Rubis v Garrett as Trustee of the Andrew Garrett Family Trust Trading as Dynamic Commercial Workforce Solutions

Background 22 The present proceeding arises in the following circumstances. On 4 August 2013, Mr Garrett caused the 2013 registration to be made in respect of, among other entities, Manta Wharf. 23 A dispute arose between Mr Garrett and his interests and a number of the present applicants in respect of the 2013 registration. That dispute was the subject of a proceeding in this Court (the 2013 proceeding) and subsequent settlement negotiations that culminated on 11 December 2013, when Mr Garrett entered into a deed of settlement and release on his own behalf and as trustee of the Andrew Garrett Family Trust, as well as on behalf of two companies that he controlled, Dynamic Workforce Solutions Pty Ltd (although a third person signed the deed on its behalf) and Sanctuary Australasia Pty Ltd (collectively the Garrett parties). The other parties to the deed were the first applicant, Robert Rubis, and five companies associated with him, being Manta Wharf, Prospero Group-Burke Road Pty Ltd, the eighth applicant, La Grillade Pty Ltd (now known as Rubis Trading Pty Ltd), the ninth applicant, Wharfside Pty Limited, the tenth applicant, and Manujan Pty Ltd, the eleventh applicant (collectively the Rubis parties). 24 The recitals to the deed recorded that the Rubis parties had commenced the 2013 proceeding against the Garrett parties seeking orders for the removal from the Register of security interests that Mr Garrett had caused to be registered over each of the five corporate Rubis parties, directly or through the Garrett parties, and that each of the parties to the deed had agreed to settle the 2013 proceeding, without admissions, in accordance with the deed's provisions. 25 Relevantly, the Rubis parties promised to pay the Garrett parties $55,000, including $35,000 on execution of the deed, in consideration of the settlement and releases for which it provided (cl 2.1(a)), and that on execution of the deed, the Garrett parties, including Mr Garrett himself, as "controller", would provide the Rubis parties with duly executed releases and the details of registration and token numbers needed to discharge the registrations of security interests in the 2013 registration against each of them that Mr Garrett had caused (cl 2.4). 26 On execution of the deed, payment of $35,000, and provision of the releases, details and tokens referred to in cl 2.4, the parties agreed to cause, as occurred, the 2013 proceeding to be discontinued, with each party to bear his or its own costs (cl 2.5). Each of the parties agreed to release the others, and, critically, cll 3.2 and 3.4 provided: 3.2 In consideration of the Rubis Entities agreeing to the terms of this Deed and with effect from the date of this deed, the Garrett Entities, the Controller and the Trustees of the Trust hereby release the Rubis Entities and all of the business assets and undertakings of the Manta Wharf, Vicinity and La Grillade Restaurants from all causes of action, claims and demands or losses of any nature and rights whatsoever which the Garrett Entities, or any entities which they are related to or control, may have against the Rubis Entities arising out of or in connection with the Dispute, the subject matter of the Dispute or Proceedings, the estate of Chris James (including any purported entitlements which may exist in respect of any asset of his estate) or any other matter fact or thing which subsists, and whether known or unknown as at the date of this deed, in connection the trade, assets or undertakings of the Manta Wharf, Vicinity and La Grillade Restaurants, including without limitation during the periods that such restaurants were operated by entities other than the Rubis Entities. 3.3 This Deed may be pleaded in bar to any action or further proceeding that may at any time be commenced by either party in relation to any matter the subject of this Deed, save for any action taken by the Garrett Entities in accordance with 2.6. 3.4 In further consideration of the Rubis Entities agreeing to the terms of this deed and with effect from the date of this deed, the Garrett Entities hereby agree not to, whether directly or indirectly, agitate upon any issue or provide funding to the liquidators of any companies now in liquidation which previously had an involvement in the trade, assets and undertakings of the Manta Wharf, Vicinity and La Grillade Restaurants, including without limitation Prospero Trading Pty Limited (In Liquidation) and ACN 122 281 574 Pty Limited (In Liquidation) ACN 122 281 574 (formerly known as La Grillade Pty Limited). (emphasis added) 27 However, despite his covenant to do so, it appears that Mr Garrett did not provide the token to discharge the 2013 registration in respect of Manta Wharf, which remains registered. 28 Brenton Yates, the sixteenth applicant, is a principal in the law firm Yates Law Pty Ltd, trading as Yates Law, the thirteenth applicant. In 2013, Mr Yates had been director of the twelfth applicant, that previously traded as Yates Beaggi Lawyers, together with the seventeenth applicant, Farshad Amirbeaggi. The twelfth applicant, the fifteenth applicant, and the eighteenth applicant are now all associated with Mr Amirbeaggi. 29 On 16 August 2018, Mr Yates wrote to Mr Garrett seeking his cooperation to remove the 2013 registration in respect of Manta Wharf. After receiving no reply, Mr Yates sent a reminder email on 21 August 2018. On 1 September 2018 Mr Garrett replied. He refused to cooperate, and instead alleged that Mr Rubis had acted in a way that entitled Mr Garrett to apply to the Court to set the deed aside, and then have himself reinstated as "managing controller" of the five corporate Rubis parties. He offered, as an alternative, that Mr Rubis and his father (who had been the nineteenth applicant but passed away on about 29 September 2018 and whose estate Mr Rubis has been appointed to represent for the purposes of the proceeding), could cause all of the companies that they controlled to hand over all their assets to Mr Garrett "in my trustee capacity". Needless to say that invitation was not taken up. 30 On 5 September 2018, Mr Yates emailed an amendment demand to Mr Garrett pursuant to s 178 of the PPS Act. The amendment demand relied on the provisions of the deed to demand that Mr Garrett register a financing change statement to remove the 2013 registration because there was no collateral to which any security interest was attached. 31 On 6 September 2018, Mr Garrett replied refusing to do so, and asked instead for the Rubis parties to consent to the registration of an amendment, in effect, to undo the releases and settlement evidenced in the deed. 32 On 7 September 2018, Mr Garrett caused the initial form of the 2018 registration to be created in the Register. 33 On 12 September 2018, Mr Garrett emailed Mr Yates informing him of the 2018 registration and the fact that Mr Garrett had included Yates Law as one of the grantors. Later that day, Mr Yates sought more information from Mr Garrett about what he had done. 34 On 19 September 2018, Mr Garrett created the first version of the notice and emailed a copy of it to Mr Yates. The wording of the notice evolved through two amendments to the current form of the further amended notice (to which I will refer to as "the notice"). The first amendment was dated 25 September 2018, and the final, disclosed version of it was dated 4 October 2018. The notice asserted that numerous of the applicants had granted security interests to him over all of their assets and undertakings, including "Registrations and Rights to act as a Solicitor and or an Accountant". I referred to some of this document in my earlier reasons: Rubis v Garrett as Trustee of the Andrew Garrett Family Trust, trading as Dynamic Commercial Workforce Solutions [2018] FCA 1760. 35 On 20 September 2018, Mr Garrett caused the 2018 registration to be amended to include as grantors Mr Rubis and Mr Yates, and two of Mr Rubis' other companies, The Truffle Group Pty Limited and Prospero Trading Pty Ltd (in liquidation) (controller appointed). The liquidators of Prospero are Brent Kijurina and Richard Albarran of Hall Chadwick (NSW) Pty Ltd, who are the twenty-first, twenty-second and twentieth applicants respectively. They came to be added to the 2018 registration on 19 October 2018 together with Mr Cahill and Altius. 36 On 25 September 2018, Mr Garrett caused Mr Amirbeaggi and a company associated with him, Financial Pty Limited, the fifteenth applicant, to be added to the 2018 registration. 37 On 2 October 2018, the then applicants commenced this proceeding urgently. Jagot J made orders for short service and stood the proceeding over to a date to be notified. 38 Next, on 4 October 2018, Mr Garrett added yet more alleged grantors, Manujan and other companies associated with Mr Amirbeaggi, the twelfth and eighteenth applicants. 39 On 11 October 2018, Thawley J granted injunctive relief against Mr Garrett by consent, restraining him from making further registrations in respect of the then applicants and appointing Mr Rubis as the representative of his late father's estate (who had been the nineteenth applicant), for the purposes of the proceeding. 40 On 14 October 2018, Mr Garrett began the first of his many attempts to seek leave or otherwise to commence some form of proceeding by way of cross-claim, by lodging for filing an interlocutory application that sought, among others, an order that Thawley J be joined as a party to this proceeding. That demonstrated in no uncertain terms why he is a vexatious litigant. 41 Next, on 16 October 2018, Mr Garrett sought to obtain orders joining the Court, the Chief Justice, ASIC, the Law Society of New South Wales and the Legal Services Commissioner of New South Wales as parties to the proceeding, claims that were transparently baseless. Then, on 17 October 2018, he wrote a 20-page letter addressed to the Chief Justice and the following day sought to invoke the Court's processes to obtain freezing orders against the then applicants (being the first to nineteenth applicants). He also lodged an incoherent document entitled "statement of grounds for common law judicial review and making of orders in the nature of "quo warranto" and/or "habeas corpus" and/or "prohibition" and/or "mandamus" and/or "certiorari"". 42 Mr Garrett continued to bombard the Court with large numbers of applications to join parties, or bring a proceeding or cross-claim, and he also made numerous other complaints. He sought to file thousands upon thousands of pages of material that had no discernible or legitimate forensic purpose. He also filed numerous documents that purported to be notices under s 78B of the Judiciary Act 1903 (Cth), that made equally nonsensical and baseless claims. Among others of his claims, as I described in my earlier reasons, he sought to join justices of the High Court and have their decision on appeal somehow judicially reviewed by this Court; a course that was, of course, legally unsustainable and calculated deliberately to cause vexation and a waste of the parties' and the Court's time and resources. He copied in the applicants' solicitors to emails to the Court attaching this material, causing (as he intended), no doubt, a further degree of vexation. 43 The matter was docketed to me at about this time. On 2 November 2018, I held a case management hearing at which the then applicants announced that they wished to join as additional applicants the twentieth to twenty-fourth applicants, namely the liquidators, their firm, Mr Cahill and his firm. Mr Garrett said he was not prepared to deal with that application at that time and said that he wished to consider his position at an interlocutory hearing, which I set down for 8 November 2018. 44 As at 7 November 2018, the 2018 registration recorded a total of 46 grantors. However, the Registrar was unable to find a name for one of those, in respect of which Mr Garrett had used an Australian company number or ACN to support his claim that it had granted him a security interest. Thus, although the 2018 registration appears to include 46 grantors, it may include only 45. 45 On 8 November 2018, after an interlocutory hearing, I made the orders for joinder and granted the applicants leave to amend the originating application. I also extended the injunctive relief granted previously to prevent further registrations in respect of the newly joined applicants: Rubis [2018] FCA 1760. I also rejected Mr Garrett's first application that I recuse myself for bias on the ground, among others, that the Court was a grantor of a security interest that he had registered as part of the 2018 registration. He asserted that this male fide entry in the Register somehow demonstrated that all of the judges of this Court had a financial interest in respect of the subject matter of the proceeding. I will say something in due course about the fact that the Registrar allowed such an obviously baseless and vexatious registration in respect of this Court to occur, notwithstanding his duties and powers under ss 150(3)(c)(i) and 184(1)(a) of the PPS Act, reflecting his duty to protect the public interest and the integrity of the Register, to prevent and or cause its removal of his own motion. 46 Also on 8 November 2018, I stood the proceeding over for case management to 27 November 2018 and ordered as follows: 5. The first respondent file electronically and serve, and provide a hard copy printed double-sided to the Court in Sydney, an affidavit paginated consecutively annexing only the transaction document or documents and no other material, by reference to which the first respondent claims that each applicant respectively entered into a transaction securing payment or performance of an obligation so as to create the security interest (within the meaning of s 12 of the Personal Property Securities Act 2009 (Cth)), that the first respondent relies on in support of the registration No 201809070092758 of the security interest against each applicant referred to in paragraph 2 of the amended originating application, on or before 16 November 2018. 47 On 27 November 2018, I raised with Mr Garrett the question as to why he had lodged for filing an affidavit dated 21 November 2018 headed "Pursuant to s37AR of the Federal Court of Australia Act 1976 (Cth) & orders Rares J dated 8 November 2018" together with an interlocutory application dated 23 November 2018 seeking leave to file a proceeding as a cross-claim or counter-claim against 273 parties, including, to name but a few, her Majesty the Queen, as the two hundred and fifty first cross-respondent, using the description "Regina"; the High Court of Australia; all of the Members and Senators of the Commonwealth Parliament; this Court; the Chief Justice and other judges of the Court, including myself; together with a number of law societies and statutory legal profession regulatory bodies, some of whom are now among the 46 alleged grantors in the 2018 registration. I refused to allow the interlocutory application be filed because it was not made in accordance with order 5 made on 8 November 2018. 48 On 27 November 2018, I set the trial of the proceeding down for hearing today, having discussed with Mr Garrett the state of the evidence and what would be before me at the hearing. I directed the applicants to file and serve written submissions in support of their claims for final relief, limited to five pages, on or before 28 November 2018. They defaulted by one day in compliance with that order because they did not serve such submissions on Mr Garrett until yesterday. I also directed Mr Garrett to show cause today by filing an affidavit limited to five pages, including annexures, and no more, on or before 29 November 2018, why he should not be restrained permanently from filing, or seeking to file, in the proceeding any further document, including but not limited to, any interlocutory application or notice under s 78B of the Judiciary Act raising in any way, or in any way relating to, any of the matters the subject of, or referred to in, his interlocutory application dated 23 November 2018, that I had rejected. I also directed him to file and serve any written submissions in opposition to the relief sought in the amended originating application, limited to five pages, on or before 29 November 2018. 49 Mr Garrett did not file any affidavit or submissions after 27 November 2018. I conducted the hearing during the morning session today, as I had previously, by video link to Hobart. The matter was called both in Sydney and in Hobart outside the Court, but Mr Garrett did not appear. I was informed from the bar table, that he had been in communication by email with, among others, Mr Yates and the New South Wales District Registry of this Court during the course of this morning's hearing. I am satisfied that Mr Garrett is fully aware of the hearing today, he having been present in Court when I made the orders for today's hearing on 27 November 2018.

Should the Registrar have acted under s 184(1)(a) of the PPS Act? 61 Each of the 24 applicants and the other persons named as grantors in the 2018 registration has been exposed to a claim that the Registrar allowed Mr Garrett to register and affect them. 62 In his submissions, the Registrar said that persons who sought removal of data or entries from the Register had a binary choice, by making an application to remove the registration either in an administrative proceeding under s 180 or in a proceeding in a court under s 182. That submission did not take account of the Registrar's public function under ss 150(3)(c)(i) and 184(1)(a) of protecting the integrity of the Register and the public from vexatious registrations such as those effected by Mr Garrett the subject of this proceeding. 63 The Courts have similar power to dismiss vexatious and frivolous proceedings as an abuse of process. Such powers enable the Courts to protect in the interests of the administration of justice, among others, not only the institution of the Court itself, but the public and litigants who may be harassed by vexatious litigants such as Mr Garrett. 64 Nothing in the Act requires that the Registrar be provided with transaction or other documents pursuant to which a person claiming to be a secured party seeks to have registered the fact that a grantor has made a grant of a security interest. Accordingly, the scope for the Registrar to act under a provision such as ss 150(3)(c)(i) or 184(1)(a) of the PPS Act is constrained to situations in which abuses of the registration regime are evident. 65 A vexatious or frivolous registration of the grant of a security interest by an individual, firm, corporation or entity can cause the alleged grantor considerable damage or inconvenience. Here, the Registrar knew of Mr Garrett's tendency to abuse the registration system under the PPS Act, because the Registrar was aware: of his Honour's reasons for judgment and was bound by his Honour's orders as a respondent in the two proceedings before Beach J; Mr Garrett was an undischarged bankrupt at least because of those proceedings; and Mr Garrett was a vexatious litigant. 66 Despite the Registrar being aware of those matters, he allowed Mr Garrett to register, and then maintain, on the Register the recording that 46 persons or bodies were grantors to him, pursuant to the 2018 registration. That registration does not appear to have had any basis other than Mr Garrett's purposes to ensure that he caused annoyance to the persons or bodies that he falsely claimed were grantors of security interests and to cause at least one of the grantors to bring him back into the forensic arena as a respondent, when such a grantor sought to remove the 2013 or 2018 registrations. 67 Here, the Registrar had a duty under s 150(3)(c)(i) to register each grantor on Mr Garrett's application only if the Registrar was not satisfied that the application was "frivolous, vexatious… or contrary to the public interest". 68 It is inconceivable how the Registrar, properly performing his functions, could not have been satisfied that Mr Garrett's application, for example, in respect of the Federal Court of Australia was frivolous, vexatious and contrary to the public interest. Yet, that registration was made and registered on 19 October 2018, after this proceeding had commenced and when the Registrar was the second respondent in it. The Court, as an institution, is part of the judicial arm of the nation's government. The Registrar knew that Mr Garrett was a vexatious litigant and a bankrupt. It is difficult to comprehend how the Registrar could have been satisfied under s 150(3)(c)(i) that the Court could possibly have granted Mr Garrett a security interest over all of its assets throughout the Commonwealth when he was a litigant in this proceeding. 69 In addition, the Registrar simultaneously registered, as grantors, the New South Wales Department of Justice, the Victorian and New South Wales Legal Services Commissioners and the Law Societies of New South Wales and South Australia. Those registrations should never have been allowed to occur. The mere fact that this extraordinary collection of public and professional institutions and bodies, together, had supposedly entered into transactions granting Mr Garrett security interests over all of their assets should have set alarm bells ringing in the Registrar's office. The asserted claims were obviously vexatious, frivolous and their registration contrary to the public interest, yet the Registrar recorded them in breach of his duty under s 150(3)(c)(i). The Registrar should not let this situation occur again. 70 In addition, the Registrar had power of his own initiative to register, under s 184(1)(a), a financing change statement to remove data, including an entire registration, if he were satisfied that the application to register the data was frivolous, vexatious or that the retention of the data in the Register is contrary to the public interest. 71 Registration of such interests is capable of causing a person falsely registered as a grantor of a security interest considerable damage. Mr Garrett used the registration processes under the PPS Act both in the proceedings before Beach J and this proceeding to cause persons, whose legal rights and interests in their property were affected by Mr Garrett's false assertion that each of those persons had been a grantor of a security interest over his, her or its property, to bring proceedings against him to remove the false registrations. Mr Garrett used his baseless registrations under the PPS Act to establish a spring board on which he would be joined as a respondent to Court proceedings without his having to obtain leave to bring such proceedings under s 37AR of the Federal Court Act. That scheme was an abuse of the Court's process. His conduct throughout this proceeding has been vexatious and calculated to cause the applicants, the Court and the other persons and bodies whom he falsely included in the 2018 registration, expense and annoyance. 72 Indeed, he went as far, during earlier case management hearings, to assert that he did not need leave to bring a cross-claim in this proceeding because he was a party. That was wrong. A cross-claim is a proceeding. And, at least the protective purpose of the orders under s 37AO of the Federal Court Act, restricting Mr Garrett from using the Court's processes, operated effectively to prevent him vexing the 273 cross-respondents whom he proposed to join.

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