Scott & Anor v HREOC [2009] FMCA 65 (6 February 2009)

Last Updated: 19 February 2009

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SCOTT & ANOR v HREOC

[2009] FMCA 65

PRACTICE AND PROCEEDURE – Vexatious litigants – rule 13.10(1)(b).

Federal Magistrates Court Rules 2001 (Cth), rr.13.10(1)(b), 13.11, 13.11(1)(b) Federal Court Rules 1979 (Cth), rr.13.11, 30.11, 62 Judiciary Act 1903 (Cth), s.39 Social Security Act 1991 (Cth) Administrative Decisions (Judicial Review Act 1977 (Cth)

Scott v Secretary, of Department of Social Security [1999] FCA 1774 Scott v Secretary, Department of Social Security [2000] FCA 1241 Scott v Pedler [2003] FCA 650 Scott v Pedler [2004] FCAC 67 Scott v HREOC [2007] FMCA 1642 Scott v HREOC [2007] FCA 2055 Attorney General (Vic) v Wentworth (1998) 14 NSWLR 481

Applicants:

RALPH & SOPHIE SCOTT

Respondent:

HUMAN RIGHTS & EQUAL OPPORTUNITIES COMMISSION

File Number:

MLG 1538 OF 2006

Judgment of:

Phipps FM

Hearing date:

13 August 2008

Date of Last Submission:

13 August 2008

Delivered at:

Melbourne

Delivered on:

6 February 2009

REPRESENTATION

The Applicants appearing in person:

Counsel for the Respondent:

Mr Ginnane

Solicitors for the Respondent:

Australian Government Solicitor

ORDERS

(1) That the applicants Ralph Scott and Sophie Scott or either of them pursuant to r.13.11(1)(b) of the Federal Magistrates Court Rules 2001 (Cth) shall not without leave of a Federal Magistrate institute any proceedings in the Federal Magistrates Court of Australia.
(2) That the applicants pay the second respondents costs in accordance with r.62 of the Federal Court Rules 1979 (Cth).

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE

MLG 1538 OF 2006

RALPH & SOPHIE SCOTT

Applicants

And

HUMAN RIGHTS & EQUAL OPPORTUNITY COMMISSION

Respondent

REASONS FOR JUDGMENT

1. Mr and Mrs Scott have a long history of dispute with the Department of Social Security and Centrelink concerning payment to them of disability support pension or special benefit. This includes a number of court proceedings, all of which have been unsuccessful. The Commonwealth of Australia now applies for the Court, on its own motion, to order that Mr and Mrs Scott may not issue a proceeding without the leave of the Court.
2. Rule 13.11 of the Federal Magistrates Court Rules 2001 (Cth) provides that if the Court is satisfied that a person has instituted a vexatious proceeding and the Court is satisfied that the person has habitually consistently, and without reasonable grounds instituted other vexatious proceedings in the Court or any other Australian Court (whether against the same person or against different persons) the Court may make such an order. The order can be made on the Court’s own motion, on the application of the Attorney General or Solicitor General of the Commonwealth or a State or Territory, or on the application of the Registrar.
3. The dispute with the Department of Social Security and then Centrelink was whether Mrs Scott was entitled to a disability support pension. She lodged a claim for such a benefit on 28 January 1993. Initially her claim was rejected. The dispute included an application to the Social Security Appeals Tribunal and the Administrative Appeals Tribunal. Eventually, on 9 September 1996, Centrelink decided to concede the application and the AAT decided that Mrs Scott was entitled to disability support pension from 28 January 1993.
4. In the meantime, Mrs Scott had been paid special benefit except for a three month period from early July 1993. However, the decision to stop the special benefit was reversed and payments backdated and made up. This happened on 1 September 1995.
5. Since then, Mr and Mrs Scott have been the litigating issues arising out of these incidents. Their complaints arise from the refusal to pay
   Mrs Scott special benefit during the three-month period in 1993, the failure to pay the disability support pension to Mrs Scott and delaying payments to Mr Scott. All of these proceedings have been dismissed. The proceedings, and their outcomes, are described in the affidavit of Mr Carson of Centrelink. The descriptions following are largely taken from the affidavit.

First Federal Court of Australia proceeding (VG 66 of 1996 and V69 of 1997)

6. On 19 April 1998 Mr and Mrs Scott commenced this action under s.39 of the Judiciary Act 1903 (Cth). They named Mr Handley, a senior member of the Administrative Appeals Tribunal as first respondent, and the Secretary, Department Social Security as second respondent. They alleged that Centrelink officers had intentionally, or recklessly or negligently misled the applicants in regard to the most appropriate payments to which they are entitled under the Social Security Act 1991 (Cth) and that Centrelink had illegally starved the applicants as they had been forced to live on the benefit paid to Mr Scott alone during the three-month period in 1993.
7. The applicants argued that Centrelink had intentionally denied them the right to a standard of living adequate to health and well-being, to security in the event of disability, to have their dignity respected, and the right to have their case reviewed by competent higher authorities. They alleged that as Centrelink was well aware of the applicants’ economic situation and nevertheless refused to grant the payments, the unlawful infringement of the applicants’ rights and the harm caused was intentional and contumelious.
8. Heerey J dismissed the application (Scott v Secretary, of Department of Social Security [1999] FCA 1774). He determined that no duty of care sounding in damages was owed by the Department. He then said at [84, 85]:
   • 84 In any case, Departmental officers have applied the Act properly. They have sought to do the best they could for her, consistently with their statutory obligations. In some instances they have made decisions giving Mrs Scott the benefit of the doubt. I refer in particular to Ms Chrystal's decision as to backdating of SB, and the decision to concede the AAT appeal.
   • 85 The allegations of malicious, conspiratorial conduct are completely without foundation. There was no misfeasance in public office.

First Full Court of Australia proceeding (No 31 of 2000)

9. The applicants appealed the decision of Heerey J. The Full Court dismissed the appeal (Scott v Secretary, Department of Social Security [2000] FCA 1241 (Beaumont, French and Finklestein JJ). Of the claim for misfeasance, Beaumont and French JJ said at [15]):
   • In the present case, his Honour made findings of fact which contradicted the existence of any intention to cause harm. Nor, on those findings, could it be demonstrated that any officer knowingly acted in excess of power, or was recklessly indifferent to the harm that was likely to ensue. In our view, no basis for appellate interference with those findings has been made out, especially given the advantage his Honour had in seeing the officers give their evidence.

First application for special leave to appeal to High Court of Australia (M112 of 2000)

10. The applicants then sought special leave to appeal to the High Court of Australia. The application was refused.

Second Federal Court of Australia proceeding (V625 of 2001)

11. The applicants commenced a second proceeding in the Federal Court of Australia. They named as respondents three officers of the Department of Social Security. They widened the basis of the application seeking declarations and injunctions, but largely relied on the allegations they had made in the previous proceedings. Gray ACJ dismissed the application. (Scott v Pedler [2003] FCA 650). His Honour said at [97]
12. As to costs he said at [99]:
    • The application must be dismissed. The ordinary rule is that costs follow the event. No occasion exists for departing from that rule in the present case. It would have been open to the applicants to have raised in the earlier proceeding before Heerey J all of the matters they raised in the present proceeding, and to have added as respondents to that proceeding the respondents they have sued in this. Instead, having failed before Heerey J, and on appeal, and on an application for special leave to appeal to the High Court, the applicants chose to start again with different respondents, and to attempt to broaden the issues and to differentiate them from those that were the subject of the earlier proceeding. They cannot contend that they have done so in any real sense in the public interest. The declaratory and injunctive relief they sought amounted to nothing more than attempts to restate what they contended to be the obligations of the respondents under the Social Security Act. I recognise that it is the case that the applicants are without significant resources. They are social security recipients and they are unwell. Poverty is not necessarily a ground for refraining from making an order for costs. In my view, it would be wrong to allow the applicants to think that they can persist in invoking the processes of the Court unsuccessfully and not be held responsible, at least to the extent of incurring debts for the costs of those whom they have chosen to sue.

Second Full Federal Court of Australia proceeding (V546 of 2003)

13. Again the applicants appealed. The appeal was dismissed (Scott v Pedler [2004] FCAC 67 (Gyles, Conti, and Allsop JJ). Gyles J said at [2-5]:
    • 2 The reasons of Gray ACJ and Conti J each demonstrate that this proceeding was effectively doomed to failure by the decision in Scott v Secretary, Department of Social Security [2000] FCA 1241[2000] FCA 1241; , 65 ALD 79. Indeed, the present proceeding is in substance, if not in form, an abuse of the process of the Court which has needlessly vexed the individual respondents over a long period. As remarked by Gray ACJ in his judgment at [99]:
    • ‘It would have been open to the applicants to have raised in the earlier proceeding before Heerey J all of the matters they raised in the present proceeding, and to have added as respondents to that proceeding the respondents they have sued in this. Instead, having failed before Heerey J, and on appeal, and on an application for special leave to appeal to the High Court, the applicants chose to start again with different respondents, and to attempt to broaden the issues and to differentiate them from those that were the subject of the earlier proceeding.’
    • 3 Besides the personal strain occasioned to the individuals is the distraction from duty of those individuals and the direct costs to the Department of participation in a series of hearings. The initial hearing of the case against the Department before Heerey J extended over four days, the appeal to the Full Court two days and the special leave application a further day. Naturally, counsel was briefed on all occasions, with senior and junior counsel briefed to oppose the grant of special leave. The present case extended over seven days at first instance and two days on appeal, with counsel briefed on each occasion.
    • 4 That account also gives some idea of the resources of the Court which have been engaged in disposing of these cases, to which must be added interlocutory processes, preparation for hearing and judgment writing.
    • 5 This case is a good illustration of the havoc which can be wreaked by determined and resourceful but impecunious litigants with a sense of grievance. Orders for costs are no deterrent.

Second Application for special leave to appeal to the High Court of Australia (M83 of 2004)

14. The applicants sought special leave to appeal from the second Full Federal Court of Australia decision. Special leave was refused.

Costs orders

15. In each of the proceedings costs were awarded against the applicants. These costs are some hundreds of thousands of dollars.

Human Rights proceedings

16. Next the applicants lodged a complaint with the Human Rights and Equal Opportunity Commission. Their complaint was against Centrelink, the Federal Court of Australia and the High Court of Australia. The Commission declined to inquire into their complaint.
    On 18 September 2006 the applicants filed with the Federal Court of Australia an application for judicial review pursuant to the Administrative Decisions (Judicial Review Act 1977 (Cth) naming the Commission as respondent. The application was transferred to the Federal Magistrates Court of Australia and the Commonwealth of Australia was added as a respondent. It applied for summary dismissal of the application.
17. On 18 October 2007 I summarily dismissed the Scotts’ judicial review application (Scott v HREOC [2007] FMCA 1642). They applied to the Federal Court of Australia for leave to appeal from my decision. Leave to appeal were refused by Kenny J on 21 December 2007 (Scott v HREOC [2007] FCA 2055) Her Honour said at [23]:
    • 23 As we have seen, the courts have already given extensive consideration to their claims and have given judgment. The time has come for Mr and Mrs Scott to turn away from their dispute with Centrelink over the Special Benefits payment.
18. To make an order under R.30.11 the Court must first be satisfied that the person has instituted a vexatious proceeding. It must then be satisfied that the person has habitually, consistently and without reasonable grounds instituted other vexatious proceedings.
19. In Attorney General (Vic) v Wentworth (1998) 14 NSWLR 481 at 491 Roden J described a three prong test for vexatiousness:
    • 1. Proceedings are vexatious if they are instituted with the intention of annoying or embarrassing the person against whom they are brought;
    • 2. They are vexatious if they are brought for collateral purposes and not for the purpose of having the court adjudicate on the issues to which they give rise;
    • 3. They are also to be properly regarded as vexatious if irrespective of the motive of the litigant they are so obviously untenable or manifestly groundless as to be utterly hopeless;
    • 4. In order to fall within the terms of [the rule]:
    • (a) proceedings in categories 1 and 2 must be also instituted without reasonable ground, proceedings in categories 3 necessarily satisfy that requirement;
    • (b) the proceedings must have been `habitually and persistently' instituted by the litigant.
20. The application for judicial review which I decided in October 2007 is within at least the third of these tests because it was manifestly groundless, and so utterly hopeless. If that was not established by my decision it was certainly established by Kenny J’s refusal of leave to appeal. All proceedings or proceedings at least from and including the second of the Federal Court of Australia proceedings meet the definition. That means that prior to my decision in October there were at least three court proceedings instituted by the Scotts which were vexatious. In these proceedings the Scotts sought to re-litigate issues which had already been decided and which they had no hope of reopening. This constitutes habitual and persistent behaviour.
21. To the extent that the power under r.13.11 is discretionary, clearly the Scotts have not been deterred from pursuing hopeless proceedings by costs orders or by statements from judges of the Federal Court of Australia that their cause is hopeless. Consequently, I will make the order.
22. The ordinary rule is that a successful party is entitled to an order for costs. Costs have been ordered against the Scotts in the previous proceedings. There is no reason why the same not be done in this case. The event based costs schedule of the Federal Magistrates Court Rules 2001 (Cth) is difficult to apply in this case. It may disadvantage either party. The appropriate order is to apply the Federal Court Rules 1979 (Cth) so that the taxing officer has available the discretions within those rules.

I certify that the preceding 22Error! Style not defined.!Syntax Error, !Error! Style not defined.Error! Style not defined.!Syntax Error, !twenty-twotwenty-two (22) paragraphs are a true copy of the reasons for judgment of Phipps FM

Associate: Jan Smith

Date: 6 February 2009