FEDERAL COURT OF AUSTRALIA

Manolakis v Carter [2009] FCA 483

ANASTASIOS MANOLAKIS v BRUCE CARTER

SAD 199 of 2008

BESANKO J

15 MAY 2009

ADELAIDE

THE COURT ORDERS THAT:

1.         The proceeding be dismissed.

2.         The applicant pay the respondent his costs of the proceeding on an indemnity basis.

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.

REASONS FOR JUDGMENT

1                          On 3 December 2008, Mr Anastasios Manolakis issued a proceeding in this Court against Mr Bruce Carter. Mr Manolakis filed an affidavit with his application, not a statement of claim. In setting out the contents of documents filed by Mr Manolakis in this and other proceedings, I have not attempted to correct obvious errors in those documents. In the application, Mr Manolakis claims that the basis of the Court’s jurisdiction is as follows:

“S18, S18A, S18AA, S19, S19A, S19AA, S176, Subdivision B—Superannuation contributions, Part 5.3A, Corporations Act 2001, Income Tax Assessment Act 1997.”

2                          Mr Manolakis seeks the following orders:

“1.        The Australian Taxation Office investigate into the allege Liquidator ‘Carter’ refusal to comply with the Income Tax Assessment Act Legislation and lodge returns of the Superannuation Fund of Anastasios Manolakis.

2.         That ASIC investigate why the Liquidator ‘Carter’ has refused to return personal assets of Anastasios Manolakis and have breached their duty to maintain the Assets of the Anastasios Manolakis Superannuation Fund.

3.         The Liquidator ‘Carter’ be investigated for breach of Duty and criminal acts committed as liquidator of Kenurios Zoi Pty Ltd A.C.N. 097 755 920 and Thomiki Pty Ltd: A.C.N 098 838 030

4.         Carter be ordered to return to the applicant the applications personal assets.

5.         Carter be ordered to return the superannuation of the application

6.         Carter be ordered to lodge the required Taxation Returns for the Anastasios Manolakis Superannuation fund and to pay for any penalties incurred due to his refusal to lodge taxation returns.

7.         Carter be ordered to lodge the required group certificates for Anastasios Manolakis who was employed by Kenious Zoi Pty Ltd.

8.         Other orders to be sought at a later date by the applicant.”

3                          Mr Manolakis states that the grounds of his application are:

“1.        Breach of Duty by Carter as liquidator, his, duty of care and fiduciary duty to creditor, shareholders and employees.

2.       Defrauding the Superannuation fund of Anastasios Manolakis, illegally withholding assets of Anastasios Manolakis.

3.       Misleading shareholders

4.       Misleading genuine creditors

5.       Allowing fraud to be committed against the named companies, Kenurios Zoi Pty Ltd A.C.N. 097 755 920 and Thomiki Pty Ltd: A.C.N 098 838 030

6.       Other matters to be raised in oral submissions.”

4                          The affidavit accompanying the application contains nine paragraphs wherein Mr Manolakis alleges breaches of duty by Mr Carter as liquidator, wrongful dealing by Mr Carter in personal and superannuation assets and records of Mr Manolakis, and a failure by Mr Carter to comply with obligations under the “Income Tax Assessment Act”.

5                          By notice of motion dated 13 January 2009, Mr Carter applied for a number of orders, but on the hearing of the motion he confined his application to the following three orders:

“1.        the Application of the Applicant filed in this Court on 3 December 2008 (the Application) be dismissed, or in the alternative, stayed pursuant to Order 20 Rule 5 of the Federal Court Rules as it is frivolous or vexatious or an abuse of process of the Court;

2.       in the alternative to paragraph 1;

2.1        …

2.2       the affidavit of the Applicant filed in this Court on 3 December 2008 be taken off the Court file pursuant to Order 14 Rule 8 of the Federal Court Rules as it contains scandalous or oppressive matter;

…

5.         the Applicant pay the Respondent’s costs of this Notice of Motion and proceeding on a full indemnity basis, to be taxed in default of agreement…”

6                          Mr Carter’s application is supported by two affidavits, one he has sworn, and the other sworn by Mr Michael John Barrett, who is a member of the firm of solicitors acting for Mr Carter.

7                          Mr Manolakis applied to tender a number of documents on the hearing of the motion. I received the documents subject to arguments about relevance. In the result, the documents were of no assistance.

8                          Order 20 r 5 of the Federal Court Rules provides as follows:

“(1)     This rule applies to a proceeding commenced on or after 1 December 2005 if the Court is satisfied that, for the proceeding generally or for a claim for relief in the proceeding:

(a)        the proceeding or claim is frivolous or vexatious; or

(b)        the proceeding or claim is an abuse of the process of the Court.

(2)      The Court may order that the proceeding be stayed or dismissed generally or in relation to the claim for relief.

(3)      The Court may receive evidence on the hearing of an application for an order under subrule (2).

Note     For a proceeding commenced on or after 1 December 2005 in which the prosecuting party has no reasonable prospect of success, see subsection 31A (2) of the Act.”

9                          Order 14 r 8 is in the following terms:

“8         Where there is scandalous or oppressive matter in an affidavit, the Court may order that the affidavit be taken off the file.”

History

10                        It is necessary to identify certain events which took place before the proceeding was commenced and which have occurred during the proceeding. For reasons I will give, the events are relevant to the determination of whether or not the proceeding is vexatious or an abuse of process.

11                        On 20 January 2004, Mr Carter was appointed the liquidator of Kenurios Zoi Pty Ltd ACN 097 755 920 and he was released as liquidator of the company on 9 November 2006. On 17 February 2004, Mr Carter was appointed the liquidator of Thomiki Pty Ltd ACN 098 838 030 and he was released as liquidator of the company on 6 March 2007.

12                        Mr Manolakis made a telephone call to Mr Carter’s office on 18 April 2007, and, in the course of speaking to Mr Carter’s secretary, he accused two prominent politicians of being paedophiles. He made a telephone call to Mr Carter’s office on 11 May 2007 and he spoke with the receptionist. During that conversation, Mr Manolakis claimed that Mr Carter and a prominent politician were paedophiles. Mr Manolakis wrote to Mr Carter on 18 April 2007 and again on 14 May 2007 and, in that correspondence, he claimed that a number of prominent politicians and judicial officers were paedophiles.

13                        In 2008, Mr Manolakis instituted a proceeding in this Court against Mr Carter and four other persons (SAD 9 of 2008). Mr Manolakis commenced a second proceeding in this Court against 15 persons in 2008 (SAD 17 of 2008). The respondents to the second proceeding included Court registrars and public officials. The application in SAD 9 of 2008 was dismissed pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) and O 20 r 5 of the Federal Court Rules, as was the application in SAD 17 of 2008. Mr Manolakis appealed to the Full Court of this Court against the orders made in each proceeding. The two appeals were heard together, and were dismissed: Manolakis v Carter [2008] FCAFC 183. I will refer to this as the Full Court decision.

14                        There are striking similarities between the orders sought in SAD 9 of 2008 and the orders sought in the proceeding before me. To illustrate this point, it is necessary to set out the orders sought in SAD 9 of 2008 and the grounds upon which those orders were sought.

“Final orders sought by applicant revised is

1.         The Australian Taxation Office investigate into the Liquidator ‘Carter’ and ‘Trustee’ ‘Macks’ refusal to comply with the Taxation Legislation

a.         Refusal to lodge returns of the Superannuation Fund of Anastasios Manolakis.

b.         Refusal of the Liquidator to provide a group certificates to the applicant and of the trustee ‘Macks’ to seek such group certificates from the trustee to which the applicant had tax refunds of some $5,114.87.

c.         Refusal of the Liquidator ‘Carter’ and the Trustee ‘Macks’ to investigate fraud committed against the applicant, the companies Kenurios Zoi Pty Ltd A.C.N 097 755 920 ‘Kenurios’ and Thomiki Pty Ltd: A.C.N 098 838 030 ‘Thomiki’ the genuine creditors of the companies, the shareholders of the companies and the genuine creditors of the applicant named in the affidavit of Anastasios Manolakis marked ‘Attachment AM One’.

d.         The refusal of the Commonwealth Attorney General, Phillip Ruddock, the Federal Australian Police to investigate fraud on the companies, the applicant and the Commonwealth of Australia.

2.         That ASIC and the Inspector General of Bankruptcy investigate why the Liquidator ‘Carter’ and Trustee ‘Macks’ have refused to return personal assets of Anastasios Manolakis and have breached their duty to maintain the Assets of the Anastasios Manolakis Superannuation Fund.

a.         The refusal of the Trustee ‘Macks’ to call a creditors meeting pursuant to S64 to S64ZF of the Bankruptcy Act 1966 and to inform all creditors of the meeting.

b.         That the court and the Inspector General of Bankruptcy were provided with an affidavit by the applicant outlining the statement of the financial affairs of the applicant prior to the sequestration order being made by the court and was accepted by the court and the Inspector General of Bankruptcy or the sequestration order was made illegally.

c.         That the court, the liquidator ‘Carter’, the Trustee ‘Macks’ were informed that the debts of Direct Interior and Reece Plumbing may not have been the debt of Thomiki Pty Ltd as a former employee of Thomiki Pty Ltd had committed fraud against the company Thomiki Pty Ltd and the allege debt consisted of debts belonging to Mr Constantinos Asclepinos ‘Asclepinos’, the former employee of Thomiki Pty Ltd.  ‘Asclepinos’ had used Thomiki Pty Ltd accounts with other suppliers to purchase material for his own use.

i.          That a debtor of Thomiki Louis and Vivian Langanis had committed fraud on Thomiki Pty Ltd and owed Thomiki Pty Ltd in excess of $115,000 for work done on a dwelling being constructed at 12 Arnold Street, Parkside in SA and were involved with Asclepinos to defraud ‘Thomiki’ and had entered into a contract with ‘Thomiki’ purely to defraud ‘Thomiki’.

ii.         Legal proceedings seeking an annulment was commenced by the applicant in 2004 and 2005, being ADG180/2004 and ADG 36/2005 which produced formal complaints against [a Federal Magistrate], [a Judge of the Federal Court of Australia] and [another Federal Magistrate].

1.         That [the judicial officers last mentioned] were and are aware of the frauds of Asclepinos, [a State Magistrate, a State Supreme Court Chief Justice] and other yet covered up for Asclepinos, [the State Magistrate, the State Supreme Court Chief Justice] and others.

2.         That this court is aware of the covering up of the fraud by [the said judicial officers] yet does not act.

3.         The Liquidator ‘Carter’ be investigated for breach of Duty and criminal acts committed as liquidator of Kenurios Zoi Pty Ltd A.C.N 097 755 920 and Thomiki Pty Ltd: A.C.N 098 838 030

4.         The Liquidator ‘Carter’ to be investigated for acts which are of a criminal nature and why the Crown (Commonwealth) has refused to deny that ‘Carter’ is a paedophile and the Crown now is estopped from making such denials.

5.         The Trustee be investigated for breaches of Duty and criminal acts committed as trustee of Anastasios Manolakis

6.         The Trustee ‘Macks’ to be investigated for acts which are of a criminal nature and why the Crown (Commonwealth) has refused to deny that ‘Carter’ is a paedophile and the Crown now is estopped from making such denials.

…

Interlocutory, interim or procedural orders sought by applicant revised

1.         The Anastasios Manolakis Superannuation fund be returned fully compensated to Anastasios Manolakis

2.         All personal assets and documents be returned to Anastasios Manolakis in the condition these assets and documents were illegally seized

3.         Carter be removed as liquidator

4.         Macks be removed as trustee

5.         The applicant to have access to all the records of Kenurios and Thomiki immediately.

6.         That the respondents be served immediately and without further delay by the court at the courts cost

7.         That the applicant be provided free of charge transcripts of each hearing free of costs.

…”

15                        The grounds upon which the above orders were sought were as follows:

“1.        That there has been a Breach of Duty by the Liquidator of ‘Carter’ and trustee ‘Macks’ as liquidator and trustee, their, duty of care and their fiduciary duty to creditors, shareholders and employees.

2.         That ‘Carter’ and ‘Macks’ defrauded the Superannuation fund of Anastasios Manolakis and (sic) illegally withholding assets of Anastasios Manolakis.

3.         That ‘Carter’ and trustee ‘Macks[’] mislead and defrauded the genuine shareholders of ‘Kenurios’ and ‘Thomiki’.

4.         That ‘Carter’ and ‘Macks’ mislead and defrauded the genuine creditors of ‘Kenurios’ and ‘Thomiki’ and the applicant.

5.         That ‘Carter’ and ‘Macks’ allowed fraud to be committed against the named companies, ‘Kenurios’ and ‘Thomiki’ by Constantinos Asclepinos, this [presumably intended to be ‘his’] wife, Nancy Asclepinos, Louis and Vivian Langanis, Amanda Forrest and others in association with [a State Magistrate] and the illegal intervention of [the Chief Justice of a State Supreme Court] to stop an investigation into [the State Magistrate].

6.         Costs against the Liquidator and Trustee both in their official capacity and individual capacity

7.         Other Grounds to be lodged at a later date and

8.         Other matters to be raised in oral submissions.”

16                        I turn now to refer to certain events which have occurred since the present proceeding was commenced.

17                        On 6 December 2008, Mr Manolakis went to Mr Carter’s home. Neither Mr Carter nor his wife were at home and Mr Manolakis gave documents to Mr Carter’s daughter. He took a photograph of Mr Carter’s daughter with his telephone. Mr Manolakis alleges that, shortly after this incident, Mr Carter made a telephone call to him and used certain language in the course of that call.

18                        On 16 December 2008, Mr Carter’s solicitors wrote to Mr Manolakis, referring to the Full Court decision and inviting Mr Manolakis to withdraw the present proceeding. On 17 December 2008, Mr Manolakis made a telephone call to Mr Barrett. He told Mr Barrett that he did not care about the Full Court decision because it was a decision of “three stooges”. Mr Manolakis told Mr Barrett that Mr Carter should not be making threats against him of the types which he said were in the letter. He referred to Mr Barrett as a “dickhead” and terminated the telephone call.

19                        On 18 December 2008, there was a directions hearing in relation to this proceeding. Mr Barrett appeared on Mr Carter’s behalf. After the hearing, Mr Manolakis spoke to Mr Barrett and Mr Barrett’s summary (in his affidavit) of Mr Manolakis’ assertions is as follows:

“4.1      that Mr Carter was a paedophile and that I knew that to be the case;

4.2       that I was in some way protecting him;

4.3       there was a general cover up of what he described as paedophilic activities;

4.4       that my firm would be ‘up shit creek’ in acting in the matter;

4.5       that he would attack my firm as well;

4.6       that I was a criminal and I was also engaged in paedophilic activities;

…”

20                        Mr Barrett said that Mr Manolakis also talked about a recent incident in Victoria where a young boy had been shot by the police and he said that was a tragedy and the public should be demonstrating at length about that, and he continued to talk generally about the evil of paedophilic activities in Australia.

21                        Mr Carter submits that the proceeding is vexatious or an abuse of process, or both. In his affidavit, he states that he has never had in his possession personal property of Mr Manolakis or assets of his superannuation fund. He states that as liquidator of Kenurios Zoi Pty Ltd and Thomiki Pty Ltd he was under no obligation to lodge tax returns or group certificates for the applicant. He states that he had no involvement with Mr Manolakis’ companies prior to his appointment as liquidator and was unaware of any alleged fraud committed against the companies.

Orders sought in the present proceeding

22                        I turn now to the orders sought in the present proceeding (set out in [2] above). As to the orders sought in paragraphs 1 and 2, neither the Australian Taxation Office nor the Australian Securities and Investments Commission is a party to the present proceeding, nor are the statutory provisions under which the orders for investigation are sought identified. Furthermore, both orders bear a striking similarity to the orders sought in SAD 9 of 2008 (see final orders 1 and 2 in [14] above). As to the order sought in paragraph 3 in the present proceeding, Mr Manolakis does not identify the party who is to investigate Mr Carter for the matters alleged, or the statutory provision under which the order is sought. Furthermore, the same order was sought in SAD 9 of 2008 (see final order 2.c.ii.3 in [14] above).

23                        As to the orders sought in paragraphs 4 and 5 in the present proceeding, they are similar to orders sought in SAD 9 of 2008 (see interlocutory  orders 1 and 2 in [14] above). As to the orders sought in paragraphs 6 and 7 in the present proceeding, the orders are based on complaints made in SAD 9 of 2008 (see final order 1.a and b in [14] above).

A vexatious proceeding or a proceeding which is an abuse of process

24                        There have been many cases in which courts have considered the circumstances in which an action or proceeding will be held to be vexatious or an abuse of process. No doubt the doctrines are broad doctrines which often overlap. Mr Carter referred to Attorney-General v Wentworth (1988) 14 NSWLR 481 at 491 and submitted that it contains a statement of the circumstances in which a court will hold that a proceeding is vexatious. Although the case is a helpful one, it must be remembered that it was decided in a different statutory context. However, I do not need to pursue the question of whether this proceeding is a vexatious one because I have reached the clear conclusion that it is an abuse of process.

25                        As I have said, the concept of an abuse of process is a broad one. The circumstances in which the Court will conclude that a proceeding or a step in a proceeding is an abuse of process are extremely varied and the concept is not limited to fixed categories. To use a proceeding for an ulterior or improper purpose is one form of an abuse of process; to use a proceeding to cause vexation or oppression is another: Rogers v The Queen (1994) 181 CLR 251 (“Rogers”) at 255 per Mason CJ. In Rogers, McHugh J said (at 286):

“Although the categories of abuse of procedure remain open, abuses of procedure usually fall into one of three categories: (1) the court’s procedures are invoked for an illegitimate purpose; (2) the use of the court’s procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court’s procedures would bring the administration of justice into disrepute.”

26                        I am satisfied that this proceeding is an abuse of process because it is unjustifiably oppressive to Mr Carter and would bring the administration of justice into disrepute. I have reached that conclusion for the following reasons:

1.         The present proceeding is largely, if not entirely, an attempt by Mr Manolakis to pursue again the matters he raised against Mr Carter in SAD 9 of 2008, which proceeding was the subject of orders for summary dismissal or judgment. Those orders were upheld by the Full Court.

2.         The allegations made by Mr Manolakis against Mr Carter are for the most part mere assertions; they are unparticularised; and they are unsupported by any evidence. Some of the allegations are extremely serious and yet there is simply no evidence to support them.

3.         The history of the matter, including the scandalous and outrageous allegations he has been prepared to make against Mr Carter, leads me to conclude that Mr Manolakis has a prejudice, bias or “grudge” against Mr Carter.

27                        In my opinion, the proceeding should be dismissed under O 20 r 5 of the Federal Court Rules. Mr Carter put the claim in paragraph 2.2 of the notice of motion (see [5] above) in the alternative to the claim in paragraph 1 and, in the circumstances, it is unnecessary to consider it.

28                        I have concluded that the proceeding is an abuse of process for the reasons I have given. For those same reasons, an order that Mr Manolakis pay Mr Carter’s costs on an indemnity basis is plainly warranted.

Orders

29                        The proceeding is dismissed and the applicant is to pay the respondent’s costs of the proceeding on an indemnity basis.

Associate:

Dated:         15 May 2009