Toyota Finance Australia Limited v Islam

This is an application for orders against the defendant, Mohammad Rajibul Islam, under the Vexatious Proceedings Act 2008 ("The Act").

There are two plaintiffs who seek the orders. The first plaintiff is Toyota Finance Australia Ltd ("TFAL"). It is a company which operates as a motor vehicle financier.

The second plaintiff is McCarroll's of Moss Vale Pty Ltd ("MMV"). It is a company which operates a motor vehicle dealership trading in new and used motor vehicles.

The origin of the proceedings is a transaction which took place in December 2021. It involved the purchase of a Maserati sports car. The purchase was financed by TFAL, and the car was bought from MMV. The purchaser of the car was a company, Australian Real Estate Relation Pty Ltd ("ARER"). The directors of the company were Mr Islam and his then business partner, Mr Abu Walid Ratul. Both Mr Islam and Mr Ratul guaranteed ARER's liabilities to TFAL under the finance contract.

In February last year, this Court (constituted by Black J) made a winding up order against ARER. Mr David Levi was appointed as the liquidator. Attempts were made by Mr Islam to challenge the winding up orders by way of appeal, but those efforts were unsuccessful.

Mr Levi exercised his power as liquidator to disclaim the finance contract between TFAL and ARER. This resulted in TFAL repossessing the car. TFAL acted on the basis of nonmonetary defaults (the insolvency of ARER). The result of the disclaimer was, no doubt, that ARER ceased to make payments under that contract.

Mr Islam told me in the course of argument that the repossession happened in circumstances which were humiliating to him. Clearly, he considered that TFAL acted wrongly in effecting the repossession. What is less clear is why that should be so. Mr Islam complained of a lack of money, and it does not seem to have been suggested by him at any stage that he would personally meet the payments on the car.

Mr Islam also blames MMV for what happened. Why that is so is even less clear, although the car was in fact repossessed from MMV's service centre where it was undergoing repairs. Mr Islam also apparently claims that an employee of MMV, Ms Jo Mae Purvis, provided information to Mr Levi for the purposes of the liquidation which she should not have.

The plaintiffs' case in the current proceedings is that since the making of the winding up order, Mr Islam has brought or continued a spate of pointless and unmeritorious proceedings against various parties associated with the initial transaction, the subsequent liquidation, and consequential events. In some of those proceedings, the plaintiffs have been defendants. In others, they have been “served” by Mr Islam with copies of court documents. Other proceedings do not involve TFAL or MMV but are still relevant for the purposes of the Act. The plaintiffs also point out that Mr Islam has brought unsuccessful professional conduct complaints against Mr David Farrar, who is the solicitor for TFAL and MMV.

These proceedings were begun by the plaintiffs in December last year. In February this year, Mr Islam filed a notice of motion. The relief sought in the motion included orders for summary dismissal of the summons, and a "declaration" that Mr Islam was not a vexatious litigant. Orders were also sought under the Act against the plaintiffs prohibiting them from instituting any further proceedings against Mr Islam without the leave of the Court. This motion was eventually fixed for hearing at the same time as the hearing of the plaintiffs’ summons.

The evidence before me identified numerous proceedings begun or continued by Mr Islam since the making of the winding-up order in February last year. I will now briefly describe those proceedings.

First, Mr Islam began proceedings in the Court of Appeal seeking leave to appeal against the winding-up orders. TFAL and MMV were not formally party to the proceedings, but they were served with the summons. The application, which was described in an unsuccessful stay application as "barely arguable", was dismissed.

Mr Islam sought special leave to appeal to the High Court from the dismissal of the application. That application was refused by the High Court.

Later, Mr Islam instituted District Court proceedings against, possibly among others, TFAL and MMV. Those proceedings were dismissed by Abadee DCJ, who stated:

Prior to the making of the winding-up order, Mr Islam had brought several proceedings in the District Court against Mr Ratul. Those proceedings continued after the winding-up order was made. Mr Ratul then successfully moved to have the statement of claim struck out. I assume that, as a result, the proceedings were later dismissed.

In the course of striking out the statement of claim, Andronos DCJ stated:

Mr Islam also brought numerous proceedings in the Local Court. These were brought in various different places. Some were brought at Kurri Kurri, one at Queanbeyan, one at Moss Vale, and three at the Downing Centre in Sydney. In some of those proceedings, TFAL, MMV and Mr Farrar personally were named as defendants. It seems that Ms Purvis was also named as a defendant in one of the proceedings.

There appear to have been also at least three other proceedings in this Court or the District Court. One of those was against the police. Another was brought against Mr Islam's former lawyer.

As I have mentioned, there were also two professional conduct complaints made by Mr Islam against Mr Farrar. Both of those complaints were terminated by the Law Society without Mr Farrar being obliged to make any response to them, presumably on the basis that they were manifestly untenable.

The evidence before me also included correspondence from Mr Islam associated with some of these proceedings. These included a complaint to the Australian Financial Security Authority against Mr Levi and TFAL, and other correspondence threatening to bring proceedings against TFAL, MMV, or serving documents on them. There is also a letter or email addressed to Ms Purvis.

Parts of this correspondence are set out at length in the written submissions which have been provided to me. I will not attempt to summarise it. It is sufficient to say that it was full of (apparently) completely unsubstantiated allegations of fraud, and rambling commentary which had no conceivable relevance to the legal merits of the proceedings in question. Some of it was bizarre and some of it was downright offensive.

The notice of motion filed by Mr Islam in these proceedings itself exhibits some of the same shortcomings. In seeking a declaration and orders under this Act, the notice of motion sought final relief, which was, of course, not appropriate. And the interlocutory relief that was sought completely lacked substance. There was never any justification for an order that the plaintiffs’ application be summarily dismissed. Whether intentionally or not, the application for such an order involved an attempt to use procedures of the Court themselves designed to prevent abuse of process in an oppressive way. As it happens, because the notice of motion was stood over to the hearing, no harm came of this, but that is not the point.

Further, the notice of motion was framed in a way not contemplated by the Rules, with a statement of alleged facts and further “pleadings and particulars”. The “facts” section of the notice of motion stated:

The “pleadings and particulars” section stated:

It is unnecessary to continue to quote from the notice of motion. In the course of his submissions to me at the hearing, Mr Islam stated that at least some of his court documents had been prepared with the assistance of an artificial intelligence program. It would not be surprising, based on the content of the notice of motion, if it, too, had been prepared by that method. Whether that is so or not, the form of the notice of motion clearly demonstrates an approach which involves the deployment of legal language without any real understanding of the legal rules being invoked.

When the proceedings came on for hearing before me earlier today, Mr Farrar appeared for the plaintiffs. Mr Islam represented himself.

Mr Farrar produced a form of order sought by the plaintiff. Orders one and two sought the transfer of five nominated Local Court proceedings to this Court, to be followed by the dismissal of those proceedings. Order three sought an order under the Act preventing Mr Islam from instituting any proceedings against the plaintiffs and associated parties relating to the subject matter of the dispute concerning the Maserati. Order four sought an order for costs on an indemnity basis.

In his opening remarks, Mr Islam said that the proceedings the subject to proposed orders one and two had already been dismissed. He agreed that the notice of motion should be dismissed, and I made that order accordingly.

Mr Islam also stated that he had apologised to Mr Farrar. He told me that he was studying to become a lawyer himself, and urged me not to make an order under the Act lest that order have some adverse effect on his ability to be admitted as a solicitor at the end of his studies. He also opposed the making of an order for costs.

The apology to Mr Farrar was not in evidence, and nor were details of the dismissal of the proceedings, but reference to the Court's electronic systems showed that the proceedings had indeed all been dismissed or otherwise disposed of. Accordingly, proposed orders one and two fell away. The remaining questions were whether, despite the dismissal of the offending proceedings against the plaintiffs, the Court should nevertheless make an order under the Act, and whether the plaintiffs’ costs of these proceedings should be awarded against Mr Islam.

After the evidence had been read, I invited Mr Islam to address me first on these questions. Although it was not, so far as I could see, relevant, part of the address concerned the merits of the original complaint about the Maserati being repossessed. I remained, however, unclear about the nature of the complaint.

It seemed from what Mr Islam was saying that what has really touched off his concern is that, so he alleges, "his car" (the Maserati) has been repossessed, but Mr Levi is permitting his business partner Mr Ratul to continue to use another luxury car owned by ARER. There was, so far as I could see, no evidence to suggest that this was actually the case, and what that has to do with TFAL and MMV, I cannot see.

These were only some of the complaints that Mr Islam made in the course of his remarks. I will not attempt to summarise the rest.

When I asked Mr Islam whether he still thought, despite his apology to Mr Farrar, that TFAL was in the wrong, he replied that he thought that "ethically", but not "legally", that was so. I asked him whether he was prepared to undertake not to bring any proceedings against TFAL, but he was not prepared to do so, at least not unconditionally. He indicated that if, in future, he were to receive legal advice that he has a justified claim against TFAL (or, presumably, MMV) he would wish to be able to pursue it.

Following submissions from Mr Farrar, I returned to this question with Mr Islam when he made his submissions in reply. His position eventually was that, not having qualified as a lawyer, he simply did not know whether there was a legal basis for a claim against TFAL. He explained the dismissal of all of his earlier proceedings as having been undertaken on technical grounds, even when I directly put to him what had been said by Abadee DCJ and Andronos DCJ.

In his concluding remarks, Mr Islam sought to put the events of the last few years in the context of personal difficulties he claimed to have encountered. He asserted that he was unable to pay lawyer's fees and "had" to bring proceedings himself. He had had, he said, "no other choice."

I come now to the basis for the plaintiffs’ application. The Act defines "vexatious proceedings" as including:

The Court's power to make a vexatious proceedings order under the Act against a defendant requires that that defendant "has frequently instituted or conducted vexatious proceedings in Australia."

Based on the evidence which I have outlined, that condition is clearly satisfied and, indeed, no submissions to the contrary were made by Mr Islam. It is quite wrong to see the dismissal of the earlier proceedings by Mr Islam as the result of some technical failure in the documents which he filed. The documents were defective, but they were defective for substantive reasons.

One fundamental problem, never addressed at any stage in anything that I heard from Mr Islam, is that the car which caused all of this trouble did not ever even belong to him. It belonged to ARER. Such rights arising out of its repossession as might have existed were those of ARER and were to be enforced, once the winding‑up order was made, for the benefit of ARER’s creditors.

It is true that the proceedings which involved the plaintiffs as parties, have now been disposed of, but it is obvious that Mr Islam retains a sense of grievance, even if ill‑founded, about the events which resulted in the Maserati being repossessed. He also appears to continue to feel some compulsion to do something about what happened.

Mr Islam has not forsworn bringing further proceedings and, I would infer, that in principle, he would see the bringing of such proceedings as desirable, if that could be achieved. While he might not do so while pursuing his studies as a result of a concern of the impact of unsuccessful proceedings on his ability to practise if he graduates, there is a risk that he might return to the idea if his plan to become a lawyer proves unsuccessful.

In my view, the orders sought by the plaintiffs retain utility and should be made.

As to costs, these proceedings have been entirely occasioned by Mr Islam's earlier conduct in bringing unsustainable proceedings. They should not have been necessary, and the proceedings which provoked them should never have been brought. In these circumstances, I will make an order for indemnity costs as sought.

The orders of the Court are: