Australian National Industries Ltd v Spedley Securities Ltd

REASONS FOR JUDGMENT The Applications There are three matters before the Court. First, an application has been made by Mr Morton, one of the three applicants, that I disqualify myself from having any further conduct of these proceedings. Secondly, Mr Morton has applied for leave to file a further statement of claim in the proceedings, following the striking out of the statement of claim as initially filed. Thirdly, the respondents have applied, inter alia, for an order dismissing the proceedings. Mr Morton's application for leave to file the statement of claim and an application to dismiss the proceedings filed by all respondents other than the fifth respondent ("Benelan") were listed for hearing on 17 April 1998. None of the applicants appeared. The respondents adduced evidence that Mr Morton had been served with the respondents' motion for an order dismissing the proceedings and with the affidavit in support of that motion. Mr Morton forwarded by facsimile to the Registry some handwritten submissions shortly before the hearing. I have taken these into account, although they contain much material that is simply offensive and scurrilous. At the hearing Mr Lever appeared with Mr Gooley for all respondents, including Benelan which had previously been separately represented in the proceedings. Prior to the hearing no motion seeking dismissal of the proceedings had been filed on behalf of Benelan. Mr Lever sought to file a motion on behalf of Benelan in identical terms to the motion already filed on behalf of all other respondents. I granted that leave, on the basis that a motion in those terms raised no new issues. I stated at the outset of the hearing that I had considered whether I should disqualify myself, having regard to the written submissions previously made by Mr Morton. I indicated that I had decided not to disqualify myself from hearing the matters then before the Court and that I would give my reasons later. I suggested to Mr Lever that the appropriate way to proceed was to regard Mr Morton's motion for leave to file the draft statement of claim as on foot, despite Mr Morton's non-appearance, and to decide that motion and the respondents' motion together. Mr Lever concurred in that course, read affidavits in support of the respondents' motion and elaborated briefly on his written submissions. The Principal Proceedings and the September 1996 Judgment The principal proceedings, QG100 of 1995, which I describe as "the administration proceedings", were commenced by an application filed in the Queensland Registry of this Court, on 12 July 1995. They were subsequently transferred to the New South Wales Registry. The applicants were Mr Morton and two companies, Mack Studios Pty Limited ("Mack Studios") and Update Publishing Pty Limited ("Update"). Both companies were dissolved on 9 October 1995 although, as will be seen, they have since been reinstated for the limited purpose of conducting certain proceedings, including the administration proceedings. There were seven respondents to the administration proceedings. The following description of the respondents is taken from a judgment delivered by me in the administration proceedings on 18 September 1996, reported at (1996) 21 ACSR 497 (the "September 1996 judgment"), in which I ordered, inter alia, that the applicants' statement of claim be struck out: · "The first respondent [is] John Vouris, a chartered accountant and a partner in the firm Court & Co, the second respondent. Mr Vouris acted as administrator of the third and fourth respondents, pursuant to deeds of company arrangement, from 1 November 1994 until his retirement on 2 September 1995. · The second respondent [is] Court & Co. · The third respondent [is] Mitchell Products Pty Ltd ("Mitchell"), formerly known as Truefeat Pty Ltd ("Truefeat"). Mitchell has ceased to be subject to the deed of company arrangement and now trades in the Australian Capital Territory, apparently in the field of "adult" entertainment. Mitchell was the petitioning creditor in bankruptcy proceedings against Mr Morton, having been substituted for the fourth respondent by an order of Tamberlin J, made on 2 November 1995. · The fourth respondent [is] Budlyre Pty Ltd ("Budlyre"). Like Mitchell, Budlyre has ceased to be subject to the deed of company arrangement and trades in the Australian Capital Territory, apparently in the same field. · The fifth respondent [is] Benelan Pty Ltd ("Benelan"). Benelan is a corporation which trades in the Australian Capital Territory, also apparently in the field of "adult" entertainment. Benelan appears to have been under the control of the Franks family. · The sixth respondent [is] Mark A Franks, a resident of the United States. · The seventh respondent [is] Mark A Franks and Barbara Franks as trustees for the Franks Family Trust (the "Franks Trust"). The Franks Trust is a shareholder in Budlyre, Mitchell and Benelan. The Franks Family, according to a statement of claim filed on behalf of the Franks Trust in earlier proceedings, [has] been involved, through various corporate entities, in the business of producing, supplying and distributing "adult" videos and products." In the September 1996 judgment, I made a number of orders, including the following: "1. The statement of claim filed on 8 March 1996 by the applicants in Proceedings QG100 of 1995 be struck out. 2. The applicants in Proceedings QG100 of 1995 be at liberty to apply to the Court within 42 days from today for leave to file an amended statement of claim, on production of an affidavit or affidavits showing that (a) there are facts which probably can be proved and which, if proved, would support the general allegations of the proposed amended statement of claim; and (b) any corporate applicant is entitled to maintain legal proceedings on its own behalf and that any such applicant has duly authorised the making of the application to file the amended statement of claim. 3. Any application for leave to file an amended statement of claim in accordance with paragraph 2, and any affidavit or affidavits in support of such an application, be in typed or word processed form and otherwise in accordance with the Federal Court Rules." I also dismissed a motion on behalf of the applicants, including Mr Morton as the debtor in Proceedings NP898 of 1995 ("the bankruptcy proceedings"), that both proceedings be heard together. I noted in the September 1996 judgment that the statement of claim filed by the applicants comprised 110 handwritten pages. Mr Morton, by the time the strike out application was heard, had filed at least ninety-three affidavits and some thirty notices of motion. The hearing of the strike out application and associated motions took four days. In August and September 1995, Beazley J had dismissed a claim by the applicants for interlocutory orders restraining Mr Vouris, who was then the administrator of Truefeat and Budlyre, from dealing with the assets of those companies. That application and subsequent hearings by Beazley J took six hearing days. There has been other litigation between Mr Morton and some or all of the respondents to the administration proceedings. This litigation includes the bankruptcy proceedings against Mr Morton and applications in the Industrial Relations Court by Mr Morton alleging unlawful termination of his employment with a number of companies including Benelan and Truefeat. The latter proceedings were dismissed by Wilcox CJ on 15 November 1996. I do not intend to summarise the September 1996 judgment. It should, however, be read together with this judgment to understand the full background to the present applications. The principal events The principal events which have occurred since the hearing of the strike out application and associated motions are as follows: · On 9 September 1996, after the strike out application had been heard by me but before I had delivered judgment, a Registrar of the Supreme Court of the Australian Capital Territory made orders, on the application of Mr Morton, that the registration of Update and Mack Publishing be reinstated "for the limited purpose of the conduct of" the administration proceedings and the applications to be heard in the Industrial Relations Court. · On 18 December 1996, Mr Morton filed an affidavit sworn by him, apparently in support of his (then) foreshadowed motion for leave to file an amended statement of claim. The affidavit is 62 pages long and contains 347 paragraphs. On its face, it includes material having nothing to do with the motion for leave to file the draft statement of claim, such as assertions relating to alleged conflicts of interests by certain solicitors and allegations concerning what Mr Morton describes as threats to his life. · On 20 December 1996, Mr Morton filed a motion seeking the leave of the Court for the "applicant" to file an amended statement of claim, identified as draft No 3. I shall refer to this document as the draft statement of claim. I should note that in some subsequent documentation filed by Mr Morton reference was made to drafts 4 and 5, but it appeared no such drafts have been filed. Nor have they been served on the respondents. · On 23 December 1996, Mr Morton filed a motion seeking a number of orders. The relief sought included an order that I disqualify myself from further participation in these proceedings. · On 26 February 1997, Mr Morton was directed to file and serve, by 13 March 1997, a list of the paragraphs in his affidavit filed on 18 December 1996 upon which he intended to rely in support of the motion for leave to file the draft statement of claim. That direction has never been complied with. In an affidavit sworn on 14 March 1997, and filed on 17 March 1997, Mr Morton referred in full to several affidavits, including the affidavit filed on 18 December 1996. · On 7 April 1997, directions were made that the matter be listed during a nominated period in May 1997 for the hearing of the following motions