FEDERAL COURT OF AUSTRALIA

Herbert v American Express Australia Limited [2018] FCA 1790

ORDERS

THE COURT ORDERS THAT:

1.    Subject to Order 2, the parties are to bring in agreed Short Minutes of Orders to give effect to these reasons within 14 days.

2.    In the absence of agreement:

(a)    the parties are to file such Short Minutes of Orders as are sought within 21 days; and

(b)    the resolution of the form of Orders to be made will thereafter be resolved on the papers.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    On 22 May 2018, the Applicant in the present proceeding, Mrs Denise Herbert, filed in this Court an Originating Application and a Statement of Claim. An Amended Statement of Claim was filed on 30 July 2018.

2    The First to Third Respondent to that proceeding are respectively named as:

    American Express Australia Limited (ABN 92 108 952 085) (“American Express”);

    Mercer Superannuation (Australia) Limited as Trustee for the Mercer Super Trust (ABN 79 004 717 533) (“Mercer Superannuation”); and

    National Mutual Life Association of Australasia Limited (ABN 72 004 020 437) (“National Mutual”). As from 1 January 2017, National Mutual relevantly transferred its liabilities and the appropriate Respondent is now AMP Life Limited (“AMP Life”).

3    The Statement of Claim as first filed on 22 May 2018 alleges that Mrs Herbert was employed by American Express. She further alleges that “while in the course of her employment” she suffered a stroke and that she was not paid for the period from 5 August to 12 August 2014.

4    From the submissions filed on behalf of the Second Respondent, it would appear that:

    American Express was the employer of Mrs Herbert;

    Mrs Herbert was a member of the American Express Superannuation Plan, which was part of the super fund known as the Mercer Super Trust of which Mercer Superannuation was trustee; and

    National Mutual, now AMP Life, was the life insurer that issued a group insurance policy which was held by Mercer Superannuation. Mrs Herbert obtained insurance under that group policy as a member of the American Express Superannuation Plan.

5    The Statement of Claim thereafter contends (without alteration) that Mrs Herbert “Pursuant to the Mercer Super Trust American Express Australia Superannuation Plan Accumulation Members (Plan) applied for insurance cover through the second [2] Respondent”. There is an allegation that Mrs Herbert “sent through all relevant material documentation to [the] Respondents … that they requested” and that she had “requested that her Total Permeant and Disability Claim be released”. Mrs Herbert further pleaded in her Statement of Claim as first filed that she “through her husband requested again the release of her Total Permeant Disability Claim by the second [2] and third [3] defendant however that again was rejected”. It is also pleaded that American Express made “two [2] offers … to discontinue any and all legal action against them”, one being an offer to pay $25,815 and the other an offer to pay $14,768.

6    The “Causes of Action” are particularised as being a claim (without alteration) that “her total permeant and disability monetary dollar amount in her claim must be released forthwith”; a contention that the “High Court has expressed and implied that contract’s must be kept” and that “the Respondents have used ‘unconscionable conduct’ to deny her Total Permeant and Disability entitlements”; and a claim for the “immediate release of her Total Permeant and Disability Monetary funds of ($146,015.59)” as well as “a sum of three [3] million ($3,000,000) dollars for economic loss, loss of enjoyment of life has been humiliated, insulted offered and degraded by the Respondents”.

7    Notwithstanding the manner in which the Statement of Claim was first pleaded, it was understood that Mrs Herbert sought to claim:

    loss of salary, being for the period from 5 to 12 August 2014;

    an entitlement to an insurance payment in respect of her alleged total and permanent disability in the sum of $146,015.59 “as she has suffered ‘disappointment and distress’”; and

    $3,000,000 for her “economic loss, loss of enjoyment of life has been humiliated, insulted offered and degraded by the Respondents” (sic).

The “genuine steps statement” filed by Mrs Herbert outlines the steps she has taken “in vain to resolve the issues in dispute” and annexes a series of documents.

8    At the first case management hearing on 3 July 2018, Mrs Herbert’s Husband – Mr Stephen Herbert – was permitted to appear on behalf of his wife. He then informed the Court that there was intended to be a claim in respect of:

    a contravention of the Fair Work Act 2009 (Cth).

That case management hearing was held in order to prepare the case for hearing. To the extent that it was necessary, leave was granted to Mrs Herbert to file an Amended Statement of Claim by 30 July 2018; orders were also made for the filing of any Cross-claims by the same date as well as for the filing of Defences by 31 July 2018. The matter was then stood over to 2 August 2018 for the hearing of any Cross-claims and all Interlocutory Applications.

9    The Amended Statement of Claim was accordingly filed on 30 July 2018.

10    At the hearing on 2 August 2018, leave was refused for Mr Herbert to continue to represent his wife and Mr and Mrs Herbert were advised that reasons for the refusal of leave would be provided at the same time as judgment in the proceeding. In summary form, Mr and Mrs Herbert were then advised that in the view of the Court the issues to be resolved required the input of a qualified legal representative. Mrs Herbert applied for an adjournment for seven days in order to obtain such representation. The proceeding was stood over for hearing on 13 August 2018.

11    All Respondents have filed Interlocutory Applications. In summary form:

    American Express by way of an Interlocutory Application filed on 27 June 2018 seeks (inter alia) an order that the Statement of Claim be struck out;

    Mercer Superannuation by way of an Interlocutory Application filed on 30 July 2018 seeks orders that the proceeding be dismissed as against the Second Respondent pursuant to r 26.01 or, alternatively, struck out pursuant to r 16.01 of the Federal Court Rules 2011 (Cth). The reference to r 16.01 is presumed to be intended to refer to r 16.21; and

    National Mutual by way of an Interlocutory Application filed on 26 June 2018 seeks orders that the proceeding be dismissed against the Third Respondent in accordance with r 26.01 or alternatively struck out in accordance with r 16.21 of the Federal Court Rules contending (inter alia) that “the claim against the Third Respondent is res judicata, alternatively Anshun-estopped”. In the alternative, National Mutual seeks to have certain paragraphs of the Originating Application dismissed or struck out on the basis that “they disclose no reasonable cause of action, are prejudicial, embarrassing, evasive and ambiguous and are an abuse or [sic] process”. Further or in the alternative, National Mutual seeks a vexatious proceedings orders pursuant to s 37AO of the Federal Court of Australia Act 1976 (Cth) (“Federal Court Act”).

Each of the Interlocutory Applications also seeks costs.

12    In addition to the Interlocutory Applications, Cross-claims have been filed by:

    American Express on 27 July 2018; and

    National Mutual on 30 July 2018.

In both of the Cross-claims, Mrs Herbert is named as the First Cross-respondent and Mr Herbert is named as the Second Cross-respondent. Both of the Cross-claims seek vexatious proceedings orders pursuant to s 37AO of the Federal Court Act. The relief sought is (inter alia) an order dismissing or staying the proceeding and an order prohibiting the Cross- respondents from instituting further proceedings.

13    The Statement of Cross Claim filed by National Mutual on 30 July 2018 claims, in very summary form, that the present proceeding is an abuse of process and is vexatious within the meaning of s 37AM of the Federal Court Act.

14    Mrs Herbert has also filed two Interlocutory Applications. In summary form:

    by way of an Interlocutory Application filed on 26 June 2018, Mrs Herbert seeks (inter alia) an order that “the Respondents … immediately within forty eight [48] hours release her whole amount of her Total Permeant [sic] and Disability Claim”, a sum said to be about $146,000 or alternatively half of that amount; and

    by way of an Interlocutory Application filed on 10 August 2018, Mrs Herbert seeks (inter alia) that the Court be reconstituted, that Mr Herbert be removed as a Cross-claimant and for a referral to pro bono legal assistance.

15    It is concluded that:

    judgment should be entered in favour of all Respondents pursuant to r 26.01(1) of the Federal Court Rules;

    even had judgment not been entered in favour of all Respondents, the pleadings would have been struck out pursuant to r 16.21(1) of the Federal Court Rules.

It has further been concluded that:

    orders should be made against both Mr and Mrs Herbert pursuant to s 37AO of the Federal Court Act prohibiting either of them from commencing any further proceeding claiming the same or substantially similar relief as that now claimed against the First and Third Respondents;

    Mrs Herbert should be ordered to pay the Respondents’ costs of the Application and the Interlocutory Application. Both Mr and Mrs Herbert should be ordered to pay the costs of the Cross-claims.

Reasons for not granting leave to Mr Herbert to continue to represent his wife and reasons for each of these conclusions can be briefly stated.

REPRESENTATION BY A NON-LAWYER

16    Rule 4.01(1) of the Federal Court Rules provides that “[a] person may be represented in the Court by a lawyer or may be unrepresented”.

17    Leave may, however, be granted for a party to be represented by a person other than a legal representative (cf. Melaleuca of Australia & New Zealand Pty Ltd v Duck [2005] FCA 1481 at [10] per Bennett J), including representation by a family member.

18    At the case management hearing on 3 July 2018, when largely procedural issues were being canvassed, Mr Herbert sought leave – and was permitted – to make submissions on behalf of his wife.

19    The hearing of the present Interlocutory Applications and the Cross-claims, however, called for different consideration.

20    The exercise of the discretion to allow a non-lawyer to appear for and make submissions on behalf of a party has at its core a consideration of “the public interest in the attainment of the ends of justice”: Damjanovic v Maley [2002] NSWCA 230 at [83], (2002) 55 NSWLR 149 at 162 to 163. Stein JA, with whom Mason P and Sheller JA agreed, reviewed the authorities and there observed:

Principles from the cases

[69]    A number of themes or principles run through the cases which are relevant to the exercise of the discretion to grant or refuse leave to an unqualified person to appear on behalf of an unrepresented litigant. They may be briefly summarised as follows:

(a)    The complexity of the case

[70]    Whether the case is one of complexity or minor or straightforward has often been seen as a discretionary factor. …

…

(b)    Genuine difficulties of the unrepresented party

[72]    These include matters such as unexpected language difficulties and emergencies. An example of the latter was the absence of legal aid in a criminal appeal …

…

(c)    The unavailability of disciplinary measures and a duty to the court by lay advocates

[74]    Almost every case mentioned these matters as protection for a client when a qualified lawyer represented a party but were protections which were not available where an unqualified lay advocate appears. …

[75]    In appropriate cases a legal practitioner may be ordered to pay costs. The position is far from clear in relation to a non party lay advocate. There may be extreme circumstances where the conduct of a lay advocate could attract an adverse costs order.

[76]    In my opinion, the overall duty of a barrister or solicitor to the court is an important consideration. It is a duty of candour and a practitioner must not knowingly mislead the court. The court is entitled to place reliance on that duty and expect it to be met. The disciplinary codes of the legal profession back up the overriding duty of a practitioner to the court. …

[77]    Training, qualifications and experience are also important. This is not to say that there are not incompetent lawyers, including some who seek to practice advocacy. For the most part, the market and the disciplinary codes account for them. But with unqualified and uninsured lay advocates, the court loses the benefit of the overriding duty and clients are at a distinct disadvantage. Apart from endeavouring to ensure that a lay person granted leave to appear obeys the rules, there is little a court can do except, in an appropriate case, withdraw the leave to appear.

[78]    … However, the absence of a disciplinary code and duty to the court underlines the inappropriateness of permitting unqualified persons to appear apart from an exceptional case.

(d)    Protection of the client and the opponent

[79]    Lay advocates are unqualified, unaccredited and uninsured. This places a client at considerable risk. … A lay advocate does not owe the same duty to his client as does a lawyer. …

[80]    One should also not lose sight of a lawyer’s duty to his/her opponent … None of these protections for the system of justice exist with an unqualified lay advocate. …

(e)    Lay advocates in inferior courts and tribunals

[81]    There are indications in some of the cases that Local Courts, given their jurisdiction and large numbers of unrepresented litigants, may be more likely to grant leave to unqualified persons. This is, one assumes, in straightforward uncomplicated matters where the party is under some disability in presenting his/her own case. This may also be the case with some specialist jurisdictions and tribunals.

[82]    The authorities however suggest that higher courts should be very chary at giving leave. …

(f)    The interests of justice

[83]    What runs through all of the authorities as the guiding principle in the exercise of the discretion is the public interest in the attainment of the ends of justice. The public has an interest in the effective, efficient and expeditious disposal of litigation in the courts. As a general rule this can best be achieved by parties employing qualified lawyers.

See also: Melaleuca of Australia & New Zealand Pty Ltd v Duck [2005] FCA 1481 at [14] per Bennett J; Cristovao v Registrar Caporale [2012] FCA 1329 at [27] to [30] per Murphy J.

21    The decision to refuse Mr Herbert leave to appear for and make submissions on behalf of his wife at the hearing of the Interlocutory Applications and Cross-claims was founded upon the fact that:

    the claims sought to be advanced by Mrs Herbert, and those advanced against her, involve some degree of factual and legal complexity and properly call for the input of a legal representative;

    the Statement of Claim as first filed exposes a manifest inability on the part of Mr Herbert, being the person identified as the person who prepared it, to draft a pleading in any satisfactory manner;

    the legal and factual issues sought to be canvassed have proven to be beyond the ability or competence of Mr Herbert, as evidenced by the manner in which the Statement of Claim was amended by him;

    the nature of the claims apparently sought to be advanced and the nature of the relief claimed called for an independent and impartial assessment of the merits of such claims. Concerns arise as to the inability of Mr Herbert to make such an assessment as evidenced by (inter alia) the presently unsubstantiated claim for $146,015.59 for “disappointment and distress” and $3,000,000 for “economic loss, loss of enjoyment of life has been humiliated, insulted offered and degraded by the Respondents” (sic);

    although Mrs Herbert was (perhaps understandably) more intimidated by a hearing before this Court than her husband and manifest some degree of stress by being called upon to make submissions on her own behalf, she remained able to do so; and

    there is no evidence of any financial inability on the part of the Applicant to secure legal representation.

The grant of leave for Mr Herbert to make submissions on behalf of his wife at the first case management hearing on 3 July 2018, it is respectfully considered, called for a different conclusion. At that hearing there was, in particular, no concern as to the ability of Mr Herbert to comprehend the procedural directions which were then put in place to progress the hearing of his wife’s proceeding.

22    Although Mr Herbert was denied leave to make submissions on behalf of his wife, at the outset of the hearing, Mrs Herbert was invited (should she so wish) to have Mr Herbert join her at the bar table to provide such support and assistance as she saw fit. Mr Herbert in fact joined his wife at the bar table and throughout the hearing routinely provided her assistance. To that extent, although Mr Herbert was denied the right to represent his wife, he performed the role of a “McKenzie friend”: cf. McKenzie v McKenzie [1971] P 33.

THE STATE OF THE PLEADINGS – SUMMARY JUDGMENT & STRIKE OUT?

23    All Respondents seek to:

    have the Amended Statement of Claim struck out pursuant to r 16.21(1) of the Federal Court Rules; and/or

    have judgment entered in their favour pursuant to r 26.01(1) of those Rules by reason of the proceedings being “vexatious”.

If judgment is entered in favour of the Respondents pursuant to r 26.01(1) it perhaps matters not whether the Amended Statement of Claim would otherwise have been struck out pursuant to r 16.21(1). However, both issues were addressed in submissions and both have been resolved.

24    It nevertheless remains prudent to put such applications in context. Brief consideration should thus be given to:

    the legal and factual issues sought to be raised for resolution by Mrs Herbert;

    the general principles to be applied when determining whether judgment should be entered pursuant to r 26.01 of the Federal Court Rules by reason of the proceeding being “vexatious”;

    whether the present proceeding, even if further amended, would constitute a “vexatious” proceeding;

    the general principles to be applied when entertaining an application that a pleading be struck out pursuant to r 16.21 of the Federal Court Rules by reason of the pleading containing “vexatious material” (r 16.21(1)(b)); it being “ambiguous” (r 16.21(1)(c)); it being “likely to cause prejudice, embarrassment or delay” (r 16.21(1)(d)); or it otherwise being an “abuse of the process of the Court” (r 16.21(1)(f)); and

    the manner in which these general principles are to be applied to the present proceeding.

The Amended Statement of Claim – the issues sought to be raised

25    The Amended Statement of Claim assumes the form of a document setting out a series of numbered paragraphs from [1] to [9]. Paragraphs [1] to [7] are characterised by statements being made in each paragraph and thereafter there is set forth what are termed as “Particulars” and “Causes of Action”. Paragraph [8] sets forth a statement as to offers made to settle the proceeding. Paragraph [9] is simply headed “Causes of Action” and thereafter there appear a series of “Particulars”.

26    Needless to say, the form of the Amended Statement of Claim fails to comply with rr 16.02 and 16.03 of the Federal Court Rules. But such deficiencies may presently be left to one side.

27    The Amended Statement of Claim again repeats the pleading that American Express employed Mrs Herbert (as para [1]) and that she suffered a stroke during the course of her employment on 5 August 2014 (at para [2]). As amended, it is now pleaded that Mrs Herbert was not paid for the period from 5 August 2014 “up to and including … around 9 November 2014” (at para [3]).

28    The “Causes of Action” provided in respect to the allegation at para [3] that Mrs Herbert was not paid include a statement that the “second and third Respondent did not exercise all due diligence and care by not providing an immediate hard copy of the PDS upon the immediate commencement of employment by the Applicant with the first Respondent thus making all the Respondents severally and jointly liable”. “PDS” is understood to be a reference to the Product Disclosure Statement of the insurance policy under which Mrs Herbert sought payment.

29    It is thereafter pleaded (at para [4]) that Mrs Herbert applied for “insurance cover through the second [2] Respondent” and (at para [5]) that she “sent through all relevant material documentation to Respondents one [1] two [2] and three [3]”. It is then pleaded (at para [6]) that Mrs Herbert had “requested that her Total Permeant Permanent and Disability Claim be released”. The “Causes of Action” to that pleading state that the “second and third Respondents through their Solicitor (Ms Haddad) at the time misled the NSW Supreme Court and in particular Justice Button and the Applicant in regards to the monetary release of the Applicant’s Total Permanent and Disability Claim”. It is further pleaded (at para [7]) that Mrs Herbert “through her husband requested again the release of her Total Permeant Permanent and Disability Claim by the second [2] and third [3] defendant” which was again rejected.

30    The pleading in the original Statement of Claim as to the offers made by American Express to discontinue “any and all legal action” is again repeated in the Amended Statement of Claim.

31    The Amended Statement of Claim concludes with a pleading as to the “Causes of Action”, including an additional Particular in respect to a claim that “the Respondents have acted as are ‘Cartel’ and are in breach of sections 18(1) & 21(1) of the Australian Competition and Consumer Law 2010”. There remains the claims for $146,015.59 for “disappointment and distress” and $3,000,000 for damages.

32    It is now understood that the claims sought to be advanced by Mrs Herbert in her Amended Statement of Claim, again in very summary form, are claims in respect to:

    loss of salary, being for the period from 5 August 2014 to about 9 November 2014;

    an entitlement to an insurance payment in respect of her total and permanent disability of around $146,015.59; and

    damages in the sum of $3,000,000.

The foreshadowed claim under the Fair Work Act failed to materialise, at least in any identifiable form. The absence of any such claim at least posed questions as to the jurisdiction of this Court sought to be invoked by Mrs Herbert. Although the Fair Work Act claim did not materialise, jurisdiction is attracted by what were understood to be claims made under ss 18(1) and 21(1) of the Australian Consumer Law, being Sch 2 to the Competition and Consumer Act 2010 (Cth).

33    The point to be made by setting out the terms of both the Statement of Claim as first filed and the terms of the Amended Statement of Claim is that the opportunity extended to Mrs Herbert to rethink her original allegations and to re-plead those allegations has not proved fruitful. Whatever difficulties arose as to the manner in which those claims were sought to be expressed, and whether claims could be differently expressed so as to avoid the foreshadowed submissions of the Respondents that those claims were “vexatious”, remains for resolution.

Rule 26.01 – general principles

34    Rule 26.01(1) of the Federal Court Rules provides as follows:

A party may apply to the Court for an order that judgment be given against another party because:

(a)    the applicant has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding; or

   (b)    the proceeding is frivolous or vexatious; or

   (c)    no reasonable cause of action is disclosed; or

   (d)    the proceeding is an abuse of the process of the Court; or

(e)    the respondent has no reasonable prospect of successfully defending the proceeding or part of the proceeding.

35    The claim that the present proceeding is “vexatious” within the meaning of r 26.01(1)(b) is a claim advanced by all Respondents.

36    There are many authorities which have canvassed the meaning of the term “vexatious” for the purposes of rules such as r 26.01(1)(b). It is sufficient for present purposes to note the following summary provided by Mansfield J in Rana v Commonwealth [2013] FCA 189:

[42]    Proceedings have been held to be “vexatious” in the past if they are instituted with the intention of annoying or embarrassing the person against whom they are brought; they are brought for collateral purposes, and are not for the purpose of having the court adjudicate on the issues to which they give rise; irrespective of the motive of the litigant, they are so obviously untenable or manifestly groundless as to be utterly hopeless; or they are scandalous, disclose no reasonable cause of action, are oppressive, are embarrassing, or are an abuse of the process of the court: see generally Attorney-General v Wentworth (1988) 14 NSWLR 481.

[41]    It has also been pointed out that “vexatiousness” is a quality of the proceeding rather than a litigant’s intention so that the “question is not whether they have been instituted vexatiously but whether the legal proceedings are in fact vexatious”: Re Vernazza [1960] 1 QB 197 at 208.

37    In addition to the simple fact of like proceedings being instituted in different forums between the same parties seeking to re-agitate claims that have previously been resolved, other factors which may contribute to a conclusion that a proceeding is “vexatious” include:

    the fact that a prior proceeding involving the same or a like claim has been struck out: cf. Mulhern v Bank of Queensland Ltd (No 3) [2015] FCA 927 at [33] per Gleeson J (“Mulhern”);

    the fact that “extravagant” claims have been made without proper foundation: cf. Mulhern at [42];

    the fact that serious but “groundless” allegations of misconduct have been made: cf. Soden v Croker (No 2) [2016] FCA 15 at [216], (2016) 334 ALR 540 at 593 per Perry J (“Soden”).

    the fact that individuals have been joined as parties to proceedings “to attempt to intimidate those individuals in respect of decisions of the institution with which they are associated”: cf. Mbuzi v Griffith University [2014] FCA 1323 at [189], (2014) 146 ALD 543 at 586 per Collier J.

The present proceeding – a vexatious proceeding?

38    The claim as advanced on behalf of the Respondents is essentially founded upon the commencement of other proceedings in other Courts and tribunals, including:

    a proceeding commenced by Mrs Herbert in the New South Wales Civil & Administrative Tribunal in December 2014 against “American Express Australia Pty Ltd”, “Mercer Supertrust” and “AMP”. The claim there made was that Mrs Herbert was “entitled to relief of the ‘income protection’ immediately from becoming incapacitated”. That proceeding was dismissed by that Tribunal in May 2015 because the Tribunal was “not satisfied (at the civil standard of proof) that the grounds required to make the orders sought have been established.”

    a second proceeding commenced by Mrs Herbert in the New South Wales Civil & Administrative Tribunal in May 2015 against American Express; Mercer Superannuation and National Mutual. That proceeding was in the nature of an appeal from the earlier Tribunal decision. In the appellate proceeding it was contended (inter alia) that the Member of the Tribunal who had constituted the earlier Tribunal had submitted “an instrument … knowing it to be false and misleading” and had applied “the wrong statutory provision to the facts of this case”. Claims were there also made as to the High Court having “entrenched the conception of a contract” and that all Respondents had engaged in “unconscionable conduct”. The appeal was dismissed in a reasoned decision in February 2016: Herbert v American Express Australia Ltd [2016] NSWCATAP 47;

    a third proceeding commenced by Mrs Herbert in the New South Wales Civil & Administrative Tribunal in September 2016 against American Express; National Mutual and Mercer Superannuation. That proceeding was expressed to be a “[c]onsumer claim application about goods and services”. Mrs Herbert claimed that she was “entitled to be compensated for breach of contract and disappointment and distress in monetary figures”. The claim was for $12,655.23 in respect to “[s]upply commenced on or around the 5th-August-2014”. Again the Tribunal published reasons for its decision in December 2016 dismissing the proceeding as “an abuse of process and misconceived”: Herbert v American Express Australia Ltd (No 2) [2016] NSWCATCD 98;

    a proceeding commenced in the Fair Work Commission in September 2015 against American Express for unfair dismissal pursuant to s 394 of the Fair Work Act 2009 (Cth). The Commission in March 2016 published reasons in support of its conclusion that the dismissal of Mrs Herbert “was a genuine redundancy pursuant to s.389”. The claim before the Commission was accordingly dismissed;

    a proceeding commenced by Mrs Herbert in December 2015 in the Local Court of New South Wales against American Express in which it was claimed (inter alia) that American Express had “withheld ... salary/wages” and a sum of $7,000 for “disappointment and distress”. The Statement of Claim was dismissed by an order of that Court in August 2016 and that Court declined to reinstate the Statement of Claim with respect to American Express in October 2016; and

    a proceeding commenced by Mrs Herbert in December 2016 in the Supreme Court of New South Wales in which the first three Defendants were American Express; Mercer Superannuation and National Mutual. Mrs Herbert there sought $802,032 “for loss of salary”, around $6,000 for “retrenchment monies”, $137,224.36 for “Total Permanent Disabilities”, around $220,000 for “28% whole body impairment”, around $11,970.14 for “the first 13 weeks for injury”, around $89,458.04 for “the next 13-130 weeks for injury” and $5,000,000 for “exemplary damages”. That Court in April 2017 (inter alia) dismissed Mrs Herbert’s application “for immediate release of monies” and dismissed the proceedings as against the first three Defendants: Herbert v American Express Australia Limited [2017] NSWSC 367.

One or other of these proceedings needs to be explored with a little more attention to detail.

39    In addition to these proceedings, in the Supreme Court proceeding Adamson J referred to a further claim for workers compensation. With respect to that claim, her Honour noted:

The plaintiff’s claim for workers compensation payments

[33]    I was informed by Ms Davidson, who appeared for the Workers Compensation Commission, that the plaintiff made a claim for workers compensation payments under the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (the 1998 Act). The plaintiff applied to the Workers Compensation Commission for an interim payment direction under the 1998 Act. The workers compensation insurer notified that there was a reasonable excuse for not commencing the payment of that claim. In October 2014 a delegate of the Registrar of the Workers Compensation Commission refused the plaintiff’s application on the basis that there was no evidence that established that the plaintiff’s employment was a contributing factor to the alleged injury, being the stroke. The workers compensation insurer subsequently notified its denial of liability in respect of the claim.

[34]    In October 2015 the plaintiff filed an application in the Workers Compensation Commission to resolve a dispute. In November 2014 a senior arbitrator of the Workers Compensation Commission resolved that dispute in favour of the employer, Amex. The plaintiff applied to appeal that decision. Subsequently the plaintiff requested a reconsideration of that decision pursuant to s 350 of the 1998 Act. During a teleconference in March 2015, the plaintiff, who was legally represented, elected to discontinue that application. An order giving effect to her election was made. In May 2015, the plaintiff filed a second application for an appeal against the senior arbitrator’s decision, which was rejected by the Workers Compensation Commission on the basis that it failed to comply with the procedural requirements of the 1998 Act, including as to the time for making an appeal.

[35]    There was a dispute as to whether or not the plaintiff’s second appeal application was within time which resulted in correspondence between the parties. Subsequently, the plaintiff made an application for external appeal to NCAT, including with respect of the senior arbitrator’s decision in November 2014 and the decision in June 2015 to reject the second appeal application. On 11 February 2016, in Herbert v Workers Compensation Commission [2016] NSWCATAD 28, NCAT decided:

“[33]    The WC Acts provide a comprehensive statutory regime for workplace injury management and workers compensation, including compensation dispute determination. There is no provision under the WC Acts or any other Act that confers jurisdiction on this Tribunal to review a decision made under the WC Acts.

[34]    This Tribunal does not have a general power to review what might be called administrative decisions generally. Its jurisdiction and the powers it may exercise in relation to that jurisdiction must be found in a statute (NCAT Act s 28). In this case no statute confers jurisdiction on this Tribunal to review the decisions the applicant had identified.

[35]    For those reasons, I find that the Tribunal does not have jurisdiction to review any of the decisions the applicant identified.”

40    Although American express did not in its Interlocutory Application expressly seek an order that judgment be entered in its favour pursuant to r 26.01, there can be no denying that American Express did vigorously contend that the present proceeding was “vexatious” both for the purposes of r 26.01 of the Federal Court Rules and s 37AO of the Federal Court Act. If it were to be concluded that the present proceeding is properly characterised as a “vexatious” proceeding, the absence of express reliance upon r 26.01 in the Interlocutory Application would not preclude judgment being entered in favour of American Express pursuant to that rule. It was understood from the oral submissions advanced on behalf of American Express that it sought a like order to that sought by Mercer Superannuation and National Mutual, namely that judgment be entered in its favour. Further, the Interlocutory Application filed by American Express did seek “[s]uch further or other order as the Court thinks fit”. In circumstances where it is considered appropriate that orders be made pursuant to r 26.01 of the Rules that summary judgment be entered in favour of the Second and Third Respondents, it is also considered appropriate that the same order be made in favour of the First Respondent.

41    If attention is focussed upon the case advanced on behalf of American Express, it is submitted on its behalf that the proceedings before the Fair Work Commission (in particular) was characterised by the fact that during the course of that proceeding:

    an offer was made to settle the proceeding at the upper limit of what could otherwise be ordered by the Commission;

    correspondence or emails were exchanged during which Mr Herbert “threatened” to report three employees of American Express to “authorities” and thereby engaged in threatening conduct; and

    Mr Herbert made claims that American Express had engaged in theft and criminal conduct.

The features of that proceeding were said to go some considerable way in supporting a conclusion that Mr and Mrs Herbert had engaged in “vexatious” conduct.

42    If attention is focussed on the Local Court proceeding, American Express submits that:

    that proceeding was initially commenced against American Express. It was thereafter dismissed on the basis that Mrs Herbert failed to appear at the final hearing. Orders were subsequently made by the Local Court reinstituting the proceeding against one defendant (Gells Lawyers) but not against American Express; and

    during that proceeding Mr Herbert made claims (inter alia) that orders would be sought seeking the imposition of a “criminal” penalty and that the conduct of American Express was “in violation of the (Cth) & or the (NSW) Crimes Act”.

43    If attention is focussed on the Supreme Court proceedings, American Express submits that:

    the claims as there advanced in the Amended Statement of Claim were – as in the present case – “unintelligible” or “baseless”; and

    included as the eighth and ninth defendant were employees of American Express (Ms Sorrine Martinolli and Ms Anshu Kohli), being those employees said to have been engaged in the provision of “false” evidence in the Fair Work Commission.

As against American Express, the first defendant to that proceeding, the Amended Statement of Claim pleaded (without alteration):

16    The plaintiff seeks relief under the Fair Work Commission (FWC) against the first defendant.

Particulars were thereafter set forth.

44    In concluding that the claims as against American Express were beyond the jurisdiction of the Supreme Court of New South Wales by reason of the claim arising out of the proceeding in the Fair Work Commission, the learned Judge of the Supreme Court (Adamson J) concluded as follows:

Motion for summary dismissal or strike out

[98]    The Federal Court has exclusive jurisdiction in relation to any matter (whether civil or criminal) arising under the Fair Work Act: s 562. This Court has no jurisdiction with respect to any matter arising under the Fair Work Act: s 4(4)(ab) of the Jurisdiction of Courts (Cross-Vesting) Act (Cth); Maleknia v University of Sydney [[2016] NSWCA 108]. Accordingly, this Court is prohibited from: entertaining an appeal from the Fair Work Commission’s rejection of the plaintiff’s unfair dismissal claim; or re-hearing that claim. In these circumstances, it is neither necessary, nor appropriate, to express a view on whether, if this Court had jurisdiction, the proceedings in this Court would amount to an abuse of process on the ground that the plaintiff seeks to re-litigate issues decided against her in the Fair Work Commission.

In respect to the balance of the claims arising by reason of the allegation of employees having given false evidence, her Honour concluded:

[106]    In summary, in my view, the claims against Amex ought be summarily dismissed as this Court has no jurisdiction to entertain them. In any event, they disclose no reasonable cause of action. The claims against Ms Martinolli and Ms Kohli ought be summarily dismissed as the amended statement of claim discloses no reasonable cause of action against them since it is not arguable that their giving of evidence in the Fair Work Commission was conduct “in trade or commerce”. These are matters which cannot be remedied by better pleading and therefore it is appropriate that the claims be summarily dismissed rather than that the amended statement of claim be struck out with leave to replead.

45    To the extent that it may be possible to discern the causes of action sought to be advanced against American Express in the present proceeding, it is concluded that those claims are “vexatious” within the meaning of and for the purposes of r 26.01(1)(b) of the Federal Court Rules and that judgment should be entered in its favour because:

    Mrs Herbert has sought to pursue much the same claims as are now advanced against American Express in a number of different administrative and judicial forums and has been given repeated opportunities to have the merits of her claims examined;

    those same claims for relief have been previously agitated and either dismissed or resolved on their merits, with reasons being provided for at least some of the decisions made;

    in the course of pursuing those claims, Mrs Herbert has made unfounded allegations of “criminal” conduct against American Express;

    in the course of pursuing those claims, Mrs Herbert has made unfounded allegations not only against American Express but also against a number of its employees; and

    in the course of pursuing those claims, Mrs Herbert has made exaggerated claims or claims having no justifiable basis, such as her claims for “exemplary damages”.

The inference that is drawn is that Mrs Herbert has deliberately gone beyond a (perhaps) understandable failure on the part of an unrepresented litigant to understand the difficulties in formulating a viable cause of action and intentionally trespassed into the area of making unfounded allegations with a view to attempting to increase the pressure exerted upon American Express.

46    The claims sought to be advanced against American Express are, perhaps, more easily discernible than those sought to be advanced against Mercer Superannuation. Indeed, the difficulties as to the manner in which the Amended Statement of Claim has been “pleaded” against all three Respondents is such that those pleadings are so deficient that they should be struck out. But, to the extent that attention can be focussed upon the “broad brush” of allegations now being advanced by Mrs Herbert, it is concluded that judgment should be entered in favour of Mercer Superannuation because:

    it was a party to the proceedings in the NSW Civil and Administrative Tribunal and the Supreme Court of New South Wales, the Supreme Court proceeding being one in which the claims against all three of the present Respondents were dismissed; and

    the issues sought to be pursued in those proceedings were much the same as those now sought to be pursued in the present proceeding in this Court.

These reasons substantially overlap those relied upon in respect to American Express.

47    In the case of Mercer Superannuation, Adamson J in the Supreme Court concluded:

Application for summary dismissal or strike out

[107]    For the reasons given above in relation to the plaintiff’s amended notice of motion, I accept Mr Koch’s submission that the plaintiff has no reasonably arguable claim to be entitled to her account balance or the TPD benefit. She has failed to co-operate with the insurer in that she has refused to attend examinations or provide information or authorities to enable an opinion to be formed as to whether she meets the requirements of TPD. She has purported to justify her refusal on the ground that she is not required to co-operate in circumstances where there is a clear contractual obligation on her to do so. It is not arguable that there is any breach by Mercer when she has no present entitlement to the account balance and no payment has been made by AMP to Mercer.

[108]    Although matters of issue estoppel and abuse of process have also been raised, I consider that the claims by the plaintiff against Mercer ought be summarily dismissed on the ground that they disclose no reasonable cause of action. The claim for damages for disappointment is without identifiable foundation and appears to be based on a misreading of the authorities. In these circumstances the claims against Mercer ought be dismissed under [Uniform Civil Procedure Rules 2005 (NSW)] r 13.4.

48    The claims now sought to be advanced against National Mutual, again to the extent that those claims can be identified, also lead to the conclusion that those claims are “vexatious”.

49    When much the same claims were before the Supreme Court, the fifth and sixth defendants, Mr Jeri Thomas and Mr Alex Vichidvongsa, were employees of that company. In dismissing the claim (that being a claim against AMP), it may be noted that Adamson J concluded:

Application for dismissal or strike out

[111]    In the December 2016 NCAT Decision, NCAT dismissed the plaintiff’s claim for TPD monies against AMP, and others, on the basis that it was an attempt to re-litigate issues which had been decided against her in the February 2016 NCAT Decision. If the plaintiff wished to argue that the December 2016 NCAT Decision was wrong, she ought to have challenged that decision. Instead, she has chosen to leave that decision unchallenged and seek the TPD monies in this Court. I am persuaded that this amounts to an abuse of process of this Court and ought lead to summary dismissal of the plaintiff’s claim against AMP.

[112]    The plaintiff has not identified any conceivable cause of action against either Mr Thomas or Mr Vichidvongsa, who appear to have been joined as defendants, notwithstanding that no allegations have been made against them, on the basis of a misapprehension on the part of the plaintiff or her husband that it was necessary for them to name as defendants anyone whose name appears on a document or piece of correspondence sent by his or her employer. As no reasonable cause of action is disclosed against either Mr Thomas or Mr Vichidvongsa, the proceedings as against them ought be summarily dismissed.

50    Judgment should be entered in National Mutual’s favour because (as with Mercer Superannuation):

    it too was a party to the proceedings in the NSW Civil and Administrative Tribunal and the Supreme Court of New South Wales; and

    the issues sought to be pursued in those proceedings were much the same as those now sought to be pursued in the present proceeding in this Court.

51    Summary judgment should thus be entered in favour of all three Respondents pursuant to r 26.01 of the Federal Court Rules. Not only has it been concluded that the pursuit by Mrs Herbert of the claims against each of the Respondents are “vexatious”, it has further been concluded that any residual discretion should be exercised in favour of those Respondents.

Rule 16.21 – general principles

52    Rule 16.21 of the Federal Court Rules confers a discretionary power upon the Court to strike out a pleading. That rule provides as follows:

Application to strike out pleadings

(1)    A party may apply to the Court for an order that all or part of a pleading be struck out on the ground that the pleading:

   (a)    contains scandalous material; or

   (b)    contains frivolous or vexatious material; or

   (c)    is evasive or ambiguous; or

   (d)    is likely to cause prejudice, embarrassment or delay in the proceeding; or

(e)    fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or

   (f)    is otherwise an abuse of the process of the Court.

(2)    A party may apply for an order that the pleading be removed from the Court file if the pleading contains material of a kind mentioned in paragraph (1)(a), (b) or (c) or is otherwise an abuse of the process of the Court.

A “pleading” for the purposes of r 16.21 is defined in the Dictionary found in Sch 1 to the Rules as including (inter alia) “a statement of claim” but not including “an originating application”.

53    In the exercise of this discretion, the starting point is a recognition of the function served by a pleading. Albeit a matter not susceptible of dispute, it is worth recalling that the function of a pleading is to inform an opposing party of the case to be met at hearing. In Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 at 286, Mason CJ and Gaudron J observed:

The function of pleadings is to state with sufficient clarity the case that must be met. In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision.

(Citation omitted.)

This passage has oft been cited: e.g., Pancontinental Mining Ltd v Posgold Investments Pty Ltd (1994) 121 ALR 405 at 413 per Beaumont J; Australian Building and Construction Commissioner v Hall [2018] FCAFC 83 at [49], (2018) 277 IR 75 at 98 to 99 per Tracey, Reeves and Bromwich JJ.

54    It is also worth recalling at the outset that the discretion is to be exercised with “great caution”: Favell v Queensland Newspapers Pty Ltd [2005] HCA 52 at [6], (2005) 79 ALJR 1716 at 1719 per Gleeson CJ, McHugh, Gummow and Heydon JJ citing with approval Favell v Queensland Newspapers P/L [2004] QCA 135 at [2] per McPherson JA. The reason for such restraint is that Courts are extremely conscious of the consequence of an order striking out a statement of claim being the potential to thereby deny a litigant access to justice. In Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2017] FCAFC 50, Greenwood, Flick and Rangiah JJ there observed:

[44]    … To [strike out the pleading] would expose a party to the prospect of being unfairly denied access to the courts. Greater uncertainty, perhaps, surrounds those circumstances in which a party may be exposed to procedural unfairness by being confronted with a pleading which (for example) is accepted to be sufficiently ambiguous or uncertain such that it should be struck out. To permit such a pleaded case to proceed to hearing exposes that party to the prospect of unfairness by being confronted with a deficiently pleaded case. Where any unfairness may be addressed by the provision of further particulars or evidence, the discretion may be exercised to permit such a case to proceed to hearing notwithstanding non-compliance with r.16.02. Although it would be imprudent to attempt to constrain the accepted discretion of the Court, it may nevertheless be observed that there would need to be a reason why a claim which is accepted to be inadequately pleaded should proceed to hearing without any potential unfairness to the opposing party being adequately addressed. The touchstone, perhaps, can be no more precisely expressed than a recognition that any pleading should adequately place an opposing party in a position where it fairly knows the case to be met. Pleadings, after all, are the “servants, not the masters of the judicial process”: Thorpe v Commonwealth (No 3) (1997) 71 ALJR 767 at 774-775.

(Some citations omitted.)

In Re Morton; Ex parte Mitchell Products Pty Ltd (1996) 21 ACSR 497 at 513 (“Morton”), Sackville J used the expression “exceptional caution”. His Honour, in consideration the need for a Court to exercise “special care” when dealing with unrepresented litigants, cited with approval the decision of McLelland J in Tardy v Secretary of the Department of Community Services and Health (unreported, NSWSC, McLelland J, 9 October 1990) which provided as follows:

As was said in Wentworth v Rogers (No 5) 6 NSWLR 534 at 536:

Persons unfamiliar with the rules of pleading and the technicalities which surround the drafting of a statement of claim in adequate and permissible legal form are inevitably, if unrepresented, at a disadvantage. Courts should approach the peremptory termination of the litigation with special care to ensure that, within the possibly ill-expressed and unstructured statement of the legal claims sought to be ventilated, there is no viable cause of action which, with appropriate amendment of the pleading and a little assistance from the court, could be put into proper form. If this can be done, the court should avoid the summary termination of the proceedings for this will prevent the court from examining any merits of the case, once the statement of claim is struck out.

But nothing turns upon the difference in terminology. All expressions underline the considerable reservation with which a Court approaches the exercise of the discretion.

55    The discretion conferred by r 16.21 of the Federal Court Rules nevertheless remains a discretionary power vested in this Court and remains a discretion to be exercised in an appropriate case.

The striking out of the Amended Statement of Claim & liberty to re-plead

56    The conclusion that the present proceeding is “vexatious” within the meaning of and for the purposes of r 26.01(1)(b) of the Federal Court Rules and that judgment should be entered in favour of all Respondents renders it unnecessary to resolve submissions directed to whether the Amended Statement of Claim should be struck out pursuant to r 16.21(1) of the Rules. This was an issue pursued principally in the written submissions filed on behalf of National Mutual. But the submissions there made are equally applicable to all Respondents.

57    Even had judgment not been entered in favour of all Respondents, little difficulty would have been experienced in striking out the Statement of Claim as initially filed. Brief reasons should nevertheless be provided.

58    That Statement of Claim:

    contained a myriad of Particulars, some of which may have been intended to be directed to a claim for breach of contract in failing to pay a salary or a benefit under an insurance policy and some of which may have been intended to be directed to an alleged contravention of the Fair Work Act. But which Particulars are directed to one claim as opposed to the other is difficult to discern;

    failed to plead “material facts” of relevance to either a claim for breach of contract or a contravention of the Fair Work Act. Although there was, for example, a pleading that Mrs Herbert was “not payed for the period 5 August 2014 up to and including the 12 August 2014” (sic), there was no pleading as to the terms of any such contract and no pleading that that failure was in breach of a contract. Perhaps more fundamentally, there was no pleading as to any contravention of the Fair Work Act, let alone any identification of the provision said to have been contravened;

    appeared to plead that Mrs Herbert “entered into a contract of insurance to receive superannuation benefits and a component of those entitlements enable the Applicant to receive are monetary dollar amount as income payments for a period of two [2] years and are lump sum dollar amount for Total Permeant and Disability” (sic). Even if the fact that such an allegation is contained in a Particular and is not the subject of a separate pleading of a “material fact” (as required by r 16.02 of the Federal Court Rules) is left to one side, the identity of the insurer remains obscure – although it is most probably the Second Respondent. Further unacceptable uncertainty is only compounded when reference is made to the pleading that Mrs Herbert “applied for insurance cover through the second [2] Respondent” and the Particular that she had “sought insurance cover immediately … which at first instance was denied”;

    appeared to plead matters of no relevance to any cause of action. For example, the pleading of the offers made by American Express assume no self-evident relevance;

    pleaded that “the Respondents have used ‘unconscionable conduct’ to deny her Total Permeant and Disability entitlements” (sic) in circumstances where the involvement of American Express in any such conduct is not self-evident. The same pleading also fails to identify any facts or circumstances which would make any conduct, be it the conduct of American Express or one or other of the other two Respondents, “unconscionable”; and

    failed to identify which of the Respondents is said to be liable to pay the sum of $3,000,000.

In short, to have allowed the Statement of Claim to proceed to hearing would place the Respondents in a position where they had no acceptable level of certainty as to the case they had to meet.

59    It perhaps matters not which provision within r 16.21(1) is relied upon. Depending on how the Amended Statement of Claim is characterised, it may be viewed as:

    containing “vexatious material” (r 16.21(1)(b)), namely that material which had been extensively canvassed in earlier proceedings in other courts and tribunals; or

    being “ambiguous” (r 16.21(1)(c)); or

    constituting “an abuse of the process of the Court” (r 16.21(1)(f)).

If it were necessary to rely upon a particular provision, and prudently a provision that can be relied upon independent of any consideration of the repeated attempts made by Mrs Herbert to seek to re-agitate legal and factual issues canvassed in other proceedings, it would have been sufficient to conclude that the Amended Statement of Claim should be struck out pursuant to r 16.21(1)(d) in that it is “likely to cause prejudice, embarrassment or delay in the proceeding”.

60    Although a Court should be conscious of the difficulties confronting an unrepresented party, a Court “must ... have regard not merely to the position of the litigant in person but also to the position of the other party or parties concerned and to what is required, in justice, to prevent the unnecessary expenditure of public and private resources”: Corporate Affairs Commission v Solomon (unreported, NSWCA, Mahoney AP, 1 November 1989).

61    The deficiencies with the Statement of Claim have not been resolved though amendment. It is concluded that the Amended Statement of Claim should be struck out pursuant to r 16.21 because:

    there is a fundamental failure to separately plead the “material facts” upon which a cause of action is sought to be advanced as opposed to the provision of “particulars” in respect to such an allegation – the Amended Statement of Claim thus is divided into separate paragraphs but thereafter in respect to those paragraphs provides both “Particulars” and statements under the heading of “Causes of Action”;

    even if such a difficulty be left to one side, there remains an unacceptable (and confusing) inability to identify the facts intended to be relied upon as constituting the “Causes of Action” and the manner in which those “Causes of Action” are sought to be made out – for example, the pleading at para [3] as to the failure to pay for the period from 5 August 2014 up to about 9 November 2014 and the “Particulars” including statements that “[t]he first [1] second [2] and third [3] Respondents at first instance did not set aside time in order that the Applicant could read their Product Disclosure Statement” and a separate statement under that heading “Causes of Action” stating that the “second and third Respondent did not exercise all due diligence and care by not providing an immediate hard copy of the PDS”; and

    there is a fundamental difficulty in identifying the Respondent against which the “Causes of Action” are sought to be advanced – for example, para [3] contains the allegation of a failure to pay, presumably a failure to pay salary – being an allegation presumably advanced only against American Express, and yet the “Particulars” refer to all three Respondents and the “Causes of Action” refers only to Mercer Superannuation and National Mutual; similarly, paras [6] and [7] contain the general allegation as to the failure to “release” the payment in respect to the total and permanent disability claim but seeks to confine that claim by way of the “Causes of Action” to a claim against both Mercer Superannuation and National Mutual.

62    It would thus have been concluded that the Amended Statement of Claim should be struck out pursuant to r 16.21 even had an order not been made pursuant to r 26.01 of the Federal Court Rules. It would have been further concluded that no liberty should be granted to Mrs Herbert to file any further pleading which is settled by either herself or by her husband. Even if it were possible to discern that within the “ill-expressed and unstructured” pleading there may remain some “viable cause of action” (cf. Morton (1996) 21 ACSR 497), the pleading of such a claim has twice proven to be beyond the ability of Mrs Herbert aided as she is by her husband.

63    The election made by Mrs Herbert to pursue her claims unrepresented is an election, apparently, deliberately made. The hearing originally scheduled for 2 August 2018 was adjourned on her application to allow her the opportunity to seek legal representation. But she appeared at the final hearing on 13 August 2018 unrepresented. In the absence of her retaining legal representation, there is little point to be served by granting leave to further amend the Amended Statement of Claim.

A PROHIBITION ON THE CONDUCT OF FURTHER PROCEEDINGS

64    The conclusion that judgment should be entered against Mrs Herbert pursuant to r 26.01(1) of the Federal Court Rules by reason of the present proceeding being a “vexatious” proceeding leaves open the question whether a separate order or orders should also be made pursuant to s 37AO(2)(b) of the Federal Court Act prohibiting the institution of further proceedings “of a particular type”. Such orders are sought by both American Express and National Mutual (but not Mercer Superannuation) against both:

    Mrs Herbert; and

    Mr Herbert.

Mr Herbert was not a party to the proceeding commenced by his wife, initially by way of the Statement of Claim filed 22 May 2018 and later amended on 30 July 2018. He was, however, the person who signed the Originating Application and the Statement of Claim in May 2018 and the Amended Statement of Claim in July 2018. He was a party to the Cross-claims filed by both American Express and National Mutual (the Second Cross-respondent).

65    Section 37AO of the Federal Court Act provides as follows:

Making vexatious proceedings orders

(1)    This section applies if the Court is satisfied:

(a)    a person has frequently instituted or conducted vexatious proceedings in Australian courts or tribunals; or

(b)    a person, acting in concert with another person who is subject to a vexatious proceedings order or who is covered by paragraph (a), has instituted or conducted a vexatious proceeding in an Australian court or tribunal.

(2)    The Court may make any or all of the following orders:

(a)    an order staying or dismissing all or part of any proceedings in the Court already instituted by the person;

(b)    an order prohibiting the person from instituting proceedings, or proceedings of a particular type, in the Court;

(c)    any other order the Court considers appropriate in relation to the person.

(3)    The Court may make a vexatious proceedings order on its own initiative or on the application of any of the following:

(a)    the Attorney‑General of the Commonwealth or of a State or Territory;

(b)    the Chief Executive Officer;

(c)    a person against whom another person has instituted or conducted a vexatious proceeding;

(d)    a person who has a sufficient interest in the matter.

(4)    The Court must not make a vexatious proceedings order in relation to a person without hearing the person or giving the person an opportunity of being heard.

(5)    An order made under paragraph (2)(a) or (b) is a final order.

(6)    For the purposes of subsection (1), the Court may have regard to:

(a)    proceedings instituted (or attempted to be instituted) or conducted in any Australian court or tribunal; and

(b)    orders made by any Australian court or tribunal; and

(c)    the person’s overall conduct in proceedings conducted in any Australian court or tribunal (including the person’s compliance with orders made by that court or tribunal);

including proceedings instituted (or attempted to be instituted) or conducted, and orders made, before the commencement of this section.

66    There are a number of different elements of this statutory regime which should be briefly considered. First, s 37AO(1)(a) refers to “a person” who has “frequently instituted or conducted vexatious proceedings”. That phrase thus extends beyond (for example) the applicant in a particular proceeding and extends to a person who may not be a party to the proceeding before the Court in which the order is made: Mulhern [2015] FCA 927. Gleeson J there concluded as follows:

[36]    Neither Mr Mulhern nor Mrs Mulhern was a party to the proceeding. However, I find that, by appearing and arguing the applications on behalf of Mulhern’s Properties, Mr Mulhern conducted the three proceedings comprising the Mulhern’s Properties proceeding within the meaning of s 37AO(1)(a).

The term “institute” is defined in s 37AM as follows:

institute, in relation to proceedings, includes:

(a)    for civil proceedings—the taking of a step or the making of an application that may be necessary before proceedings can be started against a party; and

(b)    for proceedings before a tribunal—the taking of a step or the making of an application that may be necessary before proceedings can be started before the tribunal; and

(c)    for criminal proceedings—the making of a complaint or the obtaining of a warrant for the arrest of an alleged offender; and

(d)    for civil or criminal proceedings or proceedings before a tribunal—the taking of a step or the making of an application that may be necessary to start an appeal in relation to the proceedings or to a decision made in the course of the proceedings.

The term “conducted” is a term not defined in the Federal Court Act and thus bears its ordinary and natural meaning: Mbuzi v AGL Sales Pty Ltd [2018] FCA 367 (“Mbuzi v AGL”). Reeves J there observed:

[40]    The expression “conducted” is, however, not defined in the Federal Court Act. It therefore takes its ordinary and natural meaning. That is: “2. direction or management; execution … 5. to direct in action or course; manage; carry on …” (Macquarie Dictionary, 6th ed, Macquarie Dictionary Publishers Pty Ltd). It follows that, commencing a substantive proceeding and taking a step in that proceeding by filing an application or similar document, constitutes both instituting and conducting that proceeding. Furthermore, taking the same kind of step in an existing proceeding constitutes conducting that proceeding.

67    Second, the phrase “vexatious proceeding” as employed in s 37AO(1) is defined in s 37AM as follows:

vexatious proceeding includes:

(a)    a proceeding that is an abuse of the process of a court or tribunal; and

(b)    a proceeding instituted in a court or tribunal to harass or annoy, to cause delay or detriment, or for another wrongful purpose; and

(c)    a proceeding instituted or pursued in a court or tribunal without reasonable ground; and

(d)    a proceeding conducted in a court or tribunal in a way so as to harass or annoy, cause delay or detriment, or achieve another wrongful purpose.

These instances of what is included within the concept of “vexatious proceeding” are “not discrete” and overlap one with the other: HWY Rent Pty Ltd v HWY Rentals (in liq) (No 2) [2014] FCA 449 at [105] to [106] per Perry J (“HWY Rent”).

68    Third, the term “frequently” as employed in s 37AO(1)(a) has its ordinary meaning and is not given any specific statutory meaning for the purposes of that section: Garrett v Commissioner of Taxation [2015] FCA 117 at [8], (2015) 147 ALD 342 at 346 per Pagone J. As Perry J said in HWY Rent [2014] FCA 449:

[112]    … the Court may find that a person has instituted or conducted vexatious proceedings “frequently” even though the number of proceedings may be quite small, such as where the proceedings are an attempt to re-litigate an issue determined against the person …

[114]    In short, there being no numerical threshold prescribed by Part VAAA itself, the question of whether an applicant has “frequently” instituted or conducted vexatious proceedings for the purposes of s 37AO must be answered in the circumstances of the particular case.

These observations of Perry J were approved by the Full Court in Fuller v Toms [2015] FCAFC 91 at [33], (2015) 234 FCR 535 at 545 to 546 per Besanko, Logan and McKerracher JJ. Both “the quality of the vexatiousness of a proceeding, and the nature of the proceeding itself, inform the assessment of frequency”: cf. Potier v Attorney-General (NSW) [2015] NSWCA 129 at [116], (2015) 89 NSWLR 284 at 311 per Leeming JA.

69    Fourth, the phrase “Australian courts or tribunals” employed in s 37AO(1)(a) should be construed as including the Fair Work Commission. The term “Australian court or tribunal” is defined in s 37AM as “a court or tribunal of the Commonwealth, a State or a Territory”. The Commission is certainly not a “court” but rather a statutory entity established pursuant to s 575 of the Fair Work Act. The term “tribunal” as employed in s 37AO(1)(a) should be construed as embracing the Commission.

70    Fifth, a purpose sought to be achieved by the making of an order pursuant to s 37AO(2) is “to shield other litigants from harassment and to protect the court from the expense, burden and inconvenience of baseless and repetitious suits, but not to impose punishment for litigious misconduct”: Soden [2016] FCA 15 at [9], (2016) 334 ALR 540 at 545 per Perry J. But the making of an order pursuant to s 37AO(2), it is well-recognised, is a grave step which is not to be lightly taken: Singh v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] FCA 833, (2011) 282 ALR 56 at 72. Bromberg J there summarised the approach as follows:

[76]    In the exercise of the discretion it is important to bear in mind that the making of orders that diminish a person’s capacity to access justice through the courts is a decision which is never made lightly. It is a decision which requires the careful balancing of a number of considerations.

[77]    The vexatious litigant sanction aims to strike a fair balance between the right of applicants to access justice (to bring valid disputes before a court for conclusive determination) and the countervailing right of respondents to finality of litigation and protection from further unmeritorious litigation. Another significant countervailing factor weighing in that balance is the need to safeguard scarce judicial resources so that other litigants before the court are not unfairly prejudiced and court resources are not unnecessarily wasted.

[78]    The court’s overarching purpose as set out in s 37M of the Federal Court Act “is to facilitate the just resolution of disputes (a) according to law; and (b) as quickly, inexpensively and efficiently as possible.” Section 37N provides that parties are to act consistently with the overarching purpose. The just resolution of disputes requires considering the rights of both parties to the litigation. Where serial litigants persistently bring vexatious claims before the court, repeatedly targeting and harassing the same respondents, the administration of justice as well as the court’s overarching purpose is effectively subverted as vexatious litigants use “the process of the court as an instrument of injustice and oppression”: Scott v Human Rights and Equal Opportunity Commission [2010] FCA 1323 at [226] (North J). The “efficiency” referred to in s 37M includes the efficient utilisation of the court’s resources and the need to provide to other litigants before the court timely access to justice.

(Some citations omitted.)

These observations were approved by Gleeson J in Mulhern [2015] FCA 927 at [77].

71    For the purposes of s 37AO(1)(a) of the Federal Court Act it is concluded that:

    Mrs Herbert has “frequently… instituted” proceedings and Mr Herbert has “frequently … conducted” proceedings (cf. Mulhern [2015] FCA 927 at [36] per Gleeson J; Mbuzi v AGL [2018] FCA 367 at [40] per Reeves J);

    the proceedings in the New South Wales Civil & Administrative Tribunal, the Fair Work Commission, the Local Court of New South Wales and the Supreme Court of New South Wales fall within the natural and ordinary meaning of the phrase “proceedings in Australian courts or tribunals”; and

    those proceedings are properly characterised as “vexatious proceedings”.

It is further concluded:

    that the discretion conferred by s 37AO(2) should be exercised in favour of American Express and National Mutual; and

    that an order should be made prohibiting both Mr Herbert and Mrs Herbert from instituting any further proceeding in this Court of a “particular type”, being proceedings that raise substantially the same claims as the present proceeding.

72    The conclusion that Mrs Herbert has “frequently instituted … vexatious proceedings in Australian courts or tribunals” within the meaning of s 37AO(1)(a) follows from the fact that:

    she has instituted proceedings in the New South Wales Civil & Administrative Tribunal, the Fair Work Commission, the Local Court of New South Wales and the Supreme Court of New South Wales;

    those proceedings have sought to re-agitate much the same claims;

    each of those proceedings has been unsuccessful for one or other reason (at least against the present Respondents); and

    the present proceeding has also been unsuccessful.

The conclusion that Mr Herbert has “frequently … conducted vexatious proceedings in Australian courts or tribunals” within the meaning of s 37AO(1)(a) follows from not only his involvement in the present proceeding before this Court but also from (inter alia) the fact that:

    before lodging a claim with the Tribunal, the Appeal Panel of the New South Wales Civil & Administrative Tribunal in February 2016 records Mr Herbert as having played an active part in complaining to the insurer in email correspondence about withheld monetary entitlements stating that he “regarded this as unjustifiable, unprofessional and unconscionable behaviour” and further records that Mr Herbert “appeared for [Mrs Herbert] at the hearing in the Tribunal below and at the hearing of the appeal”: Herbert v American Express Australia Ltd [2016] NSWCATAP 47 at [19] and [29];

    in the separate proceeding before the New South Wales Civil & Administrative Tribunal – which was dismissed in December 2016 – the Tribunal records that Mr Herbert had filed written submissions in the proceeding and that Mr Herbert was “representing” his wife in earlier proceedings: Herbert v American Express Australia Ltd (No 2) [2016] NSWCATCD 98 at [7] and [23]. Whether Mr Herbert should be permitted to represent his wife in that proceeding was the subject of competing submissions. The Tribunal resolved that dispute by granting Mr Herbert leave to represent his wife, such leave being confined to “determination of the issue of jurisdiction … and whether the proceedings should be summarily dismissed”: [2016] NSWCATCD 98 at [43];

    in the proceeding in the Local Court, Mr Herbert was named in the Statement of Claim filed in that Court as the “authorised officer” and “[a]gent” of his wife; an allegation tantamount to or at least analogous to fraud was made, namely that American Express had “willingly and knowingly submitted instruments to be false and misleading in a material respect/particular”, without any apparent factual basis for the allegation; Mr Herbert for the purposes of that proceeding engaged in email communications seeking (inter alia) the repayment of an “over-payment” and a further email communication in which he advised that a “particular lawyer Stacy Taylor … may or may not now be mentioned in a written complaint to the NSW Legal Services Commissar’s Office in company with the name of the principal of Gell’s Lawyers” (sic); Mr Herbert in a later email also advised that he would be “seeking a ‘criminal’ penalty against your clients, as I believe that they are in violation of the (Cth) & or the (NSW) Crimes Act” and also in a separate email advised that six named employees “may or may not be added to the NSW Local Court Statement of claim” (sic).

73    Even though the number of cases instituted by Mrs Herbert may be comparatively few, those proceedings have sought to re-agitate the same issues.

74    Having reached such conclusions, being conclusions which enliven the power to make a vexatious proceedings order, one of the two remaining matters to be addressed is the exercise of the discretion conferred by s 37AO(2). Even where a Court is satisfied that a person has “frequently instituted or conducted vexatious proceedings” an order need not necessarily be made pursuant to s 37AO(2), that subsection reserving to the Court a discretion. Circumstances may present themselves where the proceeding in which an application is made pursuant to s 37AO may be yet another proceeding in which a litigant seeks to agitate yet again much the same set of claims with the objective of achieving a different result to that obtained in prior proceedings. It is not possible, nor would it be desirable, to even attempt any exhaustive statement of the factors which may indicate that such prior proceedings should not dictate the fate of the proceeding in which the application is made. However, such factors may potentially include:

    the correlation (if any) in the legal and factual issues that have previously been resolved;

    the manner in which the prior proceedings have been resolved, including whether one or other of those proceedings has proceeded to a hearing on the merits;

    the ambit of the evidence adduced in the prior proceedings and that sought to be adduced in the proceeding in which the application is made; and

    whether the litigant commencing the prior proceedings had been self-represented but is now legally represented with the potential that prior proceedings which may have been poorly presented are for the first time being presented in a legally coherent fashion.

On the facts of the present case, however, there is no reason why the discretion should be exercised in favour of Mr and Mrs Herbert and every reason why it should be exercised adversely to them. Both have had the benefit of reasoned decisions by the Tribunal, the Commission and the Supreme Court. Both have been afforded every opportunity on previous occasions to present Mrs Herbert’s claims. The claims now sought to be agitated again in this Court are the same claims as have been previously resolved. Both Mr and Mrs Herbert have had an opportunity to be heard in the present proceeding as to why an order should not now be made under s 37AO.

75    Orders should thus be made pursuant to s 37AO(2)(b) of the Federal Court Act restraining Mr and Mrs Herbert from again instituting in this Court a proceeding “of a particular type”.

76    In the case of American Express, one of the orders which it seeks in its Notice of Cross-claim is in the following terms:

an order prohibiting the cross-defendants from instituting proceedings against the cross-claimant, its officers, employees or legal representatives, in the Court

77    In its written submissions filed in reply to Mrs Herbert’s post-hearing submissions, American Express clarified that its preferred form of orders were as follows:

Denise Faasegi Herbert is prohibited from instituting in the Federal Court of Australia any proceeding in which any relief is sought against American Express Australia Limited, or any of its related entities, officers, employees or legal advisers.

Stephen Herbert is prohibited from instituting in the Federal Court of Australia any proceeding in which any relief is sought against American Express Australia Limited, or any of its related entities, officers, employees or legal advisers.

78    Those orders, it is considered, would be too broad. However, in its post-hearing further written submissions, American Express also sought (in the alternative) more specific orders. The order sought against Mrs Herbert was in the following terms:

Denise Faasegi Herbert is prohibited from instituting in the Federal Court of Australia any proceeding in which any relief is sought:

a)    against American Express Australia Limited, or any of its related entities, officers, employees and legal advisers; and

b)    because of circumstances arising from the employment of Denise Faasegi Herbert by American Express Australia Limited including, without limitation:

i)    the circumstances of the termination of her employment;

ii)    the payment or non-payment of any insurance or superannuation benefit;

iii)    any payment made by American Express Australia for the purpose of seeking to comply with an garnishee order issued by any court;

iv)    any circumstance which gives rise to an allegation that American Express Australia Limited has done, or has failed to do, anything which makes it the subject of any claim (whether based on breach of contract, tort or any other cause of action).

An order addressed to Mr Herbert in the same terms was also sought.

79    Orders substantially in those terms, it is concluded, should be made. However, it is considered that it should be expressed in those orders that the prohibition only applies “without prior leave of the Court”, notwithstanding the provisions in s 37AR of the Federal Court Act which permit a person subject to a vexatious proceedings order to seek leave to institute a proceeding.

80    In the case of National Mutual, one of the order which it seeks against Mrs Herbert is in the following terms:

the applicant be prohibited from instituting further proceedings against The National Mutual Life Association of Australia Limited (NMLA) or AMP Life Limited (AMPL) in respect of or relating to her claim for benefits under the group life policy of insurance issued by NMLA to the second respondent, Policy Number GL21378,21087 without prior leave of the Court;

The corresponding order which it seeks against Mr Herbert is in the following terms:

Stephen Noel Herbert be prohibited from instituting further proceedings against NMLA or AMPL in respect of or relating to the applicant’s claim for benefits under the group life policy of insurance issued by NMLA to the second respondent, Policy Number GL21378,21087 without prior leave of the Court.

81    Orders in those terms, it is concluded, should be made.

MRS HERBERT’S INTERLOCUTORY APPLICATIONS

82    Given that the pleading is to be struck out, it is unnecessary to resolve the Interlocutory Application filed by Mrs Herbert on 26 June 2018 seeking the immediate release of monies.

83    Mrs Herbert did not press the Interlocutory Application filed on 10 August 2018 at the hearing seeking (inter alia) that the Court be reconstituted.

CONCLUSIONS

84    Mr Herbert should not be granted leave to appear for and make submissions on behalf of his wife, the current Applicant.

85    The present proceeding, it is respectfully concluded, is “vexatious” within the meaning of and for the purposes of r 26.01 of the Federal Court Rules and it is concluded that judgment should be entered against Mrs Herbert and in favour of all three Respondents.

86    When questioned as to what it was that she sought to achieve in the present proceeding, Mrs Herbert frankly accepted that she sought a different result on the merits of her claims. But those merits have previously been considered and resolved against her.

87    In making an order that judgment should be entered in favour of all Respondents against Mrs Herbert, it should be further noted that a reasonable state of satisfaction has been reached that no prejudice is thereby occasioned to Mrs Herbert. To the extent that some potential cause of action may possibly be discerned from the confusing mass of allegations advanced for consideration, the Court can be reasonably satisfied that – on any view of the facts – Mrs Herbert would not have been able to frame any cause of action that would have given her any greater prospects of success than she has previously achieved and no greater prospects of recovering any monetary sum greater than that offered by American Express.

88    Orders should also be made pursuant to s 37AO(2) of the Federal Court Act prohibiting both Mr and Mrs Herbert from instituting proceedings of the “particular type” described.

89    An order should also be made pursuant to s 20(5)(a) of the Federal Court Act substituting AMP Life as the Third Respondent in lieu of National Mutual. That order should contain a notation regarding the transfer of the relevant part of the business of National Mutual to AMP pursuant to the scheme approved by this Court.

90    The written submissions filed by the parties after judgment was reserved have been considered. A more recent application made by email from Mr Herbert to the Court on 18 October 2018 to adduce further evidence, without apparently disclosing to the other parties the making of such an application, has been understood to be either withdrawn or not pressed.

91    There is no reason why Mrs Herbert should not be ordered to pay the costs of the Respondents with respect to the Application and the Interlocutory Applications. Both Mr and Mrs Herbert should pay the costs of the Cross-claims.

THE ORDERS OF THE COURT ARE:

(1)    Subject to Order 2, the parties are to bring in agreed Short Minutes of Orders to give effect to these reasons within 14 days.

(2)    In the absence of agreement:

(a)    the parties are to file such Short Minutes of Orders as are sought within 21 days; and

(b)    the resolution of the form of Orders to be made will thereafter be resolved on the papers.

Associate:

Dated:    21 November 2018