REASONS FOR JUDGMENT
1 On 9 December 2014, the applicant ("Mr Garrett") filed an originating application for relief under s 39B of the Judiciary Act 1903 (Cth) ("the Judiciary Act") against the Commissioner of Taxation ("the Commissioner") and one other respondent, supported by a statement of claim. Pursuant to the application, Mr Garrett seeks orders that the decision of the Commissioner to cancel his registration for GST be set aside and that his registration for GST be reinstated. Mr Garrett also seeks orders that a "Rights Sale Agreement" dated 27 June 2014 "is valid and binding on the parties", that a notice of assessment dated 27 October 2014 "stand", and orders that the respondents have breached the provisions of various Acts and are able to be sued under the provisions of the Australian Taxation Office's Taxpayers' Charter.
2 On 7 January 2015, the respondents filed an interlocutory application seeking an order that this proceeding be dismissed pursuant to s 37AO(2)(a) of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act") and, in the alternative if the proceeding is not dismissed, an order that the second respondent be removed as a party to this proceeding under r 9.08 of the Federal Court Rules 2011 (Cth) ("the FCR"), summary judgment against Mr Garrett pursuant to r 26.01 of the FCR; and further or alternatively, that parts of the statement of claim be struck out under r 16.21 of the FCR.
3 Section 37AO of the Federal Court Act empowers the Court to make orders where the section applies:
(a) staying or dismissing all or part of any proceedings in the Court already instituted by the person described in s 37AO(1);
(b) prohibiting the person from instituting proceedings, or proceedings of a particular type, in the Court; and
(c) any other order that the Court considers appropriate in relation to the person.
4 Pursuant to s 37AO(1), this section applies if the Court is satisfied that:
(a) a person has frequently instituted or conducted vexatious proceedings in Australian courts or tribunals; or
(b) a person, acting in concert with another person who is subject to a vexatious proceedings order or who is covered by paragraph (a), has instituted or conducted a vexatious proceeding in an Australian court or tribunal.
5 An order made under s 37AO(2) is a "vexatious proceedings order". The word "vexatious" is not separately defined for the purposes of s 37AO but the expression "vexatious proceeding" is defined in s 37AM(1) to include:
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.
6 These categories overlap to some extent. In Attorney General (NSW) v Chan [2011] NSWSC 1315 at [33], Adamson J said in respect of the equivalent definition in the Vexatious Proceedings Act 2008 (NSW):
These categories are not discrete, since each of the sub-paragraphs (b)-(d) could properly be regarded as an abuse of process of a court or tribunal. Furthermore, the difference between sub-paragraph (b), which connotes a subjective intention on the part of the Defendant, and sub-paragraph (d), which does not, and is concerned with the effect and consequence, rather than motive or design, relieves the Court of the obligation of determining whether the respondent to such an application intends the consequences of his or her actions, or does not.
See also HWY Rent Pty Ltd v HWY Rentals (in liq) (No 2) [2014] FCA 449 ("HWY Rent") at [106]; Garrett v Commissioner of Taxation [2015] FCA 117.
7 Section 37AO was recently considered by Pagone J in Garrett v Commissioner of Taxation [2015] FCA 117. As his Honour pointed out, the question of whether a proceeding is a "vexatious proceeding" within s 37AM(1) depends on whether the proceeding itself is vexatious, not upon whether it was instituted vexatiously.
8 In the present case, the relevant provision is s 37AO(1)(a). The word "frequently" has its ordinary meaning and is not given a specific statutory meaning for the purposes of s 37AO(1): Garrett v Commissioner of Taxation [2015] FCA 117 at [8]. As Perry J in HWY Rent observed at [112] the term "frequently" is a relative term and "must be looked at in the context of the litigation being considered": see also Garrett v Commissioner of Taxation [2015] FCA 117 at [8]. For the purposes of s 37AO(1) the Court may have regard to any of the matters set out in s 37AO(6). Section 37AO(6) provides as follows:
For the purposes of subsection (1), the Court may have regard to:
a. proceedings instituted (or attempted to be instituted) or conducted in any Australian court or tribunal; and
b. orders made by any Australian court or tribunal; and
c. the person's overall conduct in proceedings conducted in any Australian court or tribunal (including the person's compliance with orders made by that court);
In HWY Rent, Perry J observed that the definition of "proceeding" in s 4 of the Federal Court Act and the definition of the word "institute" in s 37AM(1)(a) are sufficiently broad to allow the Court to have regard to baseless applications or appeals or repeated oral applications with no proper basis: at [102]-[104].
9 There have been two recent decisions in this Court in which orders have been made under s 37AO in relation to Mr Garrett. In Garrett v Make Wine Pty Ltd [2014] FCA 1258 ("Garrett v Make Wine"), Mortimer J made an order under s 37AO that Mr Garrett be prohibited from instituting in his own name, causing others to institute, and being concerned, directly or indirectly in the institution of any proceedings in the Federal Court against Make Wine Pty Ltd and various other entities and individuals associated with that entity, without the leave of the Court. In Garrett v Commissioner of Taxation [2015] FCA 117, Pagone J made declarations that Mr Garrett is a person who has frequently instituted or conducted vexatious proceedings in Australian courts or tribunals and, by the proceeding before his Honour, the respondents to that proceeding (namely the Commissioner and several named individuals employed in the Australian Taxation Office) were each persons against whom Mr Garrett has instituted or conducted a vexatious proceeding. Pagone J ordered that Mr Garrett be prohibited from instituting in his own name, causing others to institute, and being concerned, directly or indirectly in the institution of any proceedings in any registry of the Federal Court against the Commissioner, 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 advisor of the Commissioner, without the leave of the Court. Pagone J further ordered that Mr Garrett be prohibited from instituting in his own name, causing others to institute, and being concerned, directly or indirectly, in the institution of any proceedings in any registry of the Court without the leave of the Court, and dismissed the proceeding before his Honour as a vexatious proceeding.
10 In this proceeding, the respondents rely on Garrett v Commissioner of Taxation [2015] FCA 117 and 30 other proceedings on which the respondents relied in that proceeding to prove that Mr Garrett has frequently instituted or conducted vexatious proceedings. Those proceedings are set out in Appendix A to these reasons for decision and include Garrett v Make Wine. In Garrett v Commissioner of Taxation [2015] FCA 117, Pagone J found that Mr Garrett has frequently instituted and conducted vexatious proceedings in Australian courts and tribunals and that the reasons for that conclusion also applied to the proceeding before his Honour: at [34]. His Honour was satisfied on the material before him that Mr Garrett: has abused the process of the Court by seeking to re-litigate matters, directly and indirectly (at [11]-[20]) and by taking steps in various proceedings based on inconsistent proceedings in a way that could bring the administration of justice into disrepute (at [21]-[22]); has instituted or pursued proceedings without reasonable grounds (at [23]-[26]); and has conducted proceedings in a way to annoy, cause delay or detriment or achieve another wrongful purpose (at [27]-[30]). His Honour was also satisfied that the proceeding against the respondents in the matter before him came within the fourth category and the statutory definition of "vexatious proceeding", namely a proceeding conducted in a way so as to harass or annoy and therefore that it should be dismissed in its present form: at [34]. In this proceeding I have the benefit of the detailed reasons given by Mortimer J in Garrett v Make Wine and by Pagone J in Garrett v Commissioner of Taxation [2015] FCA 117. I respectfully adopt the analyses in those judgments of the previous cases involving Mr Garrett to which their Honours had regard in making orders under s 37AO.
11 In this proceeding, the respondents rely on a further five decisions handed down this year (in addition to Garrett v Commissioner of Taxation [2015] FCA 117) in support of their contention that Mr Garrett has instituted or conducted proceedings are "vexatious proceedings" within the meaning of s 37AM(1) of the Federal Court Act. These decisions are set out below.
12 In Garrett v Cahill [2015] FCCA 26, Mr Garrett made an application to the Federal Circuit Court ("FCC") to set aside a bankruptcy notice issued against him on the ground that he has a counter-claim, set-off or cross demand equal to or exceeding the amount of the sum payable under the final order, being a cross-claim, set-off or cross demand he could not have set up in the action in which the order was obtained, within the meaning of s 40(1)(g) of the Bankruptcy Act 1966 (Cth). That application was dismissed because the amounts that he claimed by way of cross-claim, set-off or cross demand were not amounts owed to him personally and therefore were not mutual and due in the same right as the judgment debt against Mr Garrett held by the respondent to that proceeding. The application can be said to have been brought without reasonable ground.
13 Garrett v Cahill [2015] FCA 314 was an appeal by Mr Garrett from the decision in Garrett v Cahill [2015] FCCA 26. The appeal was dismissed. Beach J held that "there is little doubt" that the FCC decision was correct and "correctly applied the relevant principles applicable to s 40(1)(g)": at [34], [37]. His Honour stated that "[a]ccepting for the moment that [Mr Garrett] was asserting bona fide claims, on the material before [the FCC, Mr Garrett] did not establish that any of his claims had such sufficient prospects of success as were required for the purposes of s 40(1)(g)": at [37]. Beach J also stated that Mr Garrett sought to rely on voluminous new material that was not before the FCC "in order to overcome any evidentiary deficiencies that had been before [the FCC]": at [38]. His Honour stated at [38] that:
... such material was for the most part in the nature of assertion, rather than material demonstrating that any of his envisaged claims had sufficient substance. There was no justifiable reason given to me as to why most of that material had not been placed before [the FCC]. In any event, if such material had been before [the FCC], it would not have changed the result. True it is that some of the material was newly created, such as for the new Supreme Court proceeding that [Mr Garrett] had recently launched. But there is no adequate reason why such proceedings could not have been instituted earlier. In any event, such material raised little more than yet further untested and unsubstantiated assertions on the part of the appellant.
Before Beach J, Mr Garrett also sought to reformulate his claims against the respondent "in an attempt to get around this lack of mutuality aspect": at [40]. His Honour noted at [40] that:
So, for example, [Mr Garrett] has now brought a proceeding against the respondent and others in the Supreme Court of Victoria for professional negligence claiming substantial damages. This is a new claim. In any event, it is unsubstantiated. As I have said earlier, it was not before [the FCC]. In any event, if it had been, it did not rise beyond mere assertion, let alone satisfy the principles that I have set out above. Another example has been an attempt made by [Mr Garrett] to convert one or more of his claims that he originally asserted in his capacity as trustee against the respondent to a claim or claims in his personal capacity. I will elaborate shortly on this aspect. But at the time of service of the bankruptcy notice and during the time for compliance therewith, there was no mutuality in respect of such claims.
Beach J also noted that this proceeding was the fourth proceeding that his Honour had dealt with involving Mr Garrett and that in the four proceedings before his Honour, Mr Garrett "has filed, without discernment or restraint, voluminous material, most of which has been irrelevant to the precise issues that needed to be considered. The Court and the Registry have been flooded with such extraneous material": at [66]. Beach J listed the 224 documents, totalling 34,133 pages, that Mr Garrett had filed or sought to file in those four proceedings and warned Mr Garrett that, if he persisted with such conduct, an order that any future filings by Mr Garrett be by post (with, accordingly, no electronic filings or filings by physical attendance at the Registry permitted) was likely to be made in other proceedings: at [67]-[68]. At the end of the hearing, Beach J invited Mr Garrett to consider whether his Honour should make an ancillary order to the vexatious litigant order made by Pagone J in Garrett v Commissioner of Taxation [2015] FCA 117 concerning the filing of material. Instead, Mr Garrett filed "uninvited" supplementary submissions on the merits of the appeal which Beach J stated did not, in any event, raise any new substantive points. The appeal by Mr Garrett is another example of a proceeding brought without reasonable ground and conducted in a way so as to harass or annoy or cause delay or detriment, in addition to being an abuse of process.
14 In Garrett v The Chief Executive of Austrade (No 2) [2015] FCA 242, Mr Garrett made an interlocutory application for an order, amongst other things, to include a claim in that proceeding which that Court had dismissed as incompetent in Garrett v The Chief Executive of Austrade [2015] FCA 39. Jessup J stated in dismissing that part of the application that:
… accepting for the moment the existence of power to enlarge the scope of the present proceeding to encompass the case originally advanced by [Mr Garrett] under the ADJR Act in VID 585 of 2014, the insuperable difficulty for [Mr Garrett] is that case was dismissed by the order which I made on 5 February 2015. To the extent that the applicant had a cause of action under the ADJR Act, it has now been judicially determined, and there is nothing left to be brought into the present proceeding.
That application by Mr Garrett provides yet another example of an attempt to re-litigate matters that have been determined against him.
15 Garrett v Duncan [2015] FCA 255 and Garrett v Macks [2015] FCA 254 dealt with applications made by Mr Garrett seeking leave to appeal from the decisions in Garrett v Duncan [2014] FCA 1260 and Garrett v Macks [2014] FCA 1259 respectively. Beach J dismissed both applications, finding that Mr Garrett had not demonstrated any error in those decisions and there was no substance in any of the 48 proposed grounds of appeal in each matter, and that Mr Garrett had not shown that he would suffer any substantial injustice if leave were refused, even if the decisions were incorrect. In addition, Beach J noted that Mr Garrett sought to raise matters that were not the subject of his originating application and that much of the evidence that Mr Garrett alleged that the primary judge in both matters had failed to consider was "largely irrelevant". The absence of proper foundation for those applications for leave to appeal and the attempt to advance new arguments not raised below also qualify those applications as "vexatious proceedings" within the statutory meaning of that term.
16 In view of Mr Garrett's litigation history and repeated institution of vexatious proceedings I am, accordingly, satisfied that s 37AO(1) applies to Mr Garrett. I am also satisfied that the current proceeding is a "vexatious proceeding" within the statutory meaning of that term as defined in s 37AM.
17 In the present case, Mr Garrett has no reasonable prospect of prosecuting his claims for the relief sought in the originating application. First, Mr Garrett has an alternate remedy under Part IVC of the Taxation Administration Act 1953 (Cth) ("the TAA") in relation to the Commissioner's decision to cancel his GST registration, and the existence of that alternate remedy is a powerful factor against the Court exercising its jurisdiction under s 39B of the Judiciary Act to grant Mr Garrett the relief he seeks in paragraphs 1 and 2: s 110-50(2) of Schedule 1 to the TAA; Commissioner of Taxation v Futuris Corporation Limited [2008] 237 CLR 146 at 153 [10]; Glennan v Commissioner of Taxation (2003) 77 ALJR 1195 at 1198-1199; [2003] HCA 31 at [15]-[18]. Secondly, Mr Garrett's claim for an order (paragraph 3) that an agreement made between Mr Garrett and a company called Adelaide Connection Pty Ltd is valid and binding on the parties is not a matter in respect of which the Court has jurisdiction to grant relief by virtue of s 39B of the Judiciary Act. Thirdly, Mr Garrett's claim for an order that a notice of assessment "stand" (paragraph 4) is fundamentally misconceived. The notice of assessment in question is the notice of assessment of income tax issued to Mr Garrett for the year ended 30 June 2014 based on the income tax return that Mr Garrett lodged for that year. By seeking that order, Mr Garrett seeks to prevent the Commissioner from exercising his power of amendment under s 170 of the Income Tax Assessment Act 1936 Act (Cth). Apart from the failure of Mr Garrett to provide any proper foundation in the statement of claim to warrant or justify such an order, the Court would not interfere to prevent the Commissioner from performing his duty to reassess Mr Garrett's liability in accordance with his duty to apply the law and to assess Mr Garrett to the correct amount of liability imposed by the Income Tax Assessment Acts. Paragraph 5 seeks an order that the respondents have breached the provisions of various Acts. The claim is based on a bald allegation in the statement of claim of "conscious maladministration" and "improper collateral purpose" by the respondents, without disclosing any proper foundation for that allegation. In Garrett v Commissioner of Taxation [2015] FCA 117, Pagone J at [30] stated in relation to a similarly objectionable pleading by Mr Garrett:
Mr Garrett's pleading in this proceeding also alleges that the respondents have acted with an improper purpose in administering the Australian Business Register and in issuing garnishee notices. None of the pleadings disclose any proper foundation for those allegations of improper purpose. Pleadings of that kind, without proper foundation, can only be explained as done so as to harass or annoy the respondents. Mr Garrett was previously criticised for making serious assertions without support. In Garrett v Macks [2006] FCA 601, Lander J said at [14]:
These claims in their bald form should never have been made. They make the most serious allegations against a number of people, three of whom are officers of this Court, two of whom are professional persons who act as liquidators and trustees and are, therefore, responsible in that manner to this Court, and one of whom, of course, is a senior public officer, being the Deputy Commissioner of Taxation. Mr Garrett has made no effort in any way to support the allegations made in the proceeding. It was put by Mr Evans, by way of evidence, but really by way of submission in paragraph 19 of his affidavit, that the allegations are scandalous. I agree.
Despite these observations, Mr Garrett repeated the allegations against Mr Macks (see Garrett v Macks [2009] FCA 253 at [8]), and has made allegations of a similar kind in the present proceeding. Whatever might be Mr Garrett's subjective motivation for making serious allegations of this kind without proper foundation, the conduct of proceedings by Mr Garrett in making such allegations, especially in light of his past and repeated conduct, is "in a way" so as to harass or annoy the respondents. The absence of any proper foundation for allegations of the kind alleged by Mr Garrett manifests conduct to harass or annoy because no other purpose is achieved by the claims made.
The pleading in the present case is yet another illustration of Mr Garrett's practice to make serious allegations of impropriety against other persons in unsupported and bald form. The final order sought that the respondents are able to be sued under the provisions of the Taxpayers' Charter (paragraph 6) is not relief that is available at law. Accordingly, the application is bound to fail.
18 In the circumstances, the present proceeding also comes within the statutory definition of "vexatious proceeding" as an abuse of process, and/or a proceeding instituted without reasonable ground. Given the lack of reasonable ground for the institution of the proceeding, the proceeding may also be seen to have been conducted in a way so as to harass or annoy or to cause delay or detriment or to achieve some other wrongful purpose "because no other purpose is achieved by the claims made": Garrett v Commissioner of Taxation [2015] FCA 117 at [30]. I am therefore satisfied that the order for dismissal under s 37AO(2) of the Federal Court Act sought by the respondents should be made. If the proceeding were not dismissed under s 37AO(2), I would in any event dismiss the proceeding under r 26.01 of the FCR as a proceeding that has no reasonable prospects of success.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Davies.