Applicant v First Respondent

2 The VCAT dispute centres upon who was responsible for the payment of the work performed by Mr Francis. Mr Kitchener was the building contractor to Mr Bitcon.

3 The hearing before the Senior Member commenced on Friday morning, 20 May 2016. Mr Sutton, who appeared for Mr Crespin, applied for a temporary stay on the basis that continuing with the VCAT hearing would prejudice his client's defence in a criminal trial which is due to commence in the County Court on 30 May 2016. It was contended that his evidence at the VCAT hearing was relevant to his defence of the criminal prosecution.

4 The application was opposed by Mr Rozenberg, counsel for Mr Francis, and Mr Kirby, counsel for Mr Bitcon. After hearing argument, the Senior Member refused the application and was preparing to take evidence when this application was brought on before me at lunch time on Friday.

5 The reasons of the Senior Member are contained in Exhibit JMP1 to the affidavit of James Murray Pergl, sworn 22 May 2016, as follows:**

1. At the commencement of today's one-day hearing the first respondent sought a stay pending criminal proceedings brought against him in the County Court. I refuse that application as I am satisfied on the basis of a statement of Mr Sutton of Counsel for the first respondent that if he had had the opportunity to understand the materials to the extent he does now on 9 March 2016 before Judge Jenkins, he would have made today's application then. I am satisfied that he did make an application for a stay before her Honour and it was refused. To enable the first respondent to repeat the same or a very similar application is, I consider, an abuse of process.
2. I also have regard to the merits of the application for a stay. The trial before the County Court concerns alleged criminal damage by the first respondent against the property owned by the second respondent. This proceeding before the Tribunal concerns who, as between the first and second respondent, is responsible to pay the applicant for plumbing works.
3. The link between the two cases is that the plumbing words are a very minor part of the context in which the alleged criminal damage occurred.
4. I accept the submission of Mr Rozenberg of counsel on behalf of the applicant that I cannot be satisfied, on the basis of the first respondent's submissions, that the link between the two cases is beyond that referred to in paragraph 18(i) of Zhao & Anor v Commissioner of the Australian Federal Police [2014] VSCA 137 where their Honours said:

The court [considering whether a stay should be granted] should consider whether there is a real and not merely notional danger of injustice in the criminal proceedings.

5. For both the above reasons I dismiss the application for a stay.

**6 It suffices to observe that the Senior Member dismissed the application for a stay on two bases: the first being that it constituted an abuse of process, and the second being that there was insufficient nexus between the work carried out by Mr Francis and the counts of criminal damage alleged against Mr Crispin.

7 Although the application before me commenced ex parte, Mr Kirby and Mr Rozenberg arrived during the lunch hour (and are to be thanked for doing so) and participated in the hearing. The benefit on any application of this kind, of having the full cast present and not just one side of the story, was demonstrated at both hearings.

8 Returning now to the VCAT hearing, I determined to put over the application until Monday morning. This was for two reasons. First, Mr Francis had come from northern New South Wales and it was essential that he not be vexed by a return visit, especially in a Victorian winter. As I understand the position, the Senior Member then took Mr Francis'evidence on Friday afternoon.

9 Second, the only potential prejudice to Mr Crespin is that of giving evidence and perhaps of putting matters to Mr Bitcon. The balance of the evidence can be heard by the senior member this afternoon if this application is unsuccessful. I requested that the senior member not require Mr Crespin to give evidence until I delivered my decision this morning. I thank the senior member for extending that courtesy.

10 There is one other aspect of the VCAT proceeding that I should now mention. On 9 March 2016, in the course of a directions hearing before a Vice President of VCAT, her Honour Judge Jenkins, Mr Sutton, on behalf of Mr Crespin, made an application for a deferral of the hearing date. I use the word deferral deliberately as there was some dispute as to whether the application was to adjourn or for a stay. The details of that hearing are set out in paragraphs [13] to [16] of the affidavit of Mr Pergl.

11 It is clear that her Honour refused the application, although there is no specific reference to it in the orders. The orders are contained in Exhibit K3, in which her Honour set the matter down for trial on 20 May 2016 and made timetabling orders. It is also apparent that at that hearing her Honour was provided with a copy of the decision of the Court of Appeal in Zhao v Commissioner of the Australian Federal Police,[1] which I will refer to in more detail in a moment.

12 I now turn to the criminal prosecution, which is due to commence next week in the County Court and its relationship, if any, to the VCAT proceeding. Mr Crespin is charged with six counts of criminal damage to the property in January 2013. Mr Bitcon and Mr Crespin had a commercial relationship dating back to 2009. In August 2010, a fixed price building contract was entered into between a company called Advaland Pty Ltd, which I take to be a corporate vehicle of Mr Crespin, and Mr Bitcon. Mr Bitcon made payments of approximately $230,000 in 2011 and 2012 towards the works.

13 Things started to fall apart between August and Christmas 2012. Further payments were allegedly made by Mr Bitcon to Mr Crespin or his company amounting to $112,000 which supplemented the money already paid.

14 What is quite clear from the material is that by Christmas 2012 the relationship had broken down, and in early 2013 a notice of termination of the contract was given by Mr Bitcon to Mr Crespin. Mr Bitcon shut Mr Crespin out of the property.

15 The charges detailed in paragraph 36 of the prosecution opening, filed under s 182 of the Criminal Procedure Act 2009, detail six counts of criminal damage by Mr Crespin at the property. These offences are alleged to have occurred in early January 2013, after the termination, and relate to the use of a chainsaw damaging timber joints, cutting a concrete slab, cutting electrical wiring, causing damage to PVC plastic piping, causing damage to brickworks, and causing damage to plaster stacks.

16 The relevant parts of the defence response to the prosecution opening, which are relied upon by counsel for Mr Crespin, are as follows:

If this matter proceeds as a criminal trial, an issue appears to be whether the accused had lawful excuse or claim of right for any of his actions. The terms of any building contract between the relevant parties, the status of the accused in that context and the rights of the accused to be present on the property including the lawfulness of any purported termination of any building contract may need to be dealt with as pre-trial issues.

17 It was this aspect of the defence case which was said to give rise to the risk of prejudice if Mr Crispin gave evidence. As I understood the argument, it was put in two ways. First, evidence that Mr Crespin might give in chief or in cross-examination may go to the nature of the arrangements between the two and thus to whether there was a legal termination of the contract. This would then go to the question of whether Mr Crespin was in permitted occupation of the premises, which would in turn go to whether there was any lawful excuse for the acts alleged by the prosecution.

18 Second, evidence given by Mr Crespin in the course of the defence of the VCAT proceeding would go to his activities on the site, and that may be relevant to his role and the status of the contracting parties prior to the purported termination of the contract.**

19 The general principles to be applied in this case in relation to an appeal under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 ('VCAT Act') are set out in the recent Court of Appeal decision of Patsuris v Gippsland and Southern Rural Water Corporation as follows:

... Section 148 does not confer a general right of appeal on the merits of a case. If no threshold question of law can be identified, the case is not suitable for the type of restricted appeal that s 148 provides.

The 'question of law' requirement in s 148 confers a limited capacity on the Court to review findings of fact made by a Tribunal member. The requirement in s 148 to state a question of law is germane to the capacity of the Court to review findings of fact made by a Tribunal member. The identification of a question of law is not merely a precondition to the exercise of a right to appeal, but the subject matter of the appeal itself. It is not sufficient for the parties to identify a point of law between them on appeal that was not raised before the Tribunal.[2]

**20 The decision to refuse a stay is discretionary. It must therefore be shown that there has been an error in the exercise of that discretion - not merely that this Court would have taken a different course.

21 Further, the absence of detailed reasons (which is understandable in this case) means that the Court must be persuaded on the basis of the orders, the reasoning in those orders and the facts available, that the decision of the Senior Member, to use the words in House v The King,[3] is 'unreasonable or 'clearly unjust',[4] such that an appellate court may infer that in some way there has been a failure to properly exercise the discretion by the Senior Member.

22 Turning now to the principles relevant to concurrent civil and criminal proceedings. In a general sense and, subject to one important qualification, the guidelines set out by Wooten J in McMahon v Gould[5] describe the manner in which an application such as this is to be determined. These are:**

(a) Prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court;

(b) It is a grave matter to interfere with this entitlement by a stay of proceedings, which requires justification on proper grounds;

(c) The burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff's ordinary rights should be interfered with;

(d) Neither an accused nor the Crown are entitled as of right to have a civil proceeding stayed because of a pending or possible criminal proceeding;

(e) The court's task is one of 'the balancing of justice between the parties', taking account of all relevant factors;

(f) Each case must be judged on its own merits, and it would be wrong and undesirable to attempt to define in the abstract what are the relevant factors;

(g) One factor to take into account where there are pending or possible criminal proceedings is what is sometimes referred to as the accused's 'right of silence', and the reasons why that right, under the law as it stands, is a right of a defendant in a criminal proceeding. I return to this subject below;

(h) However, the so-called 'right of silence' does not extend to give such a defendant as a matter of right the same protection in contemporaneous civil proceedings. The plaintiff in a civil action is not debarred from pursuing action in accordance with the normal rules merely because to do so would, or might, result in the defendant, if he wished to defend the action, having to disclose, in resisting an application for summary judgment, in the pleading of his defence, or by way of discovery or otherwise, what his defence is likely to be in the criminal proceeding;

(i) The court should consider whether there is a real and not merely notional danger of injustice in the criminal proceedings;

(j) In this regard factors which may be relevant include:

(i) the possibility of publicity that might reach and influence jurors in the civil proceedings;

(ii) the proximity of the criminal hearing;

(iii) the possibility of miscarriage of justice e.g. by disclosure of a defence enabling the fabrication of evidence by prosecution witnesses, or interference with defence witnesses;

(iv) the burden on the defendant of preparing for both sets of proceedings concurrently;

(v) whether the defendant has already disclosed his defence to the allegations;

(vi) the conduct of the defendant, including his own prior invocation of civil process when it suited him;

(k) The effect on the plaintiff must also be considered and weighed against the effect on the defendant. In this connection I suggest below that it may be relevant to consider the nature of the defendant's obligation to the plaintiff;

(1) In an appropriate case the proceedings may be allowed to proceed to a certain stage, e.g. setting down for trial, and then stayed.

**23 The qualification is significant. It is that, as was recognised by the Court of Appeal in Zhao,[6] and impliedly on the appeal in the High Court, the McMahon guidelines arguably failed to accord sufficient primacy to the accused's right to a manifestly fair criminal trial.

24 Kirby P's judgment in Yuill v Spedley Securities Ltd (in liq)[7] is worth repeating, as it was by the Court of Appeal in Zhao:**

One day it may be appropriate for this court to reconsider the guidelines stated by Wootten J in McMahon v Gould. There are, in my view, considerations additional to those which are referred to by Wootten J which it would be relevant to consider in proceeding to determine an application for a stay such as was before Rolfe J. For example, it is in my opinion relevant to take specifically into account the public's own interest in the normal primacy of the administration of criminal justice, being a part of the public law of the community relevant to its good order and peaceful government. This consideration might help explain why, ordinarily but not universally, such proceedings should be heard and determined first.

Also relevant is the fact that serious criminal proceedings are still determined, in most cases in this State, by juries. Most civil litigation is now decided by judges sitting alone. Judges, by their training, are conventionally considered to be better able to make the mental adjustments for excluding the prejudicial effect of pre-trial publicity than lay jurors are. The sensational and highly personalised presentation of much news by the news media today has become a factor relevant to the fair trial of prominent "personalities". Guarding their right to a manifestly fair criminal trial is as much in the interest of the community and its legal institutions as in the interests of the individuals concerned.

A further consideration in cases of this class is the 'deep-rooted' inclination of our law to avoid, directly or indirectly, depriving a person of the right to silence in criminal proceedings. Sometimes the prior litigation of the [civil] trial may have that effect, either by its interlocutory procedures or by the need of the accused, in the forensic setting of the civil trial, to give evidence or ask questions, thereby disclosing a defence to the outstanding criminal charge.

More than lip service must be paid by courts to the preservation of these enduring features of the criminal process, whether in the interpretation of apparently inconsistent statutes or in the exercise of a discretion to stay civil proceedings until related criminal proceedings are completed. Such features exist not only to protect the rights of the individual accused but also to help define the relationship between the organised state and citizens generally. In the context of cases such as the present, it is possible that the guidelines in McMahon v Gould need to be revised to reflect more accurately such considerations. Basic rights matter most where they seem most painful to accord.[8]

25 On appeal, the High Court in Zhao[9] reaffirmed the principle that there must not merely be a link between the criminal and civil conduct, rather, the accused must demonstrate there is a real risk of prejudice:

The Commissioner contends, as the primary judge had held, that it was necessary that the second respondent state the specific matters of prejudice before a stay could be contemplated. However, to require the second respondent to do so would be to make the risk of prejudice a reality by requiring him to reveal information about his defence, the very situation which an order for a stay seeks to avoid. Similarly, the Commissioner's contention that the court should defer making an order for a stay until the parties have exchanged their evidence is beside the point.

The prospect that civil proceedings may prejudice a criminal trial and that such prejudice may require a stay of the civil proceedings is hardly novel. In some jurisdictions, procedures are provided for making an application for a stay in such circumstances. The risk of prejudice in a case such as this is real. The second respondent can point to a risk of prejudice; the Commissioner cannot.[10]

**26 In my opinion, the High Court and the Court of Appeal have made it clear that where a civil proceeding creates a real risk of prejudice to the defence for the criminal charges - which I infer to be one that is not fanciful or remote - then the applicant should, absent a dominant contradictory consideration, be entitled to a stay of the civil proceeding.

27 Moreover, both decisions demonstrate that there should be a focus in an application such as this on the risk of prejudice (and whether it is real) to the accused in the criminal trial in determining whether to grant a stay or not.**

**28 I can well understand why the senior member refused this application. It was made within a month of a virtually identical application having been made to her Honour Judge Jenkins. It was made on the morning of the hearing, notwithstanding there had been notice given of it and the applicant had travelled from Queensland.

29 The proceeding had been on foot for years and related to events over three years ago. Moreover, Mr Francis had no involvement whatsoever in the dispute between Mr Bitcon and Mr Crespin. He was an innocent party in no man's land between two belligerents.

30 However, as Zhao demonstrates, and is perhaps insufficiently highlighted in McMahon, the defence of Mr Crespin to the criminal charges may well be of determinative importance in the disposition of an application such as this.

31 The substantive question which had to be answered by the Senior Member was whether, if Mr Crespin gave evidence and was cross-examined as to the contractual relationship between himself and Mr Bitcon, it would in some way give rise to real risk of prejudice to his defence in the criminal proceeding.

32 It was up to the Senior Member to examine the alleged nexus between Mr Crespin's defence and the evidence at VCAT relating to the contractual relationship. The senior member had to determine whether:**

**(a) the argument that there was lawful termination of the contract and thus whether Mr Crespin was entitled to be on the premises and to carry out the actions he performed genuinely went to Mr Crespin's defence in the criminal trial; and

(b) in reality, the evidence of Mr Crespin at VCAT ran the risk of real prejudice to his defence.**

**33 The granting of a stay is a discretionary remedy and, as I have mentioned, a conclusion that the Senior Member was wrong in law in refusing the application, not whether I may have reached a different conclusion.

34 I am not in the circumstances persuaded that Mr Crespin has demonstrated that the Senior Member erred in reaching the decision. In my opinion, it was open to the Senior Member to reach that conclusion on the material provided to her.

35 The question of lawful excuse is raised as a possibility in the defence response. The relationship between Mr Bitcon and Mr Crespin may have some relevance to this issue. But the contractual dealings with a plumber on site in December is surely peripheral to the true relationship between Mr Bitcon and Mr Crespin and the termination in January. Mr Francis is not mentioned by name in the prosecution opening and defence response. Moreover, the suggested reliance on lawful excuse seems extraordinarily pale in light of the events which are alleged to give rise to the charges Mr Crespin faces.

36 It is clear from the brief but cogent reasons of the Senior Member that she was alive to the central issue: whether there was a real risk of prejudice to Mr Crespin in the defence of the criminal charges in proceeding to determine the VCAT claim.

37 I am satisfied that the Senior Member applied the correct test. She read Zhao and applied the test that there had to be a real risk of prejudice and determined that it had not been demonstrated.

38 I am not satisfied that her reference to paragraph 18(i) of Zhao (referred to at paragraph 4 of the Senior Member's decision at [3] above) reveals error. To the contrary, it seems to me to demonstrate that she was alive to the central issue on the application.

39 On this basis alone I would grant leave to appeal but dismiss the appeal.

40 I should now deal briefly with the second ground upon which a matter was argued before me. Paragraph 1 of the Senior Member's reasons refused the application on the basis that constituted an abuse of process given that it raised essentially identical matters to those raised before her Honour Judge Jenkins.

41 I accept the affidavit material filed by Mr Pergl as to what occurred at the directions hearing on 9 March 2016. In particular, it is of significance that the Vice President was given a copy of Zhao. It matters not whether what was sought at that time was a stay or an adjournment. The critical issue argued before her Honour was whether the VCAT hearing of Mr Francis' claim should proceed before or after the criminal trial.

42 It seems clear that her Honour heard sufficient argument not to be persuaded to vacate the hearing date and was prepared to fix the date for trial. I accept that there was no specific order made by her Honour, however that does not undermine the true situation: that her Honour dealt with the matter and refused the application.

43 Robson J set out the principles relevant to an abuse of process in Re AWB Ltd (No 10), as follows:**

(1) The court possesses an inherent jurisdiction to stay its proceedings as an abuse of process if the proceedings are unjustifiably oppressive and vexatious or manifestly unfair or otherwise bring the administration of justice into disrepute among right-thinking people:

(2) The jurisdiction should only be exercised in exceptional cases or sparingly with the utmost caution

(3) The jurisdiction to stay for abuse of process is not limited to cases where the proceedings have been brought for an improper purpose or where there is no possibility of the court affording the affected party a fair hearing:

(4) The circumstances in which abuse of process may arise are extremely varied and the courts have refrained from limiting the circumstances to fixed categories:

(5) In considering whether to grant a stay as an abuse of process, the court should undertake a weighing process involving a subjective balancing of a variety factors and considerations:.

(6) Among those factors and considerations are the requirements of fairness to the accused, the legitimate public interest in the disposition of charges of serious offences and in the conviction of those guilty of crime, and the need to maintain public confidence in the administration of justice:

(7) These principles apply to civil penalty proceedings:

(8) The rationale underlying the principle against double jeopardy, in that an individual should not be vexed twice for the same cause, is a factor properly to be taken into account in the weighing exercise:

(9) It is prima facie vexatious to bring two extant civil actions where one will lie:.

(10) This prima facie rule applies whether or not the two proceedings are in separate courts or one:.

(11) The prima facie rule applies where the issues overlap or significantly overlap or there is a similarity of subject matters of the proceedings.

(12) The fact that the parties may not be identical, or the relief different, does not necessarily disentitle relief under this principle:

(13) In considering whether the rule should apply, the court should consider whether there was no reasonable justification for the second proceeding based on legitimate considerations of convenience, cost or the like:

(14) The guiding considerations are oppression and unfairness to the other party to the litigation and concern for the integrity of the system of administration of justice. Regard may be had to:

(a) the importance of the issue in and to the earlier proceeding, including whether its is an evidentiary or ultimate issue;

(b) the opportunity available and taken to fully litigate the issue;

(c) the terms and finality of the finding as to the issue;

(d) the identity between the relevant issues in the two proceedings;

(e) any plea of fresh evidence, including the nature and significance of the evidence and the reason why it was not part of the earlier proceeding;

(f) the extent of the oppression and unfairness to the other party if the issue was relitigated and the impact of the relitigation upon the principle of finality of judicial determination and public confidence in the administration of justice; and

(g) an overall balancing of justice to the alleged abuser against the matters supportive of abuse of process:.[11]

**44 Applying these principles I think it was open to the Senior Member to reach the conclusion that the application by Mr Crespin constituted an abuse of process. It sought to raise the same matters that had been determined by a Vice President of VCAT, and resolved by her Honour Judge Jenkins when she ordered the case to proceed to trial. Indeed, the only asserted change of circumstances was that an advice had been received from counsel. If Mr Crespin was truly vexed by her Honour's decision, then it should have been the subject of an application for leave to appeal under s 148 of the VCAT Act. It was totally inappropriate to make an identical application to the Senior Member on the day of the VCAT hearing.

45 For these reasons, I grant leave to appeal but dismiss the appeal.**

[1] (2014) 43 VR 187 ('Zhao').

[2] Patsuris v Gippsland and Southern Rural Water Corporation [2016] VSCA 109, [43] - [44] (citations omitted).

[3] [1936] HCA 40; (1936) 55 CLR 499.

[5] (1982) 7 ACLR 202 ('McMahon').

[6] (2014) 43 VR 187.

[7] (1992) 8 ACSR 272.

[9] [2015] HCA 5; (2015) 255 CLR 46.

[11] Re AWB Ltd No 10 [2009] VSC 566, [264] (citations omitted).