Plaintiffs v Defendants

PRACTICE AND PROCEDURE - Application for release from Harman undertakings imposed by another court - Where not appropriate in circumstances for release to be granted in this Court - Harman v Secretary of State for the Home Department [1983] 1 AC 280.

1 Some of the background to this proceeding is set out in my earlier decision of Kuksal v Victorian Legal Services Board [2023] VSC 495, but in essence, the Victorian Legal Services Board ('the Board') appointed Mr Damian Neylon to conduct a compliance audit of the law firm operated by People Shop Pty Ltd trading as Erudite Legal ('the Firm'), Mr Gordon Cooper as an investigator into suspected offences in connection with the Firm, and Mr Howard Rapke as an external manager to the Firm. Mr Shivesh Kuksal, Ms Maria Di Gregorio, Ms Lulu Xu, People Shop Pty Ltd and Mr Peter Ansell (the first to fifth plaintiffs respectively) filed an originating motion in which the Board is the first defendant, and Mr Neylon, Mr Cooper and Mr Rapke are the second to fourth defendants respectively. Mr Kuksal is the beneficial owner, through some intermediary companies, of People Shop Pty Ltd. Ms Di Gregorio is (or has been) a director of People Shop Pty Ltd. Mr Ansell is a solicitor who, for some time at least, worked for or with the Firm. Ms Xu, as I understand, was an employee of the Firm.

2 Mr Kuksal, Mr Ansell and Ms Xu contend that the Board and those appointed by it have acted improperly. Ms Di Gregorio has been a plaintiff but no longer wishes to proceed with the claim. They commenced this proceeding by filing an originating motion. On 7 September 2023, I ordered that the following three paragraphs of the plaintiffs' further amended summons filed 3 November 2022 be listed for hearing (along with the Board's summons filed 2 November 2022 for orders striking out the plaintiffs' originating motion) on a date to be fixed:[1]

1. Determine and declare that the appointments of:

1.1. Mr Damian Neylon to investigate whether Mr Allan McGregor was fulfilling his responsibilities pursuant to section 34 of the Uniform Law as the Firm's Principal Solicitor ...;

1.2 Mr Howard Rapke as the Firm's External Manager ...;

1.3. Mr Gordon Cooper ... to investigate any civil penalty contraventions in connection with the Firm;

Were effected for an improper purpose and were nullities at law.

1. Determine and declare that even if Mr Neylon had been lawfully appointed to investigate whether Mr McGregor was fulfilling his responsibilities pursuant to section 34 of the Uniform Law, his appointment would have reached its natural conclusion on 25 November 2021 when he had concluded in his First Interim Compliance Audit Report ... that:

"I am concerned about Mr McGregor's capacity to hold a practising certificate. I recommend that a medical report as to Mr McGregor's cognitive functioning be obtained to assess whether he should continue to hold a practising certificate"

1. Determine and declare that even if Mr Neylon had identified legitimate issues that would have given [the Board] reasonable grounds to commence further investigative procedures against the Firm or one of its solicitors or lay associates, it would have been necessary for a fresh appointment of an external intervener to take place to investigate the issues under an instrument of delegation that clarified that their appointment had been effected to investigate those specific issues.

3 I also directed the plaintiffs to file and serve any affidavit material on which they intended to rely by 29 September 2023 and a written submission by 27 October 2023. The hearing date was later fixed for 5 December 2023.

4 The plaintiffs did not file any written submission in accordance with the directions. Instead, on Friday 24 November 2023 Mr Ansell, on behalf of the plaintiffs other than Ms Di Gregorio, advised my chambers that they would be seeking orders including that I recuse myself. On Tuesday 28 November 2023, Mr Ansell, on behalf of the plaintiffs other than Ms Di Gregorio, indicated that they were seeking:

(a) to press an application for recusal;

(b) leave to file additional affidavit material 'on account of new evidence' that had been 'discovered'; and

(c) to urgently issue subpoenas that 'may yield evidence' for the hearing on 5 December 2023.

5 Through my chambers, on Wednesday 29 November 2023 I directed that:

(a) Mr Ansell, Mr Kuksal and Ms Xu provide by 4pm on Thursday 30 November 2023 a written submission of no more than 10 pages setting out the nature and the relevance of the additional affidavit material sought to be relied on and a written submission setting out the reasons for which the subpoenas were required and why no application for subpoenas to be issued had been raised earlier; and

(b) any recusal application be brought by summons and that it, a written submissions of no more than 10 pages, and affidavit material in support be filed and served by 4pm on Friday 1 December 2023.

6 Mr Ansell on behalf of himself, Mr Kuksal and Ms Xu sought extensions of time for the filing of the above application, affidavit in support and written submissions. On Thursday 30 November 2023, I granted that request. Mr Ansell on behalf of himself, Mr Kuksal and Ms Xu then requested that they each be permitted to file a separate written submission and an affidavit. Through my chambers, I directed that they each may file an additional affidavit limited to setting out any particular and separate individual personal experiences on which they wish to rely, and that it was assumed that this would not involve the exhibiting of additional material.

7 No written submission setting out the nature and the relevance of the additional affidavit material sought to be relied on and the reasons for which the subpoenas were required and why no application for subpoenas to be issued had been raised earlier was provided.

8 On 4 December 2023, Mr Ansell, on behalf of himself, Mr Kuksal and Ms Xu, filed a summons returnable on 5 December 2023 and an affidavit in support. The summons sought orders that:

(a) Mr Ansell, Mr Kuksal and Ms Xu be released from 'any implied obligation to maintain confidentiality' in respect of communications between the Board and Victoria Police 'released to the Plaintiffs on account of the orders of Magistrate Williams made on 29 November 2023';

(b) the Court permit the plaintiffs to amend their originating motion in this proceeding; and

(c) I recuse myself from further involvement in this proceeding and in a related proceeding.

9 That related proceeding is a proceeding that Mr Kuksal alone has brought against a person who used to work for him and members of their family, the State of Victoria, the Magistrates Court of Victoria and the Board.

10 The 4 December 2023 affidavit was sworn by Mr Ansell. It stated that it was, among other things in support of his, Mr Kuksal's and Ms Xu's application that I recuse myself from this proceeding, the related proceeding, and also proceeding S ECI 2022 03994. Proceeding S ECI 2022 03994 was not referred to in the summons. In that proceeding, the Board is seeking orders restraining Mr Kuksal, Mr Ansell and Ms Xu from certain conduct in relation to law practices that were previously associated with them.

11 Mr Ansell's 4 December 2023 affidavit did not depose to any matters relating to my conduct. Although the text of the affidavit was short, it exhibited, or purported to exhibit, among other things, affidavits filed in various proceedings sworn on 26 April 2023, 24 May 2023, 31 July 2023, 17 August 2023, 6 December 2022 and some audio and video files. The exhibits to that affidavit totalled more than 8,500 pages.

12 On the morning of 5 December 2023, Mr Ansell filed another affidavit. In that affidavit, among other things, he deposed that his, Mr Kuksal's and Ms Xu's ability effectively to present their recusal application would be substantially compromised if the Court were not to grant leave to rely on evidence 'recently disclosed' by Victoria Police to Mr Kuksal in the Magistrates' Court of Victoria proceeding N10047659.

13 No written submission in support of the recusal application was filed.

14 Mr Kuksal, Mr Ansell and Ms Xu were not in Court at 10:30am. Ms Di Gregorio and counsel for the Board and the other defendants were. My chambers had been advised that Mr Kuksal, Mr Ansell and Ms Xu were running late. I opened the Court at 10:45am. Mr Kuksal, Mr Ansell and Ms Xu were still not present.

15 At the request of counsel for the Board and the other defendants and Ms Di Gregorio, I made orders granting Ms Di Gregorio leave to file a notice of discontinuance and ordered that there be no order as to costs as between her and the defendants. The Board and Ms Di Gregorio had circulated to my chambers and to the other parties their intention to seek such orders. Ms Di Gregorio then left. Not long after that, Mr Kuksal, and then Mr Ansell and Ms Xu appeared. Mr Kuksal presented argument. He spoke for the rest of the morning, and then from 2;30pm to just after 4pm. Ms Xu and Mr Ansell then adopted Mr Kuksal's submissions, and Ms Xu added a short submission herself. In those circumstances, when in the discussion below I say that Mr Kuksal made a submission or took an approach, that is to be taken to be a reference to Mr Kuksal, Mr Ansell and Ms Xu making that submission or taking that approach.

B. The application for release from the Harman undertakings

16 Mr Kuksal acknowledged that the material referred to in para 12 above had been provided by those prosecuting him in the Magistrates' Court and was received by him subject to an implied undertaking that he not use those documents other than for the purpose of his defence in that[2]proceeding.2 As noted above, his summons sought an order releasing him from that implied undertaking.

17 Mr Kuksal sought release from the implied undertaking, immediately, so that he could rely on the documents in his recusal application. Mr Kuksal was, of course, limited in what he could say about the documents, but he was able to say the use to which he would seek to put them. The documents would be relied upon, he said, to establish that the Board had engaged in improper behaviour and was prepared to communicate directly with Courts and judicial officers. He proposed then to submit that this added to the perception of bias or possible bias. He, candidly and to his credit, acknowledged that he would not rely on the documents in order to establish that the Board had been involved in any inappropriate communications with me or my chambers that I had behaved in an inappropriate manner.

18 I informed Mr Kuksal that I was not prepared to make such an order, that the recusal application should proceed on that basis, and that I would publish reasons later.

19 I was prepared to accept, for the purpose of the argument, that I had the power to relieve Mr Kuksal from the obligations on him imposed in the course of his criminal proceedings conducted in another Court. But in my view it was not appropriate to make such an order in circumstances where:

(a) No application for a release from the undertaking had been made to the Court that had required the provision of the documents or whose processes had required the disclosure of those documents;

(b) I did not have a proper appreciation of the issues that arose or might arise out of the use of those documents in these proceedings in order to make an informed evaluation of the conflicting interests involved; and

(c) The persons who were required to provide those documents, or any people who might be affected by their disclosure, were not present to argue against the making of that order.

C.1 Events subsequent to my earlier decisions and abuse of process

20 This was the third recusal application that has been brought by Mr Kuksal, Mr Ansell and Ms Xu in recent times. The first was on 3 November 2023 in proceeding S ECI 2022 03994 brought by the Board against Mr Kuksal, Mr Ansell and Ms Xu. I reserved my decision and, on 28 November 2023, dismissed that application and published reasons for doing so in Victorian Legal Services Board v Kuksal (Recusal Application) (No 2).[3] The second was in the same proceeding immediately after I had published those reasons. I dismissed that application and gave oral reasons for so doing. Both applications sought that I recuse myself not just from hearing the proceedings in which they were made, but from hearing any proceedings concerning the plaintiffs.

21 I have not had any active involvement in any of Mr Kuksal's, Mr Ansell's or Ms Xu's proceedings since I dismissed the previous two applications that I recuse myself. Mr Kuksal asked that the arguments put in those other applications, and rejected by me, be treated as having been repeated and rejected for the given reasons in this (third) application in order to improve his ability to appeal. I agreed to treat the earlier arguments as having been put again, and rejected again, for the reasons previously given.

22 That, however, causes attention to focus on what has changed since I dismissed the earlier two applications. Although an application for recusal is an interlocutory application, and so its dismissal does not by itself preclude a further application being made, it is an abuse of process for parties to make a second (or third) application on the same or essentially the same material in the hope that they will obtain a different result.[4] Such conduct is oppressive to the other parties and a waste of the Court's time and resources.

23 Mr Kuksal submitted that the fact that I had (that day) granted Ms Di Gregorio leave to file a notice of discontinuance and ordered that there be no order as to costs between her and the Board without having first given him an opportunity to be heard was sufficient reason for me to recuse myself. Mr Kuksal contended that he was prejudiced on costs because if Ms Di Gregorio were forced to remain in the proceeding, she would be amenable to a costs order against her and that this could be to his benefit if she were ordered to pay costs to him or if she were required to share in any costs ordered against him.

24 I do not consider that the fair-minded lay observer might think that I might not bring an impartial mind to the resolution of issues in the case as they concerned him[5] because I granted Ms Di Gregorio leave to cease her involvement in this proceeding without first hearing from Mr Kuksal. It meant that Mr Kuksal became one of four plaintiffs, rather than one of five plaintiffs. But if Ms Di Gregorio does not wish to continue to prosecute her claims, and the parties against whom she is prosecuting her claims agree, then there is no proper reason, in my view, why she should not be allowed to discontinue her claims, and Mr Kuksal has no real interest in her being required to continue them. There are no claims made in the proceeding against Ms Di Gregorio by Mr Kuksal from which her discontinuance will protect her. Further, if Mr Kuksal wishes somehow to limit his liability to pay costs to the defendants in the event that he fails in this proceeding, then he could still seek to rely on the fact that they agreed to Ms Di Gregorio's filing of a notice of discontinuance without first insisting on costs from her. The fair-minded lay observer would not consider that my making of the order in Mr Kuksal's absence or without hearing from him means that I might not bring an impartial mind to bear on the issues that arise.

25 Mr Kuksal did not otherwise identify any material that was not or could not, with reasonable diligence, have been presented at the earlier applications. For that reason, his application that I recuse myself, to the extent that it relied on material that was previously available, was, in the circumstances, simply a third attempt to obtain the same relief and an abuse of process.

26 In any event, the submissions made by Mr Kuksal did not establish that the fair-minded lay observer might think that I might not bring an impartial mind to the resolution of issues in the case as they concerned him.

27 As noted above, Mr Kuksal filed an affidavit that contained exhibits that ran to thousands of pages. I informed Mr Kuksal that I would not consider the exhibited material unless he identified particular pages that he wanted to rely on.

C.2.1 The reasons for which I dismissed his first recusal application

28 Mr Kuksal said that I had not referred to all the cases and legal principles that he had relied upon when he sought my recusal on the first occasion when I gave my reasons in Victorian Legal Services Board v Kuksal (Recusal Application) (No 2) [2023] VSC 698. There is nothing in this submission. As those reasons make clear, I formed the view that Mr Kuksal failed to appreciate the distinction between my making of legal errors (that might justify an appeal) and my behaving in a manner that indicated the possibility of bias. I referred to those matters that I considered I had to refer to. There was no obligation to refer to every case or principle that Mr Kuksal asserted, and in any event the failure to do so could not lead the fair-minded lay observer to think that I might not bring an impartial mind to the resolution of issues in the case.

C.2.2 The reasons delivered on 23 August 2023

29 Mr Kuksal relied on various matters set out in my reasons published on 23 August 2023 in this proceeding as Kuksal v Victorian Legal Services Board.[6] The paragraphs below assume a familiarity with those reasons.

30 First, Mr Kuksal submitted that I misquoted him in para [5] of my reasons. I quoted him as saying, with respect to the first three questions in his summons that it was proposed to be heard first, that: 'We think that those three questions are the crux of the matter.' In fact, according to the transcript, that clause did not end with a full stop but with a comma, and the full sentence was as follows:

We think that those three questions are, in essence, the crux of the matter, and they will surely dispose the proceeding completely, and at the very least substantially, and give each side a realistic understanding of where they stand.

31 Mr Kuksal was probably[7] correct to point out that I should have used (as I did elsewhere) an ellipsis rather than a full stop. But there was nothing misleading in what was set out, and there is no prospect that the fair-minded lay observer might think from this that I might not be impartial.

32 Mr Kuksal referred to para [24] of my reasons where I said that I was not then in a position to determine whether the Board's summons was frivolous. Mr Kuksal submitted that I was in a position to make that assessment. My statement reflected the fact that the merits of the summons was not then being argued. Mr Kuksal's argument proceeds on a misunderstanding of my reasons. The fair-minded lay observer would not do so.

33 Mr Kuksal criticised my statement in para [22] of my reasons that it was 'common ground' that the defendant's summons had not been served. The fact that the summons had not been served was Mr Kuksal's assertion to the judicial registrar, which was not disputed by the Board, and was acted upon by the judicial registrar. But, he says, counsel for the Board had not formally conceded as much but was still 'seeking instructions' on the point. Mr Kuksal submitted that I was creating a 'narrative' that 'excluded misconduct' on the part of the Board. I reject his submission that this was so. The fair-minded lay observer would treat this as an entirely insignificant issue.

34 Mr Kuksal criticised my statement in paras [24] and [32] that he had not established that he would be prejudiced by the judicial registrar making directions in relation to the summons when the summons had not then been served beyond having to face the summons itself. He contends that he asserted prejudice based on the fact that he had not, by the time the judicial registrar made the orders, read the summons. I consider my observation to be correct for the reasons set out in my earlier reasons.

35 Mr Kuksal referred to my observations in para [12] about the possibility that People Shop Pty Ltd's originating motion or summons might not have been validly filed because, as a corporation, it was unable to take a step in the proceeding other than by a solicitor. There was no solicitor on the record as acting for People Shop Pty Ltd. Mr Kuksal noted that at the end of the originating motion Mr Ansell was associated with People Shop Pty Ltd. The originating motion does not indicate that People Shop Pty Ltd has a solicitor acting for it. It does give Mr Ansell's address as the address for service. In any event, I concluded para [12] by saying that I was prepared to assume, for the purpose of the appeal, that the originating motion and summons were validly on foot. Mr Kuksal's complaint was that I had raised this matter myself. There is nothing in this complaint. The matter was a proper matter to raise. The Court has an interest in ensuring that proceedings are validly initiated. Raising that issue the way I did could not cause the fair-minded lay observer to think that I might not be impartial.

36 Mr Kuksal complained about para [15] of my reasons, where I indicated that, subject to some direction later being made to the contrary, the question as to whether the requirement that People Shop Pty Ltd act by solicitor be dispensed with be determined at the time of the hearing of the matter. He contended that it was 'unfair not to give advance warning.' There is nothing in this. If People Shop Pty Ltd wants clarity in advance of the hearing, it can seek that. If anything, my failure to insist on this point being resolved to date is conduct in Mr Kuksal's favour.

C.2.3 My reasons for and making of a costs order

37 Mr Kuksal also relied on the fact that I had ordered that the plaintiffs pay the costs of their appeal against the judicial registrar's decision on the indemnity basis and had fixed those costs. I published reasons for my decision to do so: Kuksal v Victorian Legal Services Board (No 2).[8] In those reasons, I stated that the appeal in my assessment 'should not have been brought'. Mr Kuksal contended that my conclusion to that effect was wrong. That, however, is not the point. The fair-minded lay observer will know that the fact that a judge has made a costs order against a party, even an indemnity costs order, does not indicate that the same judge will not impartially try issues as they later arise.

38 Next, Mr Kuksal referred to a decision I made in 2021 in a different matter of Avant-Garde Logistics Solutions Pty Ltd v Five Fish Super Pty Ltd [2021] VSC 669. Mr Kuksal was the 'exclusive beneficial owner' of Avant-Garde Logistics Solutions Pty Ltd. The Victorian Civil and Administrative Tribunal had made an injunction against Avant-Garde Logistics Solutions Pty Ltd in the course of its hearing of a tenancy dispute. Avant-Garde Logistics Solutions Pty Ltd sought urgent relief in the Practice Court of this Court. I granted leave[9] to Mr Kuksal to appear for Avant-Garde Logistics Solutions Pty Ltd when the matter first came before me, granted him a temporary stay of the injunction, but advised that his right to continue to appear on its behalf could not be assumed and that leave would again have to be sought. When the matter next came before me, Five Fish Super Pty Ltd opposed Mr Kuksal being given leave. In the course of hearing argument on that point, I took into account a history of problems that had arisen in the past when Mr Kuksal had appeared on behalf of a company. As I made clear in my reasons, I did not conclude that Mr Kuksal had acted improperly. That was not something I could determine. I merely noted the fact that problems had arisen in the past was relevant because it meant that Mr Kuksal could not say that he had acted for companies in the past without problems arising. Those circumstances could not cause the fair-minded lay observer to think that I might not be impartial.

39 Mr Kuksal played in Court some videos that had been taken when those appointed by the Board entered the Firm's business premises. The videos captured some reasonably unpleasant exchanges between Mr Rapke, Ms Xu and Mr Kuksal (on telephone) and camera crew from Channel Nine filming some events. Mr Kuksal contended, as I understood it, that this revealed, beyond any real doubt, that the Board had acted improperly in various ways. While this may be an evidentiary issue the plaintiffs seek to rely on at trial, I do not consider that the video evidence has any bearing on whether a fair-minded lay observer may think I might not be impartial.

C.2.5 Limiting the length of Mr Kuksal's affidavits

40 Mr Kuksal repeated his complaint that I had made directions limiting the length of the affidavits upon which he could rely. He contends that I have no power to do so. I consider that I do have power to do so. I have set out my reasons in Kuksal v Victorian Legal Services Board (No 2)[10] at paras [17] to [24]. Again, Mr Kuksal was confusing an approach that might be wrong, with an approach that reveals bias.

41 It was a theme of Mr Kuksal's submissions that I had treated him differently to how I had treated other parties before me. I do not accept that this is the case. I have decided issues against him, but that does not amount to me treating him differently to other parties. When issues for determination arise, a judge has to make a decision. The fact that a decision is against the interests of one party and in the interests of another party is unavoidable and not a reason for which the fair-minded lay observer might think that later issues will not be impartially decided.

42 Ms Xu submitted, as I understood it, that even if there were no apprehended bias for other reasons, I was in a position of conflict and therefore should recuse myself. The position of conflict she referred to related to the issue that I had indicated to Mr Kuksal that he should copy his communications with the Court to all other parties to the proceeding in in circumstances where there was an interim family violence intervention order against him in favour of another party. This issue was considered by me in my earlier decision Victoria Legal Services Board v Kuksal (Recusal Application) (No 2)[11] at paras [20] to [22].

43 The application for an order that I recuse myself will be dismissed. I consider that to the extent that the application relied on material or events that predated the previous two applications it was an abuse of process, and to the extent that it relied on material or events that have post-dated those applications it was bound to fail.

44 I note that the application was that I recuse myself from involvement in three proceedings. Some of the parties to those proceedings were not parties to the application. The question as to whether they ought to have been given notice was not raised before me. In circumstances where I have decided not to recuse myself, I do not consider that the failure to have put the parties in the other proceedings on notice or to have given them an opportunity to be heard means that orders should not be made on the summons.

D. The application for leave to amend the originating motion

45 No proposed amended originating motion has been circulated. Mr Kuksal did not identify the amendments that he sought to make. In those circumstances, the application for leave to amend the originating motion will be dismissed.

46 I will dismiss the plaintiffs' summons filed 4 December 2023.

47 As noted above, the Board's summons and the first three paragraphs of the plaintiffs' amended summons had been set down for hearing on 5 December 2023. The Board had engaged counsel and was in a position to present its application on that day. The plaintiffs' filing of its summons and prosecution of the recusal application took the full day. Accordingly, it will be necessary to re-list those applications for hearing at another time.

48 I will hear the parties on the form of order and on the costs of the plaintiffs' summons and of any costs thrown away by reason of the need to re-fix the matters that were listed to be heard on 5 December 2023.

VICTORIAN LEGAL SERVICES BOARD (ABN 82 518 945 610)

[1] The orders were made following the hearing of an appeal against directions in similar form made by a judicial registrar - see Kuksal v Victorian Legal Services Board [2023] VSC 495.

[2] Harman v Secretary of State for the Home Department [1983] 1 AC 280.

[3] [2023] VSC 698. The first recusal application in proceeding S ECI 2022 03994 had been made before another Judge of this Court. See VLSB v Kuksal & Ors (Recusal Applications) [2022] VSC 648 (Forbes J).

[4] D A Christie Pty Ltd v Baker [1996] VicRp 89; [1996] 2 VR 582, 597-598 (Brooking JA), 603 (Hayne JA), 612 (Charles JA); Guss v Magistrates' Court of Victoria [1998] 2 VR 113, 123 (Batt J).

[5] Cf Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337, 344 [6] (Gleeson CJ, McHugh, Gummow and Hayne JJ).

[6] [2023] VSC 495. The two earlier recusal applications were made on 3 November 2023 and 28 November 2023, so these reasons were available at the time of the earlier applications.

[7] It was a quote from a transcript of an oral submission. The choice of punctuation is in the hands of the transcriber. Conceivably, a full stop could have been used. This, however, is of no moment.

[8] [2023] VSC 526.

[9] Strictly, dispensed with the requirement under the Supreme Court (General Civil Procedure) Rules 2015 (Vic) that Avant-Garde Logistics Solutions Pty Ltd act by solicitor.

[10] [2023] VSC 526.

[11] [2023] VSC 698.