De Varda v Austin (No 3)

1. [1]

   THE COURT:

2. [2]

   The dismissal of the proceedings followed the filing of a notice of motion by the Second–Fourth Defendants on 4 June 2018. That notice of motion sought the following orders:

   1. (1)

      That, upon the undertaking of the Second Defendant (a solicitor) to pay the filing fee, leave be granted to the Second, Third and Fourth Defendants to file in Court this Notice of Motion.

   2. (2)

      That this Notice of Motion be returnable instanter.

   3. (3)

      The proceedings be stayed whilst ever the Plaintiffs are not represented by an Australian Legal Practitioner within the meaning of s 6 of the Legal Profession Uniform Law 2014 (NSW).

   4. (4)

      If the Plaintiffs have not secured representation by an Australian Legal Practitioner by 30 August 2018, the proceedings be permanently stayed or dismissed.

   5. (5)

      Either party has leave to relist the matter on three days' notice.

   6. (6)

      In the event that the Plaintiffs obtain representation by an Australian Legal Practitioner prior to 30 August 2018 the matter be relisted, in accordance with the liberty granted to either party, for directions with respect to the application for the relief in prayers 7 to 12 of this Notice of Motion.

   7. (7)

      The proceeding be dismissed pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 13.4(1)(a), (b) and/or (c).

   8. (8)

      Alternatively, an order that the Statement of Claim filed on 7 May 2018 be struck out pursuant to UCPR r 14.28(1).

   9. (9)

      Further, in the alternative, a vexatious proceedings order pursuant to s 8 of the Vexatious Proceedings Act 2008 (NSW), staying the proceedings.

   10. (10)

       A vexatious proceedings order pursuant to s 8 of the Vexatious Proceedings Act, prohibiting the Plaintiffs from instituting proceedings in New South Wales against any of the Defendants.

   11. (11)

       An order that the Plaintiffs pay the costs of the proceeding including of this notice of motion, on an indemnity basis, and that those costs be assessable and payable forthwith pursuant to UCPR r 42.7(2).

   12. (12)

       Such further or other orders as the Court sees fit.

3. [3]

   On 1 June 2018, the solicitor for the Second–Fourth Defendants had sent a letter to each of the Plaintiffs enclosing a draft notice of motion, indicating that on 4 June 2018 relief would be sought from the duty judge in terms of prayers 1−6 of the draft notice of motion.

4. [4]

   Prayers 1−6 of the draft notice of motion corresponded to prayers 3–8 of the notice of motion filed on 4 June 2018 and which we have set out in [2] above. Significantly for present purposes, prayers 1–6 of the draft notice of motion did not include the orders (orders 9 and 10 of the notice of motion filed on 4 June 2018) seeking relief under the Vexatious Proceedings Act.

5. [5]

   The notice of motion filed on 4 June 2018 came on for hearing before Pembroke J on 8 June 2018. The Second Plaintiff, Rabbi Tov-Lev did not appear before the Court on either 4 or 8 June 2018. He was overseas at that time.

6. [6]

   Not only did Pembroke J dismiss the proceedings (as we have already indicated) but he made the following two further orders:

7. [7]

   It will immediately be observed that these orders were made notwithstanding that the Plaintiffs had been informed on 1 June 2018 that, notwithstanding that orders to this effect were included in the draft notice of motion, they were not amongst the orders that were to be sought when the notice of motion was returned before the duty judge in the following week. Parenthetically, counsel for the Second–Fourth Respondents took issue with the description of the synagogue as the “Holocaust Synagogue at Strathfield” submitting that the synagogue is properly named the “Strathfield and District Hebrew Congregation Synagogue”.

8. [8]

   At an early point in time in the hearing of the notice of motion on 8 June 2018, the following exchange occurred between counsel then appearing for the Second–Fourth Defendants and Pembroke J:

9. [9]

   Counsel’s response was consistent with the position that had been conveyed in the letter of 1 June 2018 to which we have referred above, the effect of which was that the Plaintiffs had been told that, insofar as the draft notice of motion sought orders under the Vexatious Proceedings Act, those orders would not be sought immediately.

10. [10]

    Counsel for the Second–Fourth Defendants then completed his submissions in support of the dismissal application. Counsel for the First Defendant, who had filed a separate notice of motion seeking a stay of proceedings pending the payment of certain outstanding costs orders from earlier proceedings, then made submissions. Mr De Varda was then called upon to reply.

11. [11]

    Later in the transcript, at p 36, Pembroke J indicated to counsel for the Second–Fourth Defendants that he “ha[d] no problem with your claim for relief in prayer 7 of your notice of motion”. This was the prayer seeking dismissal of the proceedings. Counsel for the Second–Fourth Defendants then said the following:

12. [12]

    Five points are apparent:

Primary judge’s judgment

1. [13]

   His Honour commenced his decision by noting that the proceedings involved opposing factions associated with the Strathfield and District Hebrew Congregation and a dispute involving that congregation’s Synagogue at Strathfield.

2. [14]

   In [3] of his judgment, Pembroke J noted that “the [P]laintiffs filed a statement of claim on 7 May 2018, which is lengthy, detailed and clearly obsessive. It is the latest in a series of proceedings commenced by the [P]laintiff.” His Honour then proceeded to summarise background or underlying events which included a number of earlier proceedings which had been brought by the Plaintiffs in conjunction with various other persons. At [5]–[6], his Honour said:

3. [15]

   His Honour then reviewed the history of various sets of proceedings between 2011-2013, as well as bankruptcy proceedings brought by the Fourth Defendant against the Plaintiffs in the Federal Court in 2013-2014. His Honour then turned to the 2018 proceedings which had been commenced on 7 May and said the following:

4. [16]

   At [28] his Honour said:

5. [17]

   His Honour then went on to say:

6. [18]

   Regrettably a similar characterisation may be given to Pembroke J’s analysis in the present case. More significantly, however, for present purposes is the fact that the Plaintiffs were simply not heard in relation to the orders that were made under the Vexatious Proceedings Act. This was in contravention of s 8(3) of that Act which provides that “[a]n authorised 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”.

7. [19]

   That the Plaintiffs had not been heard and had not been given an opportunity of being heard was accepted by senior counsel appearing for the Second–Fourth Respondents on the appeal to this Court and was similarly accepted by counsel for the First Respondent. Indeed, in their written submissions in this Court, the Second–Fourth Respondents accepted that “the primary judge erred by not following the procedures required by the Vexatious Proceedings Act including, but not limited to, by not giving the [A]ppellants the opportunity to be heard”. Later in their submissions they explicitly accepted that what they had defined as the “fair hearing ground” “must be upheld”. Those submissions accepted that the Second Plaintiff, not being at the hearing on either 4 or 8 June 2018, was not heard in relation to the proposed orders and that the First Plaintiff was not put on notice that vexatious proceedings orders would be sought against him on 8 June. They also accepted that the transcript of the hearing on 8 June 2018 indicated that the First Plaintiff made submissions generally about the entirety of the proceedings but did not make and was not invited to make submissions specifically about whether a vexatious proceedings order should be made against him.

8. [20]

   Notwithstanding their acceptance of the primary judge’s failure to comply with s 8(3) of the Vexatious Proceedings Act and the denial of procedural fairness, it was nevertheless submitted on behalf of the Second–Fourth Respondents that “the requirements of natural justice could have made no difference to the outcome and accordingly it would be futile to order a new hearing of the application” and that “the Court should find that a properly conducted hearing could not possibly have produced a different result”. In support of this submission, reference was made to the High Court’s decision in Stead v State Government Insurance Commission (1986) 161 CLR 141 at 147; [1986] HCA 54 (Stead). In oral submissions, however, senior counsel for the Second–Fourth Respondents retreated somewhat from her reliance on Stead in circumstances where the terms of s 8(3) of the Vexatious Proceedings Act proscribed the making of a vexatious proceedings order where a person had not been heard or given an opportunity of being heard. That retreat was, in our opinion, both justified and appropriate.

9. [21]

   Even without s 8(3) of the Vexatious Proceedings Act, however, there would have been a material denial of procedural fairness. As was the case in Nobarani v Mariconte [2018] HCA 36; 359 ALR 31 at [40] (Nobarani), the denial of procedural fairness arose from the consequences and effect of altering the focus of the hearing at short notice or, more accurately in the present case, with no notice.

10. [22]

    The Second–Fourth Respondents submitted, in the alternative, that the Court should exercise its powers pursuant to s 75A(10) of the Supreme Court Act 1970 (NSW) as complemented by UCPR r 51.52, after hearing from the Appellants or giving them the opportunity to be heard, and make findings under the Vexatious Proceedings Act, namely that the Appellants had “frequently instituted or conducted vexatious proceedings in Australia” within the meaning of s 8(1) of that Act as well as making orders of the kind in fact made by the primary judge.

11. [23]

    They submitted that such a course would best achieve the overarching purpose stipulated in s 56 of the Civil Procedure Act 2005 (NSW) rather than the remittal of the matter, and urged that this course would be consistent with the approach the Court had taken in previous decisions where the procedures dictated by the Vexatious Proceedings Act had not been properly followed at first instance. They referred, in this regard, to Zepinic in the Court of Appeal, Mahmoud v Attorney General of New South Wales [2017] NSWCA 12 (Mahmoud) and Viavattene v Attorney General (NSW) [2015] NSWCA 44. In particular, reference was made to Payne JA’s observations in Mahmoud at [84]−[86] where his Honour had said:

12. [24]

    In the present case, the course urged upon the Court was not an attractive course for a number of reasons.

13. [25]

    First, the case was unlike a number of the other cases which have come before this Court where the primary judge had worked systematically through the earlier sets of proceedings relied upon and sought to be characterised as vexatious, having had the benefit of argument and submissions from both sides of the record and produced a reasoned judgment, but where the decision was vitiated by some technical error. In the present case, of course, the parties against whom the orders were sought had simply never been heard in relation to the claims for relief under the Vexatious Proceedings Act. Moreover, the review of the earlier sets of proceedings that was engaged in by Pembroke J for the purposes of the dismissal orders was expressed at an extreme level of generality and was exceptionally conclusory in nature, having the same unsatisfactory characteristics of the judgment at first instance in Zepinic, as described by Simpson AJA (see [17] above).

14. [26]

    Secondly, it became apparent that the invitation to this Court effectively to hear, for the first time, an application for orders under the Vexatious Proceedings Act could not be completed in the time allocated for the hearing and would require the appeal to go part-heard. This was because the Second–Fourth Respondents handed up a revised chronology in the course of hearing which, for the first time, added a number of further sets of proceeding to the catalogue of proceedings which they wished to contend were vexatious and supplemented their fairly general written submissions which had been earlier filed with a very large number of references to documentary evidence before the Court said to support their case. Senior counsel for the Second–Fourth Respondents properly recognised that the Appellants, especially in their unrepresented state, could not be expected to deal with and respond to that far more granular submission on the spot and on the run.

15. [27]

    Thirdly, insofar as it was sought to characterise what the Second–Fourth Respondents sought to occur in this Court as a “rehearing”, it would in truth be a hearing for the first time of their application of 4 June 2018 for orders under the Vexatious Proceedings Act. As Mr A G Martin who appeared as amicus curiae pointed out in submissions, the Second–Fourth Defendants had never in fact moved for relief under the Vexatious Proceedings Act and the primary judge could not be said, in substance, to have conducted a hearing in relation to that matter in circumstances where the Plaintiffs had simply not been heard.

16. [28]

    Fourthly, to the extent that reliance was placed on s 56 of the Civil Procedure Act, the work which has been done by the Second–Fourth Defendants in support of their submissions that orders should be made under the Vexatious Proceedings Act will not have been wasted. They will be able to take advantage of that work if they move for the relief set forth in prayers 9, 10 and 11 of their notice of motion of 4 June 2018 before a judge of the Equity Court. As will be plain from what has been said above, relief under those prayers has never in fact been sought. Further, as the High Court said in Nobarani at [42], “[s]peed and frugality are often closely associated. But they must be consistent with justice.”

17. [29]

    Fifthly, counsel for the First Respondent, who otherwise supported the position of the Second–Fourth Respondents, recognised in oral submissions that relief under the Vexatious Proceedings Act would most properly fall to be considered by a judge at first instance, in an orderly hearing, with the benefit of full submissions as opposed to being dealt with, on the run in a part-heard proceeding, in the Court of Appeal. We agree.

18. [30]

    Sixthly, in the event that this Court were to hear, for the first time, the application for orders under the Vexatious Proceedings Act, any challenge to orders made by this Court by way of appeal could only be obtained with the benefit of a grant of special leave to appeal by the High Court cf. an application to set aside orders pursuant to s 9 of the Vexatious Proceedings Act. The Appellants would, in those circumstances, be deprived of a right of appeal to this Court which they would otherwise enjoy.

19. [31]

    For the above reasons, it was not appropriate to embark upon the exercise sought by the Second–Fourth Respondents in this Court. It may very well be that they have a powerful case for orders under the Vexatious Proceedings Act and there has undoubtedly been a long history of dispute between them and the Appellants which has no doubt produced much anxiety, cost and distraction on their part. But there must be an orderly and fair hearing if the exceptional relief they seek under the Vexatious Proceedings Act is to be granted.

20. [32]

    Subject to competing urgent matters, any application they make for orders under the Vexatious Proceedings Act should be dealt with expeditiously by a judge at first instance in the Equity Division of the Court.

Status of dismissal of proceedings

1. [33]

   The Appellants had originally sought leave to appeal not only from the orders under the Vexatious Proceedings Act but also from Pembroke J’s decision to dismiss the proceedings. In earlier proceedings in this Court before Beazley P (De Varda v Austin [2018] NSWCA 263), the President declared that the summons seeking leave to appeal filed 7 September 2018, insofar as it sought leave to appeal from the order dismissing the 2018 proceedings, stands dismissed pursuant to s 13(3) of the Vexatious Proceedings Act. Her Honour’s reasons for making this order were set out in [29]−[34] of her judgment as follows:

2. [34]

   It may be noted that the balance of the summons for leave to appeal, namely that which challenged the decisions under the Vexatious Proceedings Act, was treated as not being caught by s 13(3): see Beazley P’s judgment at [36]; Mahmoud at [7]; and Potier v Attorney General in and for the State of New South Wales (2015) 89 NSWLR 284; [2015] NSWCA 129 at [47].

3. [35]

   The consequence of this Court’s conclusion that the orders made by Pembroke J under the Vexatious Proceedings Act should not have been made is that the basis on which Beazley P made her order dismissing the summons for leave to appeal insofar as it related to the dismissal of the 2018 proceedings falls away. That order, however, still stands as does the order of Pembroke J dismissing those proceedings.

4. [36]

   In practical terms, it would be open to the Appellants either to move to set aside that order and renew their application for leave to appeal from the dismissal order or to make a fresh application for leave to appeal coupled with an application for an extension of time to do so in relation to the dismissal. Any such application, however, would face a number of challenges given that the statement of claim in the 2018 proceedings the subject of Pembroke J’s dismissal order is prolix, argumentative, contains serious allegations of forgery and fraud which do not appear to be satisfactorily particularised, is repetitive and conclusory.

5. [37]

   Finally, the Court records its gratitude to Mr A G Martin of counsel who acted as amicus curiae. His careful oral and written submissions facilitated the hearing of the appeal.