BETWEEN : COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124)

CHRISTOPHER JOHN RIDOUT (as Executors of the Estate of GEORGE EDWARD RIDOUT)

Vexatious proceedings - Application for order restraining defendants - Turns on own facts

Vexatious Proceedings Restriction Act 2002, s 4(2)(c)(i)

Attorney General v Hunter [2002] WASC 189

Attorney General v Michael & Anor [1999] WASCA 181

Commonwealth Bank of Australia v Ridout Nominees Pty Ltd & Ors [2000] WASC 37

Commonwealth Bank of Australia v Ridout Nominees Pty Ltd & Ors [2003] WASC 215

Granich Partners v Yap [2003] WASC 206

Hunters Hill Municipal Council v Pedler (1976) 1 NSWLR 478

Re Attorney General (Cth); Ex parte Skyring [1996] HCA 4; (1996) 70 ALJR 321

Re Cameron [1996] QCA 37; (1996) 2 QdR 218

Re Shaw & Anor [2001] VSCA 175; [2001] 4 VR 103

Ridout Nominees Pty Ltd & Ors v Commonwealth Bank of Australia [2003] WASCA 158

Ridout Nominees Pty Ltd & Ors v Commonwealth Bank of Australia [2003] WASCA 182

Attorney General v Wentworth (1988) 14 NSWLR 481

Chamberlain v The Queen (No 1) [1983] HCA 13; (1983) 153 CLR 514

Hip Foong Hong v H Neotia & Co (1918) AC 888

Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 68

McDonald v McDonald [1965] HCA 45; (1965) 113 CLR 529

McHarg v Woods Radio Pty Ltd [1948] VicLawRp 86; (1948) VLR 496

R v Lord Chancellor; Ex parte Witham [1997] 1 CHRL 23

Re Marks & Federated Ironworkers' Association (1981) 34 ALR 208

Tait v The Queen [1962] HCA 57; (1962) 108 CLR 620

1 MASTER SANDERSON: This is the plaintiffs' application for leave pursuant to s 4(2)(c)(i) of the Vexatious Proceedings Restriction Act 2002 ("the Act") to make an application under s 4(1) of the Act. Section 4(1) of the Act is in the following terms:

"4. Restriction of vexatious proceedings

(1) If a Court is satisfied that ¾

(a) a person has instituted or conducted vexatious proceedings (whether before or after the commencement of this Act); or

(b) it is likely that the person will institute or conduct vexatious proceedings,

the Court may make either or both of the following orders ¾

(c) an order staying any proceedings, either as to the whole or part of the proceedings, that have been instituted by that person;

(d) an order prohibiting that person from instituting proceedings, or proceedings of a particular class, without the leave of a court or tribunal, as the case requires under section 6(1)."

2 Leave may be granted under s 4(2)(c)(i) of the Act to any person against whom another person has instituted or conducted vexatious proceedings. The plaintiffs submit that they are entitled to be granted leave in the circumstances and that an order should be made under s 4(1)(d) of the Act.

3 Section 3 of the Act defines "vexatious proceedings" as proceedings:

"(a) which are an abuse of the process of the court or a tribunal,

(b) instituted to harass or annoy, to cause delay or detriment, or for any other wrongful purpose,

(c) instituted or pursued without reasonable grounds; or

(d) conducted in a manner so as to harass or annoy, cause delay or detriment, or achieve any other wrongful purpose."

"(a) any cause, matter, action, suit, proceedings, trial, or inquiry of any kind within the jurisdiction of any court, including a court of summary jurisdiction, or a tribunal;

(b) any proceedings, including interlocutory proceedings, taken in connection with or incidental to proceedings pending before a court, including a court of summary jurisdiction, or a tribunal; and

(c) an appeal from a decision or determination, whether or not a final decision or determination, of a court, including a court of summary jurisdiction, or a tribunal."

5 In Granich Partners v Yap [2003] WASC 206, E M Heenan J dealt with what was meant by vexatious proceedings. His Honour referred to the definition of the phrase found in s 3 of the Act and said (at [46]):

"It is to this definition that the court must resort in determining the present application but, to some extent, parts of the statutory definition reflect language adopted in earlier cases in this State and elsewhere. These show that a clear case of an abuse of process and of vexatious proceedings is where there are further or collateral attempts to challenge a final decision of a Court binding on the party attempting the challenge."

6 His Honour went on to quote what was said by Yeldham J in Hunters Hill Municipal Council v Pedler (1976) 1 NSWLR 478 at 488:

"When a final decision has been given, any attempt, whether by way of appeal or application to set it aside, or to set aside proceedings taken to enforce such a decision, which is in substance an attempt to re-litigate what has already been decided, is the institution of legal proceedings. It is to the substance of the matter that regard must be had and not its form."

7 His Honour then went on to refer to the decision of the Full Court in Attorney General v Michael & Anor [1999] WASCA 181 and the High Court decision in Re Attorney General (Cth); Ex parte Skyring [1996] HCA 4; (1996) 70 ALJR 321. His Honour concluded that (at [47]):

"... it is clear that a high degree of confidence and the lack of merit at the proposed cause of action is necessary before intervention is justified".

8 The authorities make it clear that a category of vexatious proceedings is proceedings instituted by a litigant who "sees dark conspiracies and a threat of great harm to himself in real or imagined wrongs of another": see Attorney General v Hunter [2002] WASC 189; Attorney General v Michael (supra).

9 In determining whether a person has instituted vexatious proceedings, regard should not be had to proceedings commenced in the Courts of the Commonwealth, except where the proceedings initiated in Western Australian courts are cumulative on those commenced in that jurisdiction. These proceedings may then be used to strengthen the conclusion that proceedings in Western Australian courts are vexatious: see Re Cameron [1996] QCA 37; (1996) 2 QdR 218; Attorney General v Michael (supra); Granich Partners v Yap (supra) at 44.

10 In Granich Partners v Yap (supra), E M Heenan J also dealt with the circumstances in which leave will be given to a private applicant to seek an order under s 4 of the Act. His Honour said (at 31):

"The requirement for leave to be obtained by a private applicant, who can be presumed to be acting in the protection of his or her own interests, is clearly to allow the court to ensure that such applications are not used as instruments of oppression or as tactical exercises between adversaries. The court will only consider the exercise of this jurisdiction if it is satisfied that there are substantial grounds for doing so and there is sufficient reason to embark on an inquiry over whether or not the procedures and opportunities of litigation are being abused, or misused, in such a way that an intolerable burden is placed upon the time, resources and procedures of the court. This is an area where relief should be given not merely because another private litigant is being inconvenienced or harassed but also because important public resources of time and attention of the court are being, or may be, diverted by inappropriate claims, to the disadvantage not only of the court but to other litigants whose causes may be delayed by the time needed to deal with vexatious proceedings."

11 Litigation between the parties to this application began in 1995 when the first plaintiff brought an action in this Court against the defendants in these proceedings and other natural persons and corporate entities related to or associated with them, seeking a determination of the amount due to it pursuant to various mortgages and guarantees executed in its favour, judgment for that amount and a declaration as to its entitlement to possession of certain mortgaged properties. The trial took place before Wheeler J and occupied 12 days between 14 June and 23 September 1999. Her Honour delivered reasons on 28 February 2002: see Commonwealth Bank of Australia v Ridout Nominees Pty Ltd & Ors [2000] WASC 37. Her Honour's decision ran to 75 pages and, with respect, involved a careful and detailed analysis of all of the issues. The first plaintiff was successful and judgment was entered in its favour against certain members of the Ridout group in the sum of $4,041,822.25, plus interest. Further, there was a declaration that the first plaintiff was entitled to possession of the mortgaged properties. The first plaintiff subsequently took possession of these properties and effected a sale.

12 The Ridout group appealed against the decision of Wheeler J. In the appeal the Ridout group raised various allegations against the first defendant and its staff, including that they (the staff) had forged documents as part of a Freemason conspiracy. The Ridout group also alleged that Wheeler J was involved in this conspiracy and should be removed from the Court. The appeal was heard by a Court comprising Murray, Roberts-Smith and Pullin JJ in June 2003. The appeal was dismissed: Ridout Nominees Pty Ltd & Ors v Commonwealth Bank of Australia [2003] WASCA 158.

13 On 1 August 2003 the Ridout group filed with the High Court an application for special leave to appeal from the decision of the Full Court. That appeal was made on the following grounds:

"(a) the Full Court members did not disclose their shareholdings in the Bank, and accordingly were guilty of various offences under the Crimes Act 1914 (Cth);

(b) the Full Court members had attempted to pervert justice and committed various offences by acting with bias against the Ridout Group;

(c) the Full Court was not validly able to decide on the issue as they did not permit a trial by jury;

(d) the Full Court members were involved in freemasonry, and were biased against the Ridout Group because they were involved in a freemasonry conspiracy;

(e) the Bank had not been validly created under the Constitution;

(f) the Supreme Court of Western Australia had no jurisdiction because it was unconstitutional, as the Constitution contains in the preamble the words "in the presence of the Almighty God", which is a reference to the God of Freemasonry, showing the continued bias of the Courts."

14 Perhaps not surprisingly, the High Court Registry rejected the special leave application as not being in the proper form. On 25 August 2003 the Chief Justice of the High Court issued a direction that the Ridout group not commence proceedings in the High Court unless the Chief Justice first gave leave to have the process issued. This direction was issued pursuant to O 58 r 4(3) of the High Court Rules which relate to matters that, on their face, appear to be "an abuse of the process of the Court or a frivolous or vexatious proceeding or application".

15 On 5 August 2003 the Ridout group applied to this Court for an order staying execution of the judgment and, in particular, to prevent the first plaintiff from taking possession of the properties. The application was heard by Pullin J and was dismissed: see Ridout Nominees Pty Ltd & Ors v Commonwealth Bank of Australia [2003] WASCA 182.

16 On 10 October 2003 the first defendants filed a Writ of Prohibition application in the High Court with an ex parte application for leave to issue a proceeding and a supporting affidavit affirmed on 10 October 2003 by the first defendants and one Brian William Shaw. The writ seeks to have the Chief Justice of the High Court and all members of the Supreme Court of Western Australia imprisoned and removed from the bench. Leave has not been granted by the High Court to commence these proceedings.

17 In October 2003 the Ridout group filed an application in this Court for orders that they be returned to the mortgage properties (already sold) in order to perform firebreak works and to harvest crops on the properties. This application was heard by E M Heenan J, who dismissed application, pointing out that there was no basis to go behind the finality of any previous judgment: see Commonwealth Bank of Australia v Ridout Nominees Pty Ltd & Ors [2003] WASC 215.

18 On 8 December 2003 the second defendants commenced further proceedings in this Court (CIV 2493 of 2003). The defendants in these proceedings included the first, third, fourth, fifth, sixth and seventh plaintiffs in this action. The third plaintiff in these proceedings is an employee of the first plaintiff. The fourth plaintiff are the solicitors who, at all relevant times, have represented the first plaintiff. The fifth plaintiff is a partner in the fourth plaintiff and the sixth plaintiff is a senior associate in the firm. The seventh plaintiff is a firm of accountants who have in the past acted as receivers and managers appointed by the first plaintiff. Also included as defendants in CIV 2493 are one Phillip Rundell, the receiver employed by the seventh plaintiff, the Sheriff of Western Australia and PricewaterhouseCoopers. PricewaterhouseCoopers actually had no involvement at all in any action taken against the Ridout group. It appears that their connection is that Mr Rundell was previously one of their employees. By this action the Ridout group seeks to have the decision in the original proceedings as affirmed by the Full Court set aside on the basis of fraud on the part of the first and second plaintiffs in these proceedings. On 17 December 2003 the defendants in CIV 2493 of 2003 applied to strike out the action. On 10 February 2004 the action was dismissed against all parties except the first plaintiff in these proceedings. The application by the first plaintiff is still pending and yet to be determined.

19 The second plaintiff in these proceedings is an employee of the first plaintiff and was previously manager of the bank's Boyup Brook branch. In the original proceedings brought by the first plaintiff heard before Wheeler J, the second plaintiff gave evidence in relation to his witnessing the Ridout's signed bank guarantees. On 2 March 2004 the first defendants commenced private prosecutions against the second plaintiff in the Court of Petty Sessions. They have alleged that the second plaintiff committed perjury and fraud in the trial of the original proceedings. A similar complaint was issued against Murray J for being a conspirator to the fraud.

20 On 5 April 2004 the Magistrate adjourned the complaints against the second plaintiff until 4 May 2004. In respect of the complaints against Murray J, the Commonwealth and State Director of Public Prosecutions intervened and discontinued the complaints on the basis they had satisfied themselves there was no merit in the action. The Director of Public Prosecutions has since advised that he will take over prosecutions against the second plaintiff from the first defendants and that it is likely he will discontinue the prosecutions. A copy of the letter from the Director of Public Prosecutions to the second plaintiff's solicitors appears as annexure "AJM21" to the affidavit of the sixth plaintiff, sworn 16 April 2004.

21 The first defendants have notified the police and people who have attended the properties that they intend to sue them for participating in the alleged fraud being perpetrated upon them by the first plaintiff and the Freemasons. A copy of these letters is to be found as annexures "AJM22, 23, 24 and 25" to the sixth plaintiff's affidavit.

22 There is one further worrying aspect of the defendants' behaviour. That relates to Mr Shaw. Mr Shaw first appeared for the defendants on the Full Court appeal. It would appear Mr Shaw has a fixation with the activities of Freemasons. He has raised such arguments in the Victorian courts: see Re Shaw & Anor [2001] VSCA 175; [2001] 4 VR 103 at 109. In that decision the Victorian Court of Appeal noted Mr Shaw's "disregard for the legal system". It is clear that the Ridouts and those associated with them, have used Mr Shaw's assertion as grounds for many of their applications and appeal. There is every reason to believe that they will continue to do so in the future.

23 In opposition to this application, the defendants provided an outline of submissions dated 13 May 2004. Mr Christopher Ridout, the second-named first defendant, appeared at the hearing. Mr Ridout indicated, despite the fact that submissions had been filed, he had not had adequate time to prepare a defence to the application. I therefore allowed him a further 14 days to file any further submissions. These submissions were filed on 17 June. Nothing need really be said in relation to any of the submissions put by the defendants. They amount to a regurgitation of the nonsense which has been trotted out in the past. Nothing was said which addressed the issues raised by this application. Rather, it was plain that the defendants were unrepentant and if not in some way restrained, would continue to pursue their unmeritorious crusade.

24 This is as clear a case as can be, both for the grant of leave to bring the application and for an order in the terms sought by the plaintiffs. The plaintiffs have established that what the defendants are attempting to mount is a collateral attack on the original decision which went against them. The defendants are harassing the plaintiffs. The court's resources are being wasted. This must stop. Accordingly, subject to hearing from counsel, I will make orders in terms of the chamber summons.