Batterham v Nauer

1. [1]

   MACFARLAN JA: I agree with Simpson AJA.

2. [2]

   PAYNE JA: I have read the reasons of Simpson AJA in draft. I agree with the reasons and orders proposed by her Honour and wish only to add some brief additional reasons, not intended to be inconsistent with what her Honour has written.

3. [3]

   The present appeal is from orders made by Hammerschlag J in Marcel Andre Nauer v Peter James Batterham [2020] NSWSC 240. There, his Honour explained that litigation conducted by Maylord Equity Management Pty Ltd and subsequently Finsec Pty Limited, each as Trustee of the Batterham Retirement Fund against Mr Nauer, was conducted at Mr Batterham’s instigation:

4. [4]

   In Finsec Pty Limited as Trustee of the Batterham Retirement Fund v Marcel Andre Nauer [2019] NSWSC 1831, Hammerschlag J had earlier found:

5. [5]

   The primary judge concluded that he was not satisfied that the proceedings had any prospects of success, not least of all because of the terms of the Deed of Settlement: at [22]. His Honour found:

6. [6]

   No appeal was brought from this decision or these findings. Those findings, in the context of all the proceedings that have been brought against Nauer identified by Simpson AJA, are dispositive of the application for leave to appeal. There are no issues of principle, questions of public importance or circumstances which make it reasonably clear that an injustice has occurred by reason of error in the judgment below.

7. [7]

   SIMPSON AJA: By summons filed on 16 April 2020 the applicant, Peter James Batterham, seeks leave to appeal against an order made in the Equity Division of the Supreme Court on 19 March 2020 that he be prohibited, under s 8(7) of the Vexatious Proceedings Act 2008 (NSW) (“the VP Act”), from instituting proceedings in NSW against Marcel Andre Nauer (the “vexatious proceedings order”): Marcel Andre Nauer v Peter James Batterham [2020] NSWSC 240 (“the primary judgment”). The summons and any appeal (if leave were granted) were listed for a concurrent hearing on 18 August 2020.

8. [8]

   In commencing the proceedings by summons seeking leave to appeal the applicant implicitly accepted (correctly, in my opinion) that leave to appeal against an order made under s 8(7) of the VP Act is required, whether by reason of s 101(2)(e) or of s 101(2)(r) of the Supreme Court Act 1970 (NSW): see Potier v Attorney-General in and for the State of New South Wales (2015) 89 NSWLR 284; [2015] NSWCA 129 at [47]; De Varda v Austin [2018] NSWCA 263 at [35].

9. [9]

   The principles on which leave to appeal will be granted are well established. As a general proposition, a grant of leave is warranted only in:

10. [10]

    In an Amended Draft Notice of Appeal the applicant identified four grounds of the proposed appeal, formulated as follows:

The Vexatious Proceedings Act 2008

1. [11]

   By s 8(1) of the VP Act an authorised court (of which the Supreme Court is one) may make a “vexatious proceedings order” in relation to a person if satisfied that:

Background

1. [12]

   The following factual background appears to emerge from the somewhat scanty material provided to this Court.

2. [13]

   The applicant is the beneficiary of a superannuation fund called the Batterham Retirement Fund (“the BRF”) of which the trustee was, until 27 June 2018, Maylord Equity Management Pty Ltd (“Maylord”), and, thereafter, Finsec Pty Ltd (“Finsec”). The applicant was the sole director of both companies, until bankruptcy (on 13 November 2014) prevented his continuing in those roles. A new director of Maylord, Mr Ohlson, was appointed in his place.

3. [14]

   Between 2007 and 2011 Maylord engaged in some form of commercial arrangement (which the applicant describes as a “joint venture”) with the respondent, Marcel Andre Nauer, and a company or companies with which Mr Nauer was associated. The applicant had a grievance arising out of the conduct of that arrangement. Maylord commenced proceedings against the respondent. Those proceedings came to an end on 4 July 2011 when the parties entered into a Deed of Settlement.

4. [15]

   It appears that the applicant became dissatisfied with the terms of the resolution of the dispute. On 19 December 2014 Maylord commenced a new proceeding (No 2014/373063) (“the 2014 proceeding”) in the Equity Division of the Supreme Court, which raised, essentially, the same issues as those the subject of Deed of Settlement. That proceeding was dismissed by the primary judge on 24 April 2015 for failure to comply with directions. There then followed a course of litigation to which it will be necessary in due course to refer in more detail. That litigation included two further proceedings in the Supreme Court, commenced by Maylord in 2016 (No 2016/124822) (“the 2016 proceeding”) and by Finsec in 2019 (No 2019/340500) (“the Finsec proceeding”), again raising essentially the same issues as had been raised in the earlier proceedings, and two proceedings commenced by the applicant in his own name in the Federal Court of Australia (respectively “the first FCA proceeding” and “the second FCA proceeding”). Both FCA proceedings were dismissed by Gleeson J on 11 April 2019: Batterham v Nauer, in the matter of Peter James Batterham [2019] FCA 485. Both FCA proceedings, in different ways, raised the same issues as had previously been resolved by the Deed of Settlement. The Finsec proceeding was finally dismissed by the primary judge on 19 March 2020: Finsec Pty Limited as Trustee of the Batterham Retirement Fund v Marcel Andre Nauer [No 2] [2020] NSWSC 238. The litigation saga was punctuated by a number of interlocutory applications. A more complete account of the saga is annexed to these reasons.

5. [16]

   The various proceedings constituted the basis of the respondent’s application for a vexatious proceedings order. Behind the application was the contention that the applicant, in his own name or in the name of one or other of the companies that he controlled, sought repeatedly to litigate the issues that had been concluded by the Deed of Settlement.

The application for a vexatious proceedings order

1. [17]

   The respondent’s application for a vexatious proceedings order was initially made by notice of motion filed in the Finsec proceeding on 7 December 2019. The applicant was not a party to that proceeding. The Finsec proceeding was listed before the primary judge on 5 March 2020, although the precise purpose of the listing is not apparent. Also before the court was the respondent’s notice of motion seeking a vexatious proceedings order. Initially the respondent was prepared to abandon that application if he were successful in obtaining other orders that he sought. It was at the applicant’s insistence that the hearing of that notice of motion proceeded on that day. The respondent then decided to press on with that application. On behalf of the respondent two affidavits were read. Neither of these affidavits are before this Court. An affidavit of the applicant was also read. That, too, is not before this Court. The respondent provided written submissions. They are not before this Court.

2. [18]

   After both parties had made their submissions, the primary judge raised a procedural issue – that the notice of motion sought an order under the VP Act against the applicant in proceedings to which he was not a party. He gave leave to the respondent to convert the application to a summons, which he would make returnable instanter. That is what happened.

The primary judgment

1. [19]

   The primary judge gave only a broad overview of the course of litigation on which the application, and the ultimate order, were based. He said (at [26]) that the applicant, either alone or through Maylord or Finsec, had commenced proceedings against the respondent on nine occasions, all in connection with the same underlying grievance. While he referred, briefly, to various of the interlocutory applications which he later found to be vexatious, he provided no details. He did not evaluate the proceedings individually for vexatiousness (as defined in s 6), nor did he state why any was vexatious.

2. [20]

   At the outset of his reasons the primary judge characterised each of Maylord and Finsec as the applicant’s “mere cypher”; later, as his “corporate alter ego”. In an earlier judgment he referred to the companies as the applicant’s “vehicle”: Finsec Pty Ltd as Trustee of the Batterham Retirement Fund v Marcel Andre Nauer [2019] NSWSC 1831 at [6].

3. [21]

   The primary judge concluded that the Finsec proceeding came within each of the four paragraphs of s 6 of the VP Act and was therefore vexatious (at [27]). He held that certain challenges to other decisions (to which I will refer below) were without reasonable ground (and came within par (c) of s 6) and were therefore vexatious. He held that the Finsec proceeding and the FCA proceedings were in themselves sufficient to satisfy the requirement of frequency (s 8(1)(a) of the VP Act), but said that they were supplemented by the calling into question of “numerous and frequent interlocutory applications and decisions” at ([29]) (by which, it may be inferred, he considered that the satisfaction as to frequency was strengthened).

4. [22]

   The primary judge quoted from correspondence from the applicant to the respondent’s solicitor, in which the applicant said:

5. [23]

   The primary judge also recorded that the applicant had expressly stated that:

6. [24]

   The primary judge said:

7. [25]

   The primary judge concluded:

8. [26]

   He accordingly made the order sought (see [17]-[18] above).

The proposed grounds of appeal

1. [27]

   Before considering the grounds of appeal advanced by the applicant, it may be noted that the approach taken by the primary judge did not comply with the requirements of the VP Act. This Court has emphasised, on a number of occasions, the importance, in dealing with applications for vexatious proceedings orders (the effect of which is to preclude an individual’s access to the courts), of identifying those proceedings which are found to be vexatious, the statutory basis on which they are found to be vexatious, and the reasons therefor. In Martin v Attorney General for the State of New South Wales [2014] NSWCA 189, Sackville AJA (with whom Basten and Leeming JJA agreed) (remitting, after successful appeal, proceedings to the Supreme Court for further hearing) said:

2. [28]

   In Viavattene v Attorney General (NSW) [2015] NSWCA 44 this Court accepted a concession made on behalf of the Attorney General that error had been shown because the primary judge had failed to specify why each of the proceedings he found to have been vexatious came within one or more of the paragraphs of s 6 of the VP Act (see [43], [64]). In Mahmoud v Attorney General of New South Wales [2017] NSWCA 12 this Court upheld a ground that the primary judge in that case failed to give the necessary detailed consideration to the circumstances in which an application for a vexatious proceedings order is made (at [45], [50]).

3. [29]

   Payne JA, with whom Beazley P and Macfarlan JA agreed, said:

4. [30]

   In Vito Zepinic v Chateau Constructions (Aust) Limited; Nina Zepinic v Chateau Constructions (Aust) Limited [2018] NSWCA 317, with the concurrence of McColl and Macfarlan JJA, I set out three steps necessary in the process of determining that application under the VP Act (at [13]-[14]). Those steps are:

   1. (1)

      identification of the “proceedings” the subject of the application said to be vexatious;

   2. (2)

      determination, applying s 6, of which, if any, of the proceedings comes within one or more of the four paragraphs of that section and is therefore vexatious;

   3. (3)

      determination, on the basis of those proceedings found to have been vexatious, whether the person concerned has “frequently” instituted or conducted vexatious proceedings in Australia or has acted in concert with such a person.

5. [31]

   The process required by s 8 of the VP Act is one that is, admittedly, painstaking, but one for which there are no shortcuts.

6. [32]

   I have set out above (at [10]) the proposed grounds of appeal. The applicant initially filed, in support of the grounds, a Summary of Argument dated 14 April 2020. He has subsequently filed written submissions dated 18 May, 18 June, 28 July, 8 August and 10 August 2020. Only the first of these documents clearly addresses the identified grounds of appeal. It is convenient to deal with those grounds as they are explained in the Summary of Argument.

7. [33]

   Under this ground the applicant complains that the primary judge erroneously took into account the correspondence that he had directed to the respondent’s solicitor. He contends that the correspondence was “personal” and did not constitute “proceedings” as defined in the VP Act. The latter proposition is correct, but irrelevant. The correspondence was not relied upon by the respondent, or by the primary judge, as “proceedings”.

8. [34]

   The applicant submitted that the primary judge took a personal dislike to him and took offence at the correspondence although (he submitted) it was not relevant “to any cause of action for wrongdoing upon which the respondent’s application was based”. He submitted that his Honour’s dislike of him influenced his decision, and that he formed the view that the respondent was an innocent party and that the applicant wrongfully instigated and continued proceedings “to hound Nauer without a reasonable basis”.

9. [35]

   The applicant clearly misunderstood the purpose for which the correspondence was put before the court. Paragraphs (b) and (d) of s 6 of the VP Act include in the definition of “vexatious proceedings”, respectively, “proceedings instituted to harass or annoy … or for another wrongful purpose”, and “proceedings that are conducted … in a way that harasses, or causes unreasonable annoyance, delay or detriment … “

10. [36]

    The evidence of the applicant’s correspondence, and, indeed, his stated aim therein, was clearly relevant to whether the respondent had established that the proceedings in question were vexatious. The various statements made by the applicant unmistakeably establish that his intention was to harass or cause unreasonable annoyance to the respondent. Taking that evidence into account was not indicative of “judicial bias”.

11. [37]

    Under the same ground the applicant argued that the primary judge “…concluded that Maylord, Finsec and [the applicant] were one party” and were determined to be “his corporate alter egos”. He therefore contended that he had a legal right to represent Finsec and pursue claims against the respondent. This appears to have been intended as a challenge to the primary judge’s refusal, in the Finsec proceeding, to dispense with the requirement that Finsec be represented by a solicitor (as to which, see item (v)(b) in the annexure to these reasons).

12. [38]

    This is not the appropriate occasion to challenge that decision. There is no arguable error in the finding of the primary judge that Maylord and Finsec were the “cyphers” or the “vehicles” or the “alter egos” of the applicant. The finding was relevant to s 8(1)(b) of the VP Act, which permits a vexatious proceedings order to be made where the person against whom it is sought has acted in concert with another who has instituted or conducted vexatious proceedings in Australia. There is no substance in this proposed ground of appeal.

13. [39]

    The applicant pointed to [7] of the primary judgment in which the primary judge said that Mr Ohlson had been appointed to Maylord (on the applicant’s bankruptcy) and had been given leave to conduct the proceedings on Maylord’s behalf (see item (i) in the annexure). The proceedings were dismissed on 24 April 2015 on terms that it was without prejudice to Maylord’s right to commence proceedings within 12 months.

14. [40]

    The applicant argued that this implied that Mr Ohlson had been given leave to conduct the proceedings before 24 April and is factually wrong because Mr Ohlson was not present at court on that date. For my part, I do not draw that inference from the paragraph on which the applicant places reliance. In any event, on behalf of the respondent it was conceded that there was a minor error of fact, but it was argued (correctly) that the error was immaterial to the outcome. The applicant has pointed to no error of fact that had any bearing on the outcome of the application. There is no substance in this ground of appeal.

15. [41]

    The applicant identified five areas of the judgment in which, he contended, the primary judge erred in law.

16. [42]

    This argument focussed on the requirement that, before a vexatious proceedings order may be made, the person the subject of the application has “frequently instituted or conducted vexatious proceedings in Australia” (s 8(1)(a)) or has acted in concert with a person who has done so (s 8(1)(b)). In finding that the requirement of frequency was satisfied the primary judge cited the decision in Teoh. In Teoh this Court adopted the approach taken by the High Court in Jones v Cusack [1992] HCA 40; (1992) 109 ALR 313 (in relation to parallel provision under the High Court Rules 1958 (Cth)). In Jones (at 315), Toohey J said that the term “frequently” is a relative term that has to be understood in the context of the proceedings in question.

17. [43]

    The argument advanced by the applicant distinguished the facts in Teoh from the facts of the present case. He argued that his prospects of success in his litigation were better than those of Mrs Teoh in hers.

18. [44]

    It is neither necessary nor possible to judge the validity of that contention: the passage in Teoh to which the primary judge referred was a statement of principle – it was equally applicable to both cases.

19. [45]

    No error is demonstrated with respect to the primary judge’s approach to the frequency with which he found the applicant had commenced vexatious proceedings.

20. [46]

    In [26] of the primary judgment the primary judge said that, on no fewer than nine occasions, the applicant, either alone or through one or other of his companies, had commenced proceedings “all in connection with the same underlying grievance”. He held that these proceedings were vexatious because they were instituted or pursued without reasonable grounds.

21. [47]

    The argument of the applicant under this subheading did not address or assert any error in the primary judgment. Rather, it sought to canvass the reasons given in various of the interlocutory proceedings to which the primary judge had referred.

22. [48]

    The applicant has identified no arguable error in this respect.

23. [49]

    The argument of the applicant under this head was entirely directed to reasons given by Bergin CJ in Eq for striking out the proceeding brought by Maylord in 2016 (see item (ii)(a) in the annexure), and (it appears) to the decision by Slattery J in dismissing, for want of due despatch, proceedings brought by Maylord. It was a challenge to the reasons for the decisions. This has nothing to do with the vexatious proceedings order made by the primary judge and does not support a grant of leave to appeal.

24. [50]

    Again, the argument that appears under this heading in the outline of argument is not directed to any asserted error in the primary judge’s approach to the application for a vexatious proceeding order. It does not support an application for leave to appeal.

25. [51]

    These arguments also seek to canvass decisions other than the decision of the primary judge in making the vexatious proceedings order. They do not support a grant of leave to appeal against that order.

Conclusion

1. [52]

   None of the proposed grounds of appeal identified by the applicant has any prospect of success. Nothing in the Summary of Argument enhances the applicant’s prospects.

2. [53]

   I have also read the various additional submissions filed by the applicant on the dates set out above. None is directed to any of the grounds of appeal proposed in the amended draft notice of appeal, and none raises any legitimate or arguable additional ground. All are directed to the applicant’s underlying grievance, and to the various decisions that rejected his pleadings and dismissed the proceedings.

3. [54]

   Bearing in mind that the applicant is unrepresented I have also considered whether leave to appeal should be granted on the basis of inadequacy of reasons. For that purpose I have carefully examined the judgments given for dismissing the applicant’s proceedings.

4. [55]

   If leave to appeal were granted the appeal would be governed by s 75A of the Supreme Court Act 1970 (NSW). An appeal would be by way of rehearing (subs (5)); this Court would have the powers and duties of the Supreme Court, including, relevantly, powers and duties concerning the drawing of inferences and the makings of findings of fact (subs (6)).

5. [56]

   I am satisfied that, even if leave were to be granted, no different outcome would eventuate.

6. [57]

   The applicant has, on five occasions, in two courts, commenced substantive proceedings that replicate the original proceedings that were finalised by the Deed of Settlement in 2011 (the 2014 proceeding, the 2016 proceeding the first and second FCA proceedings, and the Finsec proceeding). Each of these proceedings was instituted and pursued without reasonable ground (VP Act s 6(c)) and was therefore an abuse of the process of the court (par (a) of s 6). It may also be safely concluded (having regard to the applicant’s correspondence with the respondent’s solicitor) that the proceedings were instituted to harass or annoy, and were conducted for the same wrongful purpose (pars (b) and (d)).

7. [58]

   The institution of five substantive proceedings with respect to the same subject matter is sufficient to satisfy the requirement of frequency for the purposes of s 8(1) of the VP Act.

8. [59]

   It follows from the vexatious character of the substantive proceedings that the interlocutory proceedings that followed were also without reasonable ground and an abuse of process and conducted to achieve a wrongful purpose. These interlocutory proceedings included:

9. [60]

   (i) the application to set aside the orders of Bergin CJ in Eq of 24 October 2016 (item (ii)(b) in the annexure);

10. [61]

    (ii) the application to file an amended Commercial List Statement (at the hearing of which Maylord failed to appear) (item (ii)(c) in the annexure);

11. [62]

    (iii) the application to set aside Slattery J’s order of 6 November 2017 dismissing the 2014 proceeding (item (ii)(e) in the annexure);

12. [63]

    (iv) the application for leave to appeal to this Court against the orders of Bergin CJ in Eq, Ward CJ in Eq and Slattery J (item (ii)(f) in the annexure);

13. [64]

    (v) the appeal and application for leave to appeal against the orders of Gleeson J in the FCA (items (iii)(b) and (iv)(b) in the annexure).

14. [65]

    The applicant has not identified any relevant arguable error in the findings and conclusions of the primary judge. Nor has he satisfied any of the requirements for a grant of leave to appeal. Leave to appeal should be refused.

15. [66]

    The orders that I propose are:

The proceedings

1. [67]

   Five substantive proceedings were in issue, three in the Supreme Court and two in the Federal Court. In no case has the originating process been provided to this Court. In each case the named defendant/respondent was the present respondent, Mr Nauer.

   1. (1)

      This was the recommencement of the 2014 proceeding. A Commercial List Statement (“CLS”) accompanied the originating process. On 24 October 2016 Bergin CJ in Eq struck out the CLS and ordered that Maylord pay $25,000 towards the respondent’s costs by 21 November 2016. Her Honour refused leave to file an amended CLS. Neither party sought reasons for the orders and none have been provided.

2. [68]

   (b) On 6 February 2017 Maylord filed a notice of motion (presumably in reliance on UCPR r 36.16) seeking orders setting aside Bergin CJ in Eq’s orders of 24 October 2016. On 17 February 2017 the primary judge dismissed the notice of motion, but granted Maylord leave to have the notice of motion reinstated within six months.

3. [69]

   (c) On 24 March 2017 Maylord filed another notice of motion seeking orders to set aside Bergin CJ in Eq’s orders of 24 October 2016 and sought leave to file an amended CLS. This matter was listed for hearing on 7 April 2017 when there was no appearance by or on behalf of Maylord. The primary judge accordingly dismissed the notice of motion with costs.

4. [70]

   On 6 November 2017 Slattery J dismissed the 2014 proceeding for want of due dispatch: Maylord Equity Management Pty Ltd as Trustee of the Batterham Retirement Fund v Nauer (No 2) [2017] NSWSC 1467 and ordered that the applicant be personally liable for the costs because he was “substantially in control of Maylord’s actions and has been initiating and directing the impecunious Maylord’s steps on this application” (at [53]). On 19 December 2017 Slattery J quantified the costs order against the applicant in the sum of $163,456.71: Maylord Equity Management Pty Ltd as trustee of the Batterham Retirement Fund v Nauer (No. 3) [2017] NSWSC 1783.

5. [71]

   (e) On 13 December 2017 Maylord filed a notice of motion (again, presumably in reliance on UCPR r 36.16) seeking an order setting aside Slattery J’s order of 6 November 2017. On 2 February 2018 the primary judge dismissed the notice of motion.

6. [72]

   (f) In February 2018 Maylord filed in this Court an application for leave to appeal against the orders of Bergin CJ in Eq of 24 October 2016, Ward CJ in Eq of 22 May 2017 and Slattery J on 6 November 2017. In each case, leave was refused because:

   1. (1)

      (iv)(a) Federal Court Proceeding No NSD 990/2018, commenced on 12 June 2018

7. [73]

   Finsec was then briefly represented by a solicitor, but the representation terminated on 28 February 2020. On 19 March 2020 (the same day as he made the vexatious proceedings order) the primary judge dissolved the stay of the order of dismissal, which thereupon came into effect: Finsec Pty Limited as Trustee of the Batterham Retirement Fund v Marcel Andre Nauer [No 2] [2020] NSWSC 238. He said that the Finsec proceeding was an abuse of process and had no reasonable prospects of success.