Grounds 3 and 4
33 As to grounds 3 and 4, again no legal error is demonstrated in the primary judge's reasoning.
34 It was submitted for Mr Letten before the primary judge that the proposed proceedings were an abuse of process. At [40]-[42], the primary judge set out the argument:
This fact or matter arises because Mr Letten has maintained, and continues to maintain, that he has no assets with which to satisfy any judgment that might be entered against him. For that reason, he submits that the Court should query the purpose of the Proposed Proceeding and, in particular, whether the application is an abuse of process or for an improper purpose. In particular, Counsel for Mr Letten submitted that if the Proposed Proceeding was being brought to bluntly shake down some third party who might assist Mr Letten (or who has assisted Mr Letten in the past), that is not a proper purpose.
Counsel for Mr Letten referred to the following submissions made on the Receivers' behalf as providing support for the contention that the Proposed Proceeding was an abuse of process. Counsel for Mr Letten drew the Court's attention to paragraph 18 of Mr Templeton's 45th affidavit (sworn 27 March 2014) where he stated:
... Many investors have called the Receivership investor hotline and have enquired about the legal avenues being pursued against Mr Letten . A view has been expressed by some [i]nvestors that they wish for action to be taken against Mr Letten to ensure he provides some recompense to [i]nvestors for the suffering caused to many investors.
Counsel for Mr Letten submitted that the language of that paragraph was suggestive of some retributive element, punishment or penalty motivating the Proposed Proceeding, possibly with a view to ensuring Mr Letten becomes bankrupt, rather than with a view to recovering assets held by Mr Letten. Counsel for Mr Letten submitted that this paragraph should give the Court reason to doubt whether the purpose for which the proceeding is being brought is one of the proper purposes set out in the Appointment Order.
Next, Counsel for Mr Letten referred to oral submissions made by the Receivers' Counsel at the hearing where it was stated:
What we suspect is that there are assets that have been made available to [Mr Letten] for various purposes, if he indeed truly has none himself, and they include fairly expensive representation right through the course of these proceedings, and they include the inference that we drew, which is a commercial inference, from the discontinuance of the [Westpac Proceeding] that we learned of late in the middle of last year. So what the Receivers needed - approach to this is to say, "Well, we think there is something there. We think there is someone who has been willing to provide funds to keep Mr Letten out of bankruptcy and satisfy certain obligations. It could be that that would be forthcoming here. Let us make a balanced and economical attempt to see if that's so".
35 The primary judge rejected the abuse of process argument. Her Honour concluded at [46] that:
On the material before the Court there is nothing to suggest that at the present time the Receivers seek to institute and prosecute the proceedings for an improper purpose or, if instituted, would arguably constitute an abuse of process.
36 Her Honour reasoned at [47]:
In that context, a number of facts and matters are worth restating. First, the history of the proceedings. They are recorded in the various judgments published over the last four years. The circumstances giving rise to those various judgments record the involvement of Mr Letten and, to a lesser extent, Mr Lane. Second, consistent with the authorities, the Receivers provided the Court with the Draft SoC (together with the advice of Counsel) which addressed the substance and the merits of the claims. Third, there is a clear public interest in the due and beneficial administration of the estates of the Companies for the benefit of investors. Where, as here, the Receivers provide formulated claims to the Court against the defendants, it is not the Court's role to adjudicate on those claims. It is sufficient to record, as was and is the fact, that the conduct of Mr Letten in relation to the Schemes has resulted in him pleading guilty to 21 charges of operating unregistered managed investment schemes, five charges of breaching directors' duties and one charge of carrying on a financial services business without an Australian Financial Services licence. Fourth, as Counsel for the Receivers submitted, Mr Letten's submission that the Proposed Proceeding is an abuse or improper is somewhat "odd". There is nothing other than Mr Letten's word that he has no money or assets to satisfy any judgment obtained against him. He has not provided sworn evidence to the Court of his financial position or responded positively to the proposal put to him by the Receivers: see [13] above. In those circumstances it is difficult to assess that contention especially in light of the fact that Mr Letten appears to have had access to funds in relation to earlier and related proceedings: see [9] and [10] above. Moreover, he did not seek leave to cross examine Mr Templeton about these issues. In the end, as the Receivers submitted, the Court is entitled to, and should, give weight to Mr Templeton's considered belief in making his determination (with the assistance of legal advice) as to whether or not the Proposed Proceeding should be commenced. Of course, the position may change. If it does, then the defendants may make appropriate application to the appropriate court on proper material.
37 It was submitted for Mr Letten that the primary judge erred in finding that deploying funds from the Common Fund in the institution and prosecution of the proposed proceeding was not an abuse of process having regard to:
(a) the absence of evidence about the possibility of financial recovery from Mr Letten himself;
(b) the Receivers' reliance on evidence that suggested that third parties had in the past been willing to provide funds to keep Mr Letten out of bankruptcy and satisfy certain obligations; and
(c) the Receivers' submission that the purpose of the proposed proceeding was not to seek recovery from Mr Letten himself but from those supporting him.
38 There is no substance in those submissions. The criterion for abuse of process is whether the predominant purpose of bringing the proceedings is improper: Williams v Spautz (1992) 174 CLR 509. Central to the concept of abuse of process is the requirement that a party is using court proceedings and procedures for a purpose unrelated to the objectives which the Court process is designed to achieve or some collateral advantage beyond what the law offers: Williams v Spautz (1992) 174 CLR 509 at 523. However, it is not an abuse of process where the purpose is to take advantage of an entitlement or benefit which the law gives the litigant in that event. As the majority explained at 526-7:
To say that a purpose of a litigant in bringing proceedings which is not within the scope of the proceedings constitutes, without more, an abuse of process might unduly expand the concept. The purpose of a litigant may be to bring the proceedings to a successful conclusion so as to take advantage of an entitlement or benefit which the law gives the litigant in that event.
Thus, to take an example mentioned in argument, an alderman prosecutes another alderman who is a political opponent for failure to disclose a relevant pecuniary interest when voting to approve a contract, intending to secure the opponent's conviction so that he or she will then be disqualified from office as an alderman by reason of that conviction, pursuant to local government legislation regulating the holding of such offices. The ultimate purpose of bringing about disqualification is not within the scope of the criminal process instituted by the prosecutor. But the immediate purpose of the prosecutor is within that scope. And the existence of the ultimate purpose cannot constitute an abuse of process when that purpose is to bring about a result for which the law provides in the event that the proceedings terminate in the prosecutor's favour.
It is otherwise when the purpose of bringing the proceedings is not to prosecute them to a conclusion but to use them as a means of obtaining some advantage for which they are not designed or some collateral advantage beyond what the law offers.
Brennan J said at 565:
There is no impropriety of purpose (whatever may be said of motive) when a plaintiff commences or maintains a proceeding desiring to obtain a result within the scope of the remedy, even though the plaintiff has an ulterior purpose - or motive - which will be fulfilled in consequence of obtaining the legal remedy which the proceeding is intended to produce. To amount to an abuse of process, the commencement or maintenance of the proceeding must be for a purpose which does not include - at least to any substantial extent - the obtaining of relief within the scope of the remedy.
As the decision makes clear, the onus of satisfying the Court that there is an abuse of process is a "heavy one".
39 The reasons of the primary judge in rejecting the abuse of process claim do not disclose any legal error in either the identification or application of the relevant principles. The question was whether the proposed proceedings are to be brought for a purpose other than to prosecute them to a conclusion. The fact, if it be the case that, the Receivers may hope that payment may be forthcoming from some third party if the claim is successful against Mr Letten does not make the proceeding an abuse of process. In any event it was plainly open on the evidence before the Court for the primary judge to consider that such intent was not the predominant purpose of the Receivers in bringing the claim.