Mehajer v SC Lowy Primary Investments Pty Ltd

1. [1]

   Before the Court is a notice of motion, filed by the first, second, third, fourth, fifth and fourteenth defendants (for convenience, “the defendants”) on 11 May 2020, seeking orders under the Vexatious Proceedings Act 2008 NSW declaring the plaintiff (Salim Mehajer), referred to in these reasons as Mr Mehajer, as a vexatious litigant.

2. [2]

   The sixth, eighth and ninth defendants appeared by counsel to support the defendants’ motion and to invite the Court to make orders under the Vexatious Proceedings Act protective of their interests.

3. [3]

   The eleventh, twelfth and thirteenth defendants appeared by a solicitor to inform the Court that they did not wish to be heard on the defendants’ motion. At their request, they were excused from further attendance on the hearing of the motion.

4. [4]

   The principal proceedings (numbered 2020/00108037) began by way of a statement of claim filed by the Mr Mehajer on 9 April 2020 seeking, inter alia, orders that the seventeen named defendants collectively pay him damages of approximately $52,000,000 for wrongs allegedly done to him in the course of commercial dealings in or about 2016.

5. [5]

   On 18 December 2020, Mr Mehajer accepted that the statement of claim filed on 9 April 2020 was in a form that could not be maintained and ought to be struck out. Accordingly, I made orders striking out the statement of claim and reserving liberty to him to apply for leave to file an amended statement of claim.

6. [6]

   I also made orders on 18 December 2020 that the claims for relief under the Vexatious Proceedings Act be heard and determined separately from any other question to be determined in the proceedings.

BACKGROUND

1. [7]

   The current proceedings, and many of the other proceedings considered in this judgment, have their origins in the same set of commercial dealings, in or about 2016, involving Mr Mehajer and various parties including many of the defendants in the current proceedings.

2. [8]

   Mr Mehajer was the sole shareholder of S.E.T Services Pty Limited and Sydney Project Group Pty Limited, the registered proprietors of properties at 36-44 John Street, Lidcombe NSW. This site was proposed to be developed into a mixed residential and commercial development known as “SkyPoint Tower”.

3. [9]

   The first defendant (“SC Lowy”), by a Syndicated Construction Loan Note Subscription Agreement dated 29 April 2016 (“the Loan Note”), became the lender through which finance was provided for the construction of SkyPoint Tower.

4. [10]

   The second defendant (“LIM Opportunistic Fund”) lent part of the sum that was the subject of the Loan Note by a separate commercial agreement with SC Lowy.

5. [11]

   The third defendant (“Auckland LID”) was the borrower to which funds were advanced under the Loan Note. Both S.E.T Services Pty Limited and Sydney Project Group Pty Limited guaranteed the obligations of Auckland LID under the Loan Note. Those guarantees were secured by a General Security Deed dated 29 April 2016 and real property mortgages dated 29 April 2016.

6. [12]

   On 22 December 2017, the creditors of S.E.T Services Pty Limited and Sydney Project Group Pty Limited resolved that each of the two companies be placed in liquidation.

7. [13]

   The fourteenth defendants (Todd Andrew Gammel and Barry Anthony Taylor) were appointed as joint and several receivers and managers of S.E.T Services Pty Limited and Sydney Project Group Pty Limited on 16 June 2017 by virtue of the two companies defaulting on security provided.

8. [14]

   Mr Mehajer was declared bankrupt on 20 March 2018 and a trustee in bankruptcy was appointed. Mr Mehajer remains an undischarged bankrupt.

9. [15]

   Mr Mehajer blames SC Lowy and other defendants for conduct which, he says, caused him to be unable to pay the petitioning creditors on whose application he was declared bankrupt.

10. [16]

    In the current proceedings, as in earlier proceedings, Mr Mehajer has advanced serious allegations about the conduct of the defendants in the commercial dealings here outlined. Those allegations have been ventilated at length in earlier proceedings and have been either abandoned by Mr Mehajer or made the subject of findings adverse to him.

11. [17]

    Further details of earlier proceedings that form the background of the current proceedings are set out below. They inform the Court’s determination under the Vexatious Proceedings Act.

PRINCIPLES GOVERNING A VEXATIOUS PROCEEDINGS ORDER

1. [18]

   Section 8(1)(a) of the Vexatious Proceedings Act provides that an authorised court may make a vexatious proceedings order in relation to a person if the court is satisfied that “the person has frequently instituted or conducted vexatious proceedings in Australia.”

2. [19]

   Section 8(2) is in the following terms:

3. [20]

   Section 3 provides that the Supreme Court of NSW is an “authorised court”.

4. [21]

   Section 4 defines “proceedings” to include:

5. [22]

   Section 6 defines “vexatious proceedings” to include:

6. [23]

   If satisfied of the matters set out in section 8(1) the court may make any one or more of the orders set out in section 8(7) as follows:

7. [24]

   In Zepinic v Chateau Constructions (Aust) Limited [2018] NSWCA 317 at [13]-[15], Simpson AJA (with whom McColl and Macfarlan JJA agreed) set out the steps necessary for determining an application for orders under the Vexatious Proceedings Act:

IDENTIFIED PROCEEDINGS

1. [25]

   The defendants have identified ten proceedings as “vexatious proceedings” commenced and pursued by Mr Mehajer:

   1. (1)

      An appeal from a judgment of Robb J in In the matter of Sydney Project Group Pty Limited (Administrators Appointed) (Receivers and Managers Appointed) [2017] NSWSC 881, referred to in these reasons as “the Court of Appeal Proceedings”;

   2. (2)

      An application by Mr Mehajer to annul his bankruptcy commenced in the Federal Court of Australia in April 2018, referred to in these reasons as “the First Annulment Application”;

   3. (3)

      A further application by Mr Mehajer to annul his bankruptcy, heard by Lee J in the Federal Court of Australia in October 2019, culminating in a judgment styled Mehajer v Weston in his capacity as trustee of the bankrupt estate of Salim Mehajer [2019] FCA 1713, referred to in these reasons as “the Second Annulment Application”;

   4. (4)

      An application by Mr Mehajer for an extension of time to appeal against orders regarding the vesting of certain property in his Trustee, heard by Markovic J in the Federal Court of Australia, culminating in a judgment styled Mehajer (A Bankrupt) v SC Lowy Primary Investments Ltd (A Company Incorporated in Hong Kong) [2020] FCA 125, referred to in these reasons as “the First EOT Application”;

   5. (5)

      An application by Mr Mehajer for an extension of time to appeal against orders made by Lee J in the Second Annulment Application, heard by Markovic J in the Federal Court of Australia, culminating in a judgment styled Mehajer (Bankrupt) v Weston (Trustee) [2020] FCA 596, referred to in these reasons as “the Second EOT Application”;

   6. (6)

      An application by Mr Mehajer to review a decision by his Trustee that certain cash was after-acquired property, heard by Rares J in the Federal Court of Australia, culminating in a judgment styled Mehajer v Weston [2020] FCA 924, referred to in these reasons as “the Trustee Review Application”;

   7. (7)

      An application by Mr Mehajer for the removal of a caveat lodged by Portcullis Capital Pty Limited on the title of a property of which Mr Mehajer was the registered proprietor, referred to in these reasons as “the Portcullis Proceeding”;

   8. (8)

      Defamation proceedings initiated by Mr Mehajer against Seven West Media seeking damages for publication of certain materials, heard by Gibson DCJ, culminating in a judgment styled Mehajer v Seven West Media [2021] NSWDC 379, referred to in these reasons as “the Seven West Media Proceeding”;

   9. (9)

      An email on 7 October 2021 from an agent of Mr Mehajer making procedural applications four days before the listed commencement of the current proceedings, referred to in these reasons as “the Sydney Building Email”;

   10. (10)

       The current proceedings, commenced by the statement of claim filed on 9 April 2020.

VEXATIOUSNESS

1. [26]

   It is necessary to look to each of the allegedly vexatious proceedings individually rather than taking a global view of the effect of all of the proceedings: Zepinic v Chateau Constructions (Aust) Limited [2018] NSWCA 317 at [17]-[19]; Mahmoud v Attorney General of New South Wales [2017] NSWCA 12 at [49].

2. [27]

   In reaching a conclusion, I am entitled to take into account the result of each of the proceedings and the views expressed in judgments published in those proceedings: Attorney General of NSW v Wilson [2010] NSWSC 1008 at [22] citing Attorney-General of NSW v Croker [2010] NSWSC 942 at [125].

3. [28]

   The Court of Appeal Proceeding was an appeal brought by Mr Mehajer against the decision of Robb J in In the matter of Sydney Project Group Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) and S.E.T. Services Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) [2017] NSWSC 881.

4. [29]

   The proceedings before Robb J were initiated by the Administrators of Sydney Project Group Pty Ltd and S.E.T Services Pty Ltd seeking declarations that they had been validly appointed as Administrators to these companies. Robb J made the declaration sought pursuant to section 447C of the Corporations Act 2001 Cth.

5. [30]

   The Court of Appeal Proceeding was abandoned within approximately fifteen minutes of the commencement of the hearing after counsel for Mr Mehajer accepted that the grounds of appeal, and thus the appeal itself, must fail.

6. [31]

   Mr Mehajer submits, in the current proceedings, that the Court of Appeal Proceeding cannot be deemed vexatious as the matter at first instance was not initiated by him.

7. [32]

   Section 5(1)(d) of the Vexatious Proceedings Act provides:

   1. (1)

      In this Act, institute, in relation to proceedings, includes:

8. [33]

   Mr Mehajer can be described as having “initiated” the Court of Appeal Proceeding.

9. [34]

   I am satisfied, by virtue of being abandoned almost immediately at the hearing, that the Court of Appeal proceedings were initiated by Mr Mehajer without reasonable grounds and can be said to have been vexatious by operation of section 6(c) of the Vexatious Proceedings Act.

10. [35]

    The First Annulment Application was brought by Mr Mehajer seeking an order for the annulment of his bankruptcy pursuant to section 153B(1) of the Bankruptcy Act 1966 Cth.

11. [36]

    Mr Mehajer also sought interim orders that, inter alia, a sequestration order made against him on 20 March 2018 be stayed.

12. [37]

    Lee J dismissed Mr Mehajer’s interim application.

13. [38]

    At the final hearing of the First Annulment Application on 21 June 2018, counsel for Mr Mehajer informed Lee J that he was instructed to seek an adjournment of the hearing. Lee J inquired of counsel whether there was any cogent evidence to put Mr Mehajer’s solvency in issue. The following excerpt from the transcript of the hearing outlines the lack of evidence able to be put forward relating to what was sought by Mr Mehajer (Transcript, 21 June 2018, p 44-45):

14. [39]

    A finding that the First Annulment Application was brought without reasonable grounds (which I make) is reinforced by the course of events leading to the judgment of Lee J, in the Second Annulment Application.

15. [40]

    On 2 July 2019, Mr Mehajer filed another Originating Application in the Federal Court of Australia seeking, inter alia, orders annulling his bankruptcy under s153B(1) of the Bankruptcy Act. An amended application was filed on 19 July 2019 dispensing with any claim for interim relief.

16. [41]

    The Second Annulment Application was heard by Lee J on 8, 9 and 10 October 2019. Lee J dismissed the Second Annulment Application on 10 October 2019 and noted at [17] and [18] that:

17. [42]

    Mr Mehajer also contended that, notwithstanding a finding about his solvency, the hearing relating to the sequestration order ought to have been adjourned because he had access to sources of funds which he would have used to pay the claim of the petitioning creditor and other various creditors.

18. [43]

    Lee J dealt with this submission at [38] to [47] of his reasons. His Honour determined that these claimed sources of funding were insufficient to displace a finding that Mr Mehajer was insolvent, and his claimed litigation assets were of “no value whatsoever.”

19. [44]

    The litigation assets referred to in the Second Annulment Application bear resemblance to the claims pursued by Mr Mehajer in the current proceedings.

20. [45]

    It was found, at [65] of Lee J’s reasons, that:

21. [46]

    It flows from the finding of Mr Mehajer having been “hopelessly insolvent” that both the First Annulment Application and the Second Annulment Application were pursued without reasonable grounds and can be said to have been vexatious by operation of section 6(c) of the Vexatious Proceedings Act. By reason of Mr Mehajer’s hopeless insolvency it can be said that any application to annul a sequestration order made against him was “foredoomed to fail”: Walton v Gardiner (1993) 177 CLR 378 at 393.

22. [47]

    By an Originating Application filed in the Federal Court of Australia on 12 October 2018, SC Lowy sought an order that certain property had vested in the Trustee on the date that Mr Mehajer became bankrupt or, alternatively, had subsequently vested in the Trustee by operation of section 58 of the Bankruptcy Act. The property included causes of action alleged by Mr Mehajer against SC Lowy and other defendants in the current proceedings. Those alleged causes of action are largely reflected in the allegations made by Mr Mehajer in the current proceedings.

23. [48]

    On 25 January 2019, Lee J delivered an ex tempore judgment in favour of SC Lowy.

24. [49]

    On 11 October 2019, Mr Mehajer filed an Application for Extension of Time and Leave to Appeal in respect of Lee J’s orders of 25 January 2019. On 2 January 2020, he filed an Amended Application for Extension of Time and Leave to Appeal. This application constitutes the First EOT Application. It was dealt with in Mehajer (A Bankrupt) v SC Lowy Primary Investments, Ltd (A Company Incorporated in Hong Kong) [2020] FCA 125.

25. [50]

    In the affidavit filed with the First EOT Application Mr Mehajer identified his grounds of appeal as being “Arising Fresh Evidence” and “New Witnesses who have come forward in support of the Appellant.”

26. [51]

    Mr Mehajer did not appear at the hearing of the First EOT Application on 4 February 2022. Markovic J accepted that it was patently clear from the correspondence that Mr Mehajer was aware of the listing and as such did not adjourn the proceedings.

27. [52]

    Markovic J determined that there was no explanation for Mr Mehajer’s delay in filing the application and that, even if that issue was put aside, the proposed appeal had no reasonable prospects of success. Her Honour noted at [37]:

28. [53]

    Mr Mehajer submits in the current proceedings that the First EOT Application cannot be deemed vexatious as it only relates to an application for appeal whilst out of time and does not constitute an actual appeal.

29. [54]

    This submission is contrary to section 5(1)(d) of the Vexatious Proceedings Act, which includes the “taking of a step … necessary to start an appeal” in the definition of instituting proceedings.

30. [55]

    Having regard to the reasoning of Markovic J, I am satisfied that the First EOT Application was initiated without reasonable grounds and can be said to be vexatious by operation of section 6(c) of the Vexatious Proceedings Act.

31. [56]

    The Second EOT Application was initiated by Mr Mehajer on 30 December 2019, by way of an Application for Extension of Time to file a notice of appeal in respect of the orders made by Lee J in the Second Annulment Application. The Second EOT Application was dealt with in Mehajer (Bankrupt) v Weston (Trustee) [2020] FCA 596.

32. [57]

    The affidavit of Mr Mehajer filed with the Second EOT Application identified his grounds of appeal as “Arising Fresh Evidence” and “New Witnesses who have come forward in support of the Appellant.” These are the same named grounds of appeal that were raised but left unelaborated in the First EOT Application.

33. [58]

    Markovic J held that Mr Mehajer had not provided an acceptable explanation for his delay in filing the application, regardless of the fact that it was not an extensive delay. Her Honour also concluded that the proposed appeal lacked merit and did not have reasonable prospects of success.

34. [59]

    As with the First Annulment Application and the Second Annulment Application, the Second EOT Application can be said to have been “foredoomed to fail” in relation to Mr Mehajer’s insolvency as at the date of the sequestration order on 20 March 2018: Walton v Gardiner (1993) 177 CLR 378 at 393.

35. [60]

    I am satisfied that the Second EOT Application was initiated without reasonable ground and can be said to be vexatious by operation of section 6(c) of the Vexatious Proceedings Act.

36. [61]

    The Trustee Review Application was initiated by Mr Mehajer seeking a review of the decision of his Trustee to claim $6,530 in cash that was seized by NSW Police during a search warrant at Mr Mehajer’s home.

37. [62]

    Rares J concluded that Mr Mehajer had failed to adduce any evidence that the Trustee erred in concluding that the $6,530 was after-acquired property that vested in the Trustee pursuant to section 58 of the Bankruptcy Act.

38. [63]

    Rares J noted at [31] of his reasonings that:

39. [64]

    Mr Mehajer appears to have initiated the Trustee Review Application without any explanation as to the origin of the cash seized by NSW Police and pursued his application without propounding any ground which could reasonably have been regarded as tainting the decision of the Trustee.

40. [65]

    I am satisfied that the proceedings were initiated and pursued without reasonable ground and can be said to be vexatious pursuant to section 6 of the Vexatious Proceedings Act.

41. [66]

    On 26 August 2020, Mr Mehajer initiated the Portcullis Proceeding in the Federal Court of Australia seeking orders for the removal of a caveat lodged by Portcullis on the title of a property of which Mr Mehajer was the registered proprietor.

42. [67]

    SC Lowy was named as the fourth respondent in the Portcullis Proceeding despite the facts that:

43. [68]

    On 11 September 2020, Rares J made an order granting Mr Mehajer leave to file and serve an amended originating application removing SC Lowy as a respondent.

44. [69]

    Given the lack of connection between SC Lowy and the subject matter of the Portcullis Proceeding, the Portcullis Proceeding can be said to have been utilised by Mr Mehajer as a vehicle to vex, harass and annoy SC Lowy and impose on it further harassment and annoyance.

45. [70]

    The Portcullis Proceeding can thus be said to have been vexatious by operation of section 6(b) of the Vexatious Proceeding Act.

46. [71]

    If a subjective vexatious intent on the part of Mr Mehajer is not to be inferred, it is nonetheless apparent that the Portcullis Proceeding was conducted in a way that did objectively harass and cause unreasonable annoyance to SC Lowy. I am therefore satisfied that the Portcullis Proceeding was vexatious by operation of section 6(d) of the Vexatious Proceeding Act.

47. [72]

    On 29 April 2020, Mr Mehajer commenced defamation proceedings in the District Court of NSW against Seven West Media seeking damages for the publication of three sets of materials.

48. [73]

    On 5 August 2021, Gibson DCJ published a judgment summarily dismissing the proceedings. Gibson DCJ’s judgment details Mr Mehajer’s conduct between the filing of the statement of claim on 29 April 2020 and the handing down of judgment on 5 August 2021.

49. [74]

    The following details of the Seven West Media Proceeding, relevant to a declaration of it having been vexatious, are taken from Gibson DCJ’s reasons for judgment:

    1. (1)

       Paragraphs [4] and [5] of the judgment detail extensive defects with Mr Mehajer’s initial statement of claim and explain that the defects were explained to Mr Mehajer on multiple occasions;

    2. (2)

       Paragraphs [8] and [9] detail that Mr Mehajer was ordered to serve an amended statement of claim on five separate occasions and failed to comply with any of those orders;

    3. (3)

       Paragraph [13] details that, on 5 July 2021, Mr Mehajer sent an unfiled amended pleading to the solicitors for Seven West Media;

    4. (4)

       Paragraph [14b] outlines that the unfiled amended pleading failed to satisfy even simple requirements, such as attaching a transcript of the matter complained of and distilling the imputations pleaded;

    5. (5)

       Paragraph [23] details extensive defects in Mr Mehajer’s unfiled amended pleading; and

    6. (6)

       Paragraph [35] characterises Mr Mehajer’s delays as being a “deliberate choice”, and describes him as a “reluctant gladiator” citing Bi v Mourad [2010] NSWCA 17.

50. [75]

    I am satisfied upon reading Gibson DCJ’s judgment that Mr Mehajer conducted the proceeding in a manner which harassed, caused unreasonable annoyance, delay or detriment within the meaning of section 6(d) of the Vexatious Proceeding Act.

51. [76]

    On 7 October 2021, four days before the commencement of the hearing in the current proceedings, an email was sent to my staff and representatives of the defendants from an unidentified email address ending in @sydneybuilding.net purporting to have been sent on behalf of Mr Mehajer.

52. [77]

    The Sydney Building Email, in its unamended form, reads as follows:

53. [78]

    During cross-examination, Mr Mehajer confirmed that he had authorised and instructed the sending of the Sydney Building Email and clarified that it mistakenly used the word “summons” in place of the word “subpoena” throughout.

54. [79]

    Counsel for the defendants submit that the Sydney Building Email constituted a procedural application and is therefore a proceeding which can be relied upon in the present application.

55. [80]

    I am satisfied that the Sydney Building Email falls within the definitions of “proceeding” in section 4(d) of the Vexatious Proceedings Act insofar as it is an application for the issuing of subpoenas, to cross-examine witnesses, to amend the timetable of hearing dates, and for an adjournment.

56. [81]

    I am also satisfied that the Sydney Building Email was calculated to annoy the other parties in the current proceedings insofar as it foreshadowed making multiple procedural applications a few days prior to a hearing which had been set down for approximately eight months.

57. [82]

    The current proceedings were initiated by a statement of claim filed by Mr Mehajer on 9 April 2020.

58. [83]

    The statement of claim makes a number of serious allegations against the defendants relating to their conduct in the commercial dealings which ultimately led to Mr Mehajer’s bankruptcy.

59. [84]

    Two main contentions have been advanced by the defendants as pointing to the current proceedings having been initiated without reasonable grounds.

60. [85]

    The first contention of the defendants is that the each of the claims are the subject of two Deeds of Release signed by Mr Mehajer which expressly preclude the claims made in the statement of claim.

61. [86]

    A Deed of Release signed on 15 February 2018, being the second of the two signed Deeds of Release, expressly precludes all but one of the claims in the statement of claim against the defendants. $120,000 was paid to Mr Mehajer as consideration for that Deed of Release.

62. [87]

    The only claim not expressly included in the second Deed of Release is that the defendants caused Mr Mehajer to suffer “nervous shock”. This claim for “nervous shock” did not occur in isolation. It is to be read as alleged to have arisen, directly or indirectly, from the conduct of the defendants which is the subject of a release in the Deeds of Release.

63. [88]

    At some stage during the current proceedings, Mr Mehajer served on the defendants an unfiled originating application seeking to have the Deeds of Release set aside for reasons set out in an unsworn affidavit served simultaneously. This unsworn affidavit does not set out a ground upon which the Deeds of Release might be set aside but rather repeats the allegations against the defendants, states that Mr Mehajer was not receiving treatment for Bipolar Disorder, and sets out various threats that were made by unnamed persons against Mr Mehajer.

64. [89]

    On 22 October 2020, I ordered that Mr Mehajer file and serve points of claim along with any evidence upon which he might rely, in support of the proposition that the Deeds of Release should be set aside. The points of claim filed by Mr Mehajer on 16 November 2020 made no mention of the Deeds of Release and were instead a repetition of the claims within the statement of claim initiating the current proceedings.

65. [90]

    The second contention of the defendants, regardless of any finding about the Deeds of Release, is that any valid claim made by Mr Mehajer has vested in Mr Mehajer’s Trustee by virtue of his bankruptcy.

66. [91]

    Any claim that Mr Mehajer might have against the defendants, being a chose in action, is prima facie property of the bankrupt which has vested in his Trustee pursuant to section 58(1) of the Bankruptcy Act.

67. [92]

    Section 58(1) provides that property vests in the Trustee if, and only if, divisible amongst Mr Mehajer’s creditors. Section 116(1)(a) of the Bankruptcy Act provides that all property vested in Mr Mehajer at the commencement of his bankruptcy, or afterwards, is property divisible amongst his creditors.

68. [93]

    Relevantly, section 116(2)(g) of the Bankruptcy Act provides the following exception:

69. [94]

    Any claim for sufferings as a result of “nervous shock” could be a “personal injury or wrong” done to Mr Mehajer enlivening section 116(2)(g).

70. [95]

    However, any claim for a “wrong” cannot be read in isolation and must be read in the context in which it appears: Daemar v Industrial Commission of NSW (1988) 12 NSWLR 45 at 55.

71. [96]

    In Cox v Journeaux (No 2) (1935) 52 CLR 713 Dixon J at 721 explained that:

72. [97]

    In Bryant v Commonwealth Bank of Australia (1997) 75 FCR 545 at 564, O’Loughlin and Merkell JJ made the following observations:

73. [98]

    Any claim for “nervous shock” in these proceedings, when read in the context in which it arose, derives from or is referable to economic claims which have vested in the Trustee.

74. [99]

    The defendants’ contentions in opposition to the statement of claim point to a finding that the current proceedings were initiated, and subsequently pursued, without any reasonable ground.

75. [100]

    The current proceedings can also be declared vexatious as being an abuse of process pursuant to section 6(a) of the Vexatious Proceedings Act.

76. [101]

    Attempts to re-litigate claims which have already been determined are an abuse of process: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [33] citing Reichel v Magrath (1889) 14 App Cas 665.

77. [102]

    Two major elements of the current proceedings have been previously litigated and determined.

78. [103]

    First, the proceedings at first instance to which the First EOT Application related sought declarations that certain property had vested in Mr Mehajer’s Trustee. That property, in those proceedings, is largely coincident with the claims Mr Mehajer is pursuing in the current proceedings. On 25 January 2019, Lee J made orders that the property had vested in the Trustee.

79. [104]

    The issue of ownership of the choses in action presently being pursued by Mr Mehajer has therefore been previously litigated and determined. The current proceedings are an attempt to re-litigate that which has previously been determined by the Federal Court of Australia, with an additional claim for “nervous shock” added.

80. [105]

    Secondly, the claims proffered by Mr Mehajer in the current proceedings bear resemblance to the claims which were litigated before Lee J in the Second Annulment Proceedings for the purpose of a finding of insolvency, focusing upon whether Mr Mehajer had any litigation assets. Lee J detailed, at [43]-[47] of his reasons for judgment, reasons that the litigation assets were of “no value whatsoever”.

81. [106]

    In pursuing these claims through a different path and under a different label, Mr Mehajer is choosing to ignore, or to attempt to circumvent, the findings of Lee J in his Honour’s determination of the Second Annulment Application. The current proceedings amount to an effort to re-litigate the value of any claim Mr Mehajer has against the defendants in a manner that amounts to an abuse of process.

82. [107]

    I am satisfied that the current proceedings can be declared vexatious pursuant to section 6(a) of the Vexatious Proceedings Act.

FREQUENT

1. [108]

   The making of an order under section 8 of the Vexatious Proceedings Act is predicated upon a court being satisfied that a person has “frequently” instituted or pursued vexatious proceedings.

2. [109]

   The meaning of the word “frequently” as used in section 8(1)(a) of the Vexatious Proceedings Act was considered by Leeming JA (with whom Basten and Meagher JJA agreed) in Potier v Attorney General in and for the State of New South Wales (2015) 89 NSWLR 284 at [114]-[118]:

3. [110]

   The ten proceedings brought in the period between late 2017 and 2021 may be described as a “handful” (or more) of proceedings which have often contained “serious allegations without any proper basis”.

4. [111]

   In Attorney General in and for the State of NSW v Gargan [2010] NSWSC 1192, Davies J said at [7] that the term “frequently” is a “relative term and must be looked at in the context of the litigation being considered.”

5. [112]

   In my opinion the quantity and quality of the proceedings in question meet the threshold for what constitutes “frequently” for the purposes of the making of an order under the Vexatious Proceedings Act.

POWERS CONFERRED BY SECTION 8(7)

1. [113]

   If, once the Court has identified specific proceedings it considers to be vexatious, and it is satisfied of the threshold condition of frequency, then it has a discretion to make a vexatious proceedings order: Quach v New South Wales Health Care Complaints Commission; Quach v New South Wales Civil and Administrative Tribunal [2017] NSWCA 267 at [114] (Gleeson JA, Simpson JA and Sackville AJA agreeing); Mahmoud v Attorney General of New South Wales [2017] NSWCA 12 at [47] (Payne JA, Beazley P and Macfarlan JA agreeing).

2. [114]

   Mr Mehajer has frequently initiated and pursued vexatious proceedings across multiple courts with an ultimate purpose of pursuing repetitive allegations against the defendants and any other party who has become involved in any way with the commercial dealings that culminated in his bankruptcy. I am persuaded that Mr Mehajer will continue to initiate and pursue vexatious proceedings unless an order under the Vexatious Proceedings Act is made.

3. [115]

   After judgment in these proceedings had been reserved, Mr Mehajer sent an email to my Associate on 17 January 2022 seeking leave to re-open his case, and an email to the Supreme Court Registry seeking to file two summonses (to set aside the Deeds of Release) and two affidavits in support of the summonses. That led to the proceedings being relisted before me on 22 February 2022. The materials upon which Mr Mehajer then sought to rely were received and marked for identification. Separate consideration of those materials does not advance these proceedings except insofar as it points to the likelihood that Mr Mehajer will continue to initiate and pursue proceedings in the absence of a vexatious proceedings order.

4. [116]

   I am satisfied that a vexatious proceedings order should be made against Mr Mehajer but a question arises as to whether such an order should be general in its application or include a carve out of persons or subject matters about which Mr Mehajer be prohibited from initiating proceedings: Viavattene v Attorney General (NSW) [2015] NSWCA 44 at [79].

5. [117]

   Mr Mehajer has displayed what appears from time to time to have been a calculated misunderstanding of his legal rights and remedies, and a marked inability, or refusal, to accept judicial decisions which might explain to him what his legal rights and remedies are. It is not practical in these circumstances to define a category of cases which Mr Mehajer ought be prohibited from initiating: Wang v Botany View Hotel (No 4) [2019] NSWSC 1323 at [18].

6. [118]

   Notwithstanding this, as was noted during the course of the hearing of the defendants’ motion, any order prohibiting Mr Mehajer from initiating proceedings ought not to preclude him from initiating or pursuing procedural applications in criminal proceedings.

7. [119]

   The defendants’ Notice of Motion seeks an order under section 8(7)(b) prohibiting Mr Mehajer from instituting any proceedings in any New South Wales court or tribunal, either in his own name or in the name any other person or company, other than with the prior leave of a Judge of this Court under the Act.

8. [120]

   The Notice of Motion also seeks an order under section 8(7)(c) prohibiting Mr Mehajer from serving on any other person any document purporting to be an originating process unless it is accompanied by a copy of the signed order of a Judge of this Court granting leave for him to institute proceedings by that originating process.

9. [121]

   I am satisfied that orders to that effect are suitable in the circumstances and that the discretion to make such orders under section 8(7) ought be exercised.

10. [122]

    It is also appropriate to stay the current proceedings initiated by Mr Mehajer by statement of claim on 9 April 2020 as an abuse of process: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [33] citing Reichel v Magrath (1889) 14 App Cas 665.

11. [123]

    Orders have previously been made in these proceedings striking out Mr Mehajer’s statement of claim and reserving liberty to him to apply for leave to file an amended statement of claim. An order staying the proceedings should now be until further order so that any attempt by Mr Mehajer to seek leave to file an amended statement of claim can be supervised by the Court.

12. [124]

    At the time of the hearing of the proceedings Mr Mehajer was in custody in relation to a serious indictable offense. Any application by Mr Mehajer in the current, or any other, proceedings would, in that context, need to be subject to a grant of leave pursuant to the Felons (Civil Proceedings) Act 1981 NSW.

13. [125]

    The question arises as to whether the fact of Mr Mehajer already being subject to a requirement to seek leave to initiate proceedings should impact on the discretion to make orders under the Vexatious Proceedings Act.

14. [126]

    First, the making of vexatious proceedings orders would extend beyond the date upon which Mr Mehajer might cease to be in custody.

15. [127]

    Secondly, the safeguards surrounding an application for leave under section 16 of the Vexatious Proceedings Act may be considered to be more robust than those in relation to the Felons (Civil Proceedings) Act.

16. [128]

    Section 5 of the Felons (Civil Proceedings) Act provides:

17. [129]

    Section 16(4) of the Vexatious Proceedings Act provides:

18. [130]

    The additional consideration for the Court in section 16(4)(a) of whether any application is a vexatious proceeding, incorporating the definitions in section 6, includes, and ostensibly goes beyond, the test mandated by section 5 of Felons (Civil Proceedings) Act.

19. [131]

    In my opinion, the leave requirements in the Felons (Civil Proceedings) Act are not an impediment to the making of orders under the Vexatious Proceedings Act.

CONCLUSION

1. [132]

   I am conscious that orders made on the defendants’ motion might affect other parties to the principal proceedings and that, accordingly, they should be given notice of the orders proposed to be made in disposition of the motion.

2. [133]

   Subject to allowing all affected parties to the principal proceedings an opportunity to be heard as to the form of orders to be made, and costs, I propose to make orders in the following terms:

   1. (1)

      ORDER that the proceedings initiated by the plaintiff’s statement of claim filed on 9 April 2020 be stayed until further order.

   2. (2)

      ORDER, pursuant to section 8(7)(b) of the Vexatious Proceedings Act 2008 NSW, that the plaintiff, by himself his servants or agents, be prohibited from instituting any proceedings, other than procedural applications in criminal proceedings, in any New South Wales court or tribunal, either in his own name or in the name any other person or company, other than with the prior leave of a Judge of this Court under the Act.

   3. (3)

      ORDER, pursuant to section 8(7)(c) of the Vexatious Proceedings Act 2008 NSW, that the plaintiff, by himself his servants or agents, be prohibited from serving on any other person any document purporting to be an originating process unless it is accompanied by a copy of the signed order of a Judge of this Court granting leave for him to institute proceedings by that originating process.

   4. (4)

      NOTE that, for the purpose of these orders, the plaintiff is to be taken to do something in the name of another person or company if he signs any document in the name of, or purportedly on behalf of, any other person or company, or files, or causes it to be filed, with a court or tribunal, or makes any oral application to any court or tribunal in the name of, or purportedly on behalf of, any other person or company.

   5. (5)

      NOTE that these orders do not prevent the plaintiff’s trustee in bankruptcy from commencing any proceedings in the plaintiff’s name or on the plaintiff’s behalf.

   6. (6)

      ORDER that the plaintiff pay the costs of the defendants in the proceedings, as agreed or assessed.