Proietti v Proietti

1. [1]

   THE COURT: On 8 March 2024, this Court made a vexatious proceedings order (VPO), pursuant to s 8(7) of the Vexatious Proceedings Act 2008 (NSW) (VPA), in respect of Mr Philip Proietti (the Applicant): Proietti v Proietti [2024] NSWCA 48 at [120] (Proietti 2024). This order was entered on the same day.

2. [2]

   By notice of motion dated 11 June 2024, the Applicant applied to set aside the VPO, pursuant to s 9(2)(a) of the VPA and s 63 of the Civil Procedure Act 2005 (NSW) (CPA).

3. [3]

   The background and procedural history to these proceedings were detailed in Proietti 2024 at [27]-[91] and need only be briefly summarised. The proceedings concerned a dispute over property in Marsfield (the Marsfield Property) which the Applicant and his brother, Mr Peter Proietti (the First Respondent), inherited in equal shares as tenants in common.

4. [4]

   On 17 January 2022, Peter applied to appoint trustees to sell the Marsfield Property, pursuant to s 66G of the Conveyancing Act 1919 (NSW).

5. [5]

   On 30 June 2022, Kunc J ordered court appointed trustees (the Second Respondent or the trustees) to sell the Marsfield Property: Proietti v Proietti [2022] NSWSC 875 (the primary judgment).

6. [6]

   On 17 November 2022, this Court dismissed the Applicant’s appeal from the primary judgment in Proietti v Proietti [2022] NSWCA 234 (the First Appeal). The Court also stayed orders 1, 2, 4 and 8 of the primary judgment for a period of 28 days from the date of the judgment in the First Appeal.

7. [7]

   On 14 December 2022, Macfarlan JA dismissed the Applicant’s application to extend the stay ordered in the First Appeal pending his special leave application in the High Court of Australia (the Stay Extension Proceedings): [2022] NSWCA 268.

8. [8]

   On 9 March 2023, the High Court refused special leave to appeal from the First Appeal: [2023] HCASL 15.

9. [9]

   Subsequently, the Applicant commenced the following five unsuccessful sets of proceedings in this Court by notice of motion:

   1. (1)

      On 5 April 2023, the Applicant applied to set aside the decision in the First Appeal, and to review the decision in the Stay Extension Proceedings: [2023] NSWCA 76 (Ward P and Adamson JA);

   2. (2)

      On 24 April 2023, the Applicant applied for relief in similar terms to that in (1). The Court also made a Teoh direction in respect of the Applicant: [2023] NSWCA 132 at [30] (Ward P and Adamson JA);

   3. (3)

      On 24 July 2023, the Applicant applied for relief similar that in (1), and to set aside the decision in (2): [2023] NSWCA 199 (Leeming JA);

   4. (4)

      On 28 September 2023, the Applicant applied for relief similar to that in (1): [2023] NSWCA 251 (White JA);

   5. (5)

      On 13 November 2023, the Applicant applied for relief in similar terms to that in (1): [2023] NSWCA 284 (Payne JA).

10. [10]

    On 14 December 2023, Ward P listed the matter for oral hearing on 22 February 2024 in order for the Court to determine, by its own motion, whether to make a VPO in respect of the Applicant.

11. [11]

    Earlier, on 18 September 2023, the court appointed trustees completed the sale of the Marsfield Property for the sum of $2,752,733.57.

12. [12]

    On 11 June 2024, the trustees transferred to Peter his share of $1,437,064.08 in the proceeds of the sale. The Applicant’s share of $1,264,701.59 in the proceeds of sale remained, at the Applicant’s request, to be held on trust by the court appointed trustees.

The VPO proceedings

1. [13]

   On 8 March 2024, this Court in Proietti 2024 determined that the five sets of proceedings commenced by the Applicant (see [9] above) were vexatious:

2. [14]

   The Court held that the five sets of vexatious proceedings were “frequent” for the purpose of s 8(1)(a) of the VPA, and that the Court should order a VPO in the following terms (Proietti 2024 at [114]-[115], [120]):

3. [15]

   By notice of motion filed 11 June 2024, the Applicant applied to set aside the VPO supported by an affidavit which was essentially his submissions in support of his application. The notice of motion annexed earlier submissions he had made resisting the making of the vexatious proceedings order. The relief was sought pursuant to s 9(2)(a) of the VPA and s 63 of the CPA.

4. [16]

   The Applicant’s reliance on s 63 of the CPA, entitled “Directions with respect to procedural irregularities”, is misconceived. True it is that s 63(3) of the CPA confers a power to “set aside the proceedings, any step taken in the proceedings or any document, judgment or order in the proceedings, either wholly or in part”, but the exercise of that power must be referable to a failure of the kind referred to in s 63(1), namely a “failure to comply with any requirement of this Act or of rules of court, whether in respect of time, place, manner, form or content or in any other respect.” The Applicant’s submissions do not point to any failure to comply with the CPA or the rules of court.

5. [17]

   The power to set aside a VPO lies in s 9 of the VPA which provides that:

6. [18]

   Given that the Applicant is the person subject to the VPO, he has standing to make an application under s 9(2)(a) of the VPA to vary or set it aside: Quach v New South Wales Health Care Complaints Commission; Quach v New South Wales Civil and Administrative Tribunal [2018] NSWCA 175 at [7], [23] (Quach) and no leave is required. The trustees’ submission in this case to the contrary should be rejected as inconsistent with the authorities. As was said in Quach at [23]:

7. [19]

   In Attorney General (NSW) v Potier (No 2) [2015] NSWSC 238 at [52], McCallum J (as her Honour then was) noted that “there is little authority on the circumstances in which the Court might exercise its broad discretion under s 9 of the Vexatious Proceedings Act to vary or set aside a vexatious proceedings order that the Court has made”.

8. [20]

   One matter that is plain, however, is that an application to set aside or vary a VPO is not to be used as a means of ventilating a de facto appeal from such an order. The only appeal available to a person subject to a VPO which has been made by this Court is to seek special leave to appeal to the High Court.

9. [21]

   It is relevant to note that a VPO is interlocutory: see McGettigan v Coulter [2024] NSWCA 148 at [4]-[8]; see also Batterham v Nauer [2020] NSWCA 204 at [8]; Kostov v State of New South Wales [2019] NSWCA 17; Viavattene v Attorney General of New South Wales [2014] NSWCA 218 (Viavattene) at [2]; Klewer v Attorney General (NSW) [2010] NSWCA 219 at [13]-[14], [23]. The variation of interlocutory orders generally requires a material change of circumstances to be established. In Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 (Brimaud), McLelland J made important observations in relation to the variation or setting aside of interlocutory orders, noting correctly that there is a variety of types of interlocutory orders, and not every interlocutory order attracts the same considerations. His Honour said that “[i]t would be conducive to great injustice and enormous waste of judicial time and resources if there were no limit on the power of a party to have any interlocutory application or order relitigated at will”: at 46. In the case of an interlocutory order of a substantive nature, his Honour continued:

10. [22]

    Section 9 of the VPA does not differentiate between applications made to vary or set aside orders made before or after the entry of a VPO: cf. Uniform Civil Procedure Rules 2005 (NSW) (UCPR) rr 36.15 and 36.16. It is well established that the jurisdiction to vary or set aside a judgment is to be exercised conservatively, especially in circumstances (such as the present) where orders have already been entered prior to the application to vary or set aside having been made: DJL v Central Authority (2000) 201 CLR 226; [2000] HCA 17 at [38]; University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481 at 483; Bailey v Marinoff (1971) 125 CLR 529 at 530; [1971] HCA 49 (Bailey); see also Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300; [1993] HCA 6; Wentworth v Woollahra Municipal Council (1982) 149 CLR 672; [1982] HCA 41. In Bailey, Barwick CJ said at 530 that:

11. [23]

    It may also be noted that the general power to set aside a judgment conferred by provisions such as UCPR r 36.15 is confined by a requirement of “sufficient cause being shown” or where the order was made “irregularly, illegally or against good faith”. Under UCPR r 36.16(2), the power to set aside or vary an order after judgment has been entered is confined to cases where the judgment has been entered by default or in the absence of a party. UCPR r 36.16 reflects the strong public interest in maintaining the finality of litigation (subject to the exercise of any appeal rights).

12. [24]

    The same concern is reflected in McLelland J’s observations in Brimaud in the context of applications to vary interlocutory judgments. This is not a case where the Applicant invokes or places reliance upon any material change of circumstances since the making of a VPO.

13. [25]

    These considerations inform and underpin the exercise of discretion conferred on this Court by s 9 of the VPA, and it is with these considerations in mind that the Applicant’s contentions must be considered.

Consideration

1. [26]

   It is a common feature of applications such as the present that the applicant who has already been made the subject of a VPO perseveres with matters which have been ventilated in a multiplicity of previous proceedings which have in fact led or contributed to the VPO being made in the first place: see, for example, Pearce (Formerly Pascoe) v Liprini [2014] NSWSC 1316. The current application was, at least in large part, no exception.

2. [27]

   Moreover, a number of the Applicant’s arguments were challenges to findings made by the Court in the hearing leading to the making of the VPO, regurgitating arguments that had been considered and rejected. For example, the Applicant contended that this Court erred in Proietti 2024 at [17] in finding that only one of the four indicia established by s 6 of the VPA need be satisfied for proceedings to be characterised as “vexatious proceedings” arguing that, by failing to find that the impugned proceedings fell within each category, this Court erred in characterising the proceedings as vexatious. In Proietti 2024 at [17], this Court had held that a VPO may be justified where a person “frequently” institutes proceedings “which satisfy any of the four criteria established by s 6”. This conclusion was consistent with the use of the word “includes” in s 6 of the VPA and the reasoning in Viavattene at [14].

3. [28]

   In any event, as noted earlier, an application to vary or set aside a VPO may not be used to bring a de facto appeal.

4. [29]

   The same observation may be made in relation to the Applicant’s contention that the Court erred in finding that the impugned proceedings constituted an abuse of process because the Court failed to substantiate its finding that the Applicant’s institution of five sets of proceedings were oppressive or brought the administration of justice into disrepute.

5. [30]

   In any event, the Court explained in Proietti 2024 how the Applicant’s institution of five sets of proceedings, each unsuccessful and advancing substantially similar arguments, was both oppressive and liable to undermine the administration of justice:

6. [31]

   The Applicant further argued that mere re-agitation of issues is insufficient to constitute an abuse of process. Rather, the Applicant contended that proceedings must be both oppressive and have no reasonable grounds to be characterised as an abuse of process.

7. [32]

   Apart from being a de facto appeal ground, being advanced impermissibly under the guise of a set aside application, that argument is misconceived. First, as explained above at [30], this Court characterised the Applicant’s proceedings as oppressive to Peter and the trustees. Secondly, the absence of “reasonable grounds” is an indicium under s 6(c) of the VPA, which, as explained above, need not be proven where an alternative criterion is satisfied (here, abuse of process: VPA, s 6(a)). Thirdly, and finally, the Court in Proietti 2024 characterised the First Appeal as having no reasonable grounds at [109]:

8. [33]

   Next, the Applicant argued that he had been denied procedural fairness, not by the Court in Proietti 2024 but at first instance, and in the First Appeal (adopting the identification of proceedings made in Proietti 2024). Thus the Applicant complained that he was denied procedural fairness because:

9. [34]

   This was a re-agitation of arguments considered and dismissed in Proietti 2024 at [101] where the Court said:

10. [35]

    The Applicant argued that this Court’s reasoning at [101] was in error because the “case for pleadings” was undeniable in circumstances where his case involved two assertions of estoppel, one of which had five elements. The Applicant contended that pleadings would have enabled him to better develop the elements of such claims. Such arguments repeat submissions made in earlier proceedings, and are misconceived for the reasons explained by this Court in Proietti 2024 at [101] and the First Appeal at [77]-[83]. They are yet a further illustration of the Applicant seeking to use the s 9 VPA procedure illegitimately to formulate and seek to mount a de facto appeal.

11. [36]

    Next, the Applicant argued that this Court, in Proietti 2024, erred in failing to provide adequate reasons because it purportedly: (i) “has relied on the High Courts [sic] determination” to refuse special leave; and (ii) erred in upholding the First Appeal’s finding that the Applicant was not denied procedural fairness. This latter argument has been adequately dealt with at [33]-[35] above.

12. [37]

    In respect of the first argument, this Court explained in Proietti 2024 that:

13. [38]

    Once again, this aspect of the Applicant’s complaint does not provide a proper basis to have the VPO set aside. The argument also misconceives what this Court said in Proietti 2024 about the High Court’s refusal to grant special leave to appeal. This argument should be rejected and provides no basis to set aside this Court’s VPO.

14. [39]

    The Applicant raised an allegation that this Court was:

15. [40]

    The Applicant further argued that this Court misquoted him in Proietti 2024 by stating that the Applicant was not prepared to cease commencing further proceedings until he regained title to the Marsfield Property. That appears to be a reference to the following passages from the earlier reasons for judgment:

16. [41]

    The reasoning is and was clear and the Applicant’s submission provides no basis for setting aside the VPO.

17. [42]

    The application must be dismissed.

18. [43]

    The trustees contended that the costs of these proceedings should be paid from the Applicant’s share in the proceeds of the sale of the Marsfield Property (which continues to be held on trust by the trustees) on an indemnity basis. The trustees argued that it would be prejudicial against Peter to equally share the costs of proceedings which have been, and continue to be, an abuse of process.

19. [44]

    As such, the trustees sought the following orders:

20. [45]

    We would make orders 1 and 3. There is no apparent basis, and none was advanced, as to why the Applicant’s share of the proceeds of sale of the Marsfield property should be paid into Court as opposed to being dealt with by the trustees in accordance with their obligations.