FEDERAL COURT OF AUSTRALIA
Official Trustee in Bankruptcy v Gargan (No 2) [2009] FCA 398
NSD 932 of 2008
PERRAM J
23 APRIL 2009
SYDNEY
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IN THE FEDERAL COURT OF AUSTRALIA |
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NEW SOUTH WALES DISTRICT REGISTRY |
NSD 932 of 2008 |
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PETER ALEXANDER GARGAN Applicant
OFFICIAL TRUSTEE IN BANKRUPTCY Cross-Claimant
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AND: |
KIPPIN INVESTMENTS PTY. LTD. Respondent
PETER ALEXANDER GARGAN Cross-Respondent
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JUDGE: |
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DATE OF ORDER: |
23 APRIL 2009 |
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WHERE MADE: |
SYDNEY |
THE COURT ORDERS THAT:
1. Mr Peter Alexander Gargan may not institute any proceeding in this Court without the leave of the Court.
2. Mr Peter Alexander Gargan may not continue any proceeding in this Court without the leave of the Court.
3. Mr Peter Alexander Gargan pay the Official Trustee’s costs of its application.
THE COURT DIRECTS THAT:
4. A copy of these reasons for judgment be forwarded to the Registrar or Chief Executive Officer for each court in each State, the Registrar of the Federal Magistrate’s Court, the Registrar of the Family Court of Australia and the Registrar of the High Court of Australia, together with the Attorneys-General for the States, the Territories and the Commonwealth.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
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IN THE FEDERAL COURT OF AUSTRALIA |
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NEW SOUTH WALES DISTRICT REGISTRY |
NSD 932 of 2008 |
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BETWEEN: |
PETER ALEXANDER GARGAN Applicant
OFFICIAL TRUSTEE IN BANKRUPTCY Cross-Claimant
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AND: |
KIPPIN INVESTMENTS PTY. LTD. Respondent
PETER ALEXANDER GARGAN Cross-Respondent
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JUDGE: |
PERRAM J |
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DATE: |
23 APRIL 2009 |
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PLACE: |
SYDNEY |
REASONS FOR JUDGMENT
1 The Official Trustee claims that Mr Gargan is a vexatious litigant. It asks for orders which would prevent him from commencing any new or continuing any extant proceedings in this Court without first obtaining permission so to do. The principal basis upon which it asks for those orders is that Mr Gargan has habitually, persistently and without reasonable grounds instituted vexatious proceedings in this Court and in other Australian courts. That basis reflects the terms of O 21 r 1(1) which provides:
(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.
Principles relating to vexatious litigants
2 A comprehensive explanation of what makes a proceeding vexatious is difficult to proffer for the boundary between the persistent and over-zealous on the one hand, and the vexatious on the other, may at times be indistinct. However, the following principles are, at least, well-established. First, the making of such an order is an extreme remedy depriving its object of recourse to the enforcement of the law which is every citizen’s ordinary right. It is, therefore, not lightly to be made.
3 Secondly, the purpose of the order is not to impose condign punishment for past litigious misdeeds; it serves instead to shield both the public, whose individual members might be molested by vexatious proceedings, and the Court itself, whose limited resources and needs must be carefully managed and protected from the expense, burden and inconvenience of baseless and repetitious suits.
4 Thirdly, as might naturally be expected, such a severe power is not enlivened by the mere single occurrence of a vexatious claim. To err is human and transient lapses of judgment, even serious ones, may be found in the most reasonable of places. Instead, the power to make the order is conditional upon the litigant having commenced not only a single vexatious proceeding but also upon having commenced similar such proceedings in this Court or in other Australian courts.
5 Fourthly, the qualities of vexation to which O 21 is addressed are to be found, as the terms of r 1(1) show, in the commencement by the litigant of proceedings which lack reasonable grounds and where the litigant’s institution of such proceedings may fairly be said to be both habitual and persistent.
6 Fifthly, whether a proceeding is instituted without reasonable grounds is a different question to, although not wholly disconnected from, the inquiry into a proceeding’s legal merits. The wheat, no doubt, must be separated from the chaff but in this area the question is whether what is before the Court contains any wheat at all. Although, often enough, no great guidance is obtained by exchanging one formula of words with another, it will be usually of some assistance, limited perhaps, to ask whether the issues brought to the Court for determination are manifestly hopeless or devoid of merit. It is, in that context, important to distinguish the difficult from the ridiculous and the unlikely from the hopeless.
7 Sixthly, although the ways in which unreasonable grounds may manifest themselves are myriad, one form often to be found in the baggage of the vexatious is a failure, often a refusal, to understand the principles of finality of litigation which rescue court and litigant alike from a Samsara of past forensic encounters.
8 Seventhly, it is the related quality of repetition which underpins, in part, a need for the institution of the proceedings to deserve the appellations habitual and persistent. The litigant’s conduct will be habitual where the commencement of proceedings occurs as a matter of course when appropriate conditions for their commencement are present as was explained by Roden J in Attorney-General v Wentworth (1988) 14 NSWLR 481 at 492. That formulation may not wholly explain the litigant who commences proceedings on any occasion and without the presence of any conditions, whether appropriate or otherwise. In such cases, the idea of constant repetition driven by habit and symptomatic of an inability not to engage in the behaviour may be more useful. Persistence, on the other hand, generally suggests stubborn determination but, in the context of the vexatious, carries with it the capacity to endure failure beyond the point at which a rational person would abandon the field.
9 Eighthly, each of these notions – the want of reasonable grounds, habitual institution and persistent institution – are to be gauged objectively. But this does not mean that a litigant’s own protestation as to his or her own mental state is irrelevant; frequently enough, the vexatious are betrayed out of their own mouths. Rather, the need for objective determination protects courts from the vexatious litigant who is genuinely, but misguidedly, persuaded as to the correctness of his or her own conduct.
10 Ninthly, the power to make the order arises when proceedings commenced in the way described are found to exist. But the notion of a proceeding is a broad one including a substantive proceeding directed at the attainment of final relief and collateral applications within such a proceeding; further, it extends outside the proceeding itself and embraces appeals therefrom and applications which, whilst not made in the proceeding, are properly to be seen as collateral thereto – so much flows from the definition of proceeding in s 4 of the Federal Court of Australia Act 1976 (Cth).
11 Tenthly, other proceedings commenced before bodies which are not courts, such as the Administrative Appeals Tribunal, are not directly pertinent to the existence of the power but may nevertheless throw light on the vexatious nature of proceedings before the Court; so too, the existence of a body of such administrative litigation may have relevance to the question of whether the Court’s power to make the order, once enlivened, should be exercised.
12 Finally, once it is concluded that the Court’s power to prevent a litigant from commencing or pursuing proceedings has been enlivened, the considerations germane to the exercise of that power are unconfined. However, the factors which will be relevant are informed by the protective purpose which the order serves. Where a litigant displays insight into their previous litigious history this will, no doubt, be relevant for it will suggest – although not determine – a diminution in the risk posed to the public. On the other hand, the manner in which a litigant conducts herself in her affairs generally is also capable of throwing light on whether the commencement of further vexatious proceedings is likely. Those general affairs include the litigant’s defence to the proceedings by which the order restraining him is sought. Because of the protective nature of the jurisdiction it is also relevant to know the extent of the damage and inconvenience the litigant’s forays into the courts have caused, pecuniary or otherwise.
13 It is in light of those principles that Mr Gargan’s particular circumstances must be considered.
Mr Gargan’s litigious history
14 Mr Con Karantonis gave evidence on the Official Trustee’s application. He is a solicitor in the employ of the Australian Government Solicitor and is one of the solicitors responsible for the day to day conduct of the application by the Official Trustee against Mr Gargan. Between August and December 2008, Mr Karantonis carried out searches of various litigation databases to identify cases in which Mr Gargan was, or had been, a party and which, in Mr Karantonis’ opinion, were relevant to the question of whether Mr Gargan had commenced vexatious proceedings. He identified 20 cases which he thought answered that description. Those cases were put in evidence. Mr Karantonis was not cross-examined and I accept his evidence.
15 As will become apparent, the cases identified by Mr Karantonis are by no means the complete set of all of Mr Gargan’s suits. However, they are sufficient to establish the central themes of the litigation commenced by him.
16 The events which have resulted in the present application by the Official Trustee have their seeds in a partnership between Mr Gargan and his brother, Mr John Gargan, in the early 1980s. As a partnership they decided to convert to freehold a property in Queensland known as Springmount. It was their intention to subdivide the property and to develop it. However, in circumstances not presently material, the partnership came to an end. A deed of dissolution of partnership was entered into in September 1984.
17 In 1990 Mr John Gargan commenced proceedings in the Supreme Court of Queensland against Mr Gargan seeking specific performance of the deed of dissolution and declarations that certain land held by Mr Gargan were held on trust for his brother, that is, Mr John Gargan.
18 I am relieved from setting out the details of Mr Gargan’s litigious exploits in Queensland prior to 2 May 2000 by the careful and patient reasons for judgment given by Holmes J in Lohe v Gargan [2000] QSC 140 in which his Honour acceded to Mr Lohe’s application to have Mr Gargan declared vexatious pursuant to s 3(1) of the Vexatious Litigants Act 1981 (Qld). It is a tribute to Mr Gargan’s litigious enthusiasm that his Honour’s explication of the litigation between 1990 and 2000 occupies some 68 paragraphs. There is no point in my seeking to paraphrase those reasons but because of their importance for present purposes I will set out the relevant parts in full.
Supreme Court Action No 101 of 1990
[4] In the action, the respondent's brother and former partner sought a declaration that the respondent held a parcel of land (which will be referred to as "Lot 491") on trust for him. Pursuant to a deed of partnership dissolution entered in 1984, a greater parcel of partnership land had been transferred into the respondent's name, to facilitate what was described in the deed as "bank accommodation". In February 1987 a joint venture agreement ("the first joint venture agreement") was entered between the respondent, his brother, and SAM Industries Pty Ltd with a view to freeholding the land for development. In November 1989, a freehold grant was obtained in two titles, as Lot 35 and Lot 491. By a contract made on 23rd July 1990 the respondent sold Lot 35, comprising the land held under one title, to SAM Industries, in order to discharge debts which the trial judge, Thomas J., held were his own, and not those of the former partnership. The contract of sale was subject to existing contracts for the sale of portions of Lot 35 (including a contract with a Mr Mohammed). Those portions were to be excised, with the respondent meeting the costs of excision. A replacement joint venture agreement ("the second joint venture agreement"), which dealt with the use of Lot 35 was entered into on 15th August 1990 by the Respondent, his brother and SAM Industries. The remaining land, Lot 491, was mortgaged by the respondent to raise money for, as Thomas J. found, his own purposes.
[5] The respondent contended that there had been no dissolution of the partnership. A document signed by the parties in November 1990 evinced an agreement to continue in partnership and to take steps towards the eventual dissolution of the partnership. By counter-claim he sought specific performance of that agreement, a declaration to the effect that the partnership had continued since its commencement in 1966, and the taking of an account.
[6] Thomas J. found, however that the partnership had been dissolved; the 1990 document was no more than a settlement proposal. It was a breach of trust for the respondent to sell Lot 35, and to use the proceeds to pay his debts. In respect of Lot 491, he rejected a contention that the land was held subject to a statutory trust imposed by s 23(2) of the Partnership Act, and found that the land was held in trust solely for the plaintiff. He noted that the plaintiff intended to discharge an outstanding partnership debt to Mr W. Jue Sue in full from the proceeds of sale of Lot 491 upon which the dissolution of the partnership would be complete "subject only to the possibility of accounts inter se". He observed, however, that no application for an account had been made; referring presumably to the fact that there was no account sought in respect of the partnership dissolved, as he had found, in 1984. In accordance with his findings, Thomas J. made a declaration that the respondent held Lot 491 in trust for the plaintiff, his brother, and ordered him to transfer it forthwith. The respondent was also ordered to pay some $60,000 in damages arising out of costs associated with the registration of a caveat on the property and the failure to transfer it at an earlier time so as to enable discharge of the outstanding partnership debt. His counterclaim was dismissed. The respondent did not appeal against that judgment. Ten days later on 22 March 1993 a sequestration order was made against the respondent on a creditor's petition.
Originating Summons 25 of 1992 and Writ No 14 of 1992
[7] Prior to the commencement of the trial in action 101 of 1990, the respondent had filed an originating summons seeking rectification of the contract of the sale of Lot 35 to SAM Industries Pty Ltd, and what was described as "confirmation of a caveat" in respect of rights acquired by the respondent and his brother under the second joint venture agreement. That application was adjourned to a date to be fixed, conditional upon the respondent issuing a writ against SAM Industries Pty Ltd within seven days.
Supreme Court Action No 14 of 1992
[8] On 13 March 1992, the respondent issued a writ seeking specific performance of the contract of sale with SAM Industries, claiming damages, both liquidated and unliquidated, and "entry of a caveat to register instrument of joint venture". It appears that he delivered a statement of claim, but the action was dismissed by Shepherdson J. when the Official Trustee failed to elect to continue its prosecution. The subject matter of the action appears from a discussion of it in a judgment by Drummond J., set out at paragraph 14 below.
[9] In December 1997, Jones J. made an order that both the originating summons and a summons filed by SAM Industries Pty Ltd be adjourned to a date to be fixed on the basis that the respondent was to pay the costs of SAM Industries Pty Ltd, one Lance Kippin, the respondent's brother John Gargan, and the Official Trustee in Bankruptcy, all of whom had become respondents to the summons, as had Messrs Nunan and Morton, stipendiary magistrates.
Application No 4 of 1994
[10] On 12 April 1994 the respondent filed an application, No 4 of 1994, in the Cairns District Registry of this court. There were a number of respondents to the application. They included the Official Trustee, members of the Gargan family, SAM Industries Pty Ltd, AA Mohammed (the purchaser of a portion of Lot 35), WL Jue Sue (partnership creditor) and BM Johnson (who had acted as John Gargan's solicitor in the action before Thomas J.). That application sought an order that various questions of fact be submitted to a jury for determination. Those questions of fact concerned allegations of negligence as against the Official Trustee and conspiracy against various of the respondents. The application was stayed on 3 May 1994 as against all respondents other than the Official Trustee; and on 22 February 1995 the application so far as it concerned the Official Trustee was transferred to the Federal Court.
Federal Court Application in No QB 697 of 1993
[11] In July 1995, the respondent applied to the Federal Court for orders directing the Official Trustee in Bankruptcy to assign to him all choses in action presently vested in the Official Trustee. He also sought an inquiry into the conduct of the Trustee, and an examination of the nature of the debt in respect of which the Sequestration Order against him had been made. The reasons for judgment of Drummond J. in respect of the first of those issues were given on 18 August 1995. It appears that the choses in action which the respondent sought to have re-vested in him included a claim against the Queensland Water Resources Commission, in respect of its refusal to approve a proposal for subdivision, notwithstanding an earlier intimation that it was acceptable; and such rights of challenge to Thomas J.'s decision as might survive; which, as Drummond J. found, were confined to the power to make application for an extension of time for appeal. Drummond J. concluded that the respondent had no prospect of making out a claim for damages against the Queensland Water Resources Commission, and that any prospect of success on appeal against the decision of Thomas J. would be minimal, even assuming an extension of time were not required.
[12] Reference had also been made by the respondent to a possible cause of action against his brother in relation to a horse-riding business, which entailed reliance on the alleged contract of November 1990, found by Thomas J. to be no more than a settlement proposal. Drummond J. held that the findings of Thomas J, which the respondent was presently estopped from challenging, prevented such reliance, so that any cause of action in this respect was doomed to failure.
[13] The next matter in respect of which the respondent sought to have assigned to him a cause of action related to the second joint venture agreement with SAM Industries. The respondent wished to claim against SAM Industries in respect of an alleged breach of an obligation to transfer back the land subject to the contract with Mr Mohammed, and an alleged breach of a partnership right to continue managing the land. In respect of the latter, he contended that the sale to SAM Industries was a sham, designed merely to give the company security for the debt which the amount paid as purchase price in truth represented. As to the first, Drummond J. held that since the contract of sale between the respondent and SAM Industries was void by virtue of s 8 of the Land Sales Act 1984 (although the subsequent transfer of land to SAM Industries was indefeasible), no cause of action mounted on it could succeed. As to the second complaint, there was nothing to indicate that SAM Industries Pty Ltd was holding Lot 35, as the respondent suggested, only as security for repayment of a loan. Accordingly, there was no cause of action against SAM Industries in respect of its dealings with the property.
[14] Having found that there was no prospect of success in relation to any of the causes of action raised by the respondent, Drummond J. dismissed the application to direct the Official Trustee to assign the respective choses in action to the respondent. The application for an inquiry into the conduct of the Trustee was adjourned, his Honour expressing the view that insofar as it involved complaints about the Trustee's refusal to pursue the causes of action, it was bound to fail. The respondent's appeal to the Full Court of the Federal Court, heard on 4 November 1995, was dismissed.
[15] The second part of the application for an inquiry into the conduct of the official trustee was heard by Kiefel J. That application was dismissed on 23 August 1996.
[16] On 7 October 1996 Kiefel J gave judgment in respect of two further matters, the first being the application for the court to examine the basis of the sequestration order and the second being an application to empanel a jury to determine a dispute as between the respondent and the various persons named in initiating application No 4 of 1994, in respect of which leave was also sought to amend to add Kippin Investments Pty Ltd, LL Kippin, CA Marino and W Cochrane as respondents. As against these proposed additional respondents it was alleged that they had misled and deceived the court as constituted by Justice Drummond "for the purposes of defrauding the abovementioned estate". Kippin Investments had acquired Lot 35 from SAM Industries; Mr Kippin was a director of both companies. It seems from material filed in other applications that Mr Marino and Mr Cochrane were, respectively, solicitor and counsel for SAM Industries. An application was also made seeking to have the orders made by Kiefel J on 23 August 1996 rescinded or varied.
[17] Both applications were dismissed. Her Honour observed that she had no power to reconsider the orders already made, while the orders sought against other respondents for alleged false evidence and fraudulent conduct had already been dealt with on the earlier application and the relevant arguments rejected. The application for a jury hearing was unwarranted. As to the question of annulment, Kiefel J. rejected submissions based on the respondent's interpretation of the Bankruptcy Act 1966 and the Constitution; the nature of those submissions was not explored in her judgment. It seems, however, that the respondent's argument entailed a demand for a re-hearing of the dispute between his brother and him heard by Thomas J., which Kiefel J. rejected. She concluded that the respondent had not met the onus of satisfying her that a sequestration order should not have been made.
[18] That decision was appealed. The appeal named as respondents, inter alia, the respondent's brother John Ernest Gargan, BM Johnson and Francis James Toy. Those parties moved successfully to have the appeal dismissed as against them. Mr Toy, it appears from the judgment of Spender J, given on 24 March 1997, had appeared for a number of parties before Drummond J in July 1995. He seems to have had no other involvement with the matter; and, indeed, Spender J. noted, none of the three parties moving had been parties to or in any way involved in the matters before Kiefel J. Moreover, John Gargan and other members of the Gargan family had initially been named in the application, and had been struck out as respondents by Drummond J.; so that their naming in the appeal contravened his direction.
[19] In the course of giving his reasons for dismissing the appeal as against the three respondents moving, Spender J. referred to an argument he described as "central" to the respondent's appeal: that because the relation-back period for his bankruptcy commenced on 6th January 1992, prior to the trial and judgment in action 101 of 1990, the effect of the Bankruptcy Act and s.109 of the Constitution was to render the litigation and decision ineffective. The decision of the Full Court of the Federal Court dismissing the appeal is dealt with at paragraph 25 below.
[20] The respondent, meanwhile, had commenced a number of proceedings in the Supreme Court.
Supreme Court Action No 38 of 1996
[21] On 21 March 1996 the respondent filed a writ of summons, No 38 of 1996, in the Cairns District Registry of this court against SAM Industries Pty Ltd and Kippin Investments Pty Ltd. In it he claimed specific performance of the first joint venture agreement) and a declaration that the July 1990 contract of sale to SAM Industries Pty Ltd was void and of no effect. He also sought a declaration that a contract of sale between SAM Industries and Kippin Investments was void, or, alternatively, that Kippin Investments held the land sold on trust for his brother and him. Various consequential orders were sought. The statement of claim makes it clear that the subject matter of the action was a revisiting of the matters pleaded in action No 14 of 1992, the same cause of action which the respondent had sought by application before Drummond J. to have assigned to him.
[22] The defendants applied successfully to have the statement of claim struck out. Derrington J., giving judgment on the application on 12 June 1996, concluded that once the land had been transferred to SAM Industries the plaintiff's role as registered proprietor and sole trustee of the land, on behalf of either Mr Mohammed or his brother, ended. He had no standing to bring the action on behalf of either of those persons or on behalf of the Official Trustee as trustee of his estate.
Applications for statutory orders of review
[23] On 24 June 1996 the respondent filed two applications for orders of statutory review. The first joined as respondents Derrington J., the Official Trustee, SAM Industries Pty Ltd, Kippin Investments Pty Ltd, Charles Anthony Marino and Wayne Cochrane. It sought review of the decision of Derrington J. to dismiss action No 38 of 1996; review of the conduct of the Official Trustee and his solicitor in opposing the bringing of the action, admitting SAM Industries Pty Ltd's proof of debt; and failing to avoid the joint venture agreement with it; review of the conduct of SAM Industries Pty Ltd in allegedly misleading the court as to the effect of the first joint venture agreement and the July 1990 contract of sale, for alleged false representations to the Official Trustee, and for alleged fraudulent conversion and appropriation of the property of the respondent and the partnership; and review of the conduct of Charles Anthony Marino in allegedly misleading the court and of aiding SAM Industries Pty Ltd to do likewise. As against Mr Cochrane it was claimed that he had knowingly misrepresented the effect of the contract of sale and had falsely represented to the court that the statement of claim in No 38 of 1996 should be struck out.
[24] The second application was brought against Thomas and Derrington JJ, the Official Trustee, John Ernest Gargan and Barry Michael Johnson. As against Thomas J., the application was to review his decision in action No 101 of 1990 and against Derrington J., to review his striking out of the statement of claim. The application also sought review of the conduct of the Official Trustee in "opposing the lawful bringing of an application", admitting false proofs of debt in respect of the judgment of Thomas J. (presumably in respect of John Gargan's claim); the conduct of John Gargan in allegedly misleading the courts in action No 101 of 1990 as to the meaning of the deed of dissolution; and the conduct of Barry Michael Johnson in delivering the statement of claim in action 101 of 1990, representing that the matters before Thomas J. were res judicata and thus persuading the court to dismiss the respondent's application, and obtaining a mortgage over partnership land. Not surprisingly, notices of motion were filed by a number of the persons named as respondents to have the applications dismissed.
[25] The respondent accepted that the applications were wrongly brought against each of Derrington J. and Thomas J. However, in response to the (clearly correct) submission that none of the respondents had engaged in conduct or made decisions within the meaning of the Judicial Review Act 1991, he argued that what was really sought was review under the Bankruptcy Act 1966. He relied on subsection 37(1) of the Bankruptcy Act, which provides as follows:
"Subject to subsection (2)" [which deals with the making of sequestration and administration orders] "the court may rescind, vary or discharge an order made by it under this Act or may suspend the operation of such an order."
(That submission paid no regard to the fact that neither of the decisions of which the applicant had sought review were made under the Bankruptcy Act or in the exercise of jurisdiction in bankruptcy.) The respondent also relied on s 178 of the Bankruptcy Act which enables a bankrupt "affected by an act, omission or decision of the trustee" to apply to the Court. (He had, of course, already unsuccessfully sought that inquiry into the Official Trustee's allegedly negligent conduct of the estate in the application dismissed by Kiefel J.) In the event, the applications were struck out against all respondents, Moynihan J. expressing the view that the proceedings reflected a profound misconception as to the law, since none of the decisions or conduct were amenable to judicial review, and the bankruptcy matters were or had been the subject of proceedings in the Federal Court.
Appeal to the Federal Court QG 181 of 1996
[26] The respondent then appealed the decisions of Moynihan J. dismissing the applications for judicial review and the decisions of Kiefel J., refusing the application for annulment and an inquiry under s 179 of the Bankruptcy Act into the conduct of the Official Trustee, to the Full Court of the Federal Court. As to the appeals against the two decisions of Moynihan J, the court ruled that it had no jurisdiction, but commented that the decision was in any event plainly right for the reasons given by Moynihan J. In respect of the decisions of Kiefel J., the court concluded, firstly that there was no evidence which could lead to a finding that the sequestration order ought not to have been made, and, secondly, that there was no basis for an inquiry into the conduct of the Official Trustee. In addition, it observed, the Trustee was entitled to have regard to the Supreme Court's decision upon the claims which the respondent pressed; and also to the attitude of the creditors generally in refusing to support an appeal against the decision of Thomas J.
District Court application 37 of 1997
[27] In June 1997 the respondent sought, by a "motion for leave" filed in the District Court, an order directed to LL Kippin to show cause why leave to bring a private information before the court should not be granted. The grounds of that application were set out in an affidavit, and canvassed similar issues to those raised in action No 14 of 1992 argued before Drummond J., and the subject of the attempt at re-litigation in action No 38 of 1996; that is, claims that the partnership had been denied its rights under the second joint venture agreement, that the July 1990 contract of sale was a sham. It went on to assert that the conduct of Kippin Investments to whom the land had been transferred and its director, Mr Kippin, constituted stealing, and that Mr Mohammed had been deprived of his interest and that this constituted fraud. The application was dismissed.
Complaints and summonses
[28] The respondent then brought a number of complaints in the Magistrates Court. In June 1997 he brought two complaints against Mr Kippin, one of which alleged various offences, including false swearing, conversion, fraud and false pretence under the Crimes Act 1914, the Corporations Law 1989 and the Bankruptcy Act. The second complaint alleged an offence of transferring land with intent to defraud a bankrupt estate in breach of s 263(1)(a) of the Bankruptcy Act. All of the alleged offences arose out of the respondent's dealings with Mr Kippin and SAM Industries in relation to Lot 35, the subsequent litigation and the administration of the respondent's bankrupt estate.
[29] The complaint against the respondent's brother is not before me. Both complaints were struck out by the presiding magistrate who in a somewhat brief decision ruled that the respondents did not have standing to proceed under the Bankruptcy Act, and went on to comment that the actions appear to be "an abuse of process, and perhaps vexatious". Those dismissals were appealed.
[30] On 27 August 1997, the respondent brought a private complaint under s 13 of the Crimes Act against five members of the Gargan family, BM Johnson, FJ Toy, LL Kippin, CA Marino, W Cochrane, B Dowling, SJ Ridgeway, D Turnbull, P Apel, the Official Trustee in Bankruptcy and SAM Industries Pty Ltd, alleging that they had conspired to defeat the execution and enforcement of the Bankruptcy Act and to pervert the course of justice. The allegations concern the conduct of the various matters of litigation already referred to; the lodging of proofs of debt in the bankruptcy, the conduct of SAM Industries in relation to Lot 35; the conduct of the Gargans and Mr Johnson in relation to the horseriding enterprise, the subject of a District Court action, and of one of the choses in action of which the respondent had sought assignment; and in respect of Mr John Gargan and Mr Johnson, the transfer of Lot 491 (pursuant to the order of Thomas J). Nunan SM dismissed the complaints on the basis, firstly, that the respondent did not have the required consent of the Director of Public Prosecutions to commence a conspiracy prosecution and secondly, on the grounds that both prosecutions were frivolous and vexatious, the plaintiff seeking to relitigate matters already dealt with while having committed a number of procedural errors in the process.
[31] In January 1998 the respondent brought a further complaint against SAM Industries Pty Ltd, Kippin Investments Pty Ltd, and Noel Adam, Anthony Morgan and Lance Kippin as directors of SAM Industries. The allegations turned on the transfer by SAM Industries to Kippin Investments of Lot 35 and reiterated the assertion that it was subject to the second joint venture agreement, which it was said, constituted a "valuable security". That complaint was struck out by Nunan SM on 17 February 1998 on the basis, firstly, that the matters within it were the subject of res judicata, and secondly, that the proceedings were vexatious.
Applications for review to the Supreme Court
[32] In July 1998, the respondent applied to the Supreme Court for orders under s 178 of the Bankruptcy Act requiring the Official Trustee and the alleged beneficiaries of a breach of trust by him, John and Grace Gargan and SAM Industries Pty Ltd, to make good losses occasioned by the alleged breach of trust; an order removing the Official Trustee; various penalties against the Official Trustee and the other respondents; and an annulment of the respondent's bankruptcy. The statement of claim is expressed as "filed under the Bankruptcy Act 1966 in force on 6 January 1992 by reference to the Acts Interpretation Act 1901 s 8" (the latter section relating to accrued rights). Mr Gargan had, it seems, a view that he had a preserved substantive right to proceed in the Supreme Court notwithstanding the effect of the Bankruptcy Legislation Amendment Act 1996, which vested exclusive jurisdiction in bankruptcy in the Federal Court. That application has not proceeded, Jones J. having disqualified himself from hearing it in October 1998 because of an earlier appearance on behalf of John Gargan.
Refiling of application 4/94
[33] In July 1999 the respondent sought, relying on Re Wakim ex parte McNally [1999] HCA 27; (1999) 73 ALJR 839, to re-activate application No 4 of 1994, which had been stayed against all respondents other than the Official Trustee and transferred to the Federal Court so far as the Official Trustee was concerned. The respondent filed a claim and statement of claim under the Uniform Civil Procedure Rules, adding to the originally named defendants the Commonwealth of Australia, the State of Queensland, Kippin Investments Pty Ltd and Ritek Building Systems Pty Ltd. He sought the setting aside of the order made by Byrne J. as having been obtained by fraud; the setting aside of an order made by Thomas J. removing a caveat over the lands subject to litigation; the setting aside of the decision of Derrington J. as erroneous; orders correcting the Register of Titles, and, in the alternative, damages against the State of Queensland; damages against the Official Trustee for interference with the respondent's contractual rights; and exemplary damages against the Commonwealth for appointing him, as a person of insufficient education and understanding.
[34] The respondent argued that the case involved trust and partnership matters which could not properly be cross-vested to the Federal Court, and that the Federal Court had not in event properly addressed the matters cross-vested to it. Nor had (so the respondent submitted) the Official Trustee any standing to deal with trust or partnership property, so that he personally retained the capacity to bring the application. The matters ought, he contended, to be heard by a jury.
[35] Insofar as the respondent sought a setting aside of the order of Byrne J. transferring the application for an inquiry into the trustee's conduct to the Federal Court, Williams J. held that there was nothing to indicate that the order was procured by fraud, and that the matter was properly heard in the Federal Court, regardless of the decision in Re Wakim. As to the order of Thomas J., Williams J. noted that the issues in relation to the caveated land had been dealt with by Thomas J in 101 of 1990, and were the subject of action 14 of 1992 dismissed by Shepherdson J in October 1993. In any event, the application to set the order aside had already been determined by dismissal by a consent order in August 1992; and there were, in any case, no apparent merits in the applicant's claim.
[36] The striking out by Derrington J. of the respondent's statement of claim in No 38 of 1996 was, Williams J concluded, clearly correct. The applicant had been seeking to re-litigate an issue which had been the subject of the proceedings before Thomas J. in 101 of 1990 and before Drummond J. in the Full Court of the Federal Court. Moreover, the applicant as a bankrupt had no standing to commence the proceedings; and there was no evidence of any fraud in connection with the decision of Derrington J.
[37] By his claim and statement of claim the respondent had sought orders against the State of Queensland requiring alteration of the register of freehold land titles in respect of what had been Lot 35 with an alternative claim and damages. Williams J dismissed those claims as an attempt at introducing a new cause of action. The claim for exemplary damages from the Commonwealth for appointing the Official Trustee in Bankruptcy was struck out as not alleging any viable cause of action, while the claim for damages from the Official Trustee in Bankruptcy was struck out on the basis, firstly, that it was an attempted addition of a new cause of action, and secondly that the claim in relation to the Official Trustee's conduct was not justiciable in the Supreme Court, and had been dealt with by the Federal Court.
Supreme Court Action No 3 of 1999
[38] In August 1999 the respondent filed a claim in this court against the Official Trustee in Bankruptcy, John Ernest Gargan, Grace Elaine Gargan, and the State of Queensland. In it, he sought an order setting aside the judgment in action No 101 of 1990 as having been obtained by fraud; orders, premised on the continuing existence of the partnership with his brother, for an account and restoration of title; and damages against the Official Trustee in Bankruptcy for representing that partnership matters were within the jurisdiction of the Federal Court in making a sequestration order, for dealing with partnership property on a Sequestration Order made without jurisdiction, and for interference with contractual relations between the partners.
[39] In September 1999, the respondent sought judgment in default as against the Official Trustee. That application was dismissed by de Jersey CJ on the grounds that the Official Trustee had power to deal with partnership property, and the challenge to the judgment in action 101 of 1990 was doomed to failure.
19 It might be noted for completeness that Mr Gargan was declared vexatious in Queensland on 22 May 2000 by Holmes J. This does not, however, appear to have sated his appetite for curial proceedings. In evidence before me was a transcript of argument before Heydon J of an application by Mr Gargan for the issue of a writ of prohibition against Lindgren J, a judge of this Court, and Driver FM, a federal magistrate. The writ was sought in relation to judgments which can be found in Teese v Clinch [2003] FCA 274 and Teese v Clinch [2002] FMCA 205. Mr Gargan was not a party to those proceedings and took no part in them. In the Federal Court, Ms Teese appeared for herself and sought an extension of time in which to appeal from a sequestration order made against her by Driver FM at the suit of her former solicitors. In the Federal Magistrates Court, it is apparent that Mr Gargan appeared for Ms Teese in his capacity, apparently, as a “law student”. Lindgren J, unremarkably, declined to expand the time for appeal and dismissed the application. It was in respect of that step that Mr Gargan – bereft of any interest in the outcome of Ms Teese’s proceeding – sought to bring a proceeding in his own name in the High Court. His arguments before Heydon J may be summarised as follows:
(a) Mr Gargan had standing to pursue the application by reason of s 303 of the Bankruptcy Act 1966 (Cth);
(b) Lindgren J and Driver FM had abused their offices and as such were liable to be tried on indictment under s 142.2 of the Criminal Code;
(c) Heydon J could not grant an order nisi absolute because the High Court could only convene with a panel of five (or perhaps three) Justices;
(d) the International Covenant on Civil and Political Rights formed part of the domestic law of Australia;
(e) section 86 of the Bankruptcy Act 1966 (Cth)and the High Court’s decision in Gye v McIntyre (1991) 171 CLR 609required an account to be taken in relation to mutual dealings.
20 Heydon J dismissed the application holding that there was no prima facie case in relation to any of the arguments advanced by Mr Gargan. In my opinion, each of the arguments advanced by Mr Gargan on that application wholly lacked reasonable grounds. As to point (a), s 303 of the Bankruptcy Act 1966 (Cth)provides:
Applications to Court
Where in respect of any matter this Act provides that:
(a) an application may be made to the Court; or
(b) the Court or the Registrar may exercise a power;
and does not specify the person by whom the application may be made or the person on whose application the power may be exercised, as the case may be, the application may be made by, or the power may be exercised on the application of, any person aggrieved by or interested in that matter.
21 The expression “person aggrieved” means a person whose interest might conceivably be affected in some way. Mr Gargan was a true interloper in the proceedings, having no interest at all. This is precisely the situation which is not covered by s 303.
22 As to point (b) s 142.2 of the Criminal Code (Cth) provides:
142.2 Abuse of public office
(1) A Commonwealth public official is guilty of an offence if:
(a) the official:
(i) exercises any influence that the official has in the official’s capacity as a Commonwealth public official; or
(ii) engages in any conduct in the exercise of the official’s duties as a Commonwealth public official; or
(iii) uses any information that the official has obtained in the official’s capacity as a Commonwealth public official; and
(b) the official does so with the intention of:
(i) dishonestly obtaining a benefit for himself or herself or for another person; or
(ii) dishonestly causing a detriment to another person.
Penalty: Imprisonment for 5 years.
(2) A person is guilty of an offence if:
(a) the person has ceased to be a Commonwealth public official in a particular capacity; and
(b) the person uses any information that the person obtained in that capacity as a Commonwealth public official; and
(c) the person does so with the intention of:
(i) dishonestly obtaining a benefit for himself or herself or for another person; or
(ii) dishonestly causing a detriment to another person.
Penalty: Imprisonment for 5 years.
(3) Paragraph (2)(a) applies to a cessation by a person:
(a) whether or not the person continues to be a Commonwealth public official in some other capacity; and
(b) whether the cessation occurred before, at or after the commencement of this section.
23 There was no conceivable basis upon which either Lindgren J or Driver FM could have committed these offences in dealing with Ms Teese’s application. The allegation was not only wholly baseless but scandalous and was one which ought never to have been made.
24 As to point (c), a single Justice has always been permitted to exercise the original jurisdiction of the High Court: see s 15 of the Judiciary Act 1903 (Cth).
25 As to point (d), the International Covenant on Civil and Political Rights does not form part of the domestic law of Australia. It is true that it is a schedule to the Human Rights and Equal Opportunity Commission Act 1986 (Cth) but that Act gives it no direct force. It is true also that a federal court may, in deciding whether to admit improperly or illegally obtained evidence, take into account whether the impropriety or illegal behaviour was inconsistent with any right of a person recognised by the Covenant: s 138(3)(f) of the Evidence Act 1995 (Cth). That, however, falls a long way short of the treaty forming part of the domestic law of Australia. This was established some time ago: see Minogue v Williams (2000) 60 ALD 366 at 372-373 [21]-[25] per Ryan, Merkel and Goldberg JJ; Minogue v Human Rights and Equal Opportunity Commission (1999) 84 FCR 438 at 447-448 per Sackville, North and Kenny JJ; Dietrich v R (1992) 177 CLR 292 at 305-306 per Mason CJ and McHugh J, 321 per Brennan J, 348-349 per Dawson J and 359-360 per Toohey J.
26 As to point (e), leaving to one side the correctness of the proposition, it is simply impossible to identify how it might have supported the argument being advanced by Mr Gargan. Heydon J concluded as follows:
In my opinion, neither an order nisi nor a direction under Order 55 rule 34 ought to be made because there is no sufficient prima facie case to grant either form of relief. The grounds asserted for the grant of the order nisi set out various matters of complaint about the proceedings before the magistrate and the proceedings before Justice Lindgren. Whether or not there is any force in those matters of complaint are questions which a party to those proceedings could complain of on appeal against Justice Lindgren's orders.
The prosecutor himself does not appear to have been a party to the proceedings before Justice Lindgren and that in turn indicates that his standing in this Court to raise those complaints is highly questionable. If Ms Teese wished to agitate those complaints, it would be a matter for her or the trustee in bankruptcy.
In large measure, the written submissions of the prosecutor rely on the International Covenant on Civil and Political Rights and on passages in the New Testament. Neither document is as such part of the domestic law of Australia. The prosecutor submitted that the magistrate and Justice Lindgren had been guilty of abuse of public office and were therefore in breach of section 142.2 of the Criminal Code Act 1995. The prosecutor submitted that he therefore had standing to complain of that breach of statute. The contention has insufficient prospects of success to justify the grant of either of the forms of the relief sought and the same is true of the other contentions of the prosecutor. Accordingly, the application is dismissed.
27 The proceeding before Heydon J was heard on 2 June 2003. On 27 October 2003 – that is within a period of a few short months – Adams J of the Supreme Court of New South Wales delivered judgment in Gargan v Scott (unreported) striking out Mr Gargan’s claims against Mr Scott and the Commonwealth Bank for damages said to be payable by virtue of alleged breaches of s 43 of the Crimes Act 1914 (Cth) and s 134.2 of the Criminal Code. He sought these from Mr Scott and the Commonwealth Bank on the basis of s 4B of the Crimes Act 1914 (Cth) which allows a court to order that a fine or pecuniary penalty be paid by a person who has been convicted of an offence against a law of the Commonwealth punishable by imprisonment. His entitlement to bring such a suit was conferred, so Mr Gargan said, by s 14 of the Criminal Procedure Act 1986 (NSW) which is a common informer provision. He again pursued the argument that s 86 of the Bankruptcy Act 1966 (Cth) required mutual set-offs. Adams J recorded that the claims arose out of the bankrupt estate of Mr Heinrich and that Mr Gargan conceded that he had no interest whatsoever in that estate. Adams J found, unsurprisingly, that Mr Gargan’s proceeding was “a gross abuse” of process (at [4]). I agree.
28 That occurred on 27 October 2003. Three weeks later Mr Gargan appeared before O’Keefe J in the Supreme Court of New South Wales seeking a writ of habeas corpus in respect of a Mr Russell Bickford. Mr Bickford was convicted at the District Court at Penrith of one count of assault with intent to rob. Mr Gargan joined to the proceedings the New South Wales Director of Public Prosecutions and the Governor of Silverwater Correctional Centre. Mr Gargan sought damages in the sum of $165,000 pursuant, so it was said, to the Crimes Act 1914 (Cth) – the very argument held to have been a gross abuse of process by Adams J only a few weeks before. The reasons for judgment of O’Keefe J have been published as Gargan v Director of Public Prosecutions [2004] NSWSC 10.
29 The basis for the issue of the writ of habeas corpus was a contention that the jury in Mr Bickford’s trial had “separated” – that is, had not been confined at all times together – after they had retired to consider their verdict. This was said to be contrary to the common law requirement that a jury remain sequestered. However, s 54(1)(b) of the Jury Act 1977 (NSW) expressly permitted separation of the jury to occur after sequestering. Mr Gargan’s answer to that was that s 54(1)(b) was constitutionally invalid. Its invalidity was said to flow from an alleged inconsistency with the Juries Detention Act 1897 (Imp) 60 Vict, c 18. That Act was repealed by the Criminal Justice Act 1948 (Imp) 11 & 12 Geo 6, c 58 which led O’Keefe J to conclude that s 54(1)(b) was valid. In the course of putting this argument Mr Gargan apparently made a submission that the Australia Act 1986 (Cth) was invalid. O’Keefe J was unable to understand where this proposition fit in the balance of Mr Gargan’s argument but, in any event, rejected the argument upon which the submission rested, which was that the letters patent issued to the Governor-General on 21 August 1984 were invalid because they bore the letters “LS” rather than the Great Seal of Australia. As his Honour noted, the letters “LS” merely indicated where the seal had been placed.
30 O’Keefe J went on to conclude that s 54(1)(b) did not infringe the principle in Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51. This was an inevitable conclusion since the High Court had concluded that s 54(1)(b) did not infringe s 80 of the Constitution in Brownlee v The Queen (2001) 207 CLR 278. He declined, as unavailable, Mr Gargan’s invitation not to follow Brownlee.
31 Mr Gargan advanced a number of additional arguments in support of the allegation that s 54(1)(b) was invalid. These included, first, an argument based on the scriptures and, more particularly, on Matthew Ch 18 v 20 and John Ch 5 v 26-27. This argument O’Keefe J rejected on the somewhat restrained basis that it was out of line with the mainstream of current constitutional theory. Secondly, he argued that the Coronation Oath Act 1688, 1 Wm & M, c 6, required the sovereign to uphold the gospels. O’Keefe J rejected this argument on the basis that the oath administered to the present Queen was not the oath prescribed by that Act. Thirdly, he argued that s 54(1)(b) promoted feelings of ill will in the hearts and minds of the people of New South Wales. O’Keefe J rejected this argument for want of any apparent doctrinal foundation. Finally, Mr Gargan submitted that s 54(1)(b) was contrary to the common law, the laws of other States as well as Commonwealth provisions. O’Keefe J found this to be empty of relevance in light of Brownlee. Accordingly, his Honour held that s 54(1)(b) was valid and declined the issue of the writ of habeas corpus which had been sought. Mr Gargan was ordered to pay the costs of the proceedings.
32 Judgment in the proceedings before O’Keefe J was given on 28 January 2004. Three weeks later Mr Gargan found himself before Greg James J in Gargan v Woodgate [2004] NSWSC 177. It is important to recall Mr Gargan’s tryst before Heydon J in which he sought the issue of a writ of prohibition directed to Lindgren J of this Court. That application, it will be recalled, related to the bankruptcy of a Ms Teese. Mr Woodgate was her trustee in bankruptcy. Mr Gargan sought to have Mr Woodgate charged with failing to take account of mutual dealings between Ms Teese and her creditors, for seeking to pervert the course of justice before Driver FM and by doing the same before Kirby J (of the Supreme Court) by the filing of an unspecified notice of motion. He relied – again – on s 134.2 of the Criminal Code and sought also to rely upon a common informer provision contained in the Fines and Forfeitures to the Crown Act 1670, 22 & 23 Car 2, c 22, as well as the Criminal Procedure Act 1986 (NSW). Again, he sought to place reliance upon s 4B of the Crimes Act 1914 (Cth) (which authorised the imposition of a fine) despite the fact, as Mr Gargan must have known, that the very same argument had been dismissed by Adams J only three months before and described by that judge as a gross abuse of process.
33 Unsurprisingly, Greg James J dismissed this application with indemnity costs and suggested that consideration be given by the Attorneys-General for New South Wales and the Commonwealth to applying to have Mr Gargan declared a vexatious litigant.
34 On 22 December 2003 the Commonwealth Bank filed a creditor’s petition against Mr Gargan. That petition was acceded to on 4 June 2004 by Hely J in Commonwealth Bank of Australia v Gargan (2004) 140 FCR 1. His Honour’s reasons for judgment reveal that prior to making the applications before Adams and Greg James JJ, Mr Gargan had sought to have the Commonwealth Bank charged before the Magistrate’s Court at Canberra in the Australian Capital Territory. That application was apparently dismissed by a magistrate on 5 August 2003 – that is, between 2 June 2003 when Heydon J in the High Court refused to issue a writ of prohibition to Lindgren J on the basis that the arguments advanced had no prospects of success, and 27 October 2003 when Adams J described the very same argument as a gross abuse of process. The magistrate ordered Mr Gargan to pay the Commonwealth Bank’s costs of the proceedings assessed at $2,000. The Bank sought to have Mr Gargan meet that costs order and subsequently issued a bankruptcy notice with which he did not comply.
35 Upon the presentation by the Bank of its creditor’s petition, Mr Gargan applied by motion to have the petition determined by a jury. The basis for this was an argument in the following terms:
Under Protestant Christian law, the only legitimate judge since 1297 is Jesus Christ, present in a jury of 12 in accordance with Mathew 18: Paragraphs 15–20, the Bible, and enacted into Constitutional law by the Magna Carta.
36 Hely J dismissed the application noting that Mr Gargan’s scriptural argument had already been rejected by O’Keefe J in Gargan v Director of Public Prosecutions [2004] NSWSC 10: see Gargan v Commonwealth Bank of Australia [2004] FCA 641 at [5].
37 Mr Gargan also sought to have Hely J disqualify himself on the basis that the Commonwealth owned shares in the Commonwealth Bank of Australia, an argument that Hely J confessed had eluded him. He also sought the requisition of a jury on the basis that part of his complaint involved conduct by the legal profession and that Hely J, himself a former barrister, might not give him a fair hearing. Hely J did not agree.
38 The petition itself was heard on 17 May 2004 by Hely J sitting without a jury. Mr Gargan opposed the making of the sequestration order. Significantly, for present purposes his grounds for doing so were that:
(a) the petition was an abuse of process because the Commonwealth Bank of Australia was required to give an account of mutual dealings;
(b) he was entitled to recover an equal share with the Commonwealth in respect of liquidated penalties for crimes against the laws of the Commonwealth;
(c) the right to fines included treble damages due under the Fines and Forfeitures to the Crown Act 1670 for the Commonwealth Bank of Australia’s alleged unlawful conduct, being a sum of at least $4,000,090;
(d) the offence committed by the Commonwealth Bank of Australia was a breach of s 43 of the Crimes Act 1914 (Cth) constituted by it seeking to make Mr Gargan bankrupt when it had not taken account of the mutual dealings between the Commonwealth Bank of Australia and each of Ms Teese and Mr Heinrich.
39 Hely J dismissed these arguments noting that each had been described as an abuse of process by Adams J and Greg James J. During the course of the hearing it became apparent that Mr Gargan had also recently commenced proceedings in the Supreme Court of Tasmania seeking to have the Commonwealth Bank of Australia charged with offences against s 43 of the Crimes Act 1914 (Cth). Inevitably, Hely J made the sequestration order sought. That occurred on 17 May 2004.
40 On 18 July 2005 Mr Gargan commenced proceedings against the Commonwealth of Australia and Telstra Corporation Limited. Mr Gargan sought an order for judgment against the Commonwealth in the sum of $5,387,013,767 on the basis that the Commonwealth had accepted liability in that sum as an endorsee on a bill of exchange. The application was heard by Brereton J on 3 November 2005. The alleged bill of exchange was in evidence. It was not signed by the Commonwealth. Mr Gargan was not a party to it but it did bear the signature of a notary public who had witnessed the signature of the issuer. Brereton J rejected Mr Gargan’s argument that the notary had endorsed the bill on the Commonwealth’s behalf for the reason that s 28(1) of the Bills of Exchange Act 1909 (Cth) provides that a person is not liable as drawer, endorser or accepter of a bill if she has not signed as such. The notary public having signed as witness and not as endorser, Brereton J concluded that the Commonwealth could not be liable on the bill. In any event, his Honour noted that any such rights as Mr Gargan might have had would have vested in his trustee in bankruptcy. Mr Gargan also asked Brereton J to stay a costs order made by the Supreme Court of Queensland against unrelated parties – that is, not against Mr Gargan – which his Honour declined to do. The application was dismissed with costs.
41 For completeness, it should be noted that I appeared as counsel for Telstra Corporation Limited in that proceeding. I raised this with the parties in the present proceeding both prior to and during the hearing. I was told by Mr Gargan that he had no objection to my sitting: cf. Smits v Roach (2006) 227 CLR 423 at 439-442 [43]-[47] per Gleeson CJ, Heydon and Crennan JJ, 445 [61] per Gummow and Hayne JJ.
42 As a consequence of his bankruptcy Mr Gargan was required to file a statement of affairs by the Official Trustee. This he failed to do. The Official Trustee then sought to prosecute Mr Gargan for his failure to do so. An information was laid before the Local Court by the New South Wales Director of Public Prosecutions. Mr Gargan challenged the jurisdiction of the Local Court to deal with the matter which was rejected by Magistrate Dillon on 18 July 2005. Mr Gargan then commenced proceedings in the Supreme Court of New South Wales naming Magistrate Dillon and the Official Trustee in Bankruptcy as defendants. He sought to vindicate his jurisdictional challenge. The application was heard by Barrett J who on 4 November 2005 dismissed it: see Gargan v Magistrate Dillon [2005] NSWSC 1106. Barrett J summarised Mr Gargan’s points thus (at [8]):
In so far as they can be gathered from the statement of claim itself and discursive and voluminous written submissions filed by the plaintiff, as supplemented by oral submissions, a number of propositions of law are seen by the plaintiff as underpinning the claims in the statement of claim. The main propositions appear to be as follows:
1. A charge of failure to lodge a statement of affairs in accordance with s.54(1) of the Bankruptcy Act 1966 (Cth) cannot lawfully be determined by a single judicial officer since, in particular, this is contrary to the Statute of Monopolies (21 James I c.3).
2. The jurisdiction to determine such a charge resides exclusively with the Federal Court of Australia, having regard to amendments to the Bankruptcy Act by the Bankruptcy Legislation Amendment Act 1996 (Cth); but the Federal Court, “as it currently constitutes itself”, is “illegal” because of principles enunciated by the High Court in Kable v Director of Public Prosecutions (1997) 189 CLR 51.
3. The magistrate was bound to give effect to the International Covenant on Civil and Political Rights as part of Australian law and failed to do so.
4. The authority of the magistrate is inferior to that of Almighty God whose power is, by virtue of the Coronation Oath, exercisable by Her Majesty Queen Elizabeth II.
5. The power to judge, being the power exercised both by the magistrate and, as regards the sequestration order affecting the plaintiff, by the Federal Court, is vested by ss.79 and 80 of the Constitution of the Commonwealth so as to be exercisable only by a jury. This rule is reinforced by Biblical passages which, via the Queen’s intermediation (see proposition 4), form part of Australian law.
6. The proceedings in which the plaintiff was adjudged bankrupt were irregular in that they were tried by a single judge without a jury.
There may be other legal propositions inherent in the statement of claim and the plaintiff’s submissions. If there are, I merely say that they are so obscure and outlandish as not to merit serious consideration.
43 He dismissed each argument. He went on to say (at [9]):
The second defendant says, quite simply, that each of the six propositions I have extracted is not only wrong but so glaringly and palpably wrong that the plaintiff’s claims are entirely devoid of merit and represent a waste of court time and resources and therefore amount to an abuse of process. I entirely agree.
44 So far as can be told Mr Gargan’s next appearance was in the District Court of NSW in Gargan v Commonwealth [2007] NSWDC 14, heard by Balla DCJ on 9 February 2007 and determined by her Honour on 14 December 2007. In those proceedings Mr Gargan complained that his Newstart allowance could be stopped for eight weeks if three participation failures occurred in 12 months. This, so he argued, was a draconian penalty outside the authority of a public servant. He claimed that the arrangement contravened his entitlement to certain modes of trial. He sought a penalty be paid to him of $165,000 and claimed the right to trial by jury. Also before Balla DCJ were three other actions in which Mr Gargan was either a plaintiff or joint plaintiff. It is apparent, however, that each of these actions had nothing to do with Mr Gargan. The first concerned an attempt by a Mr Harding to escape taxation liability by alleging a breach of s 43 of the Crimes Act 1914 (Cth). The second concerned a claim by a Ms Dixon relating to her relationship with a Mr Lewin. The third was a claim by Mr Gargan alone but which appears solely to relate to a Queensland driver’s licence issued to a Mr Ketelhohn.
45 Balla DCJ found all four actions to be without substance and summarily dismissed them. Her Honour also said:
61 Mr Gargan has been declared a vexatious litigant in Queensland.
62 I agree with the observations made by Barrett J made in unrelated action brought by Mr Gargan:
“Many aspects of his submissions involve what Young CJ in Eq, writing extra-judicially, has called “pseudo technical legal rubbish”: see (2004) 78 ALJ at p.767. A number of the submissions have been made by the plaintiff in other proceedings and rejected. There is a strong element of perversity in his persisting with them.”
(Gargan v Magistrate Dillon and Anor, Supra, at paragraph 30).
63 I note that in Gargan v Woodgate [2004] NSWC 177 James J said:
“I further conclude that, having regard to the multiplicity of proceedings brought by Mr. Gargan, this judgment should be drawn to the attention of the Attorneys-General for the State and the Commonwealth with a view to their considering whether an application should be made to the court for Mr. Gargan to be declared a vexatious litigant”
64 I was informed that this has not occurred. I agree with this conclusion and again suggest that such steps should be taken.
46 On 28 June 2008 Mr Gargan commenced proceedings in this court against the Official Trustee in Bankruptcy and Kippin Investments Pty. Ltd. (“Kippin”) which was a successor in title to SAM Industries. He sought the annulment of his first bankruptcy in 1994 and his second bankruptcy in 2004. He also sought an account against Kippin for breaches of fiduciary duty, a claim in negligence against the Official Trustee, a claim for mandamus against the Official Trustee to compel it to commence proceedings against Kippin, a claim in damages pursuant to s 13 of the Crimes Act 1914 (Cth) or s 14 of the Criminal Procedure Act 1986 (NSW) and a claim that s 7 of the Bankruptcy Act 1966 (Cth) meant that Hely J should not have made him bankrupt.
47 The Official Trustee and Kippin applied for summary judgment. On 29 October 2008 I gave summary judgment to those parties and ordered Mr Gargan to pay the costs thereof on an indemnity basis: see Gargan v Kippin Investments Pty Ltd [2008] FCA 1718. I found each claim to be devoid of merit and without substance. The Official Trustee filed a cross-claim seeking orders dealing with Mr Gargan as a vexatious litigant. It is that cross-claim which is presently before me.
48 Before the matter came on for hearing on 25 March 2009 there were two further developments. First, Mr Gargan attempted to appeal my judgment to the Administrative Appeals Tribunal. On 5 March 2009, a Deputy President of that Tribunal determined that the Tribunal had no jurisdiction to hear an appeal from the Federal Court: see Re Gargan and Federal Court of Australia [2009] AATA 135. Secondly, on 20 February 2009 Mr Gargan filed a motion seeking the following relief:
1. That Section 39 Federal Court of Australia Act 1976 be disallowed.
2. That Order 46 Rule 7A Federal Court Rules be disallowed.
3. That the ADMINISTRATIVE APPEALS TRIBUNAL ACT 1975 be declared to allow any dissatisfied litigant in the Federal Court of Australia to apply to it for a new trial, as of right if dissatisfied with the conduct of the Presiding Judge.
4. That the Australia Act 1986 be declared invalid, except for Sections 5 and 11.
5. That the Federal Court of Australia comply with the requirements of a Court of Judicature, and adopt a Seal that reflects the Royal Authority of Her Majesty Elizabeth the Second as used in the Australian Constitution when made.
6. That the court declare that the question of whether an Act of Parliament or regulation made under any Act are within power, is one of Fact.
7. A declaration that Section 79 Constitution, where the word judges us used, is a guarantee of jury trial, and it is a common law right and must be granted on request.
8. A declaration that the Commonwealth of which the Official Trustee in Bankruptcy is a wholly owned subsidiary of the Commonwealth, is bound by the Model Litigant Guidelines published by them.
49 At the commencement of the hearing, at Mr Gargan’s request, I treated the seventh prayer as an application to requisition a jury. I dismissed, as Hely J had done, that application: see Official Trustee in Bankruptcy v Gargan [2009] FCA 352.
50 Mr Gargan’s submissions before me were diffuse, repetitive, rambling and frequently absurd. Largely his submissions centred around a number of medieval statutes, the Coronation Oath and other irrelevant and disruptive concepts. I sought, from time to time, to persuade him that his interests would be best served by making submissions directed to demonstrating that the proceedings that he had brought were not vexatious or by showing that he was not likely to commence such further proceedings in the future. He did not take up that invitation. The following transcript is illustrative of the nature of the argument which took place:
HIS HONOUR: 77A. All right.
MR GARGAN: Introduced in one of the – yes, trial without jury. One of the ones introduced by Fraser when he passed the Federal Court of Australia Act. One saving grace in that that every process should be brought in the name of the Queen; that’s fine, that brings in all the rest of my arguments, but the High Court now it does not issue process in the name of the Queen. Now, we took them – I took them – now, this is really vexatious too. I took them to the County Court in Bendigo, because you can’t get it filed in Melbourne. They have got little registrars there that run around making sure ‑ ‑ ‑
HIS HONOUR: Who did you take to the County Court?
MR GARGAN: The High Court of Australia, but it is the Commonwealth that is responsible for the High Court of Australia under section 45 of the High Court of Australia Act. The Federal Court of Australia is sueable under 18X, I think it is, of the Federal Court of Australia Act. 18X, I think it’s 18X from memory. Anyway, we got it filed in Bendigo and the High Court ‑ ‑ ‑
HIS HONOUR: Yes, 18X.
MR GARGAN: 18X.
HIS HONOUR: That’s the Federal Court.
MR GARGAN: Yes, yes; proceedings arising out of the administration of the court. My submission is that when a judge sits without a jury he’s an administrative officer.
HIS HONOUR: I’m just interested in this case against the High Court in Victoria.
MR GARGAN: Okay.
HIS HONOUR: What was it called?
MR GARGAN: It was Gargan and O’Brien or O’Brien and Gargan v the Commonwealth of Australia.
HIS HONOUR: I see.
Is the Court’s power under Order 21 rule 1 enlivened?
51 I am satisfied that commencement by Mr Gargan of the proceeding before me against Kippin was the institution of a vexatious proceeding. Each of the claims in it was doomed to fail. The claims relating to the annulment of his first bankruptcy and the position of the Official Trustee had been the subject of multiple adverse findings over a decade before. There was no conceivable rational basis for disinterring these claims. The claims based on the common informer provisions had likewise been described, more than once, as an abuse of process.
52 It is then necessary to determine whether Mr Gargan has habitually, persistently and without reasonable cause instituted other vexatious proceedings in this Court or other Australian courts. The answer to that question must be yes. In light of the determination of Thomas J in the Supreme Court of Queensland that it was Mr Gargan who was liable to his brother, and not the other way around, all of his subsequent attempts in this Court to disturb that conclusion were made without reasonable grounds. The repetitive arguments placed successively before Drummond J, the Full Court, Kiefel J and Spender J demonstrate a stubborn refusal to accept reality justifying, clearly in my view, the epithet persistent. They also show an inclination to commence proceedings on a more or less constant basis thus deserving the sobriquet habitual.
53 The intermeddling in the affairs of Ms Teese and Mr Heinrich is to be approached the same way. The commencement of the proceedings before Heydon J was entirely unreasonable. The proceedings before Adams J and Greg James J showed a persistent assertion of the same common informer argument. Despite losing that argument repeatedly, Mr Gargan remained unmoved. The proceedings before O’Keefe J and the application to Hely J for a jury fall into the same class. Each of the proceedings before Brereton J, Barrett J and Balla DCJ were of the same character as was Mr Gargan’s application to me to convene a jury.
Should the discretion be exercised against Mr Gargan?
54 The answer to this question is clearly yes. Mr Gargan shows no insights whatsoever into his behaviour or any understanding of the inconvenience he inflicts upon other people by his actions. The evidence before me was that the Official Trustee has expended $238,892.36 in dealing with the 18 claims which Mr Gargan has ensnared it in since 1995. Many other parties have been inconvenienced in much the same way. The amount of court time that has been devoted to hearing his arguments is very substantial. It follows that this is an appropriate case in which to make orders dealing with Mr Gargan as a vexatious litigant. In light of that conclusion it is not necessary to deal with the balance of his motion.
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I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. |
Associate:
Dated: 23 April 2009
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Counsel for the Cross-Claimant: |
Mr S Golledge |
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Solicitor for the Cross-Claimant: |
Australian Government Solicitor |
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The cross-respondent appeared in person. |
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Date of Hearing: |
25 March 2009 |
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Date of Judgment: |
23 April 2009 |
