Attorney-General for the State of Victoria & Phillip Morris Limited v Lindsey [2005] VSC 53

5. It is necessary to go back in time and summarise the background facts. The parties to this proceeding, being No. 7476 of 1997, are the Attorney-General for the State of Victoria and David James Lindsey ("Mr Lindsey"). The Attorney-General applied to the Court for an order declaring Mr Lindsey a vexatious litigant pursuant to s.21 of the Supreme Court Act 1986 ("the Act"). On 16 July 1998, Mr Lindsey was declared a vexatious litigant. The order made by the Court provided in paragraph 2 -

"2. David James Lindsey must not, without the leave of this Honourable Court, continue or commence legal proceedings in this Court or any inferior court or tribunal."

9. Paragraph 2 was inserted pursuant to s.21(3) of the Act.

12. On 7 January 2005, Mr Lindsey made application to the Court pursuant to s.21(3) of the Act for leave to commence a proceeding against Phillip Morris claiming damages for injuries suffered as a result of smoking cigarettes manufactured by it.

15. The application came on before me sitting in the Practice Court on 12 January 2005. The application was ex parte. These applications are invariably ex parte, although in an appropriate case the Court could require the applicant to give notice to the Attorney-General. I granted Mr Lindsey leave to bring a proceeding in the County Court.

18. Mr Lindsey, according to the affidavit filed in support of his application, had made previous applications to the Court seeking leave to bring a civil proceeding for damages against Phillip Morris. Applications were refused by judges of the Court on 17 March 2003, 1 May 2003, 21 May 2003, 30 June 2004, 8 October 2004, 19 October 2004, 1 December 2004, and the last one was refused by Hansen J on 16 December 2004. It appears that leave had been refused in the past because of deficiencies in the statement of claim and queries raised about causation, i.e. a causal link between a negligent act and the suffering of injury due to smoking Phillip Morris' products. Evidently, Mr Lindsey had been advised by judges that he should obtain legal assistance in drafting his claim. On the occasion on 16 December 2004 when Hansen J dismissed his application, his Honour repeated the suggestion.

21. Section 21(4) provides -

"(4) Leave must not be given unless the Court, or if the order under sub-section (2) so provides, the inferior court or tribunal is satisfied that the proceedings are not or will not be an abuse of the process of the Court, inferior court or tribunal."

25. It is apparent that Mr Lindsey, as a vexatious litigant, carries a heavy burden of persuading a court that the proposed proceeding is not an abuse of the process of the court. This must follow because the order declaring him to be a vexatious litigant was made upon the Court being satisfied that he has habitually, persistently and without any reasonable ground instituted vexatious legal proceedings. The English equivalent, s.42 of the Supreme Court Act 1981, requires a vexatious litigant to establish that the proceeding would not be an abuse of the process of the Court and "that there are reasonable grounds for the proceedings". The earlier provision, being s.51 of the Supreme Court Adjudicature Act 1925, required the vexatious litigant to prove not only that the proceeding was not an abuse of the process of the court but that there was also a prima facie ground for the proceeding. The latter requirement is absent in the Victorian legislation. However, in my opinion, a vexatious litigant in this State would have to establish, in proving that the proceeding was not an abuse of the process of the court, that there were reasonable grounds for the proceeding. The point was made in Becker v Teale[1] by Davies LJ when his Lordship said:

"In my view the jurisdiction which is given ... to a judge in chambers to give leave for the institution or continuance of proceedings by a vexatious litigant is a jurisdiction that should be very carefully exercised. Ex hypothesi the person has already `habitually and persistently and without any reasonable ground instituted vexatious proceedings'; and there is a high onus cast on such a person when he or she applies to the judge for the leave mentioned in the section."

"... but I repeat that in my view the jurisdiction is one which should be very carefully and indeed almost sparingly exercised, and the court should be satisfied, before giving leave, that there is really a case of some substance ... to be argued." (Emphasis added).

33. Although his Lordship was referring to the English provision which required satisfaction by the judge granting leave that there was "a prima facie ground for the proceedings", his remarks are apposite to an application made under s.21(4) of the Victorian Act.

36. Because Mr Lindsey has been declared a vexatious litigant, a court must proceed cautiously and with extreme care before granting him leave to bring a proceeding. The court must carefully consider any application. The jurisdiction should be sparingly exercised and only where there is a case of substance. His track record of bringing vexatious proceedings without any reasonable ground supports the application of a strict test.

39. On 12 January 2005 I considered the affidavit sworn by Mr Lindsey on 6 January 2005 and the proposed statement of claim. I also required Mr Lindsey to provide some evidence that he had suffered injury as a result of smoking cigarettes. He placed before the Court two reports of medical practitioners which noted that he did have some smoking related problems caused by longstanding tobacco abuse.

42. The statement of claim was in proper form, and disclosed a cause of action. The causal link was asserted in paragraph 11 of the proposed statement of claim. Some evidence was placed before the Court showing injury due to smoking. The court on an application for leave must be satisfied that the proceeding will not be an abuse of the process of the court. The court requires some evidence to support the elements of the cause of action. Whilst the court should be satisfied that there is some credible evidence that the proposed plaintiff has an arguable case, it is not the function of the court on the application to decide the factual issues which must be established by the plaintiff to succeed. Of course there may be circumstances which may lead the court to conclude that the proceeding would be an abuse of process. It is important to emphasise that the mere fact that the statement of claim is in proper form and discloses a cause of action would not be sufficient to establish that the proposed proceeding is not an abuse of process. It must not be overlooked that the reason why the person was declared a vexatious litigant is because he has in the past habitually, persistently and without reasonable grounds instituted legal proceedings. I granted Mr Lindsey leave to bring a proceeding against Phillip Morris Limited in the County Court seeking damages in a common law negligence suit.

45. On 18 January 2005, Mr Lindsey instituted a proceeding in the County Court. Phillip Morris issued a summons, returnable on 18 February 2005, for an order that the requirement to serve a defence be suspended until its solicitors received the reasons for my judgment. Her Honour Judge Lewitan refused the application. Phillip Morris delivered a defence and Mr Lindsey delivered a reply.

48. Phillip Morris now makes application to this Court on the basis that it has been affected by an order made by this Court ex parte and it seeks to be heard and have the original order set aside. Phillip Morris served its summons on the Attorney-General. By letter dated 4 March 2004 the Victorian Government Solicitor informed Phillip Morris' solicitors that the Attorney-General neither consented to nor opposed its application. The Attorney-General did not appear.

51. The first matter to consider is whether Phillip Morris has any right to bring the present application. In effect what it seeks to do is to have the original application made by Mr Lindsey re-heard, on material which includes the affidavit of Mr Lindsey originally filed in support of the application, and material now placed before the Court by Phillip Morris. Phillip Morris submits that on a proper consideration of all the material now before the Court, the Court should not have made the order it did granting leave pursuant to s.21(3) of the Act.

54. This Court has an inherent power to set aside an order made ex parte unless the power is displaced by statute. See Taylor v Taylor[2]. What Mason J said in that case was said in the context of a party to the proceeding. There is no doubt that as a general rule where an order is made or judgment entered in a proceeding against a party, in default or ex parte, the court does have an inherent power to re-consider the matter on an application made by the absent party and if necessary set aside the order or judgment. In those circumstances, the court is not sitting on appeal from its own judgment or order, but is exercising original jurisdiction to re-hear the matter. Whether or not a court would re-hear the matter would depend upon all the circumstances but as a general rule, where a credible explanation is given for the failure to attend at the hearing if it is inter partes the court will re-consider the application. The same applies in cases where applications are made ex parte in accordance with the Rules of Court. In those circumstances, the party affected by the order made ex parte has a right to return to court and seek a re-hearing of the application. Some of the cases do suggest that the right to have the case re-heard depends upon new facts being placed before the court, but in my view that is not essential. On the re-hearing the affected party is at liberty to make submissions on the law, and/or establish additional facts which may result in a decision different to the one earlier made.

57. What is different in the present application is that Phillip Morris is not a party in the proceeding and was not a party to the application for leave to bring the proceeding. Is it affected by the order made?

The Court may set aside or vary an order which affects a person where the application for the order--

(a) was made on notice to that person, but he did not attend the hearing of the application; or

(b) was not made on notice to that person."

(Emphasis added).

68. It is observed that a person affected by an order has the right to apply to set aside or vary the order. It is clear that the jurisdiction can be invoked by a person which of course, would include a corporation, who was not a party to the proceeding in which, the order was made. But does the order affect Phillip Morris? This is not an easy question to answer. Arguably, the order does not affect Phillip Morris. It is the action of Mr Lindsey pursuant to leave granted which affects Phillip Morris. The order does not of itself affect the rights, duties or interests of Phillip Morris. However, I think reference to Rule 1.14(2) provides the answer. Paragraph 2 of that rule provides:

(1) ...

(2) The Court may exercise any power under these Rules of its own motion or on the application of a party or of any person who has a sufficient interest." (Emphasis added).

75. Paragraph 2 of Rule 1.14 gives a right to a person, which would include a corporation, with a sufficient interest to apply to the court to exercise a power under the Rules. This Court exercises a power under Rule 46.08 when it makes an order setting aside or varying an order made ex parte, which affected a person. Clearly, Phillip Morris has an interest in the outcome of the application because it sets in train a course of events which ultimately affects its interests. The interest of Phillip Morris in those circumstances is sufficient to give it the right under Rule 1.14(2) to apply to the Court to exercise its powers under Rule 46.08. Ultimately, the original order does affect it once a proceeding is issued. Phillip Morris has the right to bring the present application.

78. When I heard the application in January 2005, I was aware from the contents of Mr Lindsey's affidavit that he had made application in the past to this Court on a number of occasions for leave to commence a proceeding against Phillip Morris. I also noted that he failed on those occasions because of defects in his pleading and concerns being raised about causation. Nevertheless, although it was relevant to take into account the previous applications, it was the Court's duty to consider the application on the material before the Court. Of course the Court had to take into account the heavy burden resting on Mr Lindsey and not overlook the necessity of Mr Lindsey persuading the Court his proposed proceeding had substance. I was satisfied that his proposed statement of claim did disclose a cause of action and that his claim had substance.

81. It is a right of every person of age and of sound mind to bring a proceeding in a court. That right may be lost because a person is declared a vexatious litigant. On any view it is indeed a serious step for any court to refuse a person a right to come to court. The point was made by Kirby J in Re Attorney-General for the Commonwealth of Australia & Anor; Ex parte Skyring[3] when he said -

"... it is regarded as a serious thing in this country to keep a person out of the courts. The rule of law requires that, ordinarily, a person should have access to the courts in order to invoke their jurisdiction."

85. He also pointed out that one must be careful and keep an open mind in a case where a vexatious litigant makes application for leave, that hidden amongst the verbiage a point may be there having merit. His Honour stated, "Vigilance, and not impatience, are specially required where that person is not legally represented."

88. In the present application, Phillip Morris seeks to persuade the Court that the order made on the previous occasion should not have been made. Phillip Morris may adduce facts which were not before the Court on the previous occasion and which are material to the question of leave, and/or may submit that there were matters relevant to the exercise of the Court's discretion which may have not been considered or accorded sufficient weight. Phillip Morris placed additional evidence before the Court and further, highlighted a number of matters which it was submitted were of weight and which demonstrated that Mr Lindsey could not prove the proposed proceeding was not an abuse of the process of the court. Given that Phillip Morris Limited is entitled to make the application, and given that it is not an appeal from the original order, in my view this is a re-hearing of the original application. In contrast to the earlier hearing, the Court now has further facts and a contradictor. The Court has the benefit of submissions opposing the making of the order. The Court must now reconsider the application by Mr Lindsey on the totality of the material now before it, and in light of the submissions put by the contradictor. The question is whether Mr Lindsey, as a vexatious litigant, has satisfied the Court that the proposed proceeding will not be an abuse of the process of the Court.

91. Phillip Morris emphasised that there had been eight previous applications to the Court for leave to sue Phillip Morris, all of which were dismissed. Secondly, that Mr Lindsey had brought proceedings in the Federal Court which were all dismissed with costs. The proceedings are Lindsey v Phillip Morris Limited[4]; Lindsey v Phillip Morris Limited[5]; and Lindsey v Phillip Morris Limited[6]. In accordance with Federal Court procedure an estimate of the costs was made by the Registrar to which Mr Lindsey did not object and as a result Mr Lindsey was ordered to pay a total of $96,464 for costs. These costs are outstanding and remain unpaid, and realistically will not be paid in the foreseeable future, if at all. In a letter dated 10 February 2005, Mr Lindsey stated that the costs will be paid after a jury finds Phillip Morris guilty of negligence. I interpolate to observe that in his County Court writ, Mr Lindsey seeks trial by jury.

94. Counsel for Phillip Morris emphasised that Mr Lindsey did not inform this Court of the costs awarded against him. That is correct. It is said that the failure to pay costs ordered in proceedings raising similar issues against Phillip Morris is relevant to whether or not the proposed proceeding is an abuse of process. I interpolate to observe that the submission was not put that the order granting leave should be set aside on the ground that Mr Lindsey failed to disclose a matter material to the exercise of the discretion. Where costs have not been paid a court may order a stay of a later proceeding between the same parties involving the same subject matter until the costs are paid. There is no doubt there is authority to that effect. See Williams, Civil Procedure Victoria at paragraph 23.01.115 and the authorities referred to. That principle does not apply in the present County Court proceeding, because the proceedings brought in the Federal Court sought damages for injury suffered as the result of smoking cigarettes in causes of action that relied upon a breach of the Trade Practices Act 1974. Mr Lindsey did not make a claim for common law negligence in the Federal Court. The applications were struck out for a variety of reasons, but mainly because the causes of action based on the Trade Practices Act could not be established or accrued prior to the enactment of the provision relied upon. The County Court proceeding brought by Mr Lindsey is in common law negligence.

97. However, that is not the end of the matter. Is the fact that Mr Lindsey owes to Phillip Morris a substantial sum for costs and is unlikely to pay the costs prior to the finalisation of the County Court proceeding, if at all, relevant to the grant of leave under 21(4) of the Act? If so, what weight should be given to the fact in determining the application for leave?

100. In my opinion, it is a relevant matter to the question of leave. Vexatious litigants cause vexation to the administration of justice and often also to the other party in the proceeding. Little need be said about vexation to the system. It is obvious, especially when the litigant appears in person; imaginary claims, irrelevant and half-baked ridiculous claims, and failure to properly articulate claims, all lead to much time-wasting and expense, often topped off by futile, time-wasting appeals. Vexation to the other litigant often happens. Time spent and the incurring of legal costs which are often not paid, cause much harm, annoyance and distress to the other party. Sometimes the other party is entitled to protection. Sometimes the vexation can cause real and irremediable financial hardship. Whether or not the procedure is an abuse of the court's process will depend on the circumstances. The court must strike a balance between a claim of substance going forward and avoiding vexation to the litigant brought about by financial burdens, not to mention in the case of individuals the worry, inconvenience and interference with personal and business affairs in protracted proceedings. The balancing exercise involves the court in considering the substance of the claim. It would be a serious step for the court to deny a litigant, indeed a vexatious litigant, his day in court if the claim has substance for substantial damages, because costs were owed in respect of previous proceedings involving the same parties. If the stage was reached that the proceeding was oppressive, in all the circumstances the court may stay the proceeding until the costs were paid. It would be unlikely that the court would dismiss the proceeding.

103. The costs incurred by Phillip Morris in the Federal Court arose out of proceedings brought by Mr Lindsey who pleaded causes of action under the Trade Practices Act. Those proceedings did not include a common law claim in negligence. Mr Lindsey now wishes to continue his County Court proceeding. I do not think that Phillip Morris is being oppressed by the present proceeding, nor do I think that the corporate mind of Phillip Morris would be unduly concerned by this proceeding. I earlier considered Mr Lindsey's claim and was of the view that it had substance and that the claim was for substantial damages. Mr Lindsey has in the past had difficulty with drafting his statement of claim. That observation applies not only to the proceedings in this Court but also the proceedings in the Federal Court. He has overcome that difficulty with his present statement of claim. He placed evidence before me in the form of an affidavit which persuaded me that the case was of substance. I do not think his present proceeding is oppressive in the context of the previous litigation in the Federal Court and the institution of the proceeding in the County Court. The mere fact that he owes money to Phillip Morris for costs does not convert his common law negligence claim in the County Court to an abuse of process of that Court.

106. Phillip Morris also relied upon three other matters. First, it was submitted that the pleading in paragraph 12 of his statement of claim was ambiguous. Paragraph 12 alleges that Phillip Morris was negligent and particulars are given. It must be borne in mind that the claim brought against Phillip Morris is a claim in negligence. The particulars are set out and it is open to the plaintiff to rely upon more than one particular of negligence to prove his cause of action. The paragraph does not, in my view, make his claim an abuse of process. If Phillip Morris is having difficulty with the particulars it no doubt can request further and better particulars. Phillip Morris also relied upon the fact that Mr Lindsey had failed in his applications to this Court and therefore there must be real doubts about the substance of his claim. I note the submission. Many of his prior applications failed because of the form of his statement of claim and some doubts about how he pleaded causation. I decided the application on the material before the Court. Whilst Mr Lindsey's failures in the past should alert the Court to closely scrutinise the substance of the claim, I am not satisfied, because he has failed in the past, that it follows that the present proceeding is an abuse of process of the court. Finally, counsel for Phillip Morris expressed the concern that the likely quantum of damages would not be large and because of the time period covered by the allegations in the statement of claim, Phillip Morris would be put to considerable expense in the interlocutory steps, especially in the area of discovery. Again, I note the submission. However, it could hardly be a basis for refusing a plaintiff a right to proceed in an action because substantial costs may be incurred by the defendant in the proceeding. Phillip Morris as a defendant has all the armoury of the law available to it. It can, if so advised, bring an application for summary judgment, a move which should never be taken except where it is clear beyond doubt that the plaintiff could not succeed. Nevertheless, that course is open to Phillip Morris. It can also take other steps to protect itself in respect to any costs order. I refer to making offers of compromise. I do not think that the argument carries any weight on this particular application.

109. As I have stated, the statement of claim does disclose a cause of action and is pleaded in the usual form of a common law negligence claim for damages against the manufacturer of a product. Of course, the Court must be satisfied that the proceeding is not devoid of merit and that it has substance. I was persuaded by reference to medical reports that Mr Lindsey does suffer from tobacco induced health problems. He has to prove a duty of care. I would think that it would not be a difficult matter. It is a question of law - see Benson v Lee[7]. Reference to Donohue v Stevenson[8] will support a finding that a manufacturer of a product does owe a duty of care to its ultimate consumer. Mr Lindsey has to prove negligence. Particulars are set out in paragraph 12 of his statement of claim. Negligence is a question of fact. He would have to persuade a court that Phillip Morris was negligent. The particulars allege that Phillip Morris manufactured and distributed to the public a product harmful to health. Mr Lindsey provided a link between smoking and tobacco related health problems. I did not and do not think that he should be shut out from bringing his proceeding. It has substance. Whether he succeeds is another matter. Phillip Morris has raised a number of defences.

112. After considering the additional material and the submissions of Phillip Morris, I am satisfied in all the circumstances that the proceeding instituted by Mr Lindsey in the County Court is not an abuse of process of the court. It follows that I am not persuaded to vacate the order that I made on 12 January 2005.

115. Subject to any submissions, I propose to make the following orders:

(i) That Phillip Morris Limited be joined as a party to the proceeding for the sole purpose of bringing an application to set aside the order made by the Court on 12 January 2005.

(ii) That the summons filed by Phillip Morris Limited on 17 February 2005 be dismissed.

(iii) That upon its summons being dismissed Phillip Morris Limited be removed as a party to the proceeding.

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[1] [1971] 3 All ER 715 at 716.

[2] [1979] HCA 38; (1979) 143 CLR 1 at 16.

[3] [1996] HCA 4; (1996) 70 ALJR 321 at 323.

[4] [2004] FCA 9.

[5] [2004] FCA 40.

[6] [2004] FCA 797.

[7] [1972] VicRp 103; 1972 VR 879