Shaw v MAB Corporation Pty Ltd [2013] FCA 1231 | Case summary

There be judgment for the respondents in the proceeding.
The parties file and serve written submissions as to costs in accordance with the following timetable: (a) the respondents, within 14 days; (b) the applicant, within a further 14 days; (c) the respondents in reply, if necessary, within a further 7 days. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT 1 In this proceeding, the applicant, John Shaw, seeks damages pursuant to ss 82 and 87 of the Trade Practices Act 1974 (Cth) ("the TP Act") in respect of conduct in trade or commerce alleged to have been misleading or deceptive in contravention of s 52 of that Act, and in respect of such conduct alleged to have been unconscionable in contravention of ss 51AA and 51AB of that Act. He also seeks findings that the respondents (of whom there are ten, and whom I shall identify in the course of my reasons below) engaged in conspiracy, fraud and intimidation, and suborned witnesses to tender false and misleading evidence in the Supreme Court of Victoria in a proceeding commenced by him on 1 December 2003, No 9046 of 2003 (to which I shall refer as "the original proceeding"). 2 The matter now before the court is the respondents' Interlocutory Application of 27 September 2013, in which summary judgment is sought under s 31A of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act") or r 26.01 of the Federal Court Rules 2011 (Cth); alternatively for a permanent stay of the proceeding under ss 20 and 23 of the Federal Court Act and the "implied" jurisdiction of the court. Although put in different ways, the essence of the respondents' point is that the proceeding is an abuse of process or, alternatively, has no reasonable prospect of success. 3 An understanding of the respondents' case for summary judgment requires me to commence on 12 April 2000, when the applicant entered into a contract with the third respondent, Yarranova Pty Ltd ("Yarranova") for the purchase from Yarranova of land that was then the subject of a development by way of subdivision at Docklands. On 13 December 2000, Yarranova assigned its rights and obligations under that contract to the fourth respondent, Newquay Stage 2 Pty Ltd ("Newquay"). By the time of completion under the contract, the parties were in dispute as to various matters, involved in which were the lodgement of a caveat in relation to the land by the applicant, the applicant's refusal to complete and the service by Newquay of a notice of default and rescission on the applicant. 4 It was in this environment that the original proceeding was commenced on 1 December 2003. Yarranova and Newquay were named as defendants. The applicant sought specific performance of the contract, relief against forfeiture, a declaration that the caveat was valid, and damages. Newquay counterclaimed for the removal of the caveat. On 8 March 2006, Bell J gave judgment for Yarranova and Newquay on the claim and for Newquay on the counterclaim: Shaw v Yarranova Pty Ltd [2006] VSC 45. An order was made for the removal of the caveat. The applicant was ordered to pay the defendants' costs, to 19 March 2004 on a party and party basis and thereafter on an indemnity basis. 5 On 17 March 2006, the applicant appealed from the judgment of Bell J, including so much of it as required the removal of the caveat. He applied for, and on 26 May 2006 secured, a stay of judgment pending the hearing and determination of the appeal. As a condition of that stay, the applicant offered the usual undertaking as to damages, and an undertaking to deposit the sum of $182,400.79 into an interest-bearing bank account under the joint control of the parties' solicitors. Those undertakings were accepted by the Court of Appeal. The second undertaking was complied with according to its terms. 6 On 15 December 2006, the appeal was dismissed. On 18 January 2007, the caveat was removed. On 20 April 2007, the Court of Appeal ordered the applicant to pay any damages sustained by Yarranova and Newquay by reason of the stay ordered on 26 May 2006, the matter of assessment being referred to a Master. Master Daly heard the matter on 11 September 2007, 11 December 2007 and 31 January 2008, and she received written submissions. On 7 March 2008, the Master made a damages award of $54,706.13 in favour of Yarranova and Newquay, plus interest of $5,683.44. Of the moneys held on interest-bearing account, the sum of $60,389.57 was ordered to be paid to Yarranova and Newquay, with the balance to be paid to the applicant. Certain costs orders were also made in favour of Yarranova and Newquay. On 12, and again on 14, March 2008, the applicant appealed against the orders made by Master Daly on 7 March 2008. It does not appear why two, effectively identical, appeals were lodged, but that is of no present moment. 7 Over the course of the original proceeding, a number of costs orders had been made in favour of Yarranova and Newquay. These costs had been taxed and, in recitals to terms of settlement to which I refer next, it was stated that the sum of $231,118.15 had become payable in this respect by the applicant. It was also there stated that Yarranova and Newquay had, on 12 March 2008, commenced a proceeding in the Supreme Court for orders freezing the applicant's assets worldwide and requiring the applicant to disclose his assets worldwide. That was No 5110 of 2008, and I shall refer to it as "the assets proceeding". Then on 20 March 2008, Yarranova and Newquay filed a summons in the original proceeding for orders altering the order of execution, and alternatively for a stay of the applicant's appeals from Master Daly subject to the payment of the costs referred to. 8 Under terms of settlement executed on 27 March 2008, the applicant, Yarranova and Newquay agreed to compromise the assets proceeding. By those terms, the sum of $90,000 was to be paid from the interest-bearing account (and here, for reasons which will appear, I quote from the terms) "directly to Yarranova Pty Ltd". That sum was in addition to the sum of $60,389.57 the subject of Master Daly's order of 7 March 2008, and it was the balance of the moneys in that account, after payment of both such sums, that would then be paid over to the applicant. It was also agreed that the applicant would, on or before 24 April 2008, pay to Yarranova the sum of $141,118.15 in full and final satisfaction of the costs debt of $231,118.15 (ie taking into account also the $90,000 referred to). The applicant agreed not to dispose of, to deal with or otherwise to encumber land which he owned at 5 Mast Gully Road, Upwey ("the Upwey land") without the prior written consent of Yarranova and Newquay, save for the purpose of obtaining finance to make the payment of $141,118.15. 9 The terms of settlement were mentioned before Williams J on 27 March 2008. Her Honour declined to inspect the terms, but made consent orders adjourning the summonses of Yarranova and Newquay in the original proceeding and in the assets proceeding to the Practice Court on 28 March 2008. What, if anything, happened on that occasion does not appear. 10 The applicant did not make the payment of $141,118.15 required by the terms of settlement. As a result, Yarranova and Newquay restored their applications of 12 and 20 March 2008 in the assets and original proceedings respectively to the list of the Supreme Court. They came before Judd J on 2 June 2008. In the original proceeding, his Honour stayed the applicant's appeals from Master Daly's orders of 7 March 2008 until such time as he had satisfied all the outstanding costs orders which had been made in that proceeding. His Honour ordered the applicant to pay the costs of Yarranova and Newquay of their summons of 20 March 2008. In the assets proceeding, his Honour accepted an undertaking from the applicant in the same terms as set out in the terms of settlement, namely, that he would not dispose of, deal with or otherwise encumber the Upwey land without the prior written consent of Yarranova and Newquay, save for the purpose of obtaining finance to discharge the judgment debt that he owed to Yarranova and Newquay in respect of the original proceeding. 11 On 16 June 2008, the applicant applied for leave to appeal from the orders made by Judd J in the original proceeding on 2 June 2008. On 1 August 2008, that application was dismissed by the Court of Appeal. 12 On 27 August 2008, Yarranova and Newquay issued a warrant of seizure and sale in execution of the judgment debts payable to them by the applicant. Pursuant to that warrant, on 27 May 2009 the Upwey land was auctioned, but did not sell. On 16 July 2009, Evans AsJ made an order in the original proceeding for the sale at auction of the Upwey land to the highest bidder, without reserve. On 19 August 2009, Yarranova and Newquay applied for an order to extend the period of the validity of the warrant of execution for one year, to allow for the conduct of the auction of the Upwey land, which had been arranged for 9 September 2009. On 24 August 2009, Kings AsJ made such an order. On 28 August 2009, the applicant appealed against the making of that order, such appeal being dismissed by J Forrest J on 3 September 2009: Shaw v Yarranova Pty Ltd [2009] VSC 380. 13 Two days before Yarranova and Newquay applied for the extension to the warrant of execution (ie on 17 August 2009), but unbeknown to them at the time, the applicant encumbered the Upwey land by mortgage to the National Australia Bank ("the Bank"). Yarranova and Newquay found out about this on 8 September 2009, and instructed the sheriff to withdraw the Upwey land from the auction that had been arranged for 9 September 2009. 14 By summons in the original proceeding filed on 29 September 2009, Yarranova and Newquay applied for an order to freeze the assets of the applicant. On 30 September 2009, Vickery J made an interim order by which, subject to conventional exceptions, all of the applicant's assets, up to an unencumbered value of $310,000, were frozen. By summons in the original proceeding filed on 7 October 2009, the applicant applied for the removal of the stay (of his appeal from the orders of Master Daly) imposed by Judd J on 2 June 2008 and for the setting aside of the interim freezing order made by Vickery J on 30 September 2009. That summons and the summons of Yarranova and Newquay filed on 29 September 2009 were listed for 16 October 2009. The applicant issued a number of subpoenas returnable on that date. On 14 October 2009, Yarranova and Newquay applied to set those subpoenas aside, and that summons too was dealt with on 16 October 2009. After a four-day hearing in the Practice Court, on 21 October 2009 Harper J dismissed the applicant's summonses, set aside his subpoenas and made a freezing order in relation to the applicant's assets up to an unencumbered value of $400,000. On 17 November 2009, the applicant applied for leave to appeal from the orders of Harper J. 15 On an oral application by Yarranova and Newquay in the original proceeding, on 4 December 2009 Judd J restrained the applicant, until 4 pm on 10 December 2009, from drawing down or otherwise dealing with the mortgage facility extended to him by the Bank on 17 August 2009. On 8 December 2009, Yarranova and Newquay filed a summons for an extension of that restraint. That summons came before his Honour on 10 December 2009, at which time the restraint was extended until further order (but subject to the prior written consent of Yarranova and Newquay). A number of other more detailed restraints were imposed on the applicant in relation to his properties and interests in them. By order made by Judd J on 17 December 2009, the applicant was required to pay the costs of Yarranova and Newquay of the application made on 4 December and the summons of 8 December on an indemnity basis. On 22 December 2009, the applicant applied for leave to appeal from the orders made by Judd J on 4, 10 and 17 December 2009. 16 On 25 October 2010, the Court of Appeal dismissed those applications, as well as the applicant's application for leave to appeal from the orders of Harper J of 21 October 2009. 17 The applicant had been ordered to pay the costs of Yarranova and Newquay on a number of the occasions referred to in the foregoing narrative, including costs orders made by Master Daly on 7 March 2008, by Judd J on 2 June 2008, by the Court of Appeal on 1 August 2008 and by Evans AsJ on 22 and 27 May 2009 and, in part, on 16 July 2009. On 27 April 2010, Wood AsJ made an order in favour of Yarranova and Newquay on a taxation of those costs. On 20 May 2010, the applicant applied for a review of that taxation, which application was dismissed by Wood AsJ on 26 July 2010. On 29 July 2009, Wood AsJ made further taxation orders, this time in respect of costs that had been awarded against the applicant, in part, by Evans AsJ on 16 July 2009, by Kings AsJ on 24 August 2009 and by J Forrest J on 3 September 2009. On 24 August 2010, the applicant applied for review of the orders of Wood AsJ made on 27 April, 26 July and 29 July 2010. By order made on 13 December 2010, Beach J dismissed that application for review: Shaw v Yarranova Pty Ltd [2010] VSC 567. The applicant applied for leave to appeal from that judgment, and, on 18 February 2011, the Court of Appeal refused that application: Shaw v Yarranova Pty Ltd [2011] VSCA 55. 18 On 7, 10 and 11 October 2011, Wood AsJ made a number of orders in the taxation of further costs which the applicant had been required to pay to Yarranova and Newquay in the original proceeding. On 24 October 2011, the applicant attempted to file notices by which he would object to all of the items in the bills which had been allowed by Wood AsJ. The Prothonotary of the Supreme Court refused to accept those notices for filing for the reason that they did not comply with an applicable provision of the rules of that court. Some time later, the applicant applied for an order directing the Prothonotary to accept the notices. That application was dealt with by Hargrave J on the papers and, on 23 May 2012, his Honour refused to make such an order. His Honour gave two reasons for that decision: first, that the applicant's notices did not in fact comply with the applicable provision of the rules (ie that the Prothonotary had been correct in the approach which he had taken); and secondly, having regard to the history of the proceeding in respect of costs orders, it would be an abuse of process for the applicant to proceed with his general grounds of objection, either because those grounds had been dealt with by prior decisions of the court or because the opportunity to raise them had "long passed". 19 On 12 June 2012, the applicant applied for leave to appeal from Hargrave J's refusal to give that direction to the Prothonotary. On 16 August 2012, that application was dismissed by the Court of Appeal: Shaw v Yarranova Pty Ltd [2012] VSCA 189. In relation to the first reason of Hargrave J, their Honours held that it was reasonably arguable that the applicant's notices did comply with the rules, but, in relation to the second such reason, their Honours held that the conclusion that the filing of the notices would amount to an abuse of process was not attended by sufficient doubt to warrant the grant of leave to appeal. In the course of their reasons, their Honours in the Court of Appeal observed, by way of footnote, that the applicant had not "applied to set aside the earlier orders on the basis that they were obtained by fraud". 20 By summons in the original proceeding filed on 4 September 2012, the applicant applied for an order to set aside the orders made by Master Daly on 7 March 2008 on the grounds that "there is fresh evidence" and that those orders had been "procured on the basis of false [and] misleading affidavits [and] fraud". Orders dealing with the consequences of the setting aside of the Master's orders were also sought. On 18 October 2012, Mukhtar AsJ dismissed that application "without adjudication on its merits". Although he accepted that there was no jurisdictional impediment to the applicant seeking to set aside orders made in the original proceeding by way of summons in that proceeding, even where fraud was the ground relied on, Mukhtar AsJ took the view that the preferable course was for the applicant to be required to commence a fresh proceeding supported by properly pleaded allegations. On the same day, the applicant appealed from the dismissal of his application. By a judgment delivered on 11 April 2013, Dixon J allowed the appeal and set aside the order of Mukhtar AsJ, but dismissed the applicant's summons of 4 September 2012. The reason his Honour took that course was that the appeal proceeded by way of hearing de novo and, although the course adopted by the Associate Judge was appropriate and free of error, it was preferable in the circumstances to undertake an adjudication on the merits: his Honour held that there were none. On 22 April 2013, the applicant appealed against this judgment of Dixon J. The appeal stands in the list of the Court of Appeal. 21 On 7 December 2012, Yarranova and Newquay served a bankruptcy notice on the applicant, claiming that he was indebted to them in the sum of $388.880.16 by reason of unsatisfied costs orders made by the Supreme Court. On 24 December 2012, the applicant filed an application in the Federal Magistrates Court seeking an order that the bankruptcy notice be set aside. In his affidavit affirmed in support of that application, the applicant stated that he had disputed the validity of the costs orders on the basis that "the primary judgments were procured by fraud [and] as a consequence those orders [and] consequential orders should be set aside". The application was heard in the Federal Circuit Court (by which name the Federal Magistrates Court was by then known) on 7 August 2013, and dismissed by judgment dated 25 October 2013: Shaw v Yarranova Pty Ltd [2013] FCCA 1627. 22 By the time of the hearing last referred to, the present proceeding had been instituted by the applicant. That was done on 3 August 2013. 23 The Statement of Claim is divided by subheadings, the first of which is "Torts of Conspiracy and Fraud". Under that, the applicant alleges that, in or about September 2007, the first respondent, MAB Corporation Pty Ltd ("MAB"), and the eighth respondent, Anthony Calvi (the company secretary and general counsel of MAB, of the second respondent, MAB Docklands Pty Ltd ("MAB Docklands"), of Yarranova and of Newquay), instructed the fifth respondent, Arnold Bloch Leibler ("ABL") (the respondents' solicitors in this proceeding) and the tenth respondent, Alexander William King (a partner at ABL), to initiate proceedings on behalf of Yarranova and Newquay against the applicant for an assessment of damages allegedly suffered by them due to the caveat having been placed on the land at Docklands. It is alleged that thereafter until July 2013, MAB, Mr Calvi, Yarranova, Newquay, Mr King and the ninth respondent, Ian Michael Smith (the chief financial officer of MAB), "unlawfully conspired to, and tendered false evidence, fraudulent accounting of alleged losses and claims of lost opportunity to invest in non-existent projects or minimise interest on non-existent loans to unconscionably and fraudulently gain unjust enrichment for MAB [and] injure the [applicant]". It is alleged that these parties "conspired to fabricate false accounts [and] provided false evidence to the court to gain unjust enrichment for MAB, Yarranova and Newquay". It is alleged that MAB, Mr Calvi, Yarranova, Newquay and Mr King "conspired and suborned Mr Smith to swear false evidence before the court regarding the ownership, business activities and investments of Yarranova [and] Newquay to persuade the court to make an award of damages in favour of Yarranova [and] Newquay and cause injury to the [applicant]". 24 It is next alleged that Mr Smith collaborated with MAB, Mr Calvi, Yarranova, Newquay and Mr King, tendered affidavits and falsely testified on behalf of Yarranova and Newquay that they were wholly owned subsidiaries of MAB; that he (Smith) could, and possibly would, have directed funds paid to Newquay by the applicant to finance other MAB projects; that Newquay had outstanding bank debts at the relevant time; that he (Smith) could arbitrarily direct Newquay to use funds received from the applicant to pay the debts of other MAB-owned entities and could and would have made such a direction for funds to be paid to Conder Tower Pty Ltd and/or Aquavista Pty Ltd; and that the cost to Newquay of being deprived of proceeds to put towards these options was between $75,442.84 and $91,054.03. Particularising these allegations, the applicant refers to affidavits of Mr Smith in the original proceeding made on 17 October and 8 November 2008 (the year being an obvious typographical mistake - it should be 2007). 25 Still under the same subheading, the applicant alleges that, "on [sic] or about Nov/Dec 2009" (ie between the orders made by Harper J on 21 October 2009 and the oral application made to Judd J on 4 December 2009), MAB, Yarranova, Newquay, Mr Calvi and Mr King "conspired to provide false evidence to the court to satisfy the RSC 37A undertaking requirement that a legal entity (Yarranova [and] Newquay) seeking a freezing order (without putting up security) must have assets within Victoria". There is a reference to the context in which the freezing order application was made by Yarranova and Newquay, after which it is alleged that, on 3 December 2009, Mr King swore false evidence that ABL acted for the MAB group of companies; that Yarranova and Newquay had property rights at Docklands; that Yarranova and Newquay had rights under current contracts for project development at Docklands; that Yarranova's and Newquay's interests in trusts and net assets "amounted to 10's of millions of dollars"; that Yarranova and Newquay had rights of indemnity arising out of trusts through the land at Docklands and development contracts; and that Mr King had instructions from MAB that confirmed these things. It is said that this evidence by Mr King was given "in the court witness box" on 3 December 2009. 26 It is then alleged that all of the conduct previously referred to "was formulated and carried out with the intent to obtain unjust enrichment for MAB, Yarranova and Newquay [and to] secure a freezing order by fraudulently misrepresenting the true asset positions of Yarranova [and] Newquay to cause injury [and] inconvenience to the [applicant]". 27 The next subheading in the applicant's Statement of Claim is "Torts of Deceit and Fraudulent Concealment [and] Breaches of s 52 of Trade Practices Act". At the outset under this subheading, the applicant repeats the allegations which he made under the previously-mentioned subheading. He then alleges that, on or around 27 March 2008, MAB, Yarranova, Newquay, Mr Calvi, ABL and Mr King "conspired to and provided representations to deceive [the applicant] into believing that ABL was authorised to sign a deed of agreement on behalf of Yarranova and Newquay". It is said that, in the knowledge that the applicant was of the belief that the funds paid under the terms of the agreement would "go directly to Yarranova", those parties "conspired to and deliberately concealed their intentions to instead divert the funds to MAB and did not negotiate the deed in good faith". It is alleged that, on or around 30 March 2008, ABL "fraudulently signed a deed of agreement without power of attorney [and] on behalf of Yarranova [and] Newquay and represented it to [the applicant] as a binding agreement". It is alleged that, between March 2008 and July 2013, MAB, Mr Calvi, Yarranova, Newquay, ABL, Mr King and MAB Docklands "conspired [and] acted to unjustly enrich MAB by fraudulently concealing the true destination of monies paid by [the applicant] in accordance with the specific and fundamental terms of the deed of agreement between [the applicant and] ABL (allegedly on behalf of Yarranova [and] Newquay) for [the applicant] to pay those monies directly to Yarranova". It is then said that the conduct referred to under this subheading "was formulated and carried out with the intent to obtain unjust enrichment for MAB, fraudulently [to] conceal the unlawful channelling of money to MAB, (in breach of the terms of the deed of agreement) and [to] cause injury, distress and inconvenience to [the applicant]". Finally, it is said that the conduct referred to (including that covered under the first subheading) "constitutes misleading and deceptive conduct within the meaning of s 52 of The Trade Practice[s] Act and superseding [A]cts". 28 The next subheading in the applicant's Statement of Claim is "Unconscionable Conduct, Breach of Corporations Act 2001, Breach of Part IVA & 51AC & 53A(2) of the Trade Practices Act". Again, the applicant commences by repeating the allegations which he made under the two previously-mentioned subheadings. He then alleges that, on or around 11 March 2008, MAB, Mr Calvi, Yarranova, Newquay and ABL conspired and used their combined corporate and financial resources to harass and subject him to a freezing order application initiated without good cause or in good faith. It is alleged that, on or around 26 March 2008, those parties and Mr King used their combined resources and conspired and acted to place him under duress and unfair disadvantage by instructing counsel "to negotiate directly with, mislead [and] induce the unrepresented [applicant] to immediately sign an oppressive deed of agreement under duress using the threat of the (allegedly improper) freezing order application". It is alleged that MAB, Mr Calvi, Yarranova, Newquay and ABL combined resources to initiate a further series of court applications with the ulterior motive designed to injure the applicant beyond what was reasonably necessary to enforce the payment of legal costs incurred in actions to recover "a (allegedly fraudulently procured) judgment debt(s)". It is alleged that these actions were "co-ordinated and conducted between on or around [sic] Mar 2008 and Feb 2011 with the unlawful result of the unjust enrichment of MAB and malicious injury, distress [and] inconvenience" to the applicant. It is then said that all of the previous conduct alleged in the Statement of Claim (ie not only that under this subheading) constituted unconscionable conduct "within the meaning of unwritten law and Parts IVA & 51AC & 53A(2) of the Trade Practices Act 1974." 29 The next subheading in the applicant's Statement of Claim is "Tort of Intimidation", under which the applicant commences by repeating the allegations which he made under the three previously-mentioned subheadings. He then alleges that, from on or about June 2008 to July 2013, MAB, Mr Calvi, Yarranova, Newquay, ABL and Mr King "formed a common purpose, combined resources and acted to intimidate and punish the [applicant] for attempting to lawfully defend his rights and oppose the series of court applications of MAB, Yarranova and Newquay". It is alleged that, in or about October 2011, MAB, Yarranova, Newquay, ABL and Mr King "formed a common purpose [and] used their combined corporate resources to unreasonably harass and threaten a bankruptcy application against the [applicant] as a means of placing the [applicant] under duress to enforce debt collection whilst they did not have a reasonable belief that the [applicant] could be insolvent or even a genuine intention to issue proceedings within a reasonable time". 30 The final subheading in the applicant's Statement of Claim is "Liability enlivened by Partnership Act 1958 Part 2 Division 2, Corporations Act 2001 s 129, s 180, s 181, s 204, Corporate Association & Joint Control of Liable related entities". Again, the applicant commences by repeating the allegations which he made under the four previously-mentioned subheadings. He then makes a single allegation of what is, in effect, derivative liability on the part of MAB Docklands, the sixth respondent, ABL Fiduciary Corp Pty Ltd, the seventh respondent, ABL & Co Custodians Pty Ltd, ABL "and their respective officers". 31 It is convenient next to investigate the relationship, if any, between the applicant's case in the present proceeding and the various applications that have been made, and decisions given, in the Supreme Court in the original proceeding and the assets proceeding. 32 The applicant's first group of allegations - those headed "Torts of Conspiracy and Fraud" - fall into two parts. The first, which relates to the conduct of Yarranova and Newquay (and others) in preparing their evidence for, and then advancing their case in, the assessment of damages by Master Daly, would, if well-founded, provide grounds for an application to have Master Daly's award of 7 March 2008 set aside. Allegations of this kind naturally belonged in the appeals lodged by the applicant on 12 and 14 March 2008. Those appeals remain stayed pursuant to the orders made by Judd J on 2 June 2008, but that does not affect the nature of the relationship referred to. 33 The second part of this first group of allegations relates to the conduct of Yarranova and Newquay in preparing for and making their application which came before Judd J on 4 and 10 December 2009 (in which respect I note, but do not dwell upon, the fact that the applicant's pleading places the hearing of that application on 3 December 2009, whereas the narrative set out earlier in these reasons is based upon the affidavit of the senior legal counsel for MAB in this proceeding and gives 4 December as the relevant date). As noted above, the applicant treats that as an application for a freezing order, and it is presently of no moment whether the restraint which Yarranova and Newquay sought and obtained on this occasion could be so described. What is significant is that the allegations now made naturally belonged in the application for leave to appeal which the applicant lodged on 22 December 2009, and which was dismissed on 25 October 2010. 34 The applicant's second group of allegations - those headed "Torts of Deceit and Fraudulent Concealment [and] Breaches of s 52 of Trade Practices Act" - relates to the terms of settlement of 27 March 2008, and specifically to the provision of those terms that provided for the sum of $90,000 to be paid from the interest-bearing account "directly to Yarranova Pty Ltd". On the hearing of the present application, it became clear that the applicant's complaint was that the respondents and their solicitors had so arranged matters that this sum was in fact paid to MAB, rather than to Yarranova. The applicant did not know of that at the time, which is apparently said to provide some basis for his claim of concealment and, therefore, of misleading and deceptive conduct. He did, however, make it clear in the hearing on the respondents' present application that he became aware that the money had not been paid to Yarranova by about the third week in May 2008. In an exchange with the court, the applicant said that this aspect of his case had been mentioned in the hearing before Harper J in October 2009: when his Honour referred to the settlement, the applicant responded "Well, yes, but they didn't comply with the settlement because they coerced me". The allegation had not been raised in the application which came before Mukhtar AsJ because "we didn't get into the nitty-gritty of the hearing because [the Associate Judge] declined to hear it because of lack of jurisdiction because it was the wrong process". And it had not been raised before Dixon J because that appeal, while a hearing de novo, proceeded (according to the applicant in the present case) only on the evidence that was before Mukhtar AsJ. It is sufficient to say that, to the extent that the applicant has a legitimate complaint under this subheading, he has had several opportunities to air it in applications which he in fact made in the Supreme Court. 35 The applicant's third group of allegations - those headed "Unconscionable Conduct, Breach of Corporations Act 2001, Breach of Part IVA & 51AC & 53A(2) of the Trade Practices Act" - also seem to fall into two parts. Allegations in the first part relate to the circumstances which led to the terms of settlement of 27 March 2008, centred as they were on the application of Yarranova and Newquay for orders which would freeze the applicant's assets. As such, they naturally belonged in the applications and hearings in the Supreme Court which followed upon the applicant's default under the terms - before Judd J on 2 June 2008, and/or on the application for leave to appeal from his Honour's orders of that day, and/or before Vickery J on 30 September 2008, and/or before Harper J on 16 October 2009. Indeed, it appears that the applicant in fact ventilated allegations substantially along these lines before Harper J, whose reasons of 21 October 2009 contain the following passage ([2009] VSC 490 at [12]): [The applicant] on 27 March 2008 entered into terms of settlement with [Yarranova and Newquay], which terms he has not fulfilled. There is a suggestion in [the applicant]'s evidence that he was in some way the subject of undue influence or unconscientious behaviour in the making of those terms; but that suggestion did not surface when, within a week or so of the making of the agreement, [the applicant] swore an affidavit in which he made no reference at all to any unfairness in the negotiation or expression of the terms of that settlement. I accordingly proceed upon the basis that the settlement was one into which [the applicant] entered freely, and by which he was bound. Indeed, such a finding is consistent with the findings made by the court when an application was heard by Judd J on 2 June last year, and on appeal from that judge's orders to the Court of Appeal. 36 The second part of this third group of allegations relates to a "further series of court applications", particulars of which extend to, and in some cases beyond, all the Supreme Court orders to which I have referred over the period 2 June 2008 to 18 February 2011. To the extent that the particulars relate to the matters to which I have referred, I would make the following observations: Allegations about the relevant respondents' conduct in connection with the matter which came before Judd J on 2 June 2008 naturally belonged in the application for leave to appeal made by the applicant on 16 June 2008. The order made by the Court of Appeal on 1 August 2008 was in fact made on the application for leave to appeal so made on 16 June 2008. Although, from the evidence before the court on the respondents' present application, there appears not to have been an application made by the applicant in relation to the costs orders made by Evans AsJ on 22 and 27 May 2009, the relevant costs were the subject of the taxation orders made by Wood AsJ on 27 April 2010, and I refer to the applicant's application to review the latter in its appropriate sequence below. So far as the evidence before the court on the respondents' present application shows, there was no appeal, or application for leave to appeal, from the orders made by Evans AsJ on 16 July 2009. Allegations about the relevant respondents' conduct in connection with the matter which resulted in the order made by Kings AsJ on 24 August 2009 naturally belonged in the appeal from that order made by the applicant on 28 August 2009. The order made by J Forrest J on 3 September 2009 was in fact made on the appeal so lodged on 28 August 2009. Allegations about the relevant respondents' conduct in connection with the matter which resulted in the order made by Harper J on 21 October 2009 naturally belonged in the application for leave to appeal made by the applicant on 17 November 2009. Allegations about the relevant respondents' conduct in connection with the matter which resulted in the orders made by Judd J on 4 and 17 December 2009 naturally belonged in the application for leave to appeal made by the applicant on 22 December 2009. The order made by the Court of Appeal on 25 October 2010 was in fact made in respect of the two last-mentioned groups of orders. Allegations about the relevant respondents' conduct in connection with the matter which resulted in the orders made by Wood AsJ on 27 April and on 26 and 29 July 2010 naturally belonged in the application for review made by the applicant on 24 August 2010. The order made by Beach J on 7 December 2010 was in fact made on the application for review so made on 24 August 2010; and allegations about the relevant respondents' conduct in connection with the matter which resulted in that order naturally belonged in the application for leave to appeal which was decided by the Court of Appeal on 18 February 2011. 37 Additionally to the matters listed above, the applicant's particulars refer to an order made by Wood AsJ on 24 September 2009. There is no reference to that order in the evidence, and I am, accordingly, in no position to make a finding or comment about it. In the light of the nature and apparent comprehensiveness of the applicant's associated allegations, this limited omission will not affect the ultimate conclusion which I reach on this aspect of the case. 38 To the extent that the applicant's fourth group of allegations - those headed "Tort of Intimidation" - has content, it seems to focus upon two letters sent by ABL to the applicant. The first, identified in the particulars to so much of the allegations as relate to the period June 2008 to July 2013, is a letter of 24 June 2008 "[d]emanding payment of every cent" (the applicant's description in the particulars). That letter is not presently before the court, but I note that it was sent about three weeks after the orders made by Judd J on 2 June 2008 and the applicant's undertaking not to encumber the Upwey land, and about one week after the applicant had applied for leave to appeal from those orders. The second letter, which also is not before the court, is referred to in his particulars of the allegation of harassment and the use of a bankruptcy proceeding as a means of debt collection. I note that the date of the letter, 11 October 2011, was the day upon which Wood AsJ made the third of three costs orders in that month. It is quite probable, and I would be prepared to accept favourably for the applicant, that it was then that ABL sent him a letter demanding payment of the costs referred to, upon pain of being subjected to bankruptcy proceedings. That being so, to the extent that any cause of action is here being invoked by the applicant, it would seem to have naturally belonged in the application which he made on 24 December 2012 to set aside the bankruptcy notice served by Yarranova and Newquay. 39 Before turning to the respondents' abuse of process contentions as such, I should give consideration to the question whether the court has jurisdiction at all in the proceeding which the applicant ostensibly commenced on 3 August 2013. The respondents submit not, on the basis that the applicant's claims under federal law were colourable, and had been made only for the purpose of fabricating jurisdiction: Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212, 219. 40 What is striking about the proceeding generally is that, with the possible exception of the fourth group of allegations, the conduct in which the respondents have allegedly engaged was all done in, or (in the case of the terms of settlement aspect) in close connection with, proceedings in the Supreme Court. When I asked the applicant why he had brought those allegations to the Federal Court, he said that he thought that this court was a better place for the determination of claims arising under the Corporations Act 2001 (Cth) ("the Corporations Act") and the TP Act. That begs the question apropos the purpose of making claims under those Acts in the first place, of course, but the very strong sense which one gets from a reading of the Statement of Claim is that the applicant's federal statutory claims have in effect been laid like a tarpaulin across a miscellany of grievances and aggravations which are otherwise concerned with Supreme Court proceedings, procedures and outcomes. 41 Notwithstanding those reservations, I am unable to reach the conclusion that the court wholly lacks jurisdiction in this proceeding. Although the Full Court's observation in Burgundy Royale has been referred to on a number of occasions over the years, little has been added by way of practical elaboration on the very high-level principle to which their Honours referred. There is, of course, the distinction made by Wilcox CJ in Fitzroy Motors Pty Ltd v Hyundai Automotive Distributors Australia Pty Ltd (1995) 133 ALR 445, 450 and by Merkel J in Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) ATPR 41-743 at [54] between a claim which is colourable with a view to fabricating jurisdiction and a claim which, although weak to the point of being unarguable, is genuine. That distinction does not quite come to terms with the issue which the respondents' submissions raise on the present point. Rather, I am confronted with a proceeding which is said to amount to an abuse of process, and would be so castigated wherever it had been commenced. In that context, I consider that the way in which the applicant's federal statutory claims should be viewed is as a means under which he would hope to invoke new, previously untried, causes of action for redress against the respondents in the wake of his erstwhile conspicuous want of success in the Supreme Court. I am not persuaded that his reliance upon those claims was merely a device to have this proceeding heard in the Federal Court. 42 That brings me to the respondents' abuse of process allegations as such. One established category of abuse is advancing a claim or defence in a later proceeding which properly belonged to an earlier proceeding and which might, with reasonable diligence, have been brought forward in that earlier proceeding: Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589, 598, citing, and applying, Henderson v Henderson (1843) 3 Hare 100, 115. To a very large extent, the allegations which the applicant makes in this proceeding might have been made in the various applications, motions and appeals in the original proceeding to which I have referred above. Indeed, no small number of them were then made, and disposed of. Subject only to the issue of parties, to which I shall turn below, I would hold that the making of the allegations in the applicant's first, second and third groups as outlined above amounts to an abuse of process in the Anshun sense. 43 At the more general level, in Rogers v R (1994) 181 CLR 251, 286, McHugh J said: Although the categories of abuse of procedure remain open, abuses of procedure usually fall into one of three categories: (1) the court's procedures are invoked for an illegitimate purpose; (2) the use of the court's procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court's procedures would bring the administration of justice into disrepute. This dictum was referred to with approval in Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256, 267 [15], in PNJ v R (2009) 252 ALR 612, 613 [3] and in Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427, 452 [89]. 44 As I have observed above, the allegations made by the applicant in the first three groups are more than simply such as might have been made in the various applications and appeals in the original proceeding, or, to a limited extent, in the assets proceeding, but in some respects they have that feature. The allegations are also more than the re-packaging of claims and defences which were made and disposed of in those proceedings, but in some respects they have that feature too. To my way of looking at it, a striking feature of the allegations is that, in point of substance, they relate to conduct said to have taken place in the conduct of those proceedings. Being substantially allegations of fraud or of presently analogous iniquities (misleading representation, duress, conspiracy etc), if the allegations were well-founded, they would inevitably provide grounds for the Supreme Court orders to which they relate to be set aside. But the Federal Court does not have power to grant any such relief, and none is sought. Rather, what is sought is a series of declarations about the conduct of the respondents in relation to the original proceeding, and damages on account of the applicant having been subjected to the orders made by the Supreme Court. The matter needs only to be viewed in this way for it to be clear that the use of the Federal Court and its procedures in this way would bring the administration of justice into disrepute, and very seriously so. 45 A further striking feature of the applicant's allegations is that the sources of the losses for which he claims damages are the pecuniary orders made by the Supreme Court itself. When coupled with the circumstance mentioned above - that the substantive basis of the cause of action is that the orders were procured by fraud, misrepresentation and the like - what we have is an applicant who, either alternatively or additionally to seeking the setting aside of the orders from which the losses are said to flow, desires to be compensated for those very losses. This is the clearest of collateral attacks on the Supreme Court orders, and should not be permitted. 46 I also have no doubt but that the present proceeding is being used as an instrument of oppression against Yarranova and Newquay, whose success in the original proceeding the applicant appears unwilling to accept. As stressed by counsel for the respondents on the present occasion, the genesis of the situation in which the applicant finds himself was the failure of his case against Yarranova and Newquay before Bell J, his decision to appeal from that disappointment and the undertaking which he was conventionally required to give as the price for a stay of his Honour's order for the removal of the caveat. Since then, costs have inevitably mounted up, in no small part because the applicant himself contests each successive victory which Yarranova and Newquay have had. Those victories have not been the outcomes of aggressive applications or forensic raids by the parties that enjoyed them: rather, they have constituted successful defences to applications and appeals commenced by the applicant or, in a limited number of cases, have been the result of applications necessarily (and, it seems to me, inevitably) taken by Yarranova and Newquay to protect their entitlements against the prospect that the applicant might dispose of his assets to their disadvantage. From the various applications and appeals in the Supreme Court, I have the impression that the applicant's general project is to reduce to the absolute minimum the monetary recovery that Yarranova and Newquay are able to achieve from him, whatever may be their entitlements under orders made by that court. I accept the respondents' case that the present proceeding is another, albeit somewhat different, stratagem with the purpose of vexing Yarranova and Newquay (and the entities and persons with which and whom they are associated) in relation to the conventional and legitimate steps which they have taken to assert their entitlements in the Supreme Court. 47 To date, I have said nothing specifically about the fourth group of allegations which the applicant presently makes. Here it could not be said that the applicant was acting inconsistently with any of the orders made by the Supreme Court, or that he might have brought forward his relevant claims in the context of the applications and appeals which led to the making of those orders, or in which those orders were challenged. That is because, although the applicant alleges what amounts to a conspiracy involving MAB, Mr Calvi, Yarranova, Newquay, ABL and Mr King between June 2008 and July 2013, there is no allegation about anything which they in fact did pursuant to any such conspiracy, save, perhaps (if the pleading is to be understood this way) the matters alleged in the first three groups to which I have already referred or the bankruptcy aspects of the allegations to which I turn in the next paragraph. 48 To deal with those aspects, it is convenient to refer to the judgment of the Federal Circuit Court given as recently as 25 October 2013. According to the reasons of Judge Burchardt, the applicant's application to set aside the bankruptcy notice of Yarranova and Newquay was supported by an affidavit in which he stated ([2013] FCCA 1627 at [1]): I have disputed the validity of the costs orders on the basis that the primary judgements [sic] were procured by fraud & as a consequence those orders and consequential orders should be set aside. If my applications are successful the resultant costs orders will be set aside. What the applicant meant by this became clear in an application for adjournment which he made when his application to set aside the bankruptcy notice came on for hearing. He was referring to the orders made by Dixon J on 11 April 2013 and to his pending appeal in the Court of Appeal from those orders. Judge Burchardt refused the adjournment sought and, in the substantive part of his Honour's reasons, set out the applicant's case as follows ([2013] FCCA 1627 at [32]): Essentially, in his submissions, Mr Shaw repeated that he was in limbo. He has to conclude the Court of Appeal case before he can issue the substantive proceeding, which he has endeavoured to issue by way of summons, to attack the original judgment which has given rise to his travails. He pointed out that the Court of Appeal has not refused to hear his case and that the issue of fraud he is raising is not yet determined. He said that the orders of Daly AsJ, to which I have referred, were not final orders. He further complained that the [b]ankruptcy [n]otice issued to him did not specify who was to be paid. He confirmed that he was alleging fraud and, indeed, towards the conclusion of his submissions, he alleged that the witnesses were suborned and he was the subject of a wide-ranging conspiracy. 49 Returning to the relevant allegations made by the applicant in the present case, the essence thereof is that the respondents used the threat of bankruptcy as an instrument of duress and as a means of debt collection when they did not have a reasonable belief that he could be insolvent. In everything but name, that amounts to an allegation that the bankruptcy notice was an abuse of process. The Federal Circuit Court had jurisdiction to set the notice aside on that ground: Brunninghausen v Glavanics [1998] FCA 230. This was not a ground on which the applicant in fact relied before Judge Burchardt: the closest he got to it was to contend that his allegations of fraud and the like in the Supreme Court would be upheld by the Court of Appeal and all of the orders on which the bankruptcy notice was based would be swept aside. But it was a ground upon which the applicant could have relied before his Honour. If well-founded, the ground would (subject to such discretionary considerations as may have come into play) have led directly to the grant of the relief which he then sought. 50 In my view, for the applicant now to proceed for declarations and damages with respect to the respondents' resort to bankruptcy procedures, and to do so upon a ground which could have been taken in the Federal Circuit Court, amounts to an abuse of process both in the Anshun sense and in the sense that it would bring the administration of justice into disrepute. Additionally, it is clearly oppressive to Yarranova and Newquay, having defended their bankruptcy notice in a proceeding in which its legality was directly challenged, to be required again to join issue with the applicant, but this time collaterally, on that very same question. 51 For the above reasons, I would uphold the respondents' case that this proceeding amounts to an abuse of process to the extent that it is brought against Yarranova and Newquay. They were and are the parties with which the applicant was and is litigating in the Supreme Court and the Federal Circuit Court. In the present case, however, the applicant also sues eight other respondents as indicated above. He submits that, to the extent that he has a cause of action against them, it was not appropriate, and it may not even have been open, for him to have made his claims the subject of the other proceedings to which I have referred. I should say at once that, on the hearing of the present application, the applicant made it clear that he now took the view that the individuals, and the partnership (ABL), ought not to have been joined as respondents, and that he did not propose to proceed against them. In the result, it remains to consider the implications for my findings to date of the fact that MAB, MAB Docklands, ABL Fiduciary Corp Pty Ltd and ABL & Co Custodians Pty Ltd have been joined as respondents in this proceeding. 52 The only references to the two last-mentioned companies, ABL Fiduciary Corp Pty Ltd and ABL & Co Custodians Pty Ltd, in the applicant's Statement of Claim are, first, the formal allegations of identity and incorporation, secondly, allegations that both companies were under the control of ABL and exercised control over MAB Docklands, and thirdly, the allegations of derivative liability to which I have referred at para 30 above. If the proceeding is otherwise to be regarded as an abuse of process, clearly the inclusion of these parties, and the limited allegations made about them, will not rescue the situation for the applicant. Without Yarranova, Newquay, ABL and MAB Docklands, the applicant's case against these companies comes to nothing. 53 The only references to MAB Docklands in the applicant's Statement of Claim are, first, a formal allegation of incorporation, secondly, allegations that it was under the control of ABL Fiduciary Corp Pty Ltd and ABL & Co Custodians Pty Ltd, thirdly, an allegation that Mr Calvi was its company secretary and general counsel, fourthly, the allegations of conspiracy and fraudulent concealment referred to in para 27 above, and fifthly, the allegations of derivative liability referred to in para 30 above. If the proceeding were otherwise to be viewed as an abuse of process, the first three and fifth of these allegations would go nowhere in preserving the applicant's position. Only the fourth requires any serious consideration. I shall defer consideration of it until I have dealt with the position of the remaining respondent to this proceeding which was also not a party to the original proceeding or in the Federal Circuit Court, MAB. 54 MAB is included in all the substantive allegations mentioned above (ie excepting only those that seek to make a case of derivative liability) as a conspirator with Yarranova and Newquay and others (including individuals against whom the applicant no longer proceeds). Whether described as "collaboration", as "combining together" or as "conspiracy" as such, the essence of the iniquity here alleged against MAB is that of a participant in what was a civil conspiracy. The misdeeds by which the conspiracy was, or was to be, put into effect, however, line up with the very case which the applicant seeks to run against Yarranova and Newquay, and which I have held to amount to an abuse of process. Indeed, that case itself substantially involves allegations of civil conspiracy. In the circumstances, it is not only appropriate but inevitable that the conclusion which I reached above in relation to Yarranova and Newquay - that the applicant's case would bring the administration of justice into disrepute and that the present proceeding is being used as an instrument of oppression against Yarranova and Newquay - should apply no less to so much of that case as is sought to be made against MAB. That conclusion, in relation to the proceeding generally, is not to be qualified by reason of the fact that MAB was not a party to the original proceeding, the assets proceeding or the bankruptcy notice proceeding. 55 I would take the same approach in relation to so much of the applicant's case (not already dealt with above) as involves claims against MAB Docklands. 56 For the foregoing reasons, I hold the present proceeding to be an abuse of the process of the court within the meaning of r 26.01(1)(d) of the Rules. That would be sufficient for judgment to be given for the respondents in the proceeding generally. 57 I would, however, add three things. The first relates to the applicant's reliance on the TP Act. Save for s 53A(2), each of the other provisions of that Act which the applicant seeks to invoke relates to acts or omissions by corporations in trade or commerce. Although I make allowance for the fact that the applicant is not professionally represented, I also recognise that he is no stranger to litigation and seems to have a working appreciation of the prohibitions contained in this legislation. His Statement of Claim contains no allegation that any of the conduct alleged was engaged in in trade or commerce, and no such circumstance is naturally or readily apparent from the context. Rather, everything alleged against the respondents is said to have happened in the setting of the making, resisting, reviewing, etc, of court orders. I can well understand why conduct in litigation which itself related to trade or commerce might satisfy the statutory description. But all of the hearings, applications and orders in the original proceeding to which the applicant has referred in his pleading related not to trade or commerce but, initially, to orders made by Master Daly in the assessment of damages arising from a procedural undertaking given to the Court of Appeal and, later, to costs and to the protection which Yarranova and Newquay required against the prospect that the applicant would, by disposing of his property, make it impossible for those parties to execute on the judgments which they had obtained or would obtain. Against this understanding of the applicant's case, I cannot see the sense in which it might be said that the allegations made against the respondents were of conduct in trade or commerce within the meaning of the TP Act. 58 Section 53A(2) is not limited to conduct in trade or commerce, but it is clear that the applicant does not allege the use of physical force, harassment or coercion "in connection with the sale or grant, or the possible sale or grant, of an interest in land or the payment for an interest in land". 59 Thus, for the purposes of s 31A(2) of the Federal Court Act, I would conclude that the applicant has no reasonable prospect of successfully prosecuting so much of this proceeding as arises under the TP Act. 60 The second thing relates to the applicant's derivative liability pleading. To the extent that the applicant relies on ss 180 and 181 of the Corporations Act, he would lack standing to seek compensation or any other relevant remedy pursuant to the provisions of s 1317J of that Act, specifically subs (4) thereof. Section 129, also referred to in this part of the Statement of Claim, is purely adjectival, and would seem to go nowhere apropos the applicant's substantive case against the respondents. The applicant also invokes s "204" of that Act, but there is no such section. Although, as indicated above, I cannot see how the applicant, even ostensibly, seeks to base his case on the Corporations Act, for the sake of completeness, and taking into account the matters mentioned in this paragraph, I would conclude, for the purposes of s 31A(2) of the Federal Court Act, that the applicant has no reasonable prospect of successfully prosecuting so much of this proceeding as arises under the Corporations Act. 61 The third thing relates to the applicant's case of intimidation (under which allegations in the fourth group are organised). Neither as such, nor in any way that reasonably appears from the facts alleged, does the applicant make any allegation of what is an essential ingredient in any such case, namely, that the conduct complained about involved a threat to carry out an unlawful act as a means of intimidating the injured party (here, the applicant): see Rookes v Barnard [1964] AC 1129. In those circumstances, I would hold that the applicant has no reasonable prospect of successfully prosecuting so much of this proceeding as involves allegations of intimidation. 62 For the foregoing reasons, the appropriate order to make on the respondents' application is that judgment be entered for them in the proceeding. I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.

Shaw v MAB Corporation Pty Ltd

At a glance

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Judgment (18 paragraphs)

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Legislation Cited (4)

Cases Cited (14)

Cited By (15)