FEDERAL COURT OF AUSTRALIA Mbuzi v AGL Retail Energy Limited [2016] FCA 590 File number: QUD 881 of 2015 Judge: EDELMAN J Date of judgment: 5 July 2016 Catchwords: PRACTICE AND PROCEDURE – respondent's application for summary dismissal of the applicant's application to set aside notice of discontinuance and to reopen former proceeding – notice of discontinuance filed for former proceeding – proposed reopening for the purpose of alleging breach of settlement deed – whether vexatious proceedings order should be made Legislation: Federal Court Rules 2011 (Cth) rr 1.31, 1.32, 26.12, 26.12(1), 26.14, 36.73(2) Cases cited: Ashby v Slipper [2014] FCA 973 Autodesk Inc v Dyason (No 2) [1993] HCA 6; (1993) 176 CLR 30 Chen v Monash University [2016] FCAFC 66 D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1 Davis v Insolvency and Trustee Service Australia (No 2) [2011] FCAFC 9; (2011) 190 FCR 437 Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6 McDermott v Black [1940] HCA 4; (1940) 63 CLR 161 Moussa v Minister for Immigration and Border Protection [2015] FCA 1280 Owners of Cargo of the Kronprinz v Owners of the Kronprinz (1887) 12 App Cas 256 SZFOX v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1374; (2005) 88 ALD 138 Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 471 Walsh v Greater Metropolitan Cemeteries Trust (No 2) [2014] FCA 456; (2014) 243 IR 468 Date of hearing: Determined on the papers Date of last submissions: 4 July 2016 (Applicant) Registry: Queensland Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 38 Counsel for the Applicant: The Applicant appeared in person Counsel for the Respondent: Mr AC Barlow Solicitor for the Respondent: Geoffrey Mendelson Lawyers ORDERS QUD 881 of 2015 BETWEEN: JOSIYAS MBUZI Applicant AND: AGL SALES PTY LIMITED ACN 074 839 464 Respondent JUDGE: EDELMAN J DATE OF ORDER: 5 July 2016 THE COURT ORDERS THAT: 1. The applicant's application dated 30 March 2016 be dismissed. 2. The applicant pay the respondent's costs of the applicant's application in order 1, to be taxed if not agreed. 3. The respondent has liberty to make an application, by 1 August 2016, that the taxation of the costs in order 2 be undertaken on an indemnity basis. 4. Any costs of the respondent's application for vexatious proceedings orders, including the costs of the three affidavits filed by the respondent on 6 May 2016, be reserved and excluded from the costs in order 2. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT EDELMAN J: Introduction and background to Mr Mbuzi's interlocutory application to reopen 1 The applicant, Mr Mbuzi, is an unrepresented litigant. On 24 April 2012 a vexatious proceedings order was made against him in the Supreme Court of Queensland. He was prohibited from commencing an action in any Queensland court without leave. On 5 December 2014, orders were made in this Court prohibiting Mr Mbuzi from commencing any proceeding in any registry of the Federal Court of Australia against Griffith University or any employee, officer, Council member, or student of Griffith University without leave. In this application Mr Mbuzi seeks to set aside a discontinuance of proceeding against the respondent, his former electricity supplier (AGL Sales Pty Limited, hereafter AGL) and to reopen that proceeding. AGL (by an application described as a "strike out") sought to have Mr Mbuzi's application dismissed without further hearing. AGL also sought further vexatious proceedings orders to be made against Mr Mbuzi. 2 In September 2015, Mr Mbuzi commenced an action against various parties in this Court. His claim was based upon a notice he received informing him that his electricity account was overdue. Mr Mbuzi sought injunctions and damages of $10,000. The action proceeded only against AGL. 3 Following mediation, on 17 February 2016 Mr Mbuzi discontinued his action against AGL. Less than one month later, he applied by an interlocutory application to set aside his discontinuance and to reopen the action. He did this because on 18 March 2016, he was sent an invoice from AGL for $496. He told AGL that he required payment of the $10,000 claimed in the original proceeding as well as other amounts including payment to him of "the applicable mediation hearing fees" of $855 and "the applicable filing fees of the interlocutory application" of $545. Mr Mbuzi had not paid the fees that he sought from AGL. Those fees had been waived. 4 Mr Mbuzi sought orders that he file affidavit evidence, that AGL file affidavit evidence in response, that he file affidavit evidence in reply, that both parties file written submissions, and that the matter be listed for a two hour hearing. 5 AGL applied to "strike out" Mr Mbuzi's application to reopen rather than to allow it to proceed to a hearing. Although AGL's application was described as a "strike out", the orders sought by AGL were that Mr Mbuzi's interlocutory application be dismissed without further hearing. At a directions hearing, I raised the issue of whether AGL's "strike out" application should be determined on the papers. Counsel for AGL accepted that Mr Mbuzi should be given the opportunity to consider the submissions made by AGL, which would be set out in writing. Neither Mr Mbuzi nor AGL opposed the determination of AGL's application on the papers. Given the nature and circumstances of Mr Mbuzi's application, I made that order (Federal Court Rules 2011 (Cth) rr 1.31, 1.32). 6 At the time of the directions hearing when I made orders that the application be determined on the papers, AGL had not made any application for a vexatious proceedings order. Counsel for AGL had said that he did not have instructions to make such an application. Subsequently, AGL applied for vexatious proceedings orders against Mr Mbuzi. Mr Mbuzi submitted that the application had not been properly brought because it was not formally filed and was not raised at the directions hearing. 7 After considering Mr Mbuzi's application, his affidavit in support of it, and his submissions together with the submissions of AGL, I am satisfied on the papers that Mr Mbuzi's application to reopen and to set aside his notice of discontinuance should be dismissed. It is appropriate that if the application for vexatious proceedings orders is to proceed it should be made formally and Mr Mbuzi should be given the opportunity to be heard orally. Mr Mbuzi's September 2015 action against AGL 8 In September 2015, Mr Mbuzi brought an action in this Court against various parties. After an interlocutory hearing the action was discontinued against all parties. Mr Mbuzi was given leave, which was unopposed, to amend his claim to add the current respondent, AGL, to the proceeding. 9 Mr Mbuzi's claim against AGL was based upon a notice he received informing him that his electricity account was overdue and that if payment of $1,129.58 was not received by 11 August 2015, "recovery action will commence which may result in additional cost to you". Mr Mbuzi sought an injunction restraining AGL from acting upon the electricity disconnection notice issued to him. And he claimed damages of $10,000 for "emotional distress, annoyance, inconvenience, undue harassment, negligence, unconscionable conduct, deceptive and misleading conduct and breach of statutory regulation". He also sought an interim injunction pending determination of his application. 10 On 17 February 2016, the parties attended mediation. They settled the dispute. Mr Mbuzi filed a notice of discontinuance in accordance with r 26.12(1) of the Federal Court Rules 2011 (Cth). The notice was signed by both parties. It provided: Josiyas Mbuzi, the Applicant discontinues the whole of the proceeding. Each party consents to the discontinuance. The discontinuance is by consent on the following terms: 1. as per the deed of settlement of 17 February 2016. 11 The events which subsequently occurred include matters contained in affidavit evidence filed by AGL. Mr Mbuzi objects to AGL's filing of that affidavit evidence on the basis that it was filed without leave. The programming orders that I made for AGL's application for strike out of Mr Mbuzi's application provided for AGL to file submissions but not evidence. However, Mr Mbuzi had filed an affidavit in support of his application to reopen. AGL's affidavit evidence simply provided additional details to the matters set out in Mr Mbuzi's affidavit. The affidavit evidence by AGL is brief. It does not affect any of my conclusions although it would have been important evidence to consider in relation to an application for vexatious proceedings orders. I consider that AGL should have leave to file that evidence of context in circumstances in which, at Mr Mbuzi's request, Mr Mbuzi was given substantial extra time to respond to that evidence and AGL's submissions. As a consequence of his request for an extension of time he was given nearly two months to respond. 12 The parties' deed of settlement is annexed to an affidavit that has been filed by AGL. A term of the deed is that it remain confidential. Even if the deed were somehow also the subject of legal professional privilege, Mr Mbuzi had relied upon, and quoted from, the deed as a basis for his application to reopen the proceeding. He has waived any right that he has to privilege against AGL. 13 The deed of settlement provides in clause 3 that that Mr Mbuzi must replace AGL as his electricity supplier on or before 31 March 2016. 14 The deed of settlement also provides that AGL must waive any further fees in respect of Mr Mbuzi for the period up to 31 March 2016. 15 On 18 March 2016, Mr Mbuzi was sent an invoice from AGL for $496.35 for the period between 16 December 2015 and 16 March 2016. Mr Mbuzi did not pay the invoice. 16 Mr Mbuzi was aware of the solicitors for AGL. He did not contact them. 17 On 30 March 2016, Mr Mbuzi filed an interlocutory application seeking to set aside his notice of discontinuance and to reopen the proceeding. His application was accompanied by an affidavit which alleged that AGL had reneged on the terms of the deed of settlement by sending him the account. On the same day, my associate emailed the parties informing them that they were expected to have conferred prior to the bringing of the application. 18 On 31 March 2016, following a request by AGL's solicitors for the application, Mr Mbuzi sent an email to AGL's solicitors attaching a copy of his application. He referred to AGL's conduct as "disgraceful" and said that his terms for settlement were: (1) payment of the $10,000 claimed in the original proceedings; (2) payment to him of "the applicable mediation hearing fees" of $855; (3) payment to him of "the applicable filing fees of the interlocutory application" of $545; (4) payment of travel costs of $450; (5) payment of parking costs of $70; (6) payment of document preparation costs of $150; and (7) waiver of any electricity costs above $400. 19 As to items (2) and (3) which were demanded by Mr Mbuzi, the records of the court show that these fees were waived by the Registry. Indeed, all of Mr Mbuzi's court fees have been waived in accordance with Registry policy. Mr Mbuzi did not inform AGL of this. 20 On 1 April 2016, AGL revised Mr Mbuzi's account so that it had a balance of zero. 21 On 6 April 2016 a solicitor for AGL emailed to Mr Mbuzi the new account statement, which showed that there was no money outstanding. The solicitor apologised for the confusion, confirmed that Mr Mbuzi owed no money to AGL, and provided Mr Mbuzi with a further indulgence to replace AGL as his electricity retailer. 22 Mr Mbuzi seeks the following orders: (1) the notice of discontinuance filed on 17 February 2016 be set aside; (2) the amended application be reopened; (3) AGL pay Mr Mbuzi's court fees and expenses; and (4) any other orders the Court deems fit. Relevant principles regarding reopening 23 Rule 26.12 of the Federal Court Rules provides that a party may, without the Court's leave, discontinue a proceeding by filing a notice of discontinuance in accordance with the prescribed form, at any time before the close of pleadings. Unlike the rules pertaining to the discontinuance of an appeal, there is no provision that a notice of discontinuance has the effect of an order of the Court dismissing the proceeding (cf Federal Court Rules r 36.73(2)). 24 This application by Mr Mbuzi to reopen his proceeding is based only upon r 1.32 of the Federal Court Rules. That rule provides that "The Court may make any order that the Court considers appropriate in the interests of justice." 25 In Chen v Monash University [2016] FCAFC 66 [50] the Full Court said this of r 1.32: While apparently broad in scope, this rule must be understood as one arising under the [Federal Court of Australia Act] to facilitate the exercise of powers bestowed on the Court and is not itself the source of a jurisdiction going beyond the confines of jurisdiction expressly or impliedly conferred on the Court. If the Court does not have the jurisdiction or power to set aside a notice of discontinuance under the [Federal Court of Australia Act], r 1.32 does not and cannot supply the jurisdiction to do so. 26 As an application which is based only upon r 1.32, it may be that Mr Mbuzi's application to set aside his notice of discontinuance and reopen the proceeding is incompetent. However, in any event, for the reasons I explain below, I do not consider that it is in the interests of justice for the proceeding to be reopened. Do the interests of justice favour reopening the proceeding? 27 Whether leave to reopen proceedings should be granted or refused depends on the interests of justice: Ashby v Slipper [2014] FCA 973 [10] (Flick J) citing Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 471, 478 (Clarke JA; Mahoney and Meagher JJA agreeing); Walsh v Greater Metropolitan Cemeteries Trust (No 2) [2014] FCA 456; (2014) 243 IR 468, 477 [48] (Bromberg J). 28 In this case, for five reasons, I consider that it is plainly not in the interests of justice to reopen the proceeding. This conclusion is so plain that Mr Mbuzi's application should be dismissed based on the submissions of the parties without further hearing. 29 First, there is no basis in Mr Mbuzi's affidavit evidence filed in support of his interlocutory application, or in his submissions, upon which Mr Mbuzi can set aside the notice of discontinuance of the proceeding. Mr Mbuzi does not dispute that the discontinuance was filed by him knowingly and voluntarily. He does not allege that it was filed as a result of fraud or duress: Moussa v Minister for Immigration and Border Protection [2015] FCA 1280. Nor do any of the facts contained in Mr Mbuzi's affidavit come close to establishing any other basis to set aside the notice of discontinuance. On this ground alone it is sufficient to set aside Mr Mbuzi's application. 30 Secondly, and in any event, there is a need for finality. The parties settled their dispute by deed. They discontinued the proceeding by consent. 31 The need for certainty and finality in decision making means that the jurisdiction to reopen proceedings is used sparingly: Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6 [772] (the Court). As Gleeson CJ, Gummow, Hayne and Heydon JJ said in D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1, 17 [34] "[a] central and pervading tenet of the judicial system is that controversies, once resolved, are not to be reopened except in a few, narrowly defined, circumstances." Similar sentiments were expressed by the Full Court of this Court in Davis v Insolvency and Trustee Service Australia (No 2) [2011] FCAFC 9; (2011) 190 FCR 437, 439 [6]: "[b]ecause of the importance of the public interest in the finality of litigation, it is a jurisdiction 'to be exercised with great caution'" (citing Autodesk Inc v Dyason (No 2) [1993] HCA 6; (1993) 176 CLR 300, 302 (Mason CJ)). 32 Thirdly, Mr Mbuzi's application is to reopen the proceeding for an alleged breach of the settlement deed. Plainly, his former proceeding involved no claim for AGL's subsequent alleged breach of the deed of settlement. Mr Mbuzi does not seek to amend his discontinued application or claim. In other words, he seeks to reopen a proceeding by reference to matters which were not raised in that proceeding. Again, this basis together with the fourth point below, are sufficient by themselves for Mr Mbuzi's interlocutory application to be dismissed. 33 Fourthly, and related to the third point, if proceedings were to be commenced for breach of the settlement deed then, if they were legitimate proceedings, they might have been commenced as a fresh action rather than as agitation of a new action within a previously discontinued proceeding. A discontinuance is not usually a defence to a proceeding even for the same, or substantially the same, cause of action: Federal Court Rules r 26.14; SZFOX v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1374; (2005) 88 ALD 138, 142 [16]-[17] (Edmonds J) citing Owners of Cargo of the Kronprinz v Owners of the Kronprinz (1887) 12 App Cas 256, 262 (Lord Herschell). There may, however, be issues arising from clause 6 of the deed which provides, "This Deed may be pleaded as a bar to any further proceedings": see McDermott v Black [1940] HCA 4; (1940) 63 CLR 161, 183-185 (Dixon J). Whether a new proceeding would be vexatious, or whether clause 6 would be a bar to a fresh cause of action based on breach of the deed itself need not now be considered. 34 Fifthly, the prospects of success of Mr Mbuzi's proceeding, if reopened, are a matter which can be taken into account (Chen v Monash University [2016] FCAFC 66 [48] (the Court)). Even if Mr Mbuzi were to amend his claim to allege the breach of the settlement deed, it is (at the highest) extremely doubtful that he could obtain the relief which he sought in his email to AGL. He would not be entitled to be paid court costs that he has not incurred. He would not be entitled to be paid mediation costs that he has not incurred. And it is, at best, extremely doubtful that he would be entitled to $10,000 for any breach of the settlement deed which is found to arise from the sending of the invoice on 18 March 2016 in circumstances in which the invoice was not paid by Mr Mbuzi and, within a week or so, AGL apologised for its error. This is another, independent, reason why Mr Mbuzi's application to reopen should be dismissed. Conclusion 35 Mr Mbuzi's application to reopen his previous proceeding and to set aside his notice of discontinuance has no prospect of success. There is no interest of justice in favour of reopening the proceeding or setting aside the parties' notice of discontinuance. 36 Since AGL's vexatious proceeding application was not foreshadowed at the directions hearing when I ordered that this matter be decided on the papers, it would be appropriate to give Mr Mbuzi an opportunity to be heard orally in relation to that application. The application raises serious allegations against Mr Mbuzi including the making of threats without any basis to do so. If that application is to be brought then it should be brought formally. 37 AGL also seeks an order that Mr Mbuzi pay its costs of this application on an indemnity basis. Indemnity costs are appropriate where an action has been commenced or continued where the applicant, properly advised, should have known that he had no chance of success: Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397, 401 (Woodward J). They will be granted where the action was commenced or continued for some ulterior motive, or in wilful disregard of the facts or law (at 401). AGL did not foreshadow an application for indemnity costs when this matter was listed for hearing on the papers. Again, if indemnity costs are to be ordered then Mr Mbuzi should have the opportunity to be heard. 38 I will make the usual order for costs in AGL's favour with liberty to make an application for indemnity costs. The order for costs will not include AGL's costs of its affidavit material. That material was relevant to the vexatious proceeding orders it sought. Those costs should be reserved. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edelman. Associate: Dated: 5 July 2016