FEDERAL COURT OF AUSTRALIA

Commonwealth of Australia v Scott [2011] FCA 768

THE COURT ORDERS THAT:

1.    The respondents may not institute any proceeding in the Federal Court of Australia without leave of the Court.

2.    The affidavits and submissions filed on behalf of the parties in VID 1020 of 2008, in support of, and in opposition to the notice of motion filed on behalf of the second respondent in that proceeding on 23 June 2009 be treated as filed in this application.

3.    The respondents pay the costs of the applicant including costs incurred by the applicant in relation to the preparation of affidavits and submissions filed on its behalf and appearances made in relation to its application, but not in relation to the drawing and filing of the notice of motion itself.

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 Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

1    On 2 December 2010, the Court dismissed proceeding VID 1020 of 2008 brought by the respondents against the applicant, the Commonwealth of Australia (the Commonwealth), for the reason that they had no reasonable prospect of successfully prosecuting the proceeding and that it was an abuse of process. In that proceeding, the Commonwealth, the Commonwealth of Australia, filed a notice of motion on 23 June 2009, seeking orders, including under O 21 r 1 of the Federal Court Rules, relating to vexatious litigants. The motion of the Commonwealth was adjourned at the end of the hearing of that proceeding to await judgment on the substantive issues.

Following judgment in the VID 1020 of 2008 proceeding, the Commonwealth apparently became aware of the judgment of the Full Court in Von Reisner v Commonwealth of Australia (2009) 177 FCR 531, which highlighted the correct procedure for seeking orders under O 21 r 1, namely by application in separate proceedings.

2    As a result, the Commonwealth filed the present application on 15 May 2011. The application seeks an order pursuant to O 21 r 1 that the respondents may not institute a proceeding without leave of the Court.

3    Order 21 r 1 relevantly 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:

…

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

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

(a)    on the application of a person against whom the person mentioned in subrule (1) has instituted or conducted vexatious proceedings; or

…

4    As the parties filed affidavits and written submissions in respect of the motion filed in VID 1020 of 2008, the Commonwealth also sought orders that those affidavits and submissions be treated as filed in this application. In the circumstances, that is an appropriate course.

5    This proceeding was listed for hearing on 30 May 2011. On that occasion the respondents did not appear. Consequently, the Court adjourned the hearing of the application until today.

6    The respondents did not advise the Commonwealth or the Court prior to the hearing on 30 May 2011 that they would not be attending the hearing. Nor did they provide any reason for their non-attendance at the hearing afterwards. It was only upon raising the matter on this occasion that the respondents said they were unable to attend the hearing for medical reasons. They said that once advised of the adjourned date, they thought there was no need for them to provide an explanation for their non-attendance. No evidence of any medical reason for their absence was provided.

THE FACTUAL BACKGROUND

7    The reasons for judgment in VID 1020 of 2008, delivered on 2 December 2010, explain why the respondents had no reasonable prospect of successfully prosecuting the proceeding, and why it was an abuse of process. The reasons for judgment demonstrate that the proceeding was a vexatious proceeding, within the meaning of O 21 r 1.

8    The basic factual circumstances underlying all the proceedings brought by the respondents are described in those reasons for judgment as follows:

7    Mr and Mrs Scott were born in Poland and came to Australia as refugees in 1986.

8    On 28 January 1993, Mrs Scott applied for a Disability Support Pension (DSP). In order to qualify for this benefit it was necessary, inter alia, that a claimant had an impairment of 20% or more under the Impairment Table of the Social Security Act 1991 (Cth) (the Social Security Act).

9    On 16 November 1993, the application was rejected by the Regional Manager of the Department of Social Security (the Department), Mr Stuart McLeod, on the basis that the Commonwealth Medical Officer, Dr Paulson, had assessed Mrs Scott as having a nil impairment. This decision was referred for internal review to an authorised review officer, Mr Ian Peak.

10    On 24 November 1993, Mr Peak notified Mrs Scott that the decision to reject her DSP application was correct.

11    At this time Mr Scott, who was permanently incapacitated, was receiving a DSP. As a result Mrs Scott was receiving a partner allowance. However, from 1 July 1995 this allowance was only available to claimants aged over 40. Mrs Scott was 32. Thus, on 30 June 1995, Mrs Scott applied for a Special Benefit (SB) which is available if no other benefit is applicable.

12    The application for SB was rejected by Ms Toni Pedler on the basis that the SB was only available if no other benefit was available and Mrs Scott had not tested her eligibility for other benefits. This reason for rejection was detailed in a letter from Mr McLeod to Mrs Scott, dated 19 July 1995.

13    Ms Pedler’s decision was reviewed by Ms Julie Williams. On 11 August 1995, Ms Williams also rejected the application for SB. That decision was sent for internal review to Ms Roberta Chrystal, an authorised review officer.

14    On 23 August 1995, Ms Chrystal allowed the application for SB as an interim measure on the condition that Mrs Scott commenced an appeal to the Social Security Appeals Tribunal (SSAT) against Mr Peak’s decision to reject her application for DSP on 24 November 1993. As a result of Ms Chrystal’s decision, the SB was first paid to Mrs Scott on 1 September 1995, and back paid from 3 July 1995, the next business day following Mrs Scott’s application for SB and the cessation of her Partner Allowance payments on 30 June 1995.

15    On 25 September 1995, Mrs Scott lodged an application with the SSAT for review of Mr Peak’s decision to reject her application for DSP.

16    On 8 January 1996, the SSAT affirmed the decision to reject the DSP claim on the basis that Mrs Scott had a nil impairment. Mrs Scott then appealed to the Administrative Appeals Tribunal (AAT) against the decision of the SSAT. On 9 September 1996, the AAT determined that Mrs Scott was entitled to DSP and that it be back paid from 28 January 1993. This determination was made without a contest. The Department agreed that the AAT should make the determination in favour of Mrs Scott.

9    The question now arises whether the Court is satisfied that the respondents have habitually, persistently and without reasonable grounds, instituted other vexatious proceedings in the Court, or in any other Australian court, whether against the same person or against different persons, within the meaning of O 21 r 1(1). A ‘proceeding’ in this context includes an appeal: s 4 of the Federal Court of Australia Act 1976 (Cth); Ramsey v Skyring 164 ALR 378 at [58] and [59].

10    Previous proceedings brought by the respondents are detailed in the reasons for judgment in VID 1020 of 2008, at [48], [60], [67], [68], [93], [97], [100], [101] and [102]. Those descriptions should be read together with these reasons for judgment. The proceedings brought by the respondents can be divided into four stages.

11    The first stage of the litigation was initiated by the respondents in this Court and heard by Heerey J: Scott v Secretary, Department of Social Security [1999] FCA 1774. The respondents appealed the decision of Heerey J to the Full Court comprising Beaumont, French and Finkelstein JJ: Scott v Secretary, Department of Social Security [2000] FCA 1241. Special leave to appeal this decision in the High Court was refused by Callinan and Kirby JJ.

12    The second stage of the litigation was commenced by the respondents in this Court and heard by Gray ACJ: Scott v Pedler [2003] FCA 650. The respondents appealed to the Full Court comprising Gyles, Conti and Allsop JJ: Scott v Pedler [2004] FCAFC 67. Special leave to appeal this decision in the High Court was refused by Hayne and Crennan JJ.

13    In 2006, the respondents commenced a third stage of the litigation by filing a complaint with the Human Rights and Equal Opportunity Commission (the Commission), now known as the Australian Human Rights Commission. The respondents then appealed to this Court against the decision of the Commission. Sundberg J transferred those proceedings to the Federal Magistrates Court. The proceeding in the Federal Magistrates Court was dismissed by the federal magistrate: Scott v HREOC [2007] FMCA 1642. The respondents sought leave to appeal the federal magistrate’s decision, which was refused in this Court by Kenny J: Scott v Human Rights and Equal Opportunity Commission [2007] FCA 2055. The federal magistrate then made orders preventing the respondents issuing any further proceedings in the Federal Magistrates Court without leave: Scott & Anor v HREOC [2009] FMCA 65

14    The fourth stage of the litigation commenced with a complaint made by the respondents to the Commission. In proceeding VID 1020 of 2008 in this Court, the respondents challenged the decision of the Commission: Scott v Human Rights and Equal Opportunity Commission [2010] FCA 1323. Following the judgment in that proceeding, the respondents applied for leave to appeal in this Court which was refused by Marshall J on 17 December 2010: Scott v Human Rights and Equal Opportunity Commission [2010] FCA 1427. On 1 February 2011, the respondents filed proceedings in the High Court contesting the orders made in VID 1020 of 2008 and the dismissal of the application for leave to appeal by Marshall J. On 22 March 2011, Hayne J dismissed the application for leave to appeal with costs.

15    The substance of all of the respondents’ proceedings, in each of the stages, has always been the same. Except for an initial success of the first respondent before Heerey J, all of the proceedings have failed.

THE RESPONDENTS’ SUBMISSIONS

16    The respondents made oral submissions which disputed service of the application. They accepted that they received a copy of the application by mail. However, they said the Federal Court Rules require personal service of the application.

17    The respondents also submitted that this application should be adjourned until the determination of yet a further application filed in the High Court, again contesting the orders made in VID 1020 of 2008, and the refusal by Marshall J to grant leave to appeal from that judgment. They contended it would be wrong to determine this application before the High Court has considered their application for leave to appeal. They contended that they would probably be successful before the High Court, and hence it would be wrong for this Court to proceed.

18    Finally, the respondents pointed to several orders made in other proceedings which they said demonstrated that their applications have not been uniformly unsuccessful. They provided just two examples of success in all the proceedings which have been referred to. One instance was on 3 October 1997, when the Full Court made orders in their favour in VG 192 of 1997, and the other was on 13 April 1999, when the Full Court made orders in their favour in VG 593 of 1998 and VG 594 of 1998. Both of these proceedings were interlocutory appeals.

CONSIDERATION

19    It would be a travesty of justice if the Court were to accept the respondents’ objection to the formal non-compliance with the Federal Court Rules in relation to service of the application. The respondents accepted that they had notice of the application. Not only did they receive notice of the application by mail, but they received notice of the substance of the application from service of the notice of motion filed on 23 June 2009 in VID 1020 of 2008. They also filed lengthy written submissions in relation to that motion. There can be no question of any surprise to the respondents in respect of the present application.

20    Furthermore, the respondents filed an affidavit sworn by the second respondent on 14 June 2011 in this proceeding, seeking to raise further facts upon which to base their defence to the application. In that sense, the respondents waived their right to complain of any issue of non-compliance arising from the failure to personally serve them with the application.

21    The respondents’ argument that it would be wrong for the Court to proceed with this application prior to the determination of their most recent High Court application is not accepted. The High Court has already considered the substance of the matters which the respondents wish to raise, and has dismissed that application. It is unlikely that further consideration of the same matters will have a different outcome.

22    In relation to the respondents’ submission that they have not been entirely unsuccessful in previous proceedings, neither of the proceedings to which they referred demonstrates any real history of success in their litigation. On the contrary, the history set out in the reasons for judgment in VID 1020 of 2008, and summarised in these reasons, demonstrates that the respondents have repeatedly litigated essentially the same matters, and have habitually, persistently and without reasonable grounds, instituted vexatious proceedings in this Court, the Federal Magistrates Court and in the High Court.

23    For these reasons, the Court will make the orders sought by the Commonwealth.

Associate:

Dated:    7 July 2011