SPAUTZ v NICHOLAS SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL SAMUELS, MAHONEY and PRIESTLEY JJA 7 June 1990, 12 December 1990 [1990] NSWCA 170 ABUSE OF PROCESS — unsustainable claim in District Court held to be abuse of process of that court — appeal against declaration in Common Law Division (and consequential orders) that the proceedings in District Court be stayed as abuse of process, dismissed — in general, however, such applications should be made in the District Court which has ample power to deal with unsustainable claims. VEXATIOUS LITIGANT — declaration made at first instance that defendant a vexatious litigant — declaration made under s84(2) Supreme Court Act on ground that defendant had habitually and persistently instituted vexatious legal proceedings against plaintiff — two proceedings only relied on, one in 1983, one in 1987 — held such proceedings did not show defendant had habitually and persistently instituted legal proceedings. Samuels JA I agree with Priestley JA. Mahoney JA On or about 16 December 1981 Dr Spautz laid informations against four persons charging them with criminal defamation. Mr Nicholas, in his capacity as a barrister, appeared on behalf of each of the defendants and submitted that the informations were defective in substance and form. The magistrate upheld his submission. Dr Spautz then laid fresh informations It is out of this that the proceeding has arisen. On 15 December 1987, Dr Spautz sued Mr Nicholas and the magistrate in the District Court in relation to what happened. The magistrate is no longer a party to the District Court proceeding. Mr Nicholas has applied to this Court for a declaration that the proceeding in the District Court is an abuse of the process of that Court and that Dr Spautz is a vexatious litigant. On 16 December 1988 Hunt J made the orders sought. Dr Spautz has appealed to this Court against his Honour's orders. In my opinion the proceeding brought in the District Court is clearly an abuse of the process of that Court. After alleging what had taken place before the magistrate and the proceedings upon fresh informations lodged by him, Dr Spautz claimed that he, in consequence of what had taken place, had "suffered injury, justifying damages". He gave particulars as follows: "a. The plaintiff was deprived of his right to prosecute the four accused persons for several counts each; b. The plaintiff was deprived of the opportunity to have Alan John Williams committed for trial on the numerous other counts which had been particularized on the original, forcibly-withdrawn Information; none of which were absolutely privileged; c. The plaintiff was required to pay costs. D The plaintiff's reputation was damaged as a result of the outcome of the committal hearing, the costs orders, his incarceration, and the attendant adverse publicity." 2 UNREPORTED JUDGMENTS The statement of claim then proceeded by way of summary of Dr Spautz' complaints: "12. In summary, the plaintiff alleges that the foregoing actions complained of constituted the following actionable torts: a. Four breaches of statutory duty by the defendant Nicholas, not to object to the substance or form of any Information; b. Four breaches of statutory duty by the defendant Cleary, not to allow said objections; c. Intimidation of the plaintiff by the defendant Cleary; D Alternatively, one or more misfeasances in public office by the defendant Cleary, insofar as the actions complained of were non-judicial and outside of his jurisdiction, as well as being unlawful to mis-presumptive knowledge and injurious to the plaintiff. 13. Therefore the plaintiff claims the following remedies: a. A declaration that the above complained-of actions by the defendant Cleary were null and void; b. A declaration that the Williams committal hearing was consequently null and void; c. An order that the four forcibly-withdrawn Informations be reinstated and committal hearings be conducted expeditiously; D An order that said committal hearings be conducted by a different Magistrate than the defendant Cleary; e. Damages of $100,000, of which $5000 is special, the balance being aggravated and/or exemplary; F Costs." In my opinion the District Court proceeding is clearly an abuse of that process. It has no chance of success. It claims relief which is not available in that Court. And, as far as concerns Mr Nicholas, it is clear beyond argument that there were no "breaches of statutory duty" as alleged against him. The phrase "abuse of process" and the relief available in respect of it have recently been the subject of consideration in other cases in this Court. The evidence placed before the court in support of the present proceeding is set forth in the affidavit of Pamela Anne Madafiglio. That affidavit refers to a large number of proceedings as well as the proceedings in the Magistrate's Court to which Dr Spautz' District Court claim is primarily directed. The inference from the facts stated in the affidavit is, I think, that the proceeding against Mr Nicholas was brought for an ulterior purpose and one beyond the purpose for which the proceeding could be brought in the District Court. However, it is not necessary to determine the present matter upon that basis. A proceeding so clearly unsustainable in a court is, in my opinion, an abuse of the process of the court: see generally Bayne v Baillieu (1908) 6 CLR 382; Varawa v Howard Smith Co Ltd (1911) 13 CLR 35 at 91 et seq. See generally the cases collected in the Supreme Court Practice at 3270. There is power in this Court to act in protection of the proceedings of the District Court: see R v Grassby (1989) 1 NSWLR 109 at 116; 63 ALJR 630. The court has frequently acted to prevent abuse of the proceedings in the District Court in its criminal jurisdiction. That power extends to the protection of the court in its civil jurisdiction. In my opinion therefore the court can and should make the orders from which the present appeal is brought. URJ SPAUTZ v NICHOLAS (Priestley Jamahoney JA) 3 In my opinion his Honour was correct in holding that Dr Spautz is and may be declared a vexatious litigant. The application is made under s84(2) of the Supreme Court Act 1970. For that subsection to apply, it must appear that "any person... habitually and persistently and without any reasonable ground institutes vexatious legal proceedings against any person in this subsection called the person aggrieved), whether in the Court or in any inferior court...". Therefore the proceedings which are directly relevant are those brought against Mr Nicholas. The proceedings against other parties, as detailed in the affidavit of Miss Madafiglio, cannot directly be relied upon. Hunt J held, in my opinion correctly, that there have been only two proceedings brought by Dr Spautz against Mr Nicholas. They are proceedings brought by Dr Spautz against Mr Nicholas consisting "of a prosecution alleging that, because of the submissions made by him on behalf of his clients in the earlier committal proceeding, he had sought to pervert the course of justice"; and the present proceeding in the District Court. Hunt J recorded that Dr Spautz had "conceded before me that the basis of the allegation against Mr Nicholas in that prosecution was that he had, in the role of counsel and acting on behalf of his clients, nevertheless been guilty of such a perversion of the course of justice by reason of the submissions made ky him to the magistrate, which were wrong in law". Hunt J held that both the earlier proceeding and the present proceeding in the District Court are proceedings without any reasonable grounds" within the subsection and that having regard to their nature both proceedings are properly described as vexatious. We concluded that Dr Spautz had acted within the subsection. I agree with his Honour's conclusion. If the words "habitually" and "persistently" are to be considered separately, the evidence establishes that each of them is satisfied. "Habitually" refers, as such, not to the number of the proceedings but to the person in question and whether what he has done can be described as "habitual". Where a second proceeding has been brought, it is, in my opinion, possible to conclude that the bringing of a proceeding against the relevant defendant constitutes conduct properly described as "habitual". If and insofar as it may be necessary, it is in this regard, in my opinion proper to take into account that this litigation is, as appears from the evidence now before the court, part of a calculated course of conduct undertaken by Dr Spautz against the group of persons there referred to and persons associated with them. It is, I think, possible to see that fact as evidencing the "habitual" nature of what is done in respect of Mr Nicholas. I am satisfied also that, upon a similar basis of reasoning, Dr Spautz' actions in respect of Mr Nicholas are relevantly "persistent". Thave, in dealing with this proceeding, dealt with it in isolation from the other proceedings referred to in the evidence now before the court and apart from the purpose which, in my opinion, is evidenced by what has been and is being done by Dr Spautz. To do this is, in a sense, to deal with his proceeding upon an artificial basis. However, as I have said, the significance of Dr Spautz' object in bringing the proceedings is the subject of pending appeals before this Court and it is therefore appropriate that, in the manner to which I have referred, the present matter be dealt with separately. In my opinion the appeal should be dismissed with costs. Priestley Jamahoney JA has set out in his reasons the circumstances from which the present appeal emerges. 4 UNREPORTED JUDGMENTS The first matter for consideration is whether Hunt J was right in declaring that the proceedings commenced by Dr Spautz against Mr Nicholas QC, in the District Court on 15 December 1987 were an abuse of the process of that court. In my opinion he was; for the reasons given by him and now by Mahoney JA, the proceedings did not, on any view of the claim formulated by Dr Spautz, have any chance of success, and on that ground, in the circumstances of the case, were an abuse of process. There is a real question to my mind whether Mr Nicholas should have sought relief in respect of the District Court proceedings in the Supreme Court. At the time the proceedings against him were begun by Dr Spautz, Ptl1A 13 of the District Court Rules provided that that court could order that proceedings which were an abuse of the court's process could be stayed or dismissed generally. The District Court's powers under this rule were the same as those of the Supreme Court in regard to proceedings in the Supreme Court: see Supreme Court Rules Pt 13 r5. Given that any examination of Dr Spautz's claim against Mr Nicholas was bound to end in the conclusion that it was unsustainable, there was no need for this court's extraordinary supervisory jurisdiction to be exercised in regard to Dr Spautz's claim against Mr Nicholas in the District Court; the regular course of proceeding would be for Mr Nicholas to apply to the District Court to have Dr Spautz's proceedings stayed or dismissed generally by the District Court itself. In my opinion the better course for this court to have pursued in regard to Mr Nicholas's application to it, would have been to decline to exercise its extraordinary jurisdiction and to leave it to the District Court to deal with the matter. However, in the present case there has been a full hearing in this court on the sustainability of Dr Spautz's cause of action against Mr Nicholas, there can in my opinion be no arguable doubt about the conclusion reached by Hunt J, and to set aside Hunt J's declaration and consequential orders in regard to that unsustainable cause of action for the sake of ensuring that the matter be dealt with in the more appropriate court, would be a futile waste of the resources of the District Court, Dr Spautz and Mr Nicholas. My opinion therefore is that of the three formal orders made by Hunt J concerning the unsustainable cause of action, 0.1 (a declaration) and 0.3 and 0.4 (a stay and an injunction consequential upon 0.1) should remain undisturbed. For practical purposes, these orders should have the effect of putting a permanent end to the District Court proceedings brought by Dr Spautz against Mr Nicholas, although, in formal terms, dismissal of the proceedings in the District Court would have been more satisfactory. The next aspect of the appeal concerns further orders made by Hunt J. 0.2 was a declaration that Dr Spautz was a vexatious litigant within the meaning of s84(2) of the Supreme Court Act 1970. O.5 and O.6 were consequential upon o.2. S84(2) is as follows: "Where any person (in this subsection called the vexatious litigant) habitually and persistently and without any reasonable ground institutes vexatious legal proceedings against any person (in this subsection called the person aggrieved), whether in the Court or in any inferior court, the Court may, on application by the person aggrieved, order that the vexatious litigant shall not, without leave of the Court, institute any legal proceedings against the person aggrieved in any court and that any legal proceedings instituted by the vexatious litigant against the person aggrieved in any court before the making of the order shall not be continued by him without leave of the Court." URJ SPAUTZ v NICHOLAS (Priestley Jamahoney JA) 5 Translating the relevant part of the subsection into terms of the present case, before an order could be made under the subsection, the court had to be satisfied that Dr Spautz habitually and persistently and without any reasonable ground had instituted vexatious legal proceedings against Mr Nicholas. The evidence before Hunt J showed that: (i) On 19 August 1983 Dr Spautz laid an information charging Mr Nicholas with attempting to pervert the course of public justice; (ii) On 15 December 1987 Dr Spautz began District Court proceedings against Mr Nicholas claiming damages from him for four alleged breaches of statutory duty. In regard to the 1983 criminal charge, Yeldham J stayed further prosecution of the proceedings by order of 18 November 1983, at the same time making a declaration that Dr Spautz was a vexatious litigant. So far as I can see the only possible basis for this order was s84(2); the only other source of power for such an order is s84(1) pursuant to which orders may only be made upon application by the Attorney General, who was not a party to the proceedings before Yeldham J. Subject to one qualification, I do not see how Yeldham J could make an order under s84(2) against Dr Spautz, upon the application of Mr Nicholas, when only one proceeding had been commenced against Mr Nicholas by Dr Spautz. Similarly, and subject to the same qualification, I do not see how two proceedings instituted by Dr Spautz against Mr Nicholas, one in August 1983 and the other in December 1987 could be the basis of a conclusion that Dr Spautz had habitually and persistently instituted proceedings against Mr Nicholas. The qualification I have mentioned is that there was before Yeldham J evidence of numerous legal proceedings taken by Dr Spautz against other persons, and before Hunt J there was the same evidence and further evidence to the same effect, which furnished ample foundation for thinking that Dr Spautz habitually and persistently instituted legal proceedings against persons who in his view were associated with his dismissal from Newcastle University in May 1980. Mr Nicholas was in Dr Spautz's mind connected with these persons because he appeared for some of them in defending criminal charges instituted against them by Dr Spautz. Fuller details of these matters are set out in Spautz v Gibbs, an unreported decision of this court delivered on 28 November 1990. In one sense all the proceedings brought by Dr Spautz against the University persons and Mr Nicholas were connected. The proceedings collectively certainly justified a conclusion, either in November 1983 or December 1988 (when Hunt J made his orders) that Dr Spautz had habitually and persistently instituted legal proceedings against what might be called the University group. It was this circumstance that led Hunt J to conclude that the habitual and persistent institution element of s84(2) had been made out by Mr Nicholas against Dr Spautz; he was of opinion that the question could and should be decided against the background of all the litigation instituted by Dr Spautz arising from or connected with his claims against the University. Presumably Yeldham J had earlier acted on the same basis. Upon my reading of s84 of the Supreme Court Act, there is a sharp separation in function between subss (1) and (2). Subs(1) deals with a vexatious litigant who has habitually and persistently and without any reasonable ground instituted vexatious legal proceedings; it is not limited to legal proceedings against a particular person, and is clearly apt for the situation where, to take one of an infinity of examples, the vexatious litigant has instituted vexatious legal proceedings once only against each of fifty persons. Proceedings under the 6 UNREPORTED JUDGMENTS subsection can however only be brought by the Attorney General. An order under the subsection if granted prevents the vexatious litigant from instituting any legal proceedings in any court against any person, unless the Court grants leave. When this subsection is contrasted with subs(2), it seems to me to be clear that subs(2) confines itself strictly to the question whether an applicant for an order under the subsection can persuade the court that the person against whom the order is sought has habitually and persistently and without any reasonable ground instituted vexatious legal proceedings against the applicant; it seems to me to be beside the point whether the allegedly vexatious litigant has instituted legal proceedings against persons other than the applicant. In my opinion therefore, the qualification I earlier referred to did not justify the approach to the interpretation of "habitually and persistently" in s84(2) which was taken by Hunt J. On the approach I take to "habitually and persistently" an.d giving those words what I understand to be their ordinary meaning, it is not, in my opinion, possible to say that the institution by Dr Spautz against Mr Nicholas of a legal proceeding in August 1983 and another in December 1987 amounted to habitual and persistent institution of legal proceedings by Dr Spautz against Mr Nicholas. In my opinion orders 2, 5 and 6 made by Hunt J should be set aside. Dr Spautz also sought in the appeal to have the orders made by Hunt J declared void on the ground that the reasonable observer might entertain a reasonable apprehension of bias on Hunt J's part against Dr Spautz. Apart from recording the fact that the argument was put to this court I do not think it necessary to say anything further about it, as in my opinion Dr Spautz did not have any arguable basis for his contention. The final matter to consider is that of the costs of the proceedings both before Hunt J and in this court. Despite the view's I have expressed concerning the inappropriateness of the abuse of process proceedings being brought in the Supreme Court, the result of the litigation is that Mr Nicholas holds the orders he obtained in this regard. On the other hand Dr Spautz has succeeded in regard to the s84(2) point. In a broad sense each party has won a matter he thought important and lost one. In my opinion it would be reasonable that there should be no order for costs either before Hunt J or in this court. The orders I propose are that: Appeal allowed in part and dismissed in part. 0.1, O.3 and O.4, affirmed. 0.2, O.5 and O.6, set aside. 0.7, as to costs of the summons, set aside and in lieu thereof substitute no order for the costs below. 5. No order for the costs of either party in this court. BYNE The Appellant appeared in person Counsel for the Respondent: BR McCLINTOCK Solicitors for the Respondent: MINTER ELLISON