FEDERAL COURT OF AUSTRALIA

Granich & Associates v Yap [2004] FCA 1567

PRACTICE AND PROCEDURE – vexatious litigant – Order 21 rule 2 – whether respondent habitually and persistently instituted vexatious proceedings against the applicant – order made under Order 21 rule 2

Vexatious Proceedings Restriction Act (2002) (WA)

Federal Court Rules Order 21

Granich & Associates v Yap [1999] FCA 1039 cited

Yap v Granich & Associates [1999] FCA 1867 cited

Yap v Granich & Associates [2001] FCA 799 cited

Yap v Granich & Associates [2001] FCA 1735 cited

Yap v Granich & Associates [2002] FMCA 284 cited

Yap v Granich & Associates [2004] FCA 647 cited

Horvath v Commonwealth Bank of Australia [1999] FCA 504 cited

Ramsay v Skyring (1999) 164 ALR 378 cited

Slater v Honourable Justice Higgins [2001] FCA 549 cited

Commonwealth Bank of Australia v Heinrich [2003] FCA 540 cited

Attorney-General v Wentworth (1988) 14 NSWLR 481 applied

GRANICH & ASSOCIATES v YAP CHENG SEE

W225 OF 2004

FRENCH J

1 DECEMBER 2004

PERTH

THE COURT ORDERS THAT:

1.         The respondent shall not, without leave of the Court, institute any proceeding against the applicant in the Court.

2.         Any proceeding instituted by the respondent against the applicant in the Court before the making of this Order shall not be continued by the respondent without leave of the Court.

3.         The respondent is to pay the costs of the applicant.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT ON APPLICATION WITH RESPECT TO

VEXATIOUS LITIGANT

Introduction

1                     Granich & Associates is a firm of solicitors which was sued in 1993 for professional negligence by its former client, Yap Cheng See.  Mrs Yap’s action was dismissed in the District Court.  She was ordered to pay the costs of Granich & Associates.  She failed to do so and in October 1997 Granich & Associates served her with a bankruptcy notice requiring payment of the costs which had been taxed at $29,790.45.  They also demanded payment of post-judgment interest of $3,393.66, making a total debt of $33,184.11.  Mrs Yap was made bankrupt.  In numerous proceedings since that time in which she has named Granich & Associates as respondents she has endeavoured to have her bankruptcy set aside or annulled.  Granich & Associates now seek to have her restrained from further proceeding against them without the leave of the Court on the basis that she is a vexatious litigant.  They bring their application under Order 21 rule 2 of the Federal Court Rules.

2                     Mrs Yap’s litigious history amply confirms the contention that she is a vexatious litigant.  For the reasons given below she will be restrained from instituting any new proceedings and from continuing any existing proceedings against Granich & Associates without the leave of the Court.

Factual History

3                     The present motion is the end product of a long and convoluted history of litigation between Mrs Yap and her former solicitors, Granich & Associates.  The history of the litigation and its background is as follows:

1.         P Vivante & Co Pty Ltd obtained a default judgment against Mrs Yap in District Court action 1536 of 1989 on 10 April 1989.

2.         On 23 June 1992, District Court Registrar Kingsley set aside the default judgment and gave Mrs Yap leave to defend the proceedings provided she paid $39,000 into court by 7 July 1992.

3.         Mrs Yap failed to pay the money into court.

4.         Mrs Yap appealed the decision of District Court Registrar Kingsley to his Honour Judge Viol.  The appeal was heard by his Honour on 3, 10 and 21 August 1992.  His Honour dismissed the appeal with costs.

5.         Mrs Yap applied for leave to appeal the decision of his Honour Judge Viol to the Full Court of the Supreme Court.  On 10 June 1993 the Full Court dismissed her application for leave to appeal and ordered that she pay the costs. 

6.         Mrs Yap commenced proceedings against Granich & Associates for alleged negligence in District Court action 6202 of 1993.  Her action related to the firm’s conduct of the District Court proceedings.  Her action was dismissed by Commissioner Martin QC on 7 May 1996.  He found she failed to prove the firm had been negligent.  The solicitors, Granich & Associates, were awarded the costs of the action. 

7.         Mrs Yap instituted an appeal to the Full Court of the Supreme Court.  That appeal was dismissed on 21 July 1997 for want of prosecution.  Mrs Yap was ordered to pay the costs of the appeal. 

8.         Granich & Associates initiated proceedings in the Local Court to recover legal costs from Mrs Yap.  She brought a counterclaim in those proceedings and sought to have it transferred to the Supreme Court.  On 24 October 1997, Master Bredmeyer dismissed the action for removal as an abuse of process. 

9.         Mrs Yap applied for special leave to appeal the judgment of the Full Court to the High Court.  The special leave application was dismissed on 22 October 1998 with costs.

10.       On 14 December 2001, Mrs Yap applied for judgment in the District Court action which had been dismissed by Commissioner Martin QC on 7 May 1996.  The application for a judgment was allegedly based on admissions.  It was dismissed with costs by his Honour Judge Wisbey. 

11.       On 15 March 2002, Mrs Yap applied to the District Court for a retrial of the 1993 action against her solicitors based on alleged fresh evidence.  Commissioner Greaves dismissed the application with costs on 22 March 2002. 

12.       Mrs Yap’s appeal against the decision of Commissioner Greaves was dismissed with costs by his Honour Judge Williams on 12 April 2002.

13.       Mrs Yap applied to the Supreme Court for a rehearing of the 1996 District Court action based on alleged fresh evidence.  Her application was heard by the Full Court of the Supreme Court on 14 August 2002 and dismissed by the Court on 4 December 2002.  The Full Court found that she was making the same allegations as she had in the hearing before Commissioner Martin QC.

14.       On 30 December 2002, Mrs Yap made an application for special leave to appeal to the High Court seeking, inter alia, to set aside the judgment of the Full Court of 4 December 2002.  That application is yet to be listed for hearing. 

15.       On 13 December 2002, Granich & Associates made an application for leave to apply in the Supreme Court of Western Australia to have Mrs Yap declared a vexatious litigant under the Vexatious Proceedings Restriction Act (2002) (WA).  In a judgment delivered on 31 October 2003, Heenan J made an order prohibiting Mrs Yap or any person acting on her behalf from instituting proceedings against Granich & Associates without leave of the Court or Tribunal in the manner prescribed in s 6 of the Vexatious Proceedings Restriction Act – Granich Partners v Yap [2003] WASC 206.

4                     The preceding matters set out the history of proceedings undertaken by Mrs Yap in the District and Supreme Courts of Western Australia and in the High Court on applications for special leave to appeal from the decisions of the State Full Court.  There is a separate history of proceedings in the Federal Court which is directly relevant to the motion presently before the Court.  A summary of that history follows:

1.         On 11 October 1997, Granich & Associates caused a bankruptcy notice to be served on Mrs Yap.  The notice required payment of $33,184.11.  The debt comprised taxed costs of $29,790.45 which Mrs Yap had been ordered to pay to Granich & Associates upon the dismissal of her claim by Commissioner Martin on 7 May 1996, and post-judgment interest of $3,393.66.  The costs had been taxed on 12 August 1996. 

2.         On 17 October 1997,  Mrs Yap filed an application to set aside the bankruptcy notice on the basis that she had a counterclaim based upon the negligence of Granich & Associates.  On 1 December 1997 the District Registrar of the Federal Court dismissed that application.  Mrs Yap did not seek review of or appeal from that order.

3..        On 1 May 1998, Granich & Associates filed a creditor’s petition seeking sequestration of Mrs Yap’s estate.  The act of bankruptcy relied upon was non-compliance with the bankruptcy notice served on 11 October 1997. 

4.         On 13 May 1998, Mrs Yap filed a notice of intention to oppose the petition based on a pending application for special leave to appeal to the High Court of Australia in relation to her unsuccessful professional negligence action against Granich & Associates.  She also alleged:

            “Deliberate concealment of facts relating to [Mrs Yap’s] cause of action to conceal [Granich & Associates’] breach of duty to [Mrs Yap] pursuant to [Granich & Associates’] retainer/contract to [Mrs Yap].”

5.         The High Court dismissed Mrs Yap’s application for special leave to appeal on 22 October 1998, stating amongst other things that her application was “entirely devoid of merit”.

6.         Between the filing of the notice of intention to oppose the petition and 10 December 1998, the hearing of the petition was adjourned five times and Mrs Yap filed six affidavits.  On 10 December 1998 the Registrar made a sequestration order against Mrs Yap’s estate.

7.         The matter came before me as a result of a motion filed by Mrs Yap on 16 December 1998 seeking an order that the judgment of the Registrar be set aside, the sequestration order be annulled, and that Granich & Associates pay damages and costs.

8.         The motion to review and set aside the sequestration order was dismissed by me on 30 July 1999 - Granich & Associates v Yap Cheng See [1999] FCA 1039.

9.         Mrs Yap appealed against my decision to the Full Court which dismissed her appeal on 29 November 1999 – Yap v Granich & Associates [1999] FCA 1867.

10.       On 6 October 2000, Mrs Yap lodged an application for the annulment of  her bankruptcy.  On the respondent’s motion, RD Nicholson J dismissed the application on the basis, inter alia, that Mrs Yap was seeking in it to raise the same allegations which she had previously raised in the Full Court of the Federal Court – Yap v Granich & Associates [2001] FCA 799.

11.       Mrs Yap applied to the Full Court of the Federal Court for leave to appeal against the decision of RD Nicholson J.  Her application was dismissed by the Full Court on 29 November 2001 – Yap v Granich & Associates [2001] FCA 1735.

            In dismissing her application for leave to appeal, the Full Court, per Gyles J, accepted that the primary judge was entitled to regard her proceedings ‘as doomed to failure and so as an abuse of process and vexatious’.  Mrs Yap was ordered to pay the costs of Granich & Associates.

12.       Mrs Yap sought again to set aside the sequestration order in proceedings commenced in the Federal Magistrates Court which were dismissed on 30 October 2002 by McInnis FM – Yap v Granich & Associates [2002] FMCA 284.

13.       Mrs Yap appealed against the decision of the Federal Magistrate.  Her appeal was heard by a single judge, Marshall J, who dismissed the appeal on 21 May 2004 – Yap v Granich & Associates [2004] FCA 647.  His Honour said that the learned federal magistrate was (at [11]):

            ‘... correct in characterising the proceeding before him as an abuse of process.’

5                     According to the affidavit of Mr Dodd, a partner at the firm of Mallesons Stephen Jaques acting for Granich & Associates, that firm’s costs in opposing her various applications and appeals since the judgment of Commissioner Martin QC in 1996 have exceeded $200,000. 

6                     Mrs Yap has filed three affidavits in opposition to the motion.  They endeavour to re-open the issues behind the original litigation with P Vivante & Co and the proceedings against Granich & Associates in the District Court.  They offer no adequate answer to the contention that she has habitually and persistently and without reasonable grounds instituted vexatious proceedings in this Court against Granich & Associates.

Rules Relevant to Vexatious Litigants

7                     Order 21 of the Federal Court Rules provides, inter alia:

‘1(1)    If a person institutes a vexatious proceeding and the Court is satisfied that the person has habitually, persistently and without reasonable grounds instituted other vexatious proceedings in the Court or any other Australian court (whether against the same person or against different persons), the Court may order:

(a)       that any proceeding instituted by the person may not be continued without leave of the Court; and

(b)       that the person may not institute a proceeding without leave of the Court.

1(2)     An order under this rule may be made:

(a)       on the Court’s own motion; or

(b)       on the application of the Attorney-General or Solicitor-General of the Commonwealth or of a State or Territory; or

(c)        on the application of the Registrar.

2.         Where any person (in this rule called the vexatious litigant) habitually and persistently and without any reasonable ground institutes a vexatious proceeding against any person (in this rule called the person aggrieved) in the Court, the Court may, on application by the person aggrieved, order that the vexatious litigant shall not, without leave of the Court, institute any proceeding against the person aggrieved in the Court and that any proceeding instituted by the vexatious litigant against the person aggrieved in the Court before the making of the order shall not be continued by him without leave of the Court.

3.         A person seeking an order under rule 1 or rule 2 shall proceed by application.

4.         The Court may from time to time rescind or vary any order made by it under rule 1 or rule 2.

5.         Where the Court has made an order under rule 1 or rule 2 against any person, the Court shall not give them leave to institute or continue any proceeding unless the Court is satisfied that the proceeding is not an abuse of process and that there is a prima facie ground for the proceeding.’

Whether the Orders Sought Should be Made

8                     The present application is made under O 21 r 2.  The legal principles governing applications to have litigants declared vexatious under that rule were discussed by Weinberg J in Horvath v Commonwealth Bank of Australia [1999] FCA 504 at [95] to [103].  See also Ramsay v Skyring (1999) 164 ALR 378 per Sackville J, Slater v Honourable Justice Higgins [2001] FCA 549 per Madgwick J and Commonwealth Bank of Australia v Heinrich [2003] FCA 540 per Mansfield J. 

9                     On any view, in my opinion, the history of Mrs Yap’s litigation in this Court against Granich & Associates, answers the criteria set out in O 21 r 2.  Her repeated litigation has been vexatious in the sense that she has sought to relitigate issues which have been previously determined.  It has been habitual and persistent in the senses explained by Roden J in Attorney-General v Wentworth (1988) 14 NSWLR 481 at 492 where his Honour said:

‘“Habitually” suggests that the institution of such proceedings occurs as a matter of course, or almost automatically, when the appropriate conditions (whatever they may be) exist; “persistently” suggests determination, and continuing in the face of difficulty or opposition, with a degree of stubbornness.’

The quoted observation was adopted by Sackville J in Skyring and by Mansfield in Heinrich.  The want of any reasonable ground for Mrs Yap’s persistent relitigation of issues has been amply demonstrated in the judgments that have been made in the course of those proceedings. 

10                  These conditions being satisfied, the Court has a discretion whether to make the order sought.  In my opinion, the abuses perpetrated by Mrs Yap in her proceedings in this Court and the burdens unfairly thrust on Granich & Associates require that such an order should be made.  I propose to order accordingly.

Associate:

Dated:              1 December 2004