, impecuniosity has long been recognised as no bar to the making of a costs award.
It should however be recognised that whether or not Mr SCVG has some assets greater than disclosed by him, the costs pursued against him will have a heavy impact upon his financial position. He is no longer in the workforce, and is reliant upon what appear to be fixed financial resources.
Acting on the basis that his reserves are as he describes, but that the Suburb ZZ property’s worth approaches that of the valuation of Mr AG, an award of costs as pursued by the Estate will potentially result in the complete depletion of the superannuation held by Mr SCVG, and also result in the significant erosion of the equity he has in the Suburb ZZ property, and potentially require the sale of that property.
As to its financial circumstances, the Estate disclosed assets by a schedule produced to the Supreme Court of NSW to obtain a grant of probate. An aspect of this disclosure was the assertion that interests in corporate entities held by the Estate were of nominal value. This was hotly contested by Mr SCVG. It may be observed that the material provided by the Estate was limited in both its content and cogency, meaning that no real conclusions could be drawn as to the Estate’s financial position.
However, in considering the financial circumstances of the parties in this case it should be borne in mind that the Estate makes no claim based upon its financial position. The Estate eschewed the notion that its financial circumstances form a reason to grant it the relief sought.
Further, Mr SCVG raised no cogent argument as to why the Estate’s financial circumstances, assuming that they are superior to what they assert, assist his resistance of the costs applications.
The closest Mr SCVG got to such an argument was his assertion that an award of costs would be depriving his children of a future bequest by depleting his resources, whilst providing further wealth to the Draper family.
In aid of this contention he relied upon the notion that the will of Ms KLD did not provide any asset, or the control of the asset to their children.
While it may be accepted that the will did not give control of an asset to the children, consent orders made in lieu of the will, pursuant to the family provision legislation, provided for half of the estate and half of the nominal estate to be held on trust for one of the children until she turns 18.
It was noted that the other child (who was an adult when the orders were made) consented to the family provision orders, and sought no change to her entitlement under the will.
The second is whether this is a relevant consideration in any event. It was said to be so on the basis that the court should be concerned as to the impact upon the adult children, who are not parties to this proceeding. I am unable to see how this is a relevant consideration, either as to financial circumstances of the parties, or as to such other matters as the court considers relevant.
Thirdly, even if it were considered to be relevant, the proposition lacked adequate evidential support, reliant as it was on vague assertions about a future bequest by Mr SCVG to the adult children.
In terms of the financial position of the parties, it may be considered that the financial circumstances of the Estate provide no assistance to it in its claims.
It may also be considered that Mr SCVG’s financial position is one that will be heavily impacted by the costs pursued by the Estate, particularly in circumstances where he is now retired.
Offers
Both the Estate and Mr SCVG pointed to offers made to resolve the proceedings.
At exhibit E5 the Estate tendered an offer made on 12 October 2021, in relation to a conciliation conference and in response to an order of 2 October 2021. That offer sought to end the proceedings by Mr SCVG paying all outstanding costs in relation to proceedings in the Family Court, including where costs had been estimated; to pay all outstanding costs in the Local and Supreme Courts; that the proceeds from the outstanding costs would be held on trust for the adult children as part of the estate of the late Ms KLD, that the four primary matters be discontinued with each party to bear their own costs; that all extant matters in the family law courts be dismissed with no order as to costs; that Mr SCVG be restrained from commencing or conducting proceedings in the family law courts, and State courts without first obtaining the leave of the court.
The aspect outside of the offer that falls beyond the resolution of these proceedings is the restraint in respect of State proceedings. Otherwise the offer is supportive of the Estate’s claim for costs.
Exhibit A4 sets out an offer made by Mr SCVG in November 2021. It takes the offer made by the Estate and modifies it. It deletes reference to the estimated but not then awarded costs. It seeks an order that Ms RR, Mr Draper and Ms Draper pay all outstanding costs orders made against Mr SCVG in the NSW Courts. It further requires that Ms RR, Mr Draper and Ms Draper, and the Child Support Registrar pay all parties’ costs of the primary matters and the appeals there from. The costs already awarded were to be held on trust of the children, with a restraint prohibiting payments to the Draper family members. Mr SCVG agreed to be restrained from filing further proceedings in the family law jurisdiction and sought a restraint on the Draper family and its entities likewise. He similarly sought mutual restraints in respect of the NSW State courts. He further sought an adjustment of his child support debt to zero, or to a payment to be made to him by the Estate. He further sought a provision that the gross value of the estate and notional estate be paid, along with a reimbursement to the estate of the legal fees in relation to the Supreme Court proceedings, to the children.
Notably, Mr SCVG’s proposal deleted the provision in relation to the dismissal of all current applications and appeals in the family jurisdiction. His offer also sought to bind third parties to the litigation. It further sought substantive relief regarding Child Support that Mr SCVG was not successful in securing.
His offer does not improve his position in respect of a costs argument.
Principles concerning indemnity costs
As to the second aspect, the principles to be applied in relation to indemnity costs are neatly set out by the Full Court in Quickley & Pelissier [2016] FamCAFC 124:
119.We then turn to consider whether costs should be awarded on a party/party or indemnity basis.
120.In Colgate Palmolive Co and Another v Cussons Pty Ltd (1993) 118 ALR 248 at 256, Sheppard J referred to the “settled practice” that where a court orders one party to pay another party’s costs, the order is for costs to be paid on a party/party basis. His Honour also said “there should be some special or unusual feature in the case to justify the court in departing from the ordinary practice” at 257.
121.In an appropriate case the court has a discretion to order costs on an indemnity basis. An order made in the exercise of that discretion is a very great departure from the normal approach and the circumstances justifying the departure should be of an exceptional kind (Kohan and Kohan (1993) FLC 92-340).
122.In the recent case of Madin & Palis (Costs) [2016] FamCAFC 25 this Court made reference to the increasing number of applications for indemnity costs and said at [23]:
Finally, we take the opportunity to observe that in so far as the appellant sought an order for indemnity costs, applications for such costs should only be made, and such costs will only be ordered, in the most extreme cases. This is particularly so having regard to the fact that the primary rule in this jurisdiction is that each party should pay their own costs.
The principles in Colgate Palmolive Co and Another v Cussons Pty Ltd (1993) 118 ALR 248 are also usefully discussed in Munday v Bowman (1997) 22 FamLR 321. In that judgment, Holden CJ extracted a series of circumstances which have been thought to warrant the exercise of the discretion to award costs on an indemnity basis, being:
(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts: see Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd(1988) 81 ALR 397.
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud: see Fountain Selected Meats (Sales) Pty Ltd.
(c)Evidence of particular misconduct causing loss of time to the court and to other parties: see Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (French J, Fed C of A, 3 May 1991, unreported).
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions: see Ragatta Developments Pty Ltd v Westpac Banking Corporation (Davies J, Fed C of A, 5 March 1993, unreported).
(e)An imprudent refusal of an offer to compromise.
It ought, however, to be noted that in citing such examples, Holden CJ was dealing with extremes. For example, in relation to the “no chance of success” example Holden CJ indicated that the conduct was to be such as to allow a finding of “ulterior motive” or “wilful disregard of known facts”. That is, it is not sufficient to reflect that the application had a low chance of success, but rather that the prospective lack of success was so stark as to require the inference that the application was occasioned by an ulterior motive.
Further, in relation to the final example of ‘imprudent refusal[s]’, Holden CJ noted, as did the Full Court in Kohan, that the authorities giving rise to such a category are predominately New South Wales authorities, and are in part “attributable to the amendment of the Supreme Court Rules of that State which provide for indemnity costs where a plaintiff obtains judgment in terms no less favourable than those of an offer to compromise made by him and not accepted by the defendant.”
As to the third aspect, being the application to set the costs to be paid in a fixed sum, rather than as assessed or as agreed, it should be recognised that the Federal Circuit and Family Court (Family Law) Rules 2021 caters for such an approach. Rule 12.17 is in the following terms:
12.17 Method of calculation of costs
(1) The court may order that a party is entitled to costs:
(a)of a specific amount; or
(b)as assessed on a particular basis (for example, party and party, solicitor and client or indemnity); or
(c)to be calculated in accordance with the method stated in the order; or
(d)for part of the proceeding, or part of an amount, assessed in accordance with Schedule 3.
(2)If costs are payable under the Family Law Act or these Rules, or the court orders that costs be paid and does not specify the method for their calculation, the costs are to be assessed on a party and party basis.
(3)In making an order under subrule (1), the court may consider the following:
(a)the importance, complexity or difficulty of the issues;
(b)the reasonableness of each party’s behaviour in the proceeding including by having regard to the matters set out in subrule 12.08(2);
(c)the rates ordinarily payable to lawyers in comparable proceedings;
(d)whether a lawyer’s conduct has been improper, unfair, unreasonable or disproportionate;
(e)the time properly spent on the proceeding, or in complying with pre‑action procedures;
(f)whether expenses (paid or payable) are fair, reasonable and proportionate.
In Idoport Pty Ltd v National Australia Bank Ltd & Ors, Idoport Pty Ltd v Donald Robert Argus [2007] NSWSC 23 Einstein J, in an often approved manner, set out the principles underpinning both the reason for, and the approach to a fixed sum costs order:
9For present purposes it seems convenient to commence with a recitation of the principles which inform the exercise of the discretion:
i. the purpose of the rule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation: Beach Petroleum NL v Johnson (1995) 57 FCR 119, Von Doussa J page 265: [following Purchase J in Leary v Leary [1987] 1 All ER 261 who described the purpose of the rule allowing the fixing of a gross sum as “the avoidance of expense, delay and aggravation involved in protracted litigation arising out of taxation” (All ER page 265)];
ii. the touchstone requires that the Court be confident that the approach taken to estimate costs is logical, fair and reasonable: Beach Petroleum at [16];
iii. the fairness parameter includes the Court having sufficient confidence in arriving at an appropriate sum on the materials available: Harrison v Schipp (2002) 54 NSWLR 738, per Giles JA at para [22]; [following (Wentworth v Wentworth (CA, 21 February 1996, unreported, per Clarke JA) and adopted in Sony Entertainment v Smith (2005) 215 ALR 788; [2005] FCA 228; BC200500963 at para [199];
iv. a gross sum assessment, by its very nature, does not envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place: Harrison v Schipp at para [22];
v. the gross sum “can only be fixed broadly having regard to the information before the Court”: Beach Petroleum at 124;
[In Hadid v Lenfest Communications Inc [2000] FCA 628 at [35] it was said that the evidence enabled fixing a gross sum “only if I apply a much broader brush than would be applied on taxation, but that ... is what the rule contemplates”.]
vi. nevertheless the power to award a gross sum must be exercised judicially, and after giving the parties an adequate opportunity to make submissions on the matter: Leary v Leary [1987] 1 WLR 72 at 76, and Beach Petroleum NL v Johnson (No.2) (1995) 57 FCR 119 at 120”;
vii. In terms of the necessity for the approach taken to be logical, fair and reasonable, Von Doussa J in Beach Petroleum NL & Anor v Johnson & Ors (No 2) (1995) 57 FCR 119, put the matter as follows, at paras [16]:
“On the one hand the Court must be astute to prevent prejudice to the respondents by overestimating the costs, and on the other hand must be astute not to cause an injustice to the successful party by an arbitrary “fail safe” discount on the cost estimates submitted to the Court: Leary v Leary at 265. …”
In aid of the assessment of costs in respect of the primary proceedings the Estate relied upon two affidavits prepared by Mr AE, who holds expertise in the assessment of costs. Schedules were prepared calculating the costs on an indemnity basis, a solicitor-client basis and on a party-party basis.
Mr AE adopted a “broad brush” approach, assessing for indemnity costs all costs incurred but for those incurred unreasonably, for solicitor client costs utilising the scale and allowing all costs reasonably incurred ordinarily payable to a solicitor, and for party-party costs, utilising the scale and allowing those that are fair and reasonable.
The assessment was reliant upon the invoices issued by Mr Macphillamy to the Estate and to Ms KLD, and upon the assumption that work was completed as described in the invoices. In assessing the indemnity costs, Mr AE offered the opinion that the rate of charge applied by Mr Macphillamy, in relation to himself, paralegals and clerks was not unreasonable when compared both to the scale and to market. He similarly concluded in respect of counsel’s fees.
In relation to the indemnity claim Mr AE then applied a buffer of five per cent to professional fees, in order to ensure that the charges were not unreasonable. While authorities caution against an arbitrary reduction, particularly on the basis that it may unfairly deprive a litigant of legitimate costs, where, as here, such a buffer is offered by the claimant, it may be relied upon as ameliorating risk of unreasonable charge, particularly where unreasonable charges have not otherwise been identified. On this basis the court can approach the matter, when accepting that work has been completed as charged, as not being amenable to the description ‘unreasonable’ and as constituting fees properly charged on an indemnity basis.
Where costs are awarded on an indemnity basis I am satisfied that the assessment by Mr AE is, although broad brush, a logical, fair and reasonable approach to quantification.
It is convenient to deal with the primary proceedings first (noting that they ran together) and then the miscellaneous proceedings in relation to the costs issues, noting that the descriptions of those proceedings will then be of assistance in subsequently determining the vexatious litigant aspect of the proceedings.
The primary proceedings
The scope of the primary proceedings have been set out earlier in this judgment.
On 26 October 2022, Mr SCVG’s applications were dismissed. He may be seen to have been wholly unsuccessful.
While set out individually below, each of the four primary proceedings should be considered in the context of the others, prosecuted as they were together. They form the necessary litigation context for each other, and for a holistic assessment of both the lack of success of Mr SCVG, and the manner of his conduct of the litigation. For reasons given later in relation to the vexatious litigant application, it may be seen that these proceedings, both individually and even more so together meet the description of vexatious, each variously bearing the description of unmeritorious or an abuse of process.
These descriptions lead to a conclusion that the proceedings were “commenced or continued for some ulterior motive or because of some wilful disregard of the known facts.” The proceedings may also be taken to involve irrelevant allegations of fraudulent conduct.
The lack of merit of the applications, and their use to harass, form an egregious departure from the proper conduct of litigation. It is this categorisation that should be borne in mind in examining each, and assessing each to fall into a most unusual category as warranting an order for indemnity costs.
Against this Mr SCVG asserted that conduct favoured him. He asserted that the Drapers had procured a will from Ms KLD that she did not understand, and that left their children with nothing. Even if these matters were established (they were not) they do not constitute relevant conduct for the purposes of s 117.
Mr SCVG further asserted that the resources employed by the Estate to counter his claims means that it cannot be said that his claims were without merit. He reasons that if his claims were unmeritorious they would not have cost so much to defend. While it may be accepted that at times an unmeritorious claim may be unmasked early in proceedings, it cannot be said to be universally true. In this case, once the claims were drilled into and assessed, they were revealed to be without merit. The onerous level of scrutiny required by Mr SCVG’s applications does not negate their lack of merit.
The Cronin matter
Mr SCVG sought that costs orders made by Cronin J in the parenting proceedings be set aside on the basis that they were obtained by fraud.
It was determined that the factual attack on the judgment lacked materiality, and further constituted an abuse of process, relying as it did on the pursuit of a matter that was not fresh. His conduct of this matter was indicative of an ulterior motive. His pursuit of the matter ignored the immateriality of his allegations to the cause of action he pursued.
The Estate seeks costs on an indemnity basis.
Considered in the context of each of the matters raised by the parties, and notwithstanding limitations in Mr SCVG’s financial circumstances, his complete lack of success, and the manner of his litigation constitute a sufficient basis to warrant costs awarded on an indemnity basis.
The Scarlett matter
The impugned judgment concerned an appeal from a decision of the SSAT made 7 March 2013, dismissed by Judge Scarlett on 30 April 2015. Mr SCVG’s challenge was on the basis that the dismissal had been procured by fraud, such fraud relating to material presented to the SSAT.
Mr SCVG was wholly unsuccessful in his pursuit of the setting aside of the judgment of Judge Scarlett. Importantly, the nature of the proceedings before Judge Scarlett did not render the factual attack raised by Mr SCVG as material to the dismissal that he challenged.
It was determined that his application lacked merit. His pursuit of the matter disregarded the lack of materiality of his allegations to the cause of action that he pursued, and, when considered in the context of the four primary matters, was suggestive of an ulterior motive to pursue the litigation.
The Estate seeks costs on an indemnity basis.
In the same manner as the Cronin matter, considered in the context of each of the matters raised by the parties, and despite limitations in Mr SCVG’s financial circumstances, his complete lack of success, and the manner of his litigation constitute a sufficient basis to warrant costs awarded on an indemnity basis.
The Child Support Registrar seeks costs in relation to this application by an application in proceedings and supporting affidavit filed on 23 November 2022.
In oral submissions the Registrar accepted that this application is also governed by s 117 of the Act.
The Registrar recites the observation of the Full Court in Paxton & Child Support Registrar (Costs) [2016] FAMCAFC 158 at [29] that “funded as (she) is by the public purse, ought not to have to bear the costs of reasonably defending (her) position against an unreasonable attack.” This is a matter to be considered when also considering the financial circumstances of Mr SCVG.
In reciting the work undertaken it may be observed that the Registrar took appropriate steps to minimise her involvement in the proceedings, by seeking to be excused from the bulk of the court events. While Mr SCVG sought to criticise the Registrar as failing to have complied with model litigant guidelines, there was no good basis to criticise the manner of engagement of the Registrar in the proceedings.
The Registrar submits that Mr SCVG has been wholly unsuccessful, that the application was vexatious and without merit.
This, in the context of the other matters raised forms a sufficient basis to depart from the starting position of each party bearing their own costs and to require Mr SCVG to pay the costs of the Registrar.
The Registrar seeks that the costs be fixed in the sum of $50,000, reduced from what the Registrar asserts is a reckoning of the party-party costs of $70,000. The affidavit of Mr AF relied upon by the Registrar forms a sufficient basis to consider that a fixed sum in the amount of $50,000 represents a significant discount from a party-party assessment.
Requiring the parties to engage in an assessment process may be anticipated to be the recipe for unwarranted further costs and litigation.
An order will be made for the sum to be paid to the Registrar to be fixed at $50,000.
The CSA matter
This matter was determined to be completely unmeritorious. In the context of the matters raised by the parties it too warrants both an order that costs be paid, and that costs be paid on an indemnity basis.
The email fraud
This matter was determined to lack a demonstration that the fraud alleged was material, and it was further determined that the application was an abuse of process. Again in the context of the matters raised by the parties, costs on an indemnity basis are warranted.
Quantum in relation to the primary proceedings
Adopting the opinion of Mr AE, the indemnity costs of the primary proceedings, not including either the amended application in a proceeding or the costs/vexatious litigant hearing, is $664,760.19, comprised of $355,375.73 professional costs, $292,168.30 counsel’s fees and $17,216.16 for other disbursements.
Judgment of Justice Gill dated 20 December 2022
This judgment dealt with a disqualification application by Mr SCVG, and his application to stay the orders of 26 October 2022, along with various costs orders. Mr SCVG was unsuccessful.
By his affidavit of 11 September 2023 Mr Draper identifies an estimate of solicitor’s fees at $1,500 and identifies counsel’s fees at $1,320. The Estate seeks this amount by way of indemnity costs. The close link between the primary proceedings and the unsuccessful stay (particularly when seen in the light of the unsuccessful appeal from the primary orders) reveals the stay as a part of the abusive and harassing proceedings brought by Mr SCVG. This aspect of the manner of the unsuccessful conduct of the proceedings warrants an indemnity order in the reasonable sum of $2,820.
Costs in relation to the costs and vexatious litigant applications
The Estate sought such costs to be awarded on an indemnity basis, flowing from the justifications advanced in relation to the primary proceedings.
While these matters bear a close relationship with the four primary matters, the conduct of Mr SCVG in relation to the costs and the vexatious litigant applications does not bear the extreme characteristics sufficient to warrant an order for indemnity costs.
It is however appropriate that he meet the costs of the Estate on a party-party basis, the contested costs following his lack of success in the various matters the subject of the applications, and following the manner of conduct of the balance of the proceedings.
In terms of quantum the Estate relied upon an extrapolation from the report prepared by Mr AE of 12 September 2023. The extrapolation was a necessary consequence of the costs and vexatious litigant proceedings running over into a second day.
Mr AE’s assessment of party-party costs to the conclusion of the first day was $45,004.60 professional costs, $43,821.63 counsel’s fees and other disbursements of $18,072. To this should be added a further sum of $11,500 for counsel for the second day of the costs/vexatious litigant hearing.
This provides then for further costs to be payable by Mr SCVG of $118,398.23.
Miscellaneous costs issues
Costs in relation to a judgment of 18 August 2017
Ms KLD’s costs in relation to this application was reserved, on its dismissal on 18 August 2017, to the dealing with a further application by Mr SCVG for review. On 14 September 2017 the further application was dismissed and costs orders were then made.
Given that the issue of costs in relation to that aspect of the proceedings was then and there dealt with, no further order in respect of costs of the application of 4 August 2017 should be made.
Costs in relation to a judgment of 5 February 2020
Costs were reserved on 5 February 2020. This involved a suite of applications brought by Mr SCVG, as follows:
(a)Application of 16 October 2017 – to set aside orders of 14 September 2017 that dismissed applications filed by Mr SCVG on:
(i)31 May 2017 to set aside cost assessment orders made by a Registrar on 15 May 2017;
(ii)14 August 2017 to review or set aside cost assessment orders of the Registrar of 25 June 2017; and
(iii)21 August 2017 to review a costs assessment notice of a Registrar;
(b)Application of 27 October 2017, seeking an interim stay of the orders of 14 September 2017, dismissed on 9 November 2017;
(c)Two further applications for stays filed on 9 May 2018, dismissed on 31 May 2018.
The underlying applications for review and/or to set aside were dismissed on the failure of Mr SCVG to attend for the hearing of each of them, the matter having been set down to meet his convenience. Costs were awarded in respect of each of the applications.
Mr SCVG then sought to set aside those orders pursuant to the Rules on the basis that he was absent when the orders were made. This application was refused by judgment of 8 August 2018, with the various associated applications for stays being dismissed as set out above.
Ms KLD sought her costs by an application in a case filed 27 October 2017, with the costs of the various applications being reserved by judgment of 5 February 2020, on the basis that Mr SCVG resisted those costs due to his pursuit of the setting aside of the underlying judgment on the basis that it was procured by fraud, and the need to resolve that issue to then resolve the costs application.
That underlying matter has now been resolved against Mr SCVG.
It may be observed that Mr SCVG was wholly unsuccessful in his litigation of these applications. This lack of success is sufficient to justify the making of a costs award in the usual terms despite the financial matters raised by Mr SCVG.
The Estate seeks its costs on a party-party basis, calculated in accordance with the Schedule 3 of the previous iteration of the Rules, at $15,492.87 with respect to the 16 October 2017 application and $2,337.77 in respect of the 27 October 2017 application.
The affidavit of Mr Macphillamy of 30 November 2017 sets out at scale the items charged. Of those items, the amount in relation to scanning of annexures is not warranted. Rather the equivalent of an hour should be allocated, and there is no apparent reason why a paralegal is necessary in addition to the 4.1 and 7 hours allocated to a solicitor for other firm work. The amount of the award should therefore be $10,157.43 and $1,366.11.
Judgment of Judge Scarlett dated 30 April 2015
These costs relate to a Notice of Appeal (Child Support) filed by Mr SCVG in relation to a determination of the SSAT of 7 March 2013. On 30 April 2015 Judge Scarlett dismissed the appeal and made directions in respect of submissions for costs.
The costs matter has not yet been determined by a court. With the proceedings before Judge Scarlett now before this court, the issue of costs falls to be determined here.
The material filed in relation to the costs before Judge Scarlett are as follows:
(a)On 27 May 2015 Ms KLD filed an Application in a Case and supporting Affidavit seeking costs.
(b)On 28 May 2015 the Child Support Registrar filed an Application in a Case seeking costs in the amount of $12,477.94. 34.
(c)The parties also filed submissions on the following dates:
(i)Ms KLD on 27 May 2015.
(ii)The Child Support Registrar on 28 May 2015.
(iii)Mr SCVG on 9 June 2015.
The Estate notes that Mr SCVG was wholly unsuccessful in this appeal from the SSAT, and further that a change in his position on the first day of the hearing required a second day of the hearing, and accordingly further and unwarranted expense on the part of Ms KLD.
The Estate seeks costs calculated on a party-party basis following the previous iteration of Schedule 3 for the first day, and on an indemnity basis for the second day of the hearing. Aside from the above matters the Estate notes the lack of proportion between the costs incurred and the disputed amount in the matter, the disputed amount being $14,268.
Within the broader context of the financial circumstances argued by the parties, the lack of success, and manner of conduct of the appeal by Mr SCVG are sufficient to warrant an order for costs as a departure from the general rule that each party will bear their own costs. A sufficient case has not been demonstrated to justify indemnity costs in respect of this matter.
On a party-party basis the relevant affidavit of Mr Macphillamy sets out, according to scale, a total of $12,167 for both days. This forms an adequate basis for the assessment of a fixed sum, and costs will be awarded in this amount.
Although the Registrar of the CSA was also involved in those proceedings and, at the time sought costs in the sum of $12,477.94, the Registrar did not pursue those costs here.
Judgment of Thackray ACJ, May & Ryan JJ dated 24 May 2017
On 24 May 2017, Acting Chief Justice Thackray and Justices May and Ryan dismissed several applications filed by Mr SCVG in proceedings EAA75/2015, EAA156/2015 and EAA51/2016 with costs.[5]
[5] Estate affidavit 11 September 2023 [4]
Mr SCVG was ordered to pay Ms KLD’s costs associated with the applications and appeal, which were to be assessed if there was no agreement between the parties. On 17 October 2017, Mr SCVG disputed the costs accounts filed by Ms KLD’s solicitors on 21 September 2017 and the Estate asserts that no orders or directions were made to determine the dispute costs.[6]
[6] Estate affidavit 11 Sep 2023 [16]
On 18 July 2023, a Judicial Registrar made orders for the costs disputes to be heard with the other matters listed on 13 September 2023.
What remains to be dealt with is the quantification of those costs.
By his affidavit of 11 September 2023 Mr Draper identifies that an itemised costs account at scale of $38,309.29 was served on Mr SCVG in respect of EAA75/2015 (with such being disputed by Mr SCVG); an itemised costs account at scale of $14,782.17 was served on Mr SCVG in respect of EAA156/2015 (with such being disputed by Mr SCVG); and an itemised costs account at scale of $17,873.30 was served on Mr SCVG in respect of EAA51/2016 (with such being disputed by Mr SCVG);
In relation to EAA75/2015 a detailed itemised account has been prepared at scale. No item appears that is suggestive of an unreasonable or unnecessary charge. An examination of samples of the disputes raised by Mr SCVG were unmeritorious. The full amount of $38,309.29 should be awarded.
In relation to EAA156/2015 a detailed itemised account has been prepared at scale. An examination of samples, for example of duplication, of the disputes raised by Mr SCVG were unmeritorious. No item appears that is suggestive of an unreasonable or unnecessary charge. The full amount of $14,872.17 should be awarded.
In relation to EAA51/2016 a detailed itemised account has been prepared at scale. An examination of samples of the disputes raised by Mr SCVG, for example, complaints of “BS”, were unpersuasive. No item appears that is suggestive of an unreasonable or unnecessary charge. The full amount of $17,873.30 should be awarded.
Summary of costs awarded
In summary, the Estate sought costs for a number of proceedings. Indemnity costs should be awarded for the primary proceedings given the various unmeritorious aspects, the occasions of abuse of process, and the harassing and improper nature of these proceedings, along with the judgment of 20 December 2022 given its close connection to the primary proceedings. Party/party costs should be awarded for this (September 2023) hearing, as well as the costs reserved on 5 February 2020, the 20 April 2015 judgment of Scarlett J and the appeals. No costs should be awarded in relation to the 18 August 2017 judgment as costs have already been dealt with.
The sum of $45,000 lodged as security for costs by Mr SCVG should be released to the Estate in partial meeting of the costs.
The Child Support Registrar will be awarded party/party costs of $50,000.
Table of costs awarded to the first respondent
Judgment Application Costs awarded Basis Judgment of Judge Scarlett dated 30 April 2015 First day of hearing $12,167.00 Party/party Second day of hearing Judgment of Thackray ACJ, May & Ryan JJ dated 24 May 2017 Mr SCVG’s Notice of Appeal filed 28 May 2015 EAA75/2015 $38,309.29 Party/party Mr SCVG’s Notice of Appeal filed 15 September 2015 EAA156/2015 $14,872.17 Party/party Mr SCVG’s Notice of Appeal filed 7 April 2016 EAA51/2016 $17,873.30 Party/party Judgment of Justice Gill dated 18 August 2017 Mr SCVG’s Application in a Case filed 4 August 2017 None - Judgment of Justice Gill dated 5 February 2020 Mr SCVG’s Application in a Case filed 16 October 2017 $10,157.43 Party/party Mr SCVG’s Application in a Case filed 27 October 2017
$1,366.11 Party/party Judgment of Justice Gill dated 26 October 2022 Mr SCVG’s Applications filed 25 October 2022 $664,760.19 Indemnity Judgment of Justice Gill dated 20 December 2022 Mr SCVG’s Applications filed 16 December 2022 $2,820.00 Indemnity Costs in relation to hearing of this costs application $118,398.23 Party/party Total Costs $880,732.42 THE VEXATIOUS LITIGANT APPLICATION
The Estate seeks an order, pursuant to s 102QB of the Act that Mr SCVG be prohibited from instituting proceedings under the Act in relation to Mr Draper and Ms Eaton, who are the applicants for the orders as executors for the Estate of the late Ms KLD.
Section 102QB is in the following terms:
(1)This section applies if a court exercising jurisdiction in proceedings under this Act is satisfied:
(a)a person has frequently instituted or conducted vexatious proceedings in Australian courts or tribunals; or
(b)a person, acting in concert with another person who is subject to a vexatious proceedings order or who is covered by paragraph (a), has instituted or conducted vexatious proceedings in an Australian court or tribunal.
(2)The court may make any or all of the following orders:
(a)an order staying or dismissing all or part of any proceedings in the court already instituted by the person;
(b)an order prohibiting the person from instituting proceedings, or proceedings of a particular type, under this Act in a court having jurisdiction under this Act;
(c)any other order the court considers appropriate in relation to the person.
Note: Examples of an order under paragraph (c) are an order directing that the person may only file documents by mail, an order to give security for costs and an order for costs.
(3)The court may make a vexatious proceedings order on its own initiative or on the application of any of the following:
(a)the Attorney-General of the Commonwealth or of a State or Territory;
(b)the appropriate court official;
(c)a person against whom another person has instituted or conducted vexatious proceedings;
(d)a person who has a sufficient interest in the matter.
(4)The court must not make a vexatious proceedings order in relation to a person without hearing the person or giving the person an opportunity of being heard.
(5)An order made under paragraph (2)(a) or (b) is a final order.
(6)For the purposes of subsection (1), the court may have regard to:
(a)proceedings instituted (or attempted to be instituted) or conducted in any Australian court or tribunal; and
(b)orders made by any Australian court or tribunal; and
(c)the person's overall conduct in proceedings conducted in any Australian court or tribunal (including the person's compliance with orders made by that court or tribunal);
including proceedings instituted (or attempted to be instituted) or conducted, and orders made, before the commencement of this section.
An inclusive definition for the term “vexatious proceedings” is set out at s 102Q as follows:
vexatious proceedings includes:
(a)proceedings that are an abuse of the process of a court or tribunal; and
(b) proceedings instituted in a court or tribunal to harass or annoy, to cause delay or detriment, or for another wrongful purpose; and
(c)proceedings instituted or pursued in a court or tribunal without reasonable ground; and
(d)proceedings conducted in a court or tribunal in a way so as to harass or annoy, cause delay or detriment, or achieve another wrongful purpose.
It is convenient to repeat the principles as I previously set out in Rilak & Tsocas [2020] FamCA 49:
27.Two key ingredients are to be established before the Court considers exercising the discretion to make a vexatious proceedings order. They are that vexatious proceedings have been instituted or conducted and that this has occurred frequently.
28.The approach to this compound issue taken in Cannon & Acres[7] and in Pencious & Searle[8] involved a first step of individually analysing each of the proceedings in order to establish which could be described as vexatious and then secondly determining whether or not this had happened frequently.
[7] [2014] FamCA 104.
[8] [2017] FamCAFC 210.
29.In dealing with what is meant by vexatious, and in dealing with a s 102QB application, the Full Court in Pencious & Searle[9] adopted what had been said by Perram J in Official Trustee in Bankruptcy v Gargan(No 2) [2009] FCA 398:
[9] [2017] FamCAFC 210.
In an often quoted passage in Official Trustee in Bankruptcy v Gargan (No 2) [2009] FCA 398 Perram J spoke of the general principles that apply to applications for vexatious proceedings orders. His Honour said:
A comprehensive explanation of what makes a proceeding vexatious is difficult to proffer for the boundary between the persistent and over-zealous on the one hand, and the vexatious on the other, may at times be indistinct. However, the following principles are, at least, well-established.
First, the making of such an order is an extreme remedy depriving its object of recourse to the enforcement of the law which is every citizen’s ordinary right. It is, therefore, not lightly to be made.
Secondly, the purpose of the order is not to impose condign punishment for past litigious misdeeds; it serves instead to shield both the public, whose individual members might be molested by vexatious proceedings, and the Court itself, whose limited resources and needs must be carefully managed and protected from the expense, burden and inconvenience of baseless and repetitious suits.
Thirdly, as might naturally be expected, such a severe power is not enlivened by the mere single occurrence of a vexatious claim. To err is human and transient lapses of judgment, even serious ones, may be found in the most reasonable of places. Instead, the power to make the order is conditional upon the litigant having commenced not only a single vexatious proceeding but also upon having commenced similar such proceedings in this Court or in other Australian courts.
Fourthly, the qualities of vexation to which O 21 is addressed are to be found, as the terms of r 1(1) show, in the commencement by the litigant of proceedings which lack reasonable grounds and where the litigant’s institution of such proceedings may fairly be said to be both habitual and persistent.
Fifthly, whether a proceeding is instituted without reasonable grounds is a different question to, although not wholly disconnected from, the inquiry into a proceeding’s legal merits. The wheat, no doubt, must be separated from the chaff but in this area the question is whether what is before the Court contains any wheat at all. Although, often enough, no great guidance is obtained by exchanging one formula of words with another, it will be usually of some assistance, limited perhaps, to ask whether the issues brought to the Court for determination are manifestly hopeless or devoid of merit. It is, in that context, important to distinguish the difficult from the ridiculous and the unlikely from the hopeless.
Sixthly, although the ways in which unreasonable grounds may manifest themselves are myriad, one form often to be found in the baggage of the vexatious is a failure, often a refusal, to understand the principles of finality of litigation which rescue court and litigant alike from a Samsara[10] of past forensic encounters.
[10] An endless cycle of birth death and rebirth
Seventhly, it is the related quality of repetition which underpins, in part, a need for the institution of the proceedings to deserve the appellations habitual and persistent. The litigant’s conduct will be habitual where the commencement of proceedings occurs as a matter of course when appropriate conditions for their commencement are present as was explained by Roden J in Attorney-General v Wentworth (1988) 14 NSWLR 481 at 492. That formulation may not wholly explain the litigant who commences proceedings on any occasion and without the presence of any conditions, whether appropriate or otherwise. In such cases, the idea of constant repetition driven by habit and symptomatic of an inability not to engage in the behaviour may be more useful. Persistence, on the other hand, generally suggests stubborn determination but, in the context of the vexatious, carries with it the capacity to endure failure beyond the point at which a rational person would abandon the field.
Eighthly, each of these notions – the want of reasonable grounds, habitual institution and persistent institution – are to be gauged objectively. But this does not mean that a litigant’s own protestation as to his or her own mental state is irrelevant; frequently enough, the vexatious are betrayed out of their own mouths. Rather, the need for objective determination protects courts from the vexatious litigant who is genuinely, but misguidedly, persuaded as to the correctness of his or her own conduct.
Ninthly, the power to make the order arises when proceedings commenced in the way described are found to exist. But the notion of a proceeding is a broad one including a substantive proceeding directed at the attainment of final relief and collateral applications within such a proceeding; further, it extends outside the proceeding itself and embraces appeals therefrom and applications which, whilst not made in the proceeding, are properly to be seen as collateral thereto – so much flows from the definition of proceeding in s 4 of the Federal Court of Australia Act 1976 (Cth).
Tenthly, other proceedings commenced before bodies which are not courts, such as the Administrative Appeals Tribunal, are not directly pertinent to the existence of the power but may nevertheless throw light on the vexatious nature of proceedings before the Court; so too, the existence of a body of such administrative litigation may have relevance to the question of whether the Court’s power to make the order, once enlivened, should be exercised.
Finally, once it is concluded that the Court’s power to prevent a litigant from commencing or pursuing proceedings has been enlivened, the considerations germane to the exercise of that power are unconfined. However, the factors which will be relevant are informed by the protective purpose which the order serves. Where a litigant displays insight into their previous litigious history this will, no doubt, be relevant for it will suggest – although not determine – a diminution in the risk posed to the public. On the other hand, the manner in which a litigant conducts herself in her affairs generally is also capable of throwing light on whether the commencement of further vexatious proceedings is likely. Those general affairs include the litigant’s defence to the proceedings by which the order restraining him is sought. Because of the protective nature of the jurisdiction it is also relevant to know the extent of the damage and inconvenience the litigant’s forays into the courts have caused, pecuniary or otherwise.
(Original emphasis)
30.It may be drawn from here that the protective nature of the provision, and the severe consequences of depriving a person of access to a court remain central matters to be borne in mind in considering the operation of the provision. These require a careful consideration of what is asserted to be vexatious in the light of the inclusive, non-exhaustive statutory definition.
31.What also emerges is that neither the statutory provision at s 102Q(a), (c) or (d), nor the explanation given by Perram J require, as a necessary element, a subjective intention or knowledge that the proceedings
a) Abuse the process of a court or tribunal;
b) Are without reasonable grounds;
c)Are conducted in a way so as to harass or annoy, cause delay or detriment or achieve another wrongful purpose.
32. This is consistent with the protective nature of the power.
33.However, subjective intention remains relevant (s 102Q(b)) where proceedings are conducted to harass or annoy, to cause delay or detriment, or for another wrongful purpose.
34.The Full Court in Pencious & Searle also examined the concept of “frequently”:
It is useful at this stage to refer to some general principles that have emerged from considerations of the sections in other jurisdictions analogous to s102QB.
In Potier v Attorney General (NSW) (2015) 89 NSWLR 284 Leeming JA, with the concurrence of Basten and Meagher JJA, discussed what is meant by “frequently” in the context of vexatious proceedings:
The power to make an order under the Vexatious Proceedings Act is conditioned upon a court being satisfied that the person has “frequently” instituted or conducted vexatious proceedings in Australia. The meaning of a word like “frequently” turns very much on its context; that is no different from many other protean words (such as “adversely affect” and “mistake”: cf Independent Commission Against Corruption v Cunneen [2015] HCA 14 at [2] and [57] and CTM v The Queen [2008] HCA 25; 236 CLR 440 at [7]). It is not possible to articulate a precise test. However, the following two matters relevant to its construction for the purposes of this appeal may be noted. Each supports the conclusion that “frequently” is a relatively low threshold.
First, the change in language from the predecessor provision (s 84 of the Supreme Court Act) of “habitually and persistently” was deliberate, and plainly lowered the threshold condition.
Secondly, there are vexatious proceedings and vexatious proceedings. It is one thing to file urgent appeals or applications for judicial review which cause substantial disruption to courts and other litigants and participants in the legal system (for example, the adjournment of a trial), or to make serious allegations of fraud unfounded in the evidence. It is quite different to encounter some poorly known legal doctrine which denies reasonable grounds to the proceedings or renders them technically an abuse of process, or to file a series of applications for the annulment of decisions of magistrates (I have in mind the nine applications for annulment made by Mr Viavattene all listed and determined on the same day: see Viavattene v Attorney General (NSW) [2015] NSWCA 44 at [70]). That is to say, both the quality of the vexatiousness of a proceeding, and the nature of the proceeding itself, inform the assessment of frequency.
I can readily envisage circumstances where a litigant commences only a handful of large proceedings, making serious allegations without any proper basis, but which occupy a significant amount of time and resources of parties and the courts, which could satisfy the statutory test of “frequently”. This illustrates the fact that “[t]he issue posed by the statutory term “frequently” is not to be assessed merely by an arithmetic calculation”: Viavattene at [49].
Each of those considerations favour “frequently” being a relatively low threshold.
The parties exchanged submissions on whether the proportion of proceedings instituted by a person being found to be vexatious was relevant to whether the threshold condition is satisfied. I do not think that it is. The statute requires the Court to be satisfied that a person has instituted or conducted vexatious proceedings frequently; whether the proportion of all proceedings instituted or conducted by the person which are vexatious is high or low does not bear upon that question. By the same token, suppose the question is whether a traveller will frequently encounter rabid dogs in a particular area. The answer does not turn on how many non-rabid dogs the traveller is likely to encounter in the area.
That said, the proportion of proceedings which are vexatious is highly relevant to the exercise of discretion to make an order, if the threshold condition is satisfied. For an order may bear upon all proceedings instituted or conducted by a person, and it will be essential for the Court to bear in mind its operation on existing and likely future proceedings, particularly those which are not vexatious.
…
We agree with those propositions.
35.It may be drawn from this passage that the concept of “frequently” is reliant upon context, may be described as a low threshold, and involves consideration of the “quality of the vexatiousness” to determine whether or not the test of “frequently” is met.
The four primary proceedings are examples of proceedings conducted either as an abuse of process or without reasonable grounds. The nature of Mr SCVG’s applications, each being an attempt to set aside final resolutions for which any relevant appeal path had already been exhausted, fits within the sixth point described by Perram J. Mr SCVG’s unmeritorious pursuit of the setting aside of final determinations, featuring as it did abuse of process, even where he had already unsuccessfully appealed such, is demonstrative of a refusal to understand principles of finality.
Mr SCVG’s conduct in respect of the primary matters is sufficient to meet the description of “frequent”.
What has been demonstrated is an unrelenting, dogged pursuit of the late Ms KLD, and now her estate and those responsible for its administration (and as was apparent in his submissions, the Draper family of which Mr Draper and Ms Eaton are members), that is vexatious in character. There can be no expectation that the pursuit will end absent intervention by the court to shield the applicants and the public from the effects of such.
The prospect of further proceedings is also illustrated by the fact that as this last component of the proceedings was being heard Mr SCVG was in the process of seeking to commence fresh proceedings to set aside the final judgments in the primary matters, again by assertion that they were obtained by fraud, and again in the face of an unsuccessful appeal to the Full Court. The prospect of further proceedings is further illustrated by the suite of proceedings that Mr SCVG has unsuccessfully pursued in the NSW Courts in respect of the Estate.
It should be recognised that the relief available pursuant to s 102QB is an extreme remedy, that should not lightly be granted. It is a remedy that deprives a person of recourse to the court absent the obtaining of leave pursuant to s 102QE.
Despite those features, it is a proportionate and necessary remedy to protect the applicants and the public from further abuse of the court processes. An order will be made as sought by the applicants.
I certify that the preceding one hundred and thirty-two (132) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Gill. Associate:
Dated: 22 September 2023
0
20
2