Brogden v Attorney-General

Federal Court of Australia|2016-06-10|Before: Charlesworth J

Counsel for the Plaintiff: The Plaintiff appeared in person

ORDERS SAD 134 of 2016

IN THE MATTER OF COMPANY ONE, COMPANY TWO, COMPANY THREE, COMPANY FOUR, COMPANY FIVE, COMPANY SIX, COMPANY SEVEN, COMPANY EIGHT

The application is dismissed.
The eight entities named in the title to these proceedings be referred by the pseudonyms Company One, Company Two, Company Three, Company Four, Company Five, Company Six, Company Seven and Company Eight respectively.
Subject to the order in paragraph 5, the publication or other disclosure of the following information is prohibited: (a) any information tending to identify, in connection with these proceedings, any one of the eight companies referred to in paragraph 2 of these orders; (b) any information tending to identify, in connection with these proceedings, the entity named as "Chargee" in the document commencing on page 34 of the affidavit of Andrew Morton Garrett sworn on 11 May 2016 (acting in any capacity); (c) any officer of an entity referred to in this order.
Notwithstanding rule 2.32 of the Federal Court Rules 2011, no person may inspect the following documents or parts of documents as are held in any Registry of this Court without leave: (a) the originating application in so far as it tends to identify the entities referred to in order 3; (b) the transcript of these proceedings in so far as it tends to identify the entities referred to in order 3; (c) the affidavits of Andrew Morton Garrett sworn on 11 May 2016 and 30 May 2016 in so far as the affidavits tend to identify the entities referred to in order 3; (d) the exhibit marked A1 in so far as it tends to identify the entities referred to in order 3.
The following persons have leave to inspect the materials referred to in paragraph 4 of these orders, notwithstanding that the materials tend to identify the entities named in the order in paragraph 3: (a) an officer of any one of the entities referred to in the orders in paragraph 3; (b) a liquidator appointed to any one of the entities referred to in the order in paragraph 3; (c) the trustee of the bankrupt estate of Andrew Morton Garrett; (d) the Deputy Commissioner of Taxation; (e) an employee or agent of the Australian Taxation Office; (f) an employee or agent of the Australian Investments and Securities Commission; (g) a legal practitioner duly authorised to act on behalf of any person named in this order or any one of the entities referred to in the order in paragraph 3.
Nothing in these orders prohibits or restricts the publication or distribution of the reasons for judgment in this action to any person.
Nothing in these orders restricts any entitlement Andrew Morton Garrett may have to inspect, purchase or otherwise obtain a copy of the transcript of these proceedings. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

CHARLESWORTH J: 1 The plaintiff, Mr Garrett, is subject to three vexatious proceedings orders made under s 37AO(2) of the Federal Court of Australia Act 1976 (Cth) (FCA Act). One of those orders prohibits Mr Garrett from instituting any proceedings at all in this Court without leave (the Order). 2 This is an application by Mr Garrett pursuant to s 37AR(2) of the FCA Act for leave to institute a proceeding that is subject to the Order (proposed proceeding). The Court must dismiss the application if it considers the proposed proceeding is a "vexatious proceeding" as defined in s 37AM(1) of the FCA Act: see ss 37AS(2) and 37AT(4) of the FCA Act. 3 Mr Garrett intends to seek, in the proposed proceeding, a declaration of right pursuant to s 418A of the Corporations Act 2001 (Cth) (Corporations Act) to the effect that he has been validly appointed as the "managing controller" of eight companies, and consequential relief to require the Commonwealth Bank of Australia to facilitate his access to the companies' trading accounts, and to require the directors of the companies to furnish reports to him. 4 For the reasons given below, I consider the proposed proceeding to be vexatious. I must therefore dismiss the application.

Vexatious proceedings orders 5 The Order was made by Pagone J on 26 February 2015. It is contained in paragraph 4 of the orders made by his Honour on that day. It is expressed in the following terms: 4. The applicant [Mr Garrett] is prohibited from: (a) instituting in his own name; or (b) causing others to institute; or (c) being concerned, whether directly or indirectly, in the institution of any proceeding, in any registry of the Federal Court of Australia without the leave of this Court. 6 As I have mentioned, the Order is not the only vexatious proceedings order made against Mr Garrett in this Court. Two further orders should be mentioned at this early juncture. They were made by Mortimer J on 21 November 2014 and by Pagone J on 26 February 2015; see, respectively, Garrett v Make Wine Pty Ltd [2014] FCA 1258 ([217] - [218], Order 2) and Garrett v Commissioner of Taxation [2015] FCA 117 ([35], Order 3). The effect of those orders is, respectively, to prohibit Mr Garrett from instituting in his own name, or causing others to institute, or being concerned, whether directly or indirectly, in the institution of: (a) any proceeding in any registry of the Federal Court of Australia against the Commissioner of Taxation, any Second Commissioner of Taxation, any Deputy Commissioner of Taxation, any person who is or was employed in the Australian Taxation Office as an "APS employee" within the meaning of the Public Service Act 1999 (Cth), or any agent or adviser of the Commissioner of Taxation without the leave of this Court (the ATO Order); and (b) any proceedings in any registry of the Federal Court of Australia against Make Wine Pty Ltd, VOK Beverages Pty Ltd, Treasury Wine Estates Vintners Limited or any related body corporate, employee, agent or adviser of Make Wine Pty Ltd, VOK Beverages Pty Ltd, Treasury Wine Estates Vintners Limited without the leave of this Court (the Make Wine Order). 7 The entities referred to in the ATO Order and the Make Wine Order are not named as parties in the proposed proceeding. For the reasons given below, the existence of those orders, particularly the ATO Order, is nonetheless relevant to my determination that the proposed proceeding is vexatious.

Meaning of "vexatious proceeding" 8 The expression "vexatious proceeding" is defined non-exhaustively in s 37AM(1) of the FCA Act as follows: 37AM Definitions (1) In this Part: vexatious proceeding includes: (a) a proceeding that is an abuse of the process of a court or tribunal; and (b) a proceeding instituted in a court or tribunal to harass or annoy, to cause delay or detriment, or for another wrongful purpose; and (c) a proceeding instituted or pursued in a court or tribunal without reasonable ground; and (d) a proceeding conducted in a court or tribunal in a way so as to harass or annoy, cause delay or detriment, or achieve another wrongful purpose. vexatious proceedings order means an order made under subsection 37AO(2). 9 The phrase "without reasonable ground", as used in paragraph (c) of the definition, is equivalent in meaning to the phrase "without reasonable cause". In Spotless Services Australia Ltd v The Honourable Senior Deputy President Jeanette Marsh [2004] FCAFC 155 (Spotless) the Full Court considered the phrase "without reasonable cause" as it then appeared in s 347(1) of the Workplace Relations Act 1996 (Cth). The Full Court said (at [13]) that the question of whether a proceeding has been commenced without reasonable cause is to be answered as a matter of objective fact and requires an assessment of whether the proceeding is "bound to fail" or "so obviously untenable that it cannot possibly succeed", "manifestly groundless" or "bad beyond argument". In Hatchett v Bowater Tutt Industries Pty Ltd (No 2) (1991) 28 FCR 324, von Doussa J said (at FCR 327 [8]; IR 34): The test imposed by the expression 'vexatiously or without reasonable cause' is similar to the one applied by a court on an application for the exercise of summary power to stay or strike out proceedings: see Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 at 272-273 and Geneff v Peterson (1986) 19 IR 40 at 87-88. 10 The test being an objective one, it is not to the point that the applicant subjectively believes there to be a reasonable ground to institute the proceeding. 11 In contrast, paragraph (b) of the definition involves a subjective element in that it invites an enquiry into the purposes for which the applicant proposes to institute proceedings. The application for leave must be dismissed if the Court considers the proposed proceeding is sought to be instituted to harass or annoy, to cause delay or detriment or for any other wrongful purpose. 12 The considerations that may be taken into account in determining whether a proceeding meets the description in paragraph (a), (b) or (c) of the definition may overlap. For example, where there is evidence that an applicant appreciates that an intended proceeding is lacking in merit, that circumstance will be a relevant factor in determining whether the proceedings are sought to be instituted for a wrongful purpose and will also inform the question of whether the proposed proceeding constitutes an abuse of process. 13 As I have mentioned, the definition of the phrase "vexatious proceeding" is expressed in non-exhaustive terms. The phrase may encompass proceedings that do not strictly meet any one of the descriptions in paragraphs (a) to (d) in the statutory definition, but which nonetheless are encompassed within the meaning of the word "vexatious", properly construed having regard to the statutory purpose of the enactment in which it is employed. 14 In Fuller v Toms [2015] FCAFC 91 (Fuller), the Full Court said, of the purpose of s 37AO (at [31]) (emphasis added): Section 37AO of the Federal Court Act empowers a court to balance the right of one individual of access to justice with other rights namely, a correlative right on the part of the present respondents to finality and the separate right of other individuals also to access this Court. It is for this Court, the present manifestation of a recognition by the Australian Parliament, the origins of which may be traced to an earlier recognition by the United Kingdom Parliament, via the Vexatious Actions Act 1896 (UK) (59 & 60 Vict. C. 51), of a need for a power to effect just such a balance. 15 In Gallo v Attorney-General [1984] VicSC 412 the Victorian Supreme Court said, of the meaning of the word "vexatious": In the light of the mischief to which the section is directed, however, it seems to me that the word 'vexatious' is not in this context the term of art and is an omnibus expression, which includes proceedings which are scandalous, which disclose no reasonable cause of action, which are oppressive, which are embarrassing, or which are an abuse of the process of the court. All of such and similar proceedings, in my opinion, fall within the meaning of the word 'vexatious' in the statute. 16 The above passage has been adopted with approval in a number of decisions of this Court as a proper expression of the meaning of the word "vexatious" as it is used in the FCA Act: Garrett v Federal Commissioner of Taxation (2015) 147 ALD 342; [2015] FCA 117 (Pagone J at [4]), Mathews v State of Queensland [2015] FCA 1488 (Reeves J at [87]), Mulhern v Bank at Queensland Ltd (No 3) [2015] FCA 927 (Gleeson J at [8]). 17 In Jones v Skyring (1992) 109 ALR 303, Toohey J said (at 310) that the test for whether proceedings are vexatious was properly characterised in Hutchison v Bienvenu (unreported, High Court of Australia, Walsh J, 19 October 1971) as "not simply a subjective one". His Honour continued: In expressing that view Walsh J endorsed (at p 11) what Ormerod LJ had said in In re Vernazza [1960] 1 QB 197 at 208: '[T]he question is not whether [legal proceedings] have been instituted vexatiously but whether the legal proceedings are in fact vexatious.' That question is one for the Court to decide on the facts; it is not decided by reference to whether the person against whom an order is sought was acting maliciously or in bad faith. So, in deciding the present application, it is not to the point that Mr Skyring may believe and believe strongly in his view of s 115 of the Constitution and the associated points he wishes to agitate 18 Further, in determining that a proceeding is vexatious, it is not necessary for the Court to identify that any particular party to the proposed litigation would be troubled, vexed or harassed by the proceedings. Part VAAA of the FCA Act is protective not only of the interest of persons who may be joined in or otherwise directly or indirectly affected by a vexatious proceeding, but of the public interest in the proper administration of justice more broadly. So much was recognised by the Full Court in Fuller by its reference to the right of other litigants to access the resources of the Court, which, of course, are not unlimited. 19 An application for leave under s 37AR will necessarily be determined against the legal history of the Court already having made findings (whether or not embodied in declarations) to the effect that the applicant is a person who has frequently instituted or conducted vexatious proceedings in Australian courts or tribunals: s 37AO(1)(a) of the FCA Act. That history may, in a given case, be a relevant and weighty circumstance in determining whether the new proceeding sought to be instituted by the applicant is also to be regarded as vexatious. This is particularly so where the new proceeding appears to be a further attempt by the applicant to agitate an issue already determined, or is otherwise a new manifestation of the same prior obsessions which formed the background to the vexatious proceedings order made against the person in the first place. In a statement that captures an issue arising on the present application, the New Zealand Court of Appeal said in Brogden v Attorney-General [2001] NZCA 208; [2001] NZAR 809 at [21] (emphasis added): A litigant may be said to be persisting in litigating though the number of separate proceedings he or she brings is quite small if those proceedings clearly represent an attempt to re-litigate an issue already conclusively determined against that person, particularly if this is accompanied by extravagant or scandalous allegations which the litigant has no prospect of substantiating or justifying. The Court may also take into account the development of a pattern of behaviour involving a failure to accept an inability in law to further challenge decisions in respect of which the appeal process has been exhausted, or attacking a range of defendants drawn into the widening circle of litigation solely because of an association with a defendant against whom a prior proceeding has failed. 20 Finally, of the balance referred to by the Full Court in Fuller, it should be noted that a person who becomes the subject of a vexatious proceedings order is in a vulnerable position in the sense that he or she does not have the same access to the Court as other members of the community. Particular care should be exercised in circumstances where, as here, the applicant seeks relief in the nature of a declaration of a legal right that the applicant claims to have independently of, and irrespective of, the exercise of the Court's jurisdiction to grant declaratory relief. The nature of the relief of that kind is a circumstance that may tell against a finding that the proceeding is vexatious. 21 In the present case, Mr Garrett seeks declaratory relief to resolve doubt as to his asserted statutory rights. I have taken that important circumstance into account in determining whether or not to grant leave. The resolution of that doubt is important, not only for Mr Garrett and the entities he claims to represent but also for other persons currently affected by his conduct in asserting his alleged right in a commercial and non-litigious context.

Mr Garrett's evidence 22 In support of his application, Mr Garrett relied on an affidavit sworn on 11 May 2016 (the 11 May affidavit). Exhibited to the affidavit are the originating application and a draft unsworn affidavit sought to be filed by Mr Garrett should he be granted leave to institute the proposed proceeding. I will refer to those documents as the Draft Originating Application and the Draft Affidavit. Mr Garrett relied on a further affidavit sworn on 30 May 2016 (the 30 May affidavit) and a bundle of documents evidencing communications he is alleged to have had with the Australian Securities & Investments Commission (ASIC). The 30 May affidavit had annexed to it a sworn version of the Draft Affidavit. The Court read the 11 May affidavit and the 30 May affidavit subject to the qualification that any material in the nature of submissions contained in them would be received as submissions and not as evidence of fact. 23 Necessarily, the evidence was admitted only for the purpose of deciding Mr Garrett's application for leave. In that regard, it was Mr Garrett's submission that the evidence contained in the affidavits was sufficient to enable the Court to determine "on the papers" that he ought be granted leave and that he was entitled to the relief sought in the Draft Originating Application as a matter of urgency.

Relief sought in the proposed proceedings 24 The proposed proceedings seek relief under the Corporations Act and are, therefore, proceedings to which the Federal Court (Corporations) Rules 2000 (Cth) (Corporations Rules) would apply. 25 Rule 2.1 of the Corporations Rules requires that the title of documents in the proceedings be in Form 1. That form requires that the corporations to which the proceedings relate are to be named in the title to the proceedings, preceded with the words "IN THE MATTER OF". The Draft Originating Application contains, in its title, the words IN THE MATTER OF, followed by the names of eight companies. I will collectively refer to the eight companies named in the title as the affected Companies. 26 The Draft Originating Application contains the words "the Plaintiff claims urgent relief on the papers". A similar phrase is used in the Draft Affidavit. There is no defendant named on the Draft Originating Application. 27 The relief specified in the Draft Originating Application is expressed as follows (original spelling and grammar retained): Claim for declaration of a Right and other urgent relief 1. That a declaration is made under s418A(2) that the Plaintiff is validly acting as Controller. 2. That an order is made that the Directors comply with the Plaintiff's request to provide a report as to affairs under s430 of the Corporations Act 2001 (Cth) as soon as practicable, and 3. That an order is made that an officer of the CBA; a. open Banks accounts in the name of the Plaintiff as Controller appointed to each of the aforementioned entities as required under 2421 of the Corporations Act 2001 (Cth) b. links the Plaintiffs Customer Client Number 81744770 to the existing trading Accounts of the aforementioned entities as the Administrator of the accounts. 28 In addition to these words, there is, on the title page of the Draft Originating Application, a claim for declaratory relief pursuant to s 21 of the FCA Act. 29 There are a number of things to observe about this claim for relief. First, the relief sought in paragraphs 2 and 3 of the Draft Originating Application is dependent upon Mr Garrett succeeding in his contention that he is validly acting as controller of the affected Companies, whether or not a declaratory order is made to that effect. Second, the relief is directed at entities that are not intended to be joined by Mr Garrett as parties in the proposed proceeding. The entities include the directors of the affected Companies and the Commonwealth Bank of Australia. In addition, the declaratory relief sought by paragraph 1 is clearly directed at the affected Companies.

ASIC 30 Mr Garrett alleges that he has lodged notices with ASIC notifying the regulator of his purported appointment as controller of the affected Companies. In the 30 May affidavit Mr Garrett deposed: [32] On the 20th May 2016 ASIC made a decision not to lodge the relevant Forms 504 in respect to [relevant companies] on grounds of the sequestration order prevented me from acting as an officer of Corporations. Now produced and shown as exhibit 'AMG 8' is a true and correct copy of that letter and forms returned to me in hard copy. … [34] I seek a declaration that ASIC register the forms tendered as the failure to register is delaying the opening of Bank Accounts in accordance with my obligations under s421 of the Corporations Act 2001 (Cth). 31 ASIC's rejection of the forms lodged by Mr Garrett appears to have been made pursuant to s 1274(8) of the Corporations Act on the basis that the forms contain matter contrary to law or otherwise contain matter that is false or misleading. 32 Mr Garrett submitted that he sought to make, within the proposed proceedings, a challenge to the decisions of ASIC to refuse to receive and register the notices lodged by him. After hearing submissions from Mr Garrett on the point, this Court proceeds on the basis that the relief sought in the proposed proceeding is that specified on the Draft Originating Application, which does not include any proposed claim for relief pursuant to s 39B(1) of the Judiciary Act 1903 (Cth) nor pursuant to the Administrative Decisions (Judicial Review) Act 1977 (Cth), and which does not name ASIC as a proposed party. 33 Mr Garrett acknowledged that if he was successful in obtaining the declaratory relief he sought in the proposed proceeding, ASIC could be expected to act in a manner consistent with the Court's declaratory order and accept his forms for registration. In that event, he acknowledged, any review of ASIC's decisions, whether brought directly or collaterally, would not materially alter the practical outcome of the proposed proceeding. 34 The Court admitted in evidence the bundle of correspondence between Mr Garrett and representatives of ASIC for the limited purpose of identifying whether Mr Garrett's proposed challenge to ASIC's decisions could properly be regarded as collateral to the proposed proceeding and also for the purpose of assessing whether the proposed proceeding was properly described as vexatious. By omission, the bundle of correspondence was not marked as an exhibit during the course of Mr Garrett's oral submissions. It is now marked Exhibit A1. It consists of 34 pages, some parts which are marked in the original exhibit with yellow highlighter.

Service 35 Section 37AT(1) of the FCA Act provides: 37AT Granting application for leave (1) Before the Court makes an order granting an application under section 37AR for leave to institute a proceeding, it must: (a) order that the applicant serve: (i) the person against whom the applicant proposes to institute the proceeding; and (ii) any other person specified in the order; with a copy of the application and affidavit and a notice that the person is entitled to be heard on the application; and (b) give the applicant and each person described in subparagraph (a)(i) or (ii), on appearance, an opportunity to be heard at the hearing of the application. 36 The requirement that this Court make an order that Mr Garrett serve the persons named in s 37AT(1)(a) preconditions the Court's power to make an order granting his application. The purpose of s 37AT(1)(a) is to ensure that the Court affords procedural fairness to any person whose interests might be affected by the institution of proceedings should leave to institute them be granted. Section 37AT is to be read in the context of the FCA Act as a whole, including s 37AR(4), which prohibits an applicant for leave from serving a copy of the application or supporting affidavit on any person unless an order under s 37AT(1)(a) is made. The two provisions, read together, evince a clear intention that the persons whose interests might be affected by the proposed proceedings not be unnecessarily vexed by the very making of an application for leave to commence the proceedings. Where a court does not propose to grant the application for leave, there is no requirement that the Court order the service of the application for leave on any person and, indeed, there are sound reasons why it should not. 37 As I do not propose to grant Mr Garrett's application for leave, there is no requirement that I order that the application and any supporting affidavits be served on the persons "against whom" Mr Garrett proposes to institute proceedings, or on any other person. The question of whether the proceedings are "against" any person or otherwise affect the interests of any person nonetheless remains relevant to the question of whether the proposed proceeding is vexatious.

Pseudonyms 38 There may be circumstances in which the publication of reasons for judgment on an application for leave made pursuant to s 37AR of the FCA Act may, of itself, adversely affect the interests of third parties, for example by repeating allegations made in the evidentiary materials that are damaging to their trading or personal reputations. In circumstances where the affected parties have not been heard on the substance of the allegations, and in circumstances where no leave is granted for proceedings to be instituted to determine the truth of the allegations, it may, in all of the circumstances, be necessary or appropriate to make orders prohibiting the publication of evidence that would tend to identify the affected persons, and that the reasons for judgment name the affected persons by pseudonyms. 39 For reasons that will become apparent, this is such a case.

Alleged facts 40 The facts alleged by Mr Garrett in the 11 May affidavit and the 30 May affidavit are best described as labyrinthine. He alleges a series of commercial transactions which, it is said, culminate in his valid appointment as controller of the affected Companies. The transactions are allegedly recorded in a number of legal documents. It is reasonable to infer that the documents have been drafted by Mr Garrett personally. They are executed on behalf of companies whose property Mr Garrett claims to be entitled to control. 41 It is difficult to render the alleged facts simply. The following paragraphs condense the effect Mr Garrett's written materials into eight steps. 42 First, Mr Garrett purports to be entitled to exercise the capacities of "managing controller" of a company named OenoViva (Vietnam) Pty Ltd (OenoViva Vietnam). OenoViva Vietnam is alleged to be a trustee of the Andrew Garrett Family Trust No 4 (AGFT 4), jointly with Mr Garrett. The joint trustees of AGFT 4 are alleged to own, as trustees, a business system for the production and distribution of wine that is capable of being licensed to third parties. 43 Second, it is alleged that the rights to use the business system were licensed by the joint trustees to a company that I will refer to by the pseudonym "the Original Chargee". The document said to record that transaction is titled "OenoViva Business Systems Heads of Agreement" (HOA) dated 28 September 2015. The HOA names OenoViva Vietnam as Licensor and the Original Chargee as Licensee. Under the HOA, the license to use the business system is limited to the territories of South Australia and Western Australia. The purchase price payable by the Original Chargee pursuant to the HOA is said to be $23,700,000 plus GST. The HOA was executed by Mr Garrett in his purported capacity as controller of OenoViva Vietnam on 28 September 2015. Mr Garrett alleges that a director of the Original Chargee executed the HOA on 28 December 2015. I pause here to note that at least three inferences may arise from the amount of the purchase payable under the HOA. Either the license for the business system is properly valued at that amount, or the Original Chargee has made a bad (but nonetheless enforceable) bargain, or the transaction said to be recorded in the HOA is not a genuine transaction or has some other purpose not recorded in it. 44 Third, it is alleged that on 31 December 2015 and 7 March 2016, the Original Chargee entered into a series of sub-license agreements with the affected Companies, variously described as "distributor" licenses and "station" licenses and that the affected Companies also entered into vendor finance agreements in connection with each sub-license. Emails produced by Mr Garrett suggest that insofar as the affected Companies entered into any such agreements with the Original Chargee, the agreements were induced by Mr Garrett himself by dealings in which he styles himself as a consultant or trustee, and in which he refers to a multifaceted and global business "comprising the Andrew Garrett Group of Companies". Mr Garrett relies on invoices allegedly raised by the Original Chargee and addressed to each of the affected Companies. The invoices bear dates between 31 December 2015 and 7 March 2016. They are notable in that they charge a loan repayment said to be payable pursuant to a vendor finance agreement, apply GST to that amount, then subtract from the total the amount of the loan repayment, leaving only the GST immediately payable. There are 22 such invoices pursuant to which a total of $2,660,000.00 in GST is said to now be immediately payable. 45 Fourth, it is then alleged that each of the affected Companies granted a charge in favour of the Original Chargee to secure the performance of their obligations under the sub-license and associated vendor finance agreements. Mr Garrett exhibits to his Draft Affidavit a copy of an undated charge said to be registered in respect of the eighth-named company in the title to the proposed proceeding. I will refer to that company by the pseudonym "Company Eight" and to the particular charge as the "Company Eight Charge". The Company Eight Charge is alleged by Mr Garrett to be in the same terms as other charges he has either registered, or claims to be entitled to register, in connection with the other affected Companies. For the purposes of this application I proceed on the assumption that Mr Garrett could adduce in the proposed proceedings evidence of the existence of equivalent charges in connection with the other seven affected Companies. I also assume (without deciding) that the Company Eight Charge and the other charges are authentic documents. 46 Fifth, Mr Garrett alleges that the Original Chargee assigned the debts owed to it by the affected Companies to three further companies purportedly controlled by Mr Garrett, including OenoViva (UK & Ireland) Pty Ltd (OneoViva UK) and to Mr Garrett in their capacities as the joint trustees of AGFT 4. Mr Garrett relies on a document titled "Deed of Assignment" dated 26 April 2016 to evidence that assignment. It is unclear how or why OenoViva Vitenam is identified as a trustee of AGFT 4 in the HOA, and yet three different companies are named as joint trustees of AGFT 4 in the Deed of Assignment. The affected Companies are referred to in the Deed of Assignment as "the Debtors". The Deed is executed by Mr Garrett personally and on behalf of the three assignee companies in the capacity of their managing controller. The Deed is not executed by any person on behalf of the Original Chargee, nor is it executed on behalf of the affected Companies. The recitals to the Deed of Assignment are lengthy. They include references to the Original Chargee not having executed a series of agreements with AGFT 4 or with the affected Companies as the trustees of AGFT 4 had anticipated. The consideration for the assignment is said to be $29,000,000.00, which is said, in the recitals to the Deed, to be payable by way of AGTF 4 agreeing to "commercially forgive", in part, the Original Chargee's debts said to be owing under the HOA. By the recitals to the Deed (but not its operative part), the Original Chargee is also said to assign to the trustees of AGFT 4 their interests in the Original Chargee's "right to register a charge" pursuant to the Personal Property Security Act 2009 (Cth) in respect of the affected Companies' alleged debts. 47 Sixth, Mr Garrett alleges that the Original Chargee itself granted a charge in favour of the trustees of AGFT 4 to secure its own obligations under the HOA. Mr Garrett alleges that an event of default occurred under that charge and that OenoViva UK (as assignee of the rights of OenoViva Vietnam) subsequently appointed Mr Garrett as controller of the Original Chargee. The event of default upon which Mr Garrett relies is the unilateral termination by the Original Chargee of all of the transactions it had previously entered into (or agreed to enter into) after receiving a private ruling from the Australian Taxation Office. The recitals to a document titled "Notice of Crystallisation of Charge" allegedly served on the Original Chargee shed some light on the possible reasons for the Original Chargee unilaterally terminating all of the agreements (albeit expressed from Mr Garrett's point of view). As the tenor and content of the relevant recitals is also relevant to my determination of Mr Garrett's purposes for instituting the proposed proceeding, it is appropriate that I extract them here: WHEREAS the Chargor applied for a Private Binding Ruling from the Australian Tax Office in respect to the HOA and the agreements to be executed subsequent to the HOA for the territories of OenoViva (South Australia) and OenoViva (Western Australia) including; (a) The Master Sub Regional License Purchase Deed; (b) The Master Sub Regional License Vendor Finance Agreement; (c) The Master Sub Regional License Performance Security; (d) The Master Sub Regional License (e) The OenoVlva Artisans consulting agreement WHEREAS The Private Binding Ruling dated 29th April 2016 was received by the Chargor on the 3rd May 2016, and WHEREAS The Chargor was interviewed by Trevor Coulter and Neville Thomas of the ATO at his offices in McLaren Vale on the 4th May 2016 during which the ATO revealed the knowledge of cash movements between AGFT 4 and the Chargor and advised the Chargor that the ATO view of the Business Model was that of Fraud and the Chargor could be complicit in the committing of the alleged fraud which was a material adverse change under the Charge, and WHEREAS the Conduct of the ATO has at all material times been adverse to OenoViva Business Systems which was the subject of submissions made by the Chargee on the 26th January 2015 to the House of Representatives Standing Committee on Tax and Revenue, and WHEREAS the Conduct of the Federal Court has revealed a systemic breach of the principles relating to separation of powers and the Commissioner of Taxation admitted having a special relationship with the Federal Court before a Senate Enquiry on or about the 21st April 2016 which is the subject of an application to the office of the Commonwealth Attorney General Public Interest Test Case Funding branch, and WHEREAS upon the execution of the HOA on or about the 28th December 2015 by the Chargor in accordance with the Personal Properties Securities Act 2009, the Chargor charged in favour of the Vendor (The Charge) on a fixed and floating basis all of its business, intellectual property, choses in action, bank accounts, assets and undertakings and any other thing of value to secure the payment of the secured money as defined therein and was registered on the Personal Property Security Register and given registration [suppressed], and WHEREAS the agreements set out above were provided to the ATO in unexecuted form for the purposes of the Tax Ruling without negating the intention to provide a charge, and WHEREAS the Chargor advised the Chargee on the 5th May 2016 that as a consequence of the meeting with the ATO officers he intended to terminate the agreement unilaterally which was a material adverse change, and WHEREAS the terms of the Charges (in clause 1.9.1) after an event of default has occurred, the Chargee may by notice convert the floating charge into a fixed charge in respect of the property described in the Notice, and WHEREAS an event (or events) of default as defined in clause 1.8 of the Charges has occurred in that interalia a material adverse event has occurred in relation to the Chargor as set out above, … 48 The notice goes on to state: NOW TAKE NOTICE that the floating charge comprised within the Charge is to convert into a fixed charge with immediate effect with respect to the property described in schedule 1. 49 The property included in Schedule 1 of the Notice of Crystallisation served on the Original Chargee includes "Choses in action against any person including the Commissioner of Taxation". 50 Seventh, Mr Garrett alleges that on 27 April 2016 he was appointed as "Managing Controller" of the affected Companies by the operation of the terms and conditions of charges allegedly registered in connection with each of them. 51 Eighth, it is alleged that on 27 April 2016, Mr Garrett, in his purported capacity as "managing controller" of the affected Companies, served upon each of them a document titled "Notice of Crystallisation of Charges". The recitals in that document allege that a material adverse event has occurred under charges allegedly granted by the affected Companies. The alleged adverse event is the same adverse event alleged in the crystallisation notice served upon the Original Chargee, namely the receipt by the Original Chargee of an "Advice of Audits" by the Australian Taxation Office. It is reasonable to infer that the Advice of Audits is the same advice referred to in the crystallisation notice served on the Original Chargee - namely, advice to the effect that the transactions entered into (or proposed to be entered into) by the Original Chargee constituted a fraud in which the Original Chargee might be found to be complicit. The Notice of Crystallisation goes on to state that the floating charge granted by the affected Companies had "converted with immediate effect with respect to the property described in schedule 1". The list of property in Schedule 1 includes: Choses in action against National Australia Bank Limited, Simon Illsley the Commissioner of Taxation and any other person who may have adversely affected to [sic] circumstances of the Chargees.

The declaration sought 52 The claim for declaratory relief in the Draft Originating Application is made pursuant to s 418A(2) of the Corporations Act. Section 418A provides: 418A Court may declare whether controller is validly acting (1) Where there is doubt, on a specific ground, about: (a) whether a purported appointment of a person, after 23 June 1993, as receiver of property of a corporation is valid; or (b) whether a person who has entered into possession, or assumed control, of property of a corporation after 23 June 1993 did so validly under the terms of a security interest in that property; the person, the corporation or any of the corporation's creditors may apply to the Court for an order under subsection (2). (2) On an application, the Court may make an order declaring whether or not: (a) the purported appointment was valid; or (b) the person entered into possession, or assumed control, validly under the terms of the security interest; as the case may be, on the ground specified in the application or on some other ground. 53 Mr Garrett does not claim to have presently entered into possession or assumed control of the property of the affected Companies within the meaning of s 418A(1)(b). His evidence is to the effect that he has been frustrated by other persons in his attempts to do so. The Draft Originating Application is to be understood as alleging that Mr Garrett is a person who meets the description in s 418A(1)(a) and that he is entitled to an order made pursuant to s 418A(2)(a) declaring his purported appointment as receiver of the affected Companies to be valid. 54 The orders sought in paragraphs 2 and 3 of the Draft Originating Application confirm that Mr Garrett has the subjective intention to exercise the powers of a receiver. Mr Garrett confirmed that he would, in the capacity of receiver, be legally obliged to exercise the powers and duties conferred on a receiver by ss 420 and 421 of the Corporations Act. Those powers are extensive. I do not reproduce them here. It is sufficient to note that the conferral of powers under the charge and under the Corporations Act would give Mr Garrett the capacity to manage the affairs of each of the affected Companies and to make decisions affecting the whole or a substantial part of the affected Companies' businesses, and to affect significantly the affected Companies' financial standing. 55 I accept for present purposes that Mr Garrett is a person who purports to have been appointed a receiver of the affected Companies' property. Although Mr Garrett would not submit there is any doubt as to the validity of his appointment within the meaning of the opening words of s 418A(1), I disagree. More than that, I consider there to be no reasonable ground to assert the purported appointment to be valid at all. It follows that there is no reasonable ground for the institution of the proposed proceeding within the meaning of paragraph (c) of the definition of the phrase "vexatious proceeding" in s 37AM of the FCA Act. These conclusions follow from Mr Garrett's status as a person who is not a registered liquidator, and from his status as a person who is an undischarged bankrupt.

No entitlement to act as receiver 56 Section 418(1)(d) of the Corporations Act provides that a person is not qualified to be appointed, and must not act, as receiver of property of a corporation if the person is not a registered liquidator. Mr Garrett made submissions before this Court to the effect that the joint trustees of AGFT 4 could not and would not appoint a registered liquidator as receiver, firstly because of the expenses associated with such an appointment and secondly because of Mr Garrett's strong personal views as to the integrity of persons acting in the capacity as registered liquidators generally, which I do not repeat here. 57 Mr Garrett is not registered as a liquidator, nor is he entitled to be registered as one. 58 The registration of liquidators is regulated under Part 9.2 of the Corporations Act. An application for registration as a liquidator may be made under s 1279. Section 1282(2) requires ASIC to register as a liquidator any person who makes an application for registration, subject to the requirements of that section. Section 1282(4) provides: 1282 Registration of liquidators (4) ASIC must not register as a liquidator, or as a liquidator of a specified body corporate, a person who is disqualified from managing corporations under Part 2D.6.

Disqualification 59 On 15 May 2015 Judge Riethmuller of the Federal Circuit Court made a sequestration order against the estate of Mr Garrett under s 43 of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act). Mr Garrett's bankruptcy commenced on 19 January 2015. Mr Garrett does not dispute that he is an undischarged bankrupt. He submitted that he was entitled to the annulment of his bankruptcy by reason of the alleged payment of his debts and that he was corresponding with the trustee of his bankrupt estate with a view to obtaining a certificate of annulment under s 153A of the Bankruptcy Act. He also informed the Court that he had commenced proceedings for judicial review in the original jurisdiction of the High Court in which he sought relief under s 75(v) of the Constitution quashing the vexatious proceedings orders made against him in this Court under s 37AO of the FCA Act. He made no application to stay this application pending the finalisation of any proceedings in the High Court or pending the resolution of his bankruptcy, whether by annulment or discharge. 60 Section 206B of the Corporations Act relevantly provides: 206B Automatic disqualification Convictions (1) A person becomes disqualified from managing corporations if the person: … (b) is convicted of an offence that: … (ii) involves dishonesty and is punishable by imprisonment for at least 3 months; or … (2) The period of disqualification under subsection (1) starts on the day the person is convicted and lasts for: (a) if the person does not serve a term of imprisonment - 5 years after the day on which they are convicted; or … (3) A person is disqualified from managing corporations if the person is an undischarged bankrupt under the law of Australia, its external territories or another country. 61 Section 206A of the Corporations Act provides: 206A Disqualified person not to manage corporations (1) A person who is disqualified from managing corporations under this Part commits an offence if: (a) they make, or participate in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or (b) they exercise the capacity to affect significantly the corporation's financial standing; or (c) they communicate instructions or wishes (other than advice given by the person in the proper performance of functions attaching to the person's professional capacity or their business relationship with the directors or the corporation) to the directors of the corporation: (i) knowing that the directors are accustomed to act in accordance with the person's instructions or wishes; or (ii) intending that the directors will act in accordance with those instructions or wishes. Note: Under section 1274AA, ASIC is required to keep a record of persons disqualified from managing corporations. (1A) For an offence based on subsection (1), strict liability applies to the circumstance, that the person is disqualified from managing corporations under this Part. Note: For strict liability, see section 6.1 of the Criminal Code. (1B) It is a defence to a contravention of subsection (1) if the person had permission to manage the corporation under either section 206F or 206G and their conduct was within the terms of that permission. Note: A defendant bears an evidential burden in relation to the matters in subsection (1B), see subsection 13.3(3) of the Criminal Code. (2) A person ceases to be a director, alternate director or a secretary of a company if: (a) the person becomes disqualified from managing corporations under this Part; and (b) they are not given permission to manage the corporation under section 206F or 206G. Note: If a person ceases to be a director, alternate director or a secretary under subsection (2) the company must notify ASIC (see subsection 205B(5)). 62 Mr Garrett submitted that his disqualification from "managing corporations", as that phrase is used in s 206B(3) of the Corporations Act, does not preclude him from acting as a receiver of the property of a corporation within the meaning of s 418A(1)(a) of the Corporations Act. There was, he submitted, a relevant difference between the management of a corporation and the receipt and control of a corporation's property. It can be accepted that a receiver is a person who is a receiver of a corporation's property. So much is supported by the definitions of the words "controller" and "managing controller" in s 9 of the Corporations Act: controller, in relation to the property of a corporation, means: (a) a receiver, or receiver and manager, of that property; or (b) anyone else who (whether or not as agent for the corporation) is in possession, or has control, of that property for the purposes of enforcing a security interest; and has the meaning affected by paragraph 434F(b) (which deals with 2 or more persons appointed as controllers). … managing controller, in relation to the property of a corporation, means; (a) a receiver and manager of that property; or (b) any other controller of that property who has functions or powers in connection with managing the corporation; and has the meaning affected by paragraph 434G(b) (which deals with 2 or more persons appointed as managing controllers). 63 The phrase "receiver and manager of that property" is given meaning by s 90 of the Corporations Act. It is relevant because Mr Garrett, seeks among other things to have ASIC register documents confirming his appointment as managing controller. Section 90 provides: 90 Receivers and managers A receiver of property of a body corporate is also a manager if the receiver manages, or has under the terms of the receiver's appointment power to manage, affairs of the body. 64 It can be assumed for present purposes that a person will not contravene s 206A of the Corporations Act merely by reason of that person being an undischarged bankrupt who purports to have the capacities of a receiver, or a receiver manager. Liability for a contravention turns not on the existence of that capacity, but on two circumstances: (a) the person being a person disqualified from managing corporations under Part 2D.6; and (b) the person committing any one of the physical acts specified in subs 206A(1)(a), (b) or (c), whether or not in the exercise of powers as a receiver of the corporation's property. 65 The first circumstance is satisfied because Mr Garrett is disqualified from managing corporations under Part 2D.6 by reason of s 206B(3) of the Corporations Act. He was also between October 2010 and October 2015 disqualified from managing corporations by reason of having been convicted of an offence described in s 206B(1) of the Corporations Act. 66 As I have mentioned, Mr Garrett intends, in the capacity of managing controller of the affected Companies, to commit (at least) the physical acts prescribed in s 206A(1)(a) and (b) of the Corporations Act.

Limits on the exercise of the discretionary power under s 418A(2) 67 The discretionary power of a Court to make a declaratory order under s 418A(2) of the Corporations Act is not at large. The power is to be exercised according to law. The confines of the power are to be ascertained by reference to the scope and purpose of the statutory enactment by which it is conferred: see Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at [14] (French CJ) and the cases cited there. Without being exhaustive, the power is confined by Part 2D.6 and Part 9.2 of the Corporations Act. Two related and overlapping conclusions follow. 68 First, on its proper construction, s 418A(2) of the Corporations Act does not confer jurisdiction on the Court to declare a person to have been validly appointed as a receiver of property of a corporation in circumstances where the person is not qualified to be appointed as receiver and is prohibited from acting as receiver by reason of s 418(1). 69 Second, it cannot be a lawful exercise of the discretionary power conferred by s 418A(2) of the Corporations Act, properly construed, to declare a purported appointment of a receiver to be valid in circumstances where the person has expressed an intention to engage in conduct in that capacity that would, in all of the circumstances, constitute an offence under s 206A(1) of the Corporations Act. 70 In support of his application, Mr Garrett relied on the decision of Jessup J in Garrett v Chief Executive Officer of Austrade [2015] FCA 39. That was a judgment given in two proceedings heard concurrently: VID 584 of 2014 and VID 585 of 2014. In the second of those proceedings, Jessup J dismissed an objection to competency that had been made by the respondent. The respondent had argued that Mr Garrett did not have standing to conduct judicial review proceedings under s 39B(1) of the Judiciary Act 1903 (Cth) that had been commenced at a time when his interests would not have been relevantly affected by the outcome. Nothing in the reasons given by Jessup J assists Mr Garrett on his present application. In particular, Jessup J made no finding as to whether or not Mr Garrett was validly acting or entitled to act as a controller of a company to which those proceedings related. Mr Garrett's written submissions before Jessup J expressly denied that he was acting in the capacity of a receiver in that case.

Other consequences of Mr Garrett's disqualification 71 In the narrative of facts I have given above, Mr Garrett has purported to act as the controller of entities other than the affected Companies. He has, for example, purported to act as managing controller of OenoViva Vietnam in to causing it to enter into the HOA with the Original Chargee. As I have mentioned, the purchase price under the HOA was said to be $23,700,000.00. A very real question arises as to the enforceability of the HOA, and as to whether Mr Garrett has contravened s 206A of the Corporations Act by causing or purporting to cause, OenoViva Vietnam to enter into that transaction. The same may be said of the Deed of Assignment, entered into by a further three companies of which Mr Garrett is, or purports to be, managing controller, and in respect of which there is said to be a purchase price payable of $29,000,000.00. It is not necessary on the present application to finally determine those questions. However, the very fact that Mr Garrett admits to having caused the various companies to enter into the transactions in his capacity as managing controller reinforces my view that Mr Garrett will engage in conduct in contravention of s 206A of the Corporations Act in respect of the affected Companies. Insofar as Mr Garrett genuinely advances an alternative interpretation of s 206A, his interpretation is wrong.

Proposed proceedings without reasonable ground 72 In all of the circumstances, there is no reasonable ground for the relief claimed in paragraph 1 of the Draft Originating Application. The relief sought in paragraphs 2 and 3 depend upon Mr Garrett's valid appointment as managing controller. Insofar as Mr Garrett expressed an intention to challenge, in the course of the proposed proceedings, ASIC's refusal to receive and register documents concerning his purported status as managing controller of the affected Companies, that aspect of the proposed proceedings is, for the same reasons, bound to fail, even assuming that such a challenge could properly be regarded as collateral to the principal relief specified in the Draft Originating Application.

Proposed proceeding to harass, annoy etc: 73 Mr Garrett's affidavits deposed to efforts he had made to institute the proposed proceeding in the South Australia District Registry without the leave of this Court. It is apparent that he originally took the view that the proposed proceeding was not a "proceeding" within the meaning of the Order because he intended that the proceeding be heard and determined in the absence of any other party. Mr Garrett now concedes that the proposed proceeding is indeed a proceeding which is subject to the Order: see s 4 of the FCA Act which defines a proceeding to be a "proceeding in a court, whether between parties or not". 74 Mr Garrett made submissions to the effect that his stated intention to bring the proposed proceeding ex parte supported an inference that the proposed proceeding was not brought to harass or annoy or to cause delay or detriment within the meaning of paragraph (b) of the definition in s 37AM of the FCA Act. He submitted that any person who considered their interests would be affected by his application and who sought to be heard upon it could exercise their own discretion as to whether or not to "intervene". I understood that submission to mean that any inconvenience suffered by third parties by the institution and conduct of the proceedings would be of their own making. He submitted that the director of the affected companies would have no standing to intervene and that the affected companies could only intervene through the agency of a liquidator. 75 As I have mentioned, I did not make any order under s 37AT of the FCA Act requiring Mr Garrett to serve his application and supporting affidavits on any person. However, my reasons for not making that order have nothing to do with the question of whether the proposed proceeding itself could lawfully be heard in the absence of the affected Companies and other persons who might have an interest in being heard in the action. 76 Mr Garrett's affidavit material contains some limited evidence as to the attitude of the persons or entities who are alleged to have participated in dealings with him. At least one of those persons has reported Mr Garrett's conduct to the South Australia Police alleging fraud. Mr Garrett also briefly deposes to attempts made by directors of the affected Companies to have Mr Garrett barred from premises from which, I infer, the businesses of the affected Companies operate. I infer from that evidence that the affected Companies would allege, in the proposed proceedings, at least equitable fraud against Mr Garrett and that Mr Garrett's application for declaratory relief would be strenuously opposed. 77 The correspondence passing between Mr Garrett and ASIC demonstrates that Mr Garrett is well aware of the principles of procedural fairness. Less than a week before the hearing of this application, Mr Garrett was forcefully complaining to ASIC that his own entitlement to procedural fairness and natural justice had been denied. Taking into account that correspondence and his long history of litigation, I consider Mr Garrett to be a strategic litigant who would fully appreciate that the institution of the proposed proceeding would set in train a process in which persons whose interests might be affected by the outcome would be entitled to be heard and, indeed, would have no real commercial choice but to exercise that entitlement in order to rebut his allegations. 78 If leave were granted to institute the proceedings, rule 2.7(1)(b) of the Corporations Rules would in any event require Mr Garrett to serve the instituting documents on the affected Companies. The affected Companies would be entitled to appear in the proceedings, irrespective of whether they are named as parties on the originating process: r 2.9(1) of the Corporations Rules. Moreover, the Court may grant leave to any person claiming to be a creditor, contributory or officer of the affected Companies to be heard in the proceeding without becoming a party to it: r 2.13 of the Corporations Rules. In addition, ASIC may intervene as of right in the proposed proceedings: s 1330 of the Corporations Act. Quite apart from its statutory right to participate in the proposed proceedings, ASIC would have a sufficient interest to intervene to the extent that Mr Garrett sought to use the proposed proceedings as a vehicle to collaterally or directly challenge ASIC's administrative decisions. 79 In all of the circumstances, it is wrong to characterise the proposed proceeding as ex parte. It is not for Mr Garrett to determine who may or may not be heard in the proposed proceeding. Mr Garrett's subjective views as to whether the parties would succeed in defending the proposed proceeding are irrelevant to the issue presently under consideration, namely, whether the proposed proceeding is a proceeding instituted to "harass or annoy, to cause delay or detriment, or for any other wrongful purpose". 80 After judgment was reserved on this application, Mr Garrett sought to elaborate on his oral submissions on the question of the entitlement of the affected parties to be heard. The Court granted Mr Garrett leave to rely upon the further submission. It contained the following statement: It is my respectful submission that all relevant parties were before Her Honour yesterday as I act as agent for the entities to whom I have been appointed, the only alternative voice would be that of an administrator of liquidator who has a limited voice under s180 of the Corporations Act 2001 (Cth) 81 The written submission fails for obvious circularity. The validity of Mr Garrett's purported appointment is the very issue he seeks to have determined; an issue obviously affecting the interests of the affected Companies, and perhaps their directors, creditors and contributories. The reference in Mr Garrett's late written submission to a liquidator followed from Mr Garrett's oral submission to the effect that the affected Companies must, in the proposed proceeding, be presumed to be insolvent. That submission has no proper legal or factual foundation. 82 I reject Mr Garrett's submission that his intention to have the proceedings heard ex parte supports a conclusion that he does not subjectively intend to institute the proposed proceedings to harass, annoy or cause delay or detriment or for any other wrongful purpose.

Mr Garrett's purposes 83 This application is not the first time that questions have arisen as to the legality of Mr Garrett acting (or purporting to act) as receiver of a company's property or otherwise as an agent for a company whilst disqualified from managing corporations. 84 Section 37AR(3) of the FCA Act required Mr Garrett to file, with the present application, an affidavit that lists all of the proceedings that he has instituted in any Australian court or tribunal, including proceedings instituted before the commencement of that section. In a long list of proceedings set out in the 11 May affidavit, Mr Garrett includes the following: SCCIV-05-164; Evajade Pty Ltd & Ors v National Australia Bank Limited • Application by the Trustee of the Andrew Garrett Family Trust for loss cost and Damage arising from breach of the First and Second Contracts of Finance in circumstances where I was no longer a Trustee of the Andrew Garrett Family Trust • Dismissed in circumstances where the Trustee was impecunious and unable to afford Legal Representation as a consequence of the Trespass on the Bankrupt Estates of the Prior Trustees by the Trustees in Bankruptcy. 85 In Evajade Pty Ltd v National Australia Bank (No 2) [2005] SASC 229 (Evajade) the Supreme Court of South Australia dismissed an appeal from a decision of a Master of that Court staying the plaintiff's company's action against National Australia Bank. In the proceedings before the Master, Mr Garrett had asserted an entitlement to commence and conduct litigation on behalf of the plaintiff company in his purported capacity as the donee of a Power of Attorney granted by that company. He asserted that he fell within a class of persons entitled to apply for leave to represent a company in legal proceedings within the meaning of r 36.11 of the Supreme Court Rules 1987 (SA). In dismissing Mr Garrett's appeal, the Supreme Court said at [29] (emphasis added): The Master was correct to conclude that Mr Garrett was not within the class of persons identified in Rule 36.11(1). Even assuming that Mr Garrett was within the class of persons who could be given, on application of the company, leave to act and appear for Evajade, it does not follow that leave should be granted. Section 206A(1) of the Corporations Act provides that it is an offence for an undischarged bankrupt to make or participate in making decisions that affect the whole or a substantial part of the business of a corporation. There is a possibility if not a probability that Mr Garrett, in representing Evajade, would participate in the making of decisions that would affect a substantial part of the business of Evajade. That business is to act as a trustee for two Andrew Garrett Family Trusts. Mr Garrett submitted that Evajade was in substance part of the Garrett interests and that he should be allowed to represent Evajade along with all other Garrett interests. The terms of the power of attorney referred to earlier provide evidence, or suggest the involvement, of Mr Garrett in the general management of the affairs of Evajade. The exercise of such powers may well lead to a breach of section 206A(1) of the Corporations Act. It would be inappropriate to grant leave under Rule 36.11 where there was potential, that a person appointed, would or may commit a breach of section 206A(1). Even if Mr Garrett was a person within Rule 36.11(1) a grant of leave should not be made in his favour on the material before this Court. 86 The judgment in Evajade was made in the proceedings SCCIV-05-164, to which Mr Garrett referred in his 11 May affidavit. The proceedings were not dismissed in the circumstances described in the 11 May affidavit. The proceedings were stayed for reasons very similar to those that render the proposed proceeding in this Court without merit. Moreover, the proceedings were dismissed upon the Supreme Court having heard submissions by Mr Garrett to the effect that he was entitled to manage the affairs of the company in the litigation, not by reason of holding office as a director, but by reason of being appointed as the plaintiff company's agent. 87 The Supreme Court in Evajade noted a submission by Mr Garrett to the effect that he proposed making an application for leave pursuant to s 206G of the Corporations Act to manage the affairs of Evajade. In the list of proceedings set out in his 11 May affidavit Mr Garrett refers to having made such an application in 2006 in connection with Evadale which, he says, were dismissed. 88 Similarly, in Industrial Mutual Liability Pty Ltd & Ors v International Vineyards Pty Ltd & Ors (No 2) [2005] SASC 238 (Industrial Mutual), the Supreme Court dismissed an appeal in which Mr Garrett purported to be entitled to appear on behalf of four plaintiff companies in proceedings SCCIV-04-247. Again, Mr Garrett purported to be so entitled by reason of his status as a donee under a Power of Attorney granted by the companies. A Master of the Supreme Court had ordered that the proceedings be permanently stayed. As in Evajade, the Master had determined that Mr Garrett was disqualified from managing corporations by virtue of s 206B(3) of the Corporations Act. The Master's reasons, extracted at [4] of the judgment on appeal state: Under s 206A(1) of the Commonwealth Corporations Act it is an offence for an undischarged bankrupt to "make, or participate in making, decisions that affect the whole, or a substantial part, of the business of the corporation". If Mr Garrett was to be granted leave under R 36.11 to appear for a company, there is a potential for him to commit an offence under this section. This Court should not grant leave under R 36.11 where there is such a potential for the person appointed to commit an offence by appearing for the company. 89 The Master's decision was upheld on appeal. 90 Mr Garrett's 11 May affidavit makes no reference to the proceedings in Industrial Mutual. Mr Garrett, in those matters, alleged that he ought be entitled to act on behalf of the plaintiff companies by reason of having been appointed as their agent. That is the very status he now alleges he has assumed in connection with the affected Companies by reason of the following terms of the company eight charge: 1.11.1 Receiver / Controller as agent (a) a receiver, subject to Clause 1.10(b) and 1.10(c) will be the agent of the Chargor who alone shall be responsible for the receiver's acts and omissions and remuneration. (b) The Chargee may appoint a receiver/controller as the agent of the Chargee and delegate to a receiver any of the Chargee's rights under this document. (c) To the extent that as a result of an order being made or a resolution being passed for the winding up of the Chargor, a receiver/controller ceases to be the agent of the Chargor, the receiver will immediately become the agent of the Chargee. 91 In Garrett v Deputy Commissioner of Taxation [2014] FCA 576 Davies J dismissed an application made by Mr Garrett pursuant to s 482 of the Corporations Act to have the liquidation of a company terminated. Such an application can only be made by the liquidator, a creditor or a contributor of the company. Mr Garrett initially claimed that he had standing to make the application as the "managing controller" of the company but later conceded that he would not have standing to bring the application in that capacity. Davies J determined that Mr Garrett had no standing to bring the application. The respondent provided the Court with a letter from ASIC to Mr Garrett dated 23 October 2012 referring to Mr Garrett's criminal conviction for an offence of dishonesty and his disqualification from managing corporations under s 206B(1)(b)(ii) of the Corporations Act by reason of that conviction. The respondent submitted that the proceedings should be dismissed as an abuse of process because Mr Garrett was acting in contravention of s 206A of the Corporations Act by acting as the managing controller of companies to which he purported to have been appointed. Davies J did not consider it necessary or appropriate to determine whether or not Mr Garrett had contravened s 206A of the Corporations Act. Davies J nonetheless heard submissions from the parties going to the very question now before this Court, including submissions from Mr Garrett. 92 In February 2014, Mr Garrett asked ASIC to confirm whether ASIC took the view that it was necessary for him to seek the leave of a Court in order to be appointed as controller or act in that capacity. ASIC responded in the following terms: The question that you ask turns upon the individual facts as to each company you are acting as controller over, and the extent of your involvement in those companies. As an employee of ASIC I cannot provide individual legal advice. Depending upon the extent of your involvement with the companies you may be in breach of the Corporations Act. For this reason I strongly recommend that you obtain legal advice about whether your position as controller requires leave to manage, that you seek legal advice. I confirm that as a person who is disqualified from managing corporations under s.206B of the Corporations Act you are prohibited from managing corporations. Whether you are managing corporations as controller depends upon whether you are engaging in any of the following conduct. 93 The ASIC correspondence then sets out the terms of s 206A of the Corporations Act, including s 206A(1B) which provides that a person has a defence to a contravention of s 206A if the person has permission to manage the corporation under either s 206F or s 206G. The bundle of correspondence between Mr Garrett and ASIC also discloses that Mr Garrett had previously foreshadowed to ASIC that he would make an application for leave pursuant to s 206G of the Corporations Act to manage corporations. No such application has since been made. 94 In correspondence sent to Mr Garrett in May 2014, ASIC said, in connection with Mr Garrett purporting to act as managing controller of a company (not being on the affected Companies): As you are currently disqualified from managing corporations under s 206B(1)(b)(ii) of the [Corporations] Act and no order has been made by a Court under s 206G of the Act, granting you leave to manage the corporation, this may mean that you are not permitted to act as managing controller of the company…. 95 I infer from the ASIC correspondence and from Mr Garrett's litigation history that Mr Garrett specifically turned his mind to the question of whether his acting in the capacity of a receiver would contravene the Corporations Act and that he did so prior to causing, in his purported capacity as "controller", a series of companies to enter into the underlying transactions that form the subject matter of the proposed proceeding. There is no evidence that he has made any application pursuant to s 206G of the Corporations Act to act as receiver of the property of any of the companies to which he purports to have been appointed as "managing controller" and, in particular, has made no application for leave to manage the affected Companies. 96 Further, I find that Mr Garrett has attempted to exercise his purported capacities as managing controller of the affected Companies in circumstances where he is well aware that there is not only doubt as to the validity of his appointment but a strenuous denial of it by the affected Companies. He has done so against the background of a series of cases in which he has unsuccessfully sought to act as an agent of corporations whilst an undischarged bankrupt or whilst otherwise being disqualified from managing corporations. Notwithstanding that knowledge and background, Mr Garrett has purported to require the officers of the affected Companies to provide reports to him as to the companies' affairs pursuant to s 430 of the Corporations Act. He has sought access to the books and records of the affected Companies under s 431 of the Corporations Act. He has had dealings with a senior employee of one affected entity and deposes to having had dealings with the banks at which the affected Companies' trading accounts are held. All of that conduct is relevant in my assessment of Mr Garrett's purpose for now seeking to commence the proposed proceeding. 97 In his oral submissions, Mr Garrett stated that he had attempted to persuade the directors of the affected Companies to pay the debts alleged to be owing to AGFT 4 so that the controversy as to his purported status as managing controller might then be resolved. In ordinary circumstances, a bona fide attempt to settle a legal dispute would be afforded considerable weight on the question of whether a proceeding is commenced to harass or annoy or for another wrongful purpose. A genuine willingness to negotiate and settle a dispute ordinarily tells against a vexing attitude. However, in all of the circumstances, the fact (if it be true) that Mr Garrett has put such a proposition to the affected Companies is, I find, concerning. 98 Mr Garrett has made that proposal in circumstances where he knows that the Original Chargee considers his conduct to amount to fraud and in circumstances where he has been urged by ASIC to obtain legal advice as to whether acting in the capacity as controller might amount to a contravention of the Corporations Act, and in circumstances where he knows that the Australian Taxation Office has also expressed a view that his business dealings are affected by fraud. Notwithstanding all of those surrounding circumstances, Mr Garrett has made no application pursuant to s 206G of the Corporations Act for leave to manage the affected Companies prior to causing himself to be appointed. Instead, he has engaged in conduct that constitutes an attempt to wrongfully interfere with the affected Companies' affairs, knowing, from his previous litigation experience, that this legal entitlement to do so is doubtful. 99 In all of the circumstances, I infer that Mr Garrett proposes to institute the proceedings for the purpose of continuing his conduct of harassment and annoyance commenced in his commercial dealings and now sought to be continued in litigation before this Court. I find that Mr Garrett proposes to institute the proposed proceedings for the purpose of applying pressure on the affected Companies to agree terms of settlement with him, rather than face the spectre of costly litigation. That is a wrongful purpose within the definition of the expression "vexatious proceeding" in s 37AM(1) of the FCA Act.

Other purposes 100 Less than two weeks before the present application was made, Mr Garrett was refused leave to institute proceedings by way of cross claims in the Victoria District Registry of this Court: Treasury Wine Estates Vintners Limited v Garrett, in the matter of Treasury Wine Estates Vintners Limited [2016] FCA 496. Justice Middleton found, as I have done, that the proceeding sought to be instituted by Mr Garrett were without merit. Among the issues sought to be raised by Mr Garrett in those proceedings was an issue he wrongly contended arose under the Constitution. 101 It is evident from the terms of the of the recitals to which I have referred at [47] above that Mr Garrett alleges there to be a Constitutional issue related in some way to the subject matter of the proposed proceeding, and concerning his history of dealings with this Court and the entities named in the ATO Order. 102 Relatedly, the property allegedly controlled by Mr Garrett in his capacity as managing controller of the affected Companies includes "choses in action" against any entity that has ever adversely affected the interests of the trustees of AGFT 4. Those words are, I find, intended to capture the entities in the ATO order. The content and tenor of Mr Garrett's legal documents indicate that he continues to harbour an antagonistic obsession about his past dealings with the Australian Taxation Office. I find, in all of the circumstances, that Mr Garrett seeks to institute the proposed proceeding for the purpose of continuing his past conduct of instituting proceedings to harass and annoy the entities named in the ATO Order, albeit indirectly in the capacity of agent of the affected Companies. That intention may be reasonably inferred from the terms and tenor of the crystallisation notices served on the Original Chargee and the affected Companies viewed in all of the circumstances, including his litigation history.

Conclusion 103 Notwithstanding that the relief sought on the Draft Originating Application is cast in terms of a declaration of right, I consider the proposed proceeding to be a vexatious proceeding within the meaning of s 36AM(1) of the FCA Act. 104 The application for leave to institute the proposed proceeding is dismissed. In circumstances where the affected Companies and the Original Chargee have not been heard on the application, I will make orders pursuant to s 37AF of the FCA Act prohibiting, without the leave of the Court, the publication of evidentiary or other material on the Court record that may tend to identify those entities. I certify that the preceding one hundred and four (104) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Charlesworth.

Personal Property Security Act 2009(Cth)

Workplace Relations Act 1996(Cth)

Supreme Court Rules 1987(SA)

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