Jambrecina v S T White & Ors

Supreme Court of NSW|2005-10-07|Before: Rothman J

CITATION : Jambrecina v S T White & Ors [2005] NSWSC 1102

DECISION : 1. The Proceedings be dismissed; 2. The plaintiff pay each defendant's costs as taxed or agreed.

CATCHWORDS : Notice to dismiss - undischarged bankrupt - no right to commence/continue proceedings - vexatious litigant - whether cause of action to warrant substitution of trustee - immunity of counsel

Supreme Court Rules NSW Bar Association Rules LEGISLATION CITED : Supreme Court Act 1970 Legal Profession Act

Jambrecina v Pyramid Building Society & Anor [2002] NSWSC 1076 CASES CITED : D'Orta-Ekenaike v Victoria Legal Aid (2005) 214 ALR 92; 79 ALJR 755 General Steels

Plaintiff - Drago JAMBRECINA First Defendant - S T White PARTIES : Second Defendant - Hugh MARSHALL Third Defendant - Attorney General of New South Wales

Plaintiff - Self Represented COUNSEL : 1st & 2nd Defendant - Mr Lee 3rd Defendant - My Lynch

Plaintiff - Self Represented SOLICITORS : 1st & 2nd Defendant - Scott Maurice Friedman of Friedman Reeves 3rd Defendant - I V Knight of Crown Solicitors Office

1 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

20225/2005 DRAGO JAMBRECINA v S T WHITE, HUGH MARSHALL & ATTORNEY GENERAL OF NEW SOUTH

JUDGMENT 1 HIS HONOUR: Each of the defendants move by notice to dismiss the proceedings on the basis that the plaintiff is an undischarged bankrupt and a vexatious litigant.

Facts 2 In or about 1987 Drago Jambrecina borrowed $458,800 from Combined Mortgage Services Pty Ltd which borrowing was secured by way of mortgage and the terms of which were that only the interest on the money, charged at 13.75% if paid within 7 days of the due date and 18.75% if paid after 7 days from the date, would be paid and was payable on a monthly basis in arrears. The loan was for a period of 5 years. It is said that, pursuant to the terms of the mortgage, the mortgagor, Mr Jambrecina, had the power to compel the mortgagee to release any and all of the mortgage property earlier than the five year period in discharge of the loan. 3 There were requests by Mr Jambrecina for the discharge of the mortgage over some of the property which was subject to that mortgage. Those requests for discharge were intertwined in the changing fortunes of the mortgagee. 4 The mortgagee, Combined Mortgage Services Pty Ltd, changed its name, it is said, to Farrow Mortgage Services Pty Ltd in November 1987. In 1990, Farrow was under the control of a liquidator and a month later, also in 1990, Farrow transferred the mortgage to Pyramid Building Society, which was also in liquidation. Pyramid transferred the mortgage to Perpetual Trustee Australia Pty Ltd, it is said, without authority or knowledge of the mortgagor. On 28 September 1991, Perpetual Trustee Australia Pty Ltd transferred the mortgage back to Pyramid and on 5 November 1990, Mr Jambrecina, the mortgagor, requested a discharge of the mortgage over some of the property. There were delays which are said by Mr Jambrecina to be unacceptable. 5 Dispute arose as between Mr Jambrecina and the Mortgagee in relation to the terms of the mortgages and the properties that were said to be the subject of the mortgage or, more accurately, ought to have been the subject of a partial discharge. These disputes also involved allegations by the mortgagee of non-payment or late payment of interest. On 27 January 1992, the liquidator directed the mortgagee to file a Summons in the Supreme Court of New South Wales seeking orders for possession of remaining properties under the mortgage, the alleged reason for the possession was the then stated arrears of Mr Jambrecina of allegedly $76,000. Mr Jambrecina alleges that the allegation which formed the basis of the order for possession, namely that he was $76,000 in arrears, was false and the basis for it was fraudulent. 6 Mr Jambrecina appeared in Court on 5 March 1992. It did not proceed on that date. On 24 July 1992 an affidavit was filed on behalf of Mr Jambrecina in relation to that matter. On 21 August 1992 Mr Jambrecina became bankrupt. Mr Jambrecina is still an undischarged bankrupt. Orders were made by the Court, on the basis of the consent of Mr Jambrecina's wife only, and the mortgagee took possession of properties and sold the properties under a mortgagee sale. 7 Mr Jambrecina sued Pyramid Building Society (in liquidation) and Farrow Mortgage Services (in liquidation) which proceedings were heard in the Supreme Court of New South Wales on 13 July 1999, 6 December 1999, 5 March 2001 and 28 October 2002. In those proceedings, Mr Jambrecina was seeking leave to sue both companies in liquidation for damages and for losses said to arise over the breach of the terms and conditions of the mortgage and the consequent sale of three of the properties that were the subject of the mortgagee sale. 8 In those proceedings Justice Hidden directed the plaintiff to the Principal Registrar in order to arrange legal advice under the pro-bono scheme. The second defendant, Mr Hugh Marshall, was the counsel who represented Mr Jambrecina under that scheme. The first defendant, Mr S T White, was counsel for the defendants in the proceedings that occurred between July 1999 and October 2002 and opposed the interests of Mr Jambrecina. The third defendant, the Attorney General of New South Wales is sued by Mr Jambrecina because the Attorney General, he said, "is responsible for the action of the Judges" who ruled against Mr Jambrecina in those same proceedings. Those judges included Associate Justice Malpass, Associate Justice Harrison, Justice Levine and Justice Meagher. The claim against the Attorney General, on the basis of his responsibility for the Judges, is based on "negligence and breach of professional duty of care and possible corruptions by judicial officers". 9 The first defendant, Mr S T White, was counsel representing parties other than Mr Jambrecina in the earlier proceedings. Mr Jambrecina bases his claim against the first defendant on "fraud and deceit and breach of professional duty of care, committed by the defendant during 1999 proceedings in the Supreme Court in Sydney. Where he was barrister representing defendants ….". It should be made clear, if it is not clear from the above, that Mr White did not appear for or give advice to Mr Jambrecina. 10 The second defendant, Mr Hugh Marshall, is named as a defendant in the proceedings on the basis that there is a claim by Mr Jambrecina against him arising "from conspiracy to defraud and breach of professional duty of care, in connection with legal advice, prier (sic) hearing on 28/10/2002 No. SC20019/2002 and No. 10820/2002." 11 The Statement of Claim of Mr Jambrecina recites the events, as Mr Jambrecina alleges them, that occurred in relation to the proceedings in 1999. It also recites in what purports to be a chronological order of main events, the allegations of mortgage, discharge of mortgage and alleged inappropriate conduct by mortgagees which had lent money to Mr Jambrecina. 12 It also makes clear that the second defendant, Mr Hugh Marshall of counsel, undertook to provide legal advice pursuant to arrangements made under Part 66A of the Supreme Court Rules which advice was given on a pro-bono basis. The factual allegation of fraud and conspiracy upon which Mr Jambrecina relies against Mr Marshall is that when a conference was arranged with Mr Marshall, at a short time after he had been provided with documentation, Mr Marshall advised, for reasons which were substantially the same as those presented to the Court by the defendant's barrister, Mr S T White, in those proceedings, that the proceedings must fail. That advice was given from "a notepad in which were several written reasons". It is said that the second defendant is, in that regard, in breach of the rules of the NSW Bar Association. 13 It is not asserted that the advice was wrong. It is not asserted that, even if it were wrong, the advice was provided negligently. Rather, the assertion by Mr Jambrecina was that the only basis upon which Mr Marshall could come to the advice and reasons written on his note pad and provided to him in conference was through a conspiracy with the defendant in those proceedings. Mr Jambrecina asserts at paragraph 94 of the Statement of Claim: "94. It is applicant's belief that Mr Martial (sic) could get information in his note pad only from second defendant Mr S T White (Barrister ) 95. First and Second defendants have conspired to defraud, by use of dishonest means to: a) deprive plaintiff from full and proper legal advice and b) to influence the exercise of a public duty." (sic) 14 There is no allegation of fact, other than the belief of the plaintiff in these proceedings, which would give rise to a basis, or an arguable basis, for a conspiracy to defraud to which Mr Marshall would have been party. It does not seem to have occurred to Mr Jambrecina that the legal difficulties he faced in those proceedings may have been obvious to more than one barrister. The mere fact, if it were so, that Mr Marshall spoke to opposing counsel to obtain that counsel's arguments does not amount to fraud or conspiracy. 15 Further, there is no allegation of fact, other than an allegation that the first defendant, S T White, was able to convince judges of the position that he was advocating, of fraud or deception on the part of Mr White in the 1999 proceedings. 16 As a matter of form the Statement of Claim is wholly deficient but the defendants seek, not the striking out of the Statement of Claim for the purpose of allowing an amendment, nor do they seek the summary dismissal of the proceedings as not disclosing any cause of action.

Bankruptcy 17 One of the affidavits, being the affidavit of Scott Maurice Freidman, upon which the defendants rely attests to a search of the National Personal Insolvency Index which records that the plaintiff is an undischarged bankrupt originally on the petition of Pyramid Building Society and Farrow Mortgage Services. The trustee in bankruptcy is the Official Trustee. There is no controversy of fact as to this issue. Moreover the cause of action, if it ever existed, arose, on the allegations, in 1999 and, assuming without deciding that there was a chose in action in 1999, such chose in action passed to the trustee in bankruptcy before the filing of the Statement of Claim in this matter. 18 The law is clear. An undischarged bankrupt is incapable of commencing or continuing proceedings of this kind. The chose in action passes to the Trustee in bankruptcy and it is for the Trustee to commence or continue such actions.

Vexatious Litigant 19 The affidavit of Mrs Jacqueline Townsend of 29 August 2005, Solicitor, attests to the fact that the plaintiff, Mr Jambrecina, was declared to be a vexatious litigant by Levine J of this Court on 15 November 2002. The declaration of Levine J to that effect is not disputed by the plaintiff who has annexed to his affidavit of 3 October 2005 a copy of that judgment upon which he relies for other purposes (Jambrecina v Pyramid Building Society & Anor [2002] NSWSC 1076). 20 The orders of Levine J relevant to the above are found at [24] of the judgment in paragraph 3,4 and 5 of the orders. The orders are extant and were made under s.84(2) of the Supreme Court Act 1970. Section 84(2) of the Supreme Court Act permits an order declaring a person to be vexatious in relation to legal proceedings against particular persons, not, as in the case of s.84(1), generally. The parties named in the order of Levine J upon which reliance is placed are not the same as the parties to these proceedings. The status of the plaintiff as a vexatious litigant as against Pyramid and Farrow under s.84(2) of the Supreme Court Act does not prevent Mr Jambrecina from commencing or maintaining litigation against the parties to the current litigation.

Cause of Action 21 Because the current proceedings are unable to be maintained on account of the status of Mr Jambrecina as an undischarged bankrupt, the possibility exists for the trustee in bankruptcy, the Official Trustee, to commence proceedings. I would, on application, if I thought there were an arguable basis for the proceedings, adjourn to allow the substitution of the Trustee as plaintiff or at least allow argument on that course. No such application was made. However, because Mr Jambrecina is unrepresented and there may be duties on the Trustee, I shall now consider whether any arguable issue arises on the "facts" as pleaded. 22 From the above it is clear that Mr Jambrecina is unimpressed by the result of the proceedings in 1999 and considers that he has been wronged. Litigation generally involves losing parties, most of whom consider that the result should have gone the other way, or hoped that it would. It is for these reasons that there are clearly defined and extensive immunities granted to judges, counsel and witnesses in relation to their conduct in court or for work done out of court which leads to a decision affecting the conduct of the case in court. 23 The High Court recently confirmed the principles to be applied in relation to the immunity of judges, counsel and witnesses in D'Orta-Ekenaike v Victoria Legal Aid (2005) 214 ALR 92; 79 ALJR 755. In the course of the judgments of their Honours Chief Justice Gleeson, and Justices Gummow, Hayne and Heydon, the Court said: "[39] From as early as the sixteenth century, a disappointed litigant could not sue those who have given evidence in the case. That is, the disappointed litigant could not seek to demonstrate that witnesses had given, or parties had suborned perjured evidence or that witnesses or parties had conspired together to injure that litigant. Nor could the disappointed litigant seek to demonstrate that what was said by the witnesses had defamed that litigant. All such actions were precluded or answered by an absolute privilege. It matters not how the action was framed. And it mattered not whether the disappointed litigant believes that the witnesses had acted deliberately or maliciously. No action lay, or now lies, against the witness for what is said or done in Court. It does not matter whether what is done is alleged to have been done negligently or even done deliberately or maliciously with the intention that it harm the person who would complain of it. The witness is immune from suit and the immunity extends to prepatory steps. … [40] … What is important to notice for present purposes is not the history of development of this immunity, but that both judicial immunity and the immunity of witnesses were, and are, ultimately, although not solely, founded in considerations of the finality of judgments. … [42] In R v Skinner Lord Mansfield said that 'neither party, witness, counsel, jury or judge, can be put to answer, civilly or criminally, for words spoken in office'. Of that immunity it has been said in Mann v O'Neill that it responds to two related considerations, 'to assist full and free access to independent courts for the impartial quelling of controversies without fear of the consequences' and 'the avoidance of the re-agitation by discontented parties of decided cases after the entry of final judgment' other than by appellate processes. That view of the matter reflects the consideration that what is at stake is the public interest in 'the effective performance' of its functions by the judicial branch of government. [43] The 'unique and essential function' of the judicial branch is the quelling of controversies by the ascertainment of the facts and the application of the law. Once a controversy has been quelled, it is not to be re-litigated. Yet re-litigation of the controversy would be an inevitable and essential step in demonstrating that an advocate's negligence in the conduct of litigation had caused damage to the client. … [45] Rather, the central justification for the advocate's immunity is the principle that controversies, once resolved, are not to be reopened except in a few narrowly defined circumstances. This is a fundamental and pervading tenet of the judicial system, reflecting the role played by the judicial process in the government of society. If an exception to that tenet were to be created by abolishing that immunity, a peculiar type of re-litigation would arise. There would be re-litigation of a controversy (already determined) as a result of what had happened during, or in preparation for, the hearing that had been designed to quell that controversy. … [46] A justification based on finality has as much force today as it did when Giannarelli was decided. … [70] What unites these different types of consequences is that none of them has been, or could be, wholly remedied within the original litigation. The final order has not been, and cannot be, overturned on appeal. The intermediate consequence cannot be repaired or expunged on appeal. The costs order cannot be set aside; the costs incurred can not be recovered from an opposite party. And in every one of these cases, the client would say that, but for the advocate's conduct, there would have been a different result. In particular, leaving cases of wasted costs aside, the client wishes to assert that, if the case had been prepared and presented properly, a different final, or intermediate result would have been reached. And yet the judicial system has arrived at the result it did. The consequences that have befallen the client are consequences flying from what, by hypothesis, is a lawful result. … In a case where the client would say the wrong final result is reached, the result in fact reached, is, by hypothesis, one that was lawfully reached. Further, the lawful infliction of adverse consequences (such, for example, as imprisonment) can constitute a form of damage as a question that may be noted but need not be answered." 24 The rationale of the judgment of the High Court in D'Orta-Ekenaike requires continuation of the immunity of judges for that which is performed in court, the immunity of counsel, the immunity of parties and the immunity of witnesses.

25 Of course, officers of the court, such as counsel, are subject to disciplinary proceedings for a breach of duty to the court and/or conduct which is in breach of the Legal Profession Act. But those actions are not actions in damages by a party who alleges he or she has been aggrieved. 26 While I have set out at greater length than would be normal some of the statements of the High Court on the immunity of counsel, it should be made clear that on the material before the Court, there is no basis in fact for the allegations made against either the judges or counsel. There is no cause of action available to the plaintiff either on the basis of the facts that have been alleged or on the basis of the law as it relates to actions that may or may not be taken against judges and counsel. 27 It is unnecessary for me to discuss the proposition that the Attorney General would be responsible in damages for the actions of judges simply because the Attorney General has administrative responsibility for some aspects of the administration of courts. 28 For the above reasons, and applying the principles in General Steels I have a preliminary view that there is no cause of action and cannot be on the facts as alleged. I, therefore, do not propose to allow an adjournment to permit the Trustee an opportunity to join the proceedings or be substituted for the plaintiff. For the reasons already stated, I grant the motion of the defendants and strike out the proceedings. 29 I make the following orders: a The proceedings be dismissed; b The plaintiff pay each defendant's costs as taxed or agreed.

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Judgment (17 paragraphs)

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Cases Cited (2)