Brookfield v Realestate Now Pty Ltd & Anor [2022] QDC 87

DISTRICT COURT OF QUEENSLAND CITATION: Brookfield v Realestate Now Pty Ltd and Another [2022] QDC 87 PARTIES: IAN BROOKFIELD (Plaintiff) v REALESTATE NOW PTY LTD (ACN 153 307 432) (First Defendant) AND MARK WILLIAM MERGARD (Second Defendant) FILE NO: 868/21 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: Brisbane District Court DELIVERED ON: 1 April 2022 DELIVERED AT: Brisbane (ex tempore) HEARING DATE: 1 April 2022 JUDGE: Porter QC DCJ ORDER: 1. The application is dismissed. 2. Pursuant to Rule 368(2) Uniform Civil Procedure Rules 1999, all applications brought in relation to this matter (868 of 2021) be heard and determined by Judge Burnett of the District Court. 3. Pursuant to Rule 389A Uniform Civil Procedure Rules 1999, the Plaintiff must not, without leave of Judge Burnett of the District Court: i. Make a further application in relation to the existing proceeding; or ii. Start a similar proceeding in the court against a party to the existing proceeding or against a party to the existing proceeding and any other person. -- 1 of 5 -- 2 CATCHWORDS: CIVIL PRACTICE AND PROCEDURE – ABUSE OF PROCESS – RESTRICTING PARTICULAR APPLICATIONS – Where the plaintiff brought an urgent application before the Court – Whether the application was an abuse of process – Plaintiff restricted from bringing future applications in existing or similar proceedings APPEARANCE: Plaintiff in person Second Defendant in person [1] This is an interlocutory application by the plaintiff, Mr Brookfield. The respondent to the interlocutory application is the second defendant, Mr Mergard. This application is described as an interlocutory application, but it might reasonably be said that that is a misnomer. The seeks the following relief: (a) First, that Mr Mergard (identified as the sole director and shareholder) take immediate steps to reregister the first defendant company, Realestate Now Pty Ltd (REN); (b) Second that following reregistration, Mr Mergard’s leave to represent the company in these proceedings be withdrawn. (c) Thirdly, a receiver be appointed over Realestate Now Pty ltd (REN). [2] This application was brought on an urgent basis and was filed the day before yesterday. I previously made an order under rule 368(1) Uniform Civil Procedure Rules 1999 (UCPR) that Judge Burnett manage the matter and his Honour has made directions with the objective of resolving this matter by trial. When I made that order, I overlooked also making an order under Rule 368(2) UCPR that all applications in relation to the proceeding be heard and decided by his Honour. For that reason, this application, which was unable to be dealt with by his Honour, was listed in applications. That should not have happened and to avoid it happening in the future, I make an order that all applications in relation to this proceeding be heard and determined by the District Court constituted by Judge Burnett. [3] The application should be dismissed for the following reasons. [4] The first order of the interlocutory application was ultimately not pressed by Mr Brookfield today. He informed the Court from the Bar Table that he had formed the view since filing the application that the Court could not, or should not, make that order because Mr Mergard did not have standing as a director of REN to seek the re-registration of the company. Ironically, that seems likely to be wrong in law. The real difficulty, though, with the relief sought in the first order is that the company was deregistered by ASIC and, the Corporations Act 2001 sets out the statutory criteria necessary for an application for a company to be reregistered in those circumstances. -- 2 of 5 -- 3 [5] It was plain that Mr Brookfield did not know what those criteria were and was seemingly unable to identify them. However, he nonetheless brought this application. Furthermore, paragraph 1 of the application is is in substance a proceeding for a final mandatory injunction. It would take compelling evidence for the Court to make such an order. None was available. Further, Mr Brookfiled was unable to identify the source of this Court’s jurisdiction to make such an order. I suppose it is theoretically possible that a great legal mind might be able to have teased out a basis for jurisdiction, but I cannot think of one immediately and, importantly, Mr Brookfield was not even aware of the jurisdiction issue or how to deal with it. For all those reasons, paragraph 1 of the application was hopeless and bound to fail and should not have been brought. It was an abuse of process of the Court. [6] The second order in the application in substance sought a final, prospective order excluding Mr Mergard from being granted leave to represent REN in the proceedings, though in form it sought the withdrawal of such leave. However, there has been no order by this Court granting Mr Mergard leave to represent the company into the future either up to the trial or at trial and for that reason alone, it was not an appropriate order to seek. As I have said, what was really being sought was, in effect, a final prospective prohibitory order. Needless to say, although the Court would have jurisdiction make such an order under section 69 District Court Act 1967, it would require compelling circumstances for it to be made and none such were shown. [7] The principal basis for the argument was that REN became deregistered at or around the time the Mr Mergard had leave to represent it and that Mr Megard nonetheless agreed to directions being made in the case which bound REN. Mr Brookfield’s argument was that Mr Mergard knew the company had been deregistered at the time, although he had no direct evidence, from which that conclusion could, with any confidence, be drawn even on an interlocutory basis. The second order was misconceived and, on the material before the Court, had no prospects of succeeding and should never have been brought. [8] The third order is the most extraordinary of the orders sought. It sought the appointment of the receiver over a company which is presently deregistered. Mr Brookfield was unable to identify the source of the Court’s jurisdiction to make such an order (even assuming the company was re-registered by ASIC), nor was he able to identify any of the criteria that would justify such an order. [9] One difficulty with the appointment of a receiver that immediately springs to my mind, is that an undertaking as to damages would be required and it is uncontentious that Mr Brookfield is a debtor to the company in respect of substantial costs orders. He has his claim against the company, which is for a larger amount, but that, in my view, would hardly be sufficient to justify accepting an undertaking from him on appointment of a receiver, because the undertaking will only be called upon if the proceedings are ultimately unsuccessful, which is exactly the circumstance where his claim would be worthless. The third order -- 3 of 5 -- 4 sought was misconceived and hopeless as to the law and facts and should never have been brought. [10] A further element that makes this application an abuse of process is that it was brought on an urgent basis, notwithstanding that Judge Burnett was managing the case, although I recognise, to be fair to Mr Brookfield, that no order compelling all applications to be brought before his Honour had been made. The urgency was said to be because money was being paid by tenants to the company. There was no evidence of that and, indeed, what Mr Brookfield said from the Bar Table was not evidence of it. Indeed, it is unclear whether his assertions from the Bar Table would even be admissible on an interlocutory application. However, more problematically, if the situation he complains about has been going on for a while, as it appears it would have been if rent was being paid to REN despite its degregistration, there was nothing to suggest that the issue had to be dealt with between now and next week when Judge Burnett was available. There is no basis whatsoever for the view that this was an urgent application. [11] For all those reasons, I dismiss this interlocutory application as an abuse of process. I put to Mr Brookfield that this was a case where the Court, of its own motion, was considering making orders under rule 389A(3)(a) to (b) UCPR which provides: (3) The court may order that— (a) the relevant party must not make a further application in relation to the existing proceeding without leave of the court; or (b) the relevant party must not start a similar proceeding in the court against a party to the existing proceeding or against a party to the existing proceeding and any other person without leave of the court. [12] I explained to him that the effect of that rule is that the Court may order that parties cannot bring further applications or proceedings without prior leave of the Court. Its heading describes its character, “Restricting applications that are frivolous, vexatious or abuse of court’s process”.1 [13] The precondition to the Court’s power to make that order is that there is more than one application in relation to an existing proceeding that is an abuse of process. Conveniently, for this purpose in my judgment Brookfield v Realestate Now Pty Ltd [2021] QDC 226, I reached the conclusion that a proceeding brought by Mr Brookfield was, indeed, an abuse of process of the Court. I reached that conclusion at paragraph [58] of that judgment. In that case, Mr Brookfield brought a separate proceeding which had the effect of avoiding a stay I had made of the existing proceeding. I accepted that he thought that that would avoid the difficulty of the stay, but, objectively, it was an abuse of process because it involved the bringing of a separate proceeding in the same terms as an existing proceeding. [14] If it were thought that the precondition in 389A(1) UCPR could not be met by abuse of process in a different (related) proceeding, there was also an application 1 UCPR r. 389A -- 4 of 5 -- 5 brought in this proceeding (also referred to in that judgment), where I had made a stay of the proceeding and Mr Brookfield had brought a further application in the proceeding just three weeks later to have the stay lifted in circumstances where there was no suggestion of a material change of circumstance. That, of course, is also an abuse of process notwithstanding that interlocutory injunctions do not give rise to issue estoppels. [15] In my respectful view, the Court’s power to make an order under 389A(1) is engaged. The application was brought on the Court’s own initiative. It was not brought by the respondent defendant, Mr Mergard. However, for the reasons I have given, it would be obvious why the Court harboured concerns about the conduct of this litigation. I gave Mr Brookfield an opportunity to explain to me why, notwithstanding those considerations, I should exercise my discretion not to make the order. It is fair to say that he feels a sense of grievance about the difficulties he has had in progressing the litigation against REN and Mr Mergard. [16] As I am familiar with that history explained in my judgment just referred to, it is clear to me that the fundamental difficulty with progress of the proceeding is, respectfully, Mr Brookfield’s inability to conduct legal proceedings in a way which meets the minimum requirements for competent civil litigation. So much occurred in the Federal Court in his numerous misconceived and mistaken attempts to have REN wound up. I have observed the same thing happen in this Court. [17] The reality is that no matter how meritorious a litigant-in-person’s claim might be, a respondent or defendant to such a claim is entitled to have the proceedings conducted in a way that meets the minimum standards required by the UCPR by the requirements of fairness in the conduct of the proceedings. Mr Brookfield, respectfully, for all his efforts, is repeatedly unable to meet those minimum requirements and that seems to me to be the real reason for the delay in this proceeding. Of course, what that demonstrates is that there is a compelling argument why I should exercise the discretion to make these orders and, to be fair to Mr Brookfield, he ultimately did not resist them saying from the Bar Table that he is content for his applications to require the Court’s leave, according to the rule, before they are issued. [18] All I would say is that is not carte blanche to send any application that occurs to Mr Brookfield to the Court to see if it is any good or not. If that happens, there might be further consequences in respect of the underlying proceedings. Conclusion [19] For those reasons, I dismiss the interlocutory application and I order that Mr Brookfield must not make a further application in relation to proceedings 868/21 without the prior leave of Judge Burnett of this Court and that Mr Brookfield must not start a similar proceeding in this Court against a party to this existing proceeding or against a party to the existing proceeding and any other person without the leave of Judge Burnett of the District Court. -- 5 of 5 --