Vexatious Proceedings Act 2014 (Vic): the three tiers of litigation restraint

The Vexatious Proceedings Act 2014 (Vic) (the "Act") commenced on 31 October 2014, and repeals the previous single-tier system for dealing with vexatious litigants in (the then) s21 Supreme Court Act 1986 (Vic).

Purpose and background to the Act

The purpose of the Act and the summary of the powers given to Victorian courts and the Victorian Civil and Administrative Tribunal ("VCAT") are set out in the explanatory memorandum to the Bill as follows:

The [Act] introduces a new regime for the management and prevention of vexatious litigation in Victorian courts and tribunals. The [Act] aims to improve the effectiveness of the justice system by ensuring that unmeritorious litigation is disposed of at an early stage and that persons are prevented from wasting court time with further unmeritorious cases. This will allow court and judicial resources to be allocated to the determination of meritorious cases, which will reduce delays in the court system for other pending matters.

The [Act] enables the Supreme Court, the County Court, the Magistrates' Court and VCAT to make various types of "litigation restraint orders", which increase in severity in accordance with a person's litigation history and pattern of vexatious behaviour. The Children's Court is also given the power to make litigation restraint orders, but only in relation to litigation conducted under the intervention order legislation. The tiered approach to litigation restraint orders promotes early intervention and aims to provide flexibility for the Courts and VCAT to adopt a proportionate response to a person's conduct.

An extract from the legislative guide to the Act published by the Civil Law Policy division of the Department of Justice notes that a 2008 Victorian Parliamentary Law Reform Committee conducted an inquiry into vexatious litigants, and found:

that, although small in number, vexatious litigants consume a disproportionate amount of court and tribunal time and resources, which creates delays in the courts and reduces access to justice for other members of the community with meritorious claims. The Committee also found that vexatious litigants can have a significant financial and emotional impact on the people they sue. 

For example, one vexatious litigant brought 77 separate civil and criminal proceedings over an 11-year period. Many of these proceedings were private prosecutions attempting to summon grand juries to hear treason charges against judicial officers, government ministers and other public officials. Despite the fact that these allegations were completely lacking in substance, considerable court time was required to hear and ultimately dismiss the claims. This not only caused embarrassment, inconvenience and expense to those involved in the proceedings (who were required to spend time and money in contesting the baseless allegations), but it also created delays in the court system for other litigants with genuine claims.

Summary of the Act's provisions

The Act empowers all Courts and VCAT to make a form of litigation restraint order ("LRO"). Altogether there are three types of litigation restraint order, including the Limited Litigation Restraint Order ("LLRO"), the Extended Litigation Restraint Order ("ELRO") and the General Litigation Restraint Order ("GLRO"). In this article and in the Act they are presented in order of increasing breadth and severity, with the LLRO (Part 2) restricting the issue of interlocutory proceedings, the ELRO (Part 3) restricting the issue of litigation in respect of a particular matter or against a particular person, and the GLRO (Part 4) restricting all litigation without leave. There are also associated orders, including an acting in concert order that seeks to prevent a person from acting in concert with a person the subject of a LRO (Part 5) and an appeal restriction order restricting the right to appeal a decision to refuse leave to proceed (Part 6).  The Act aligns the existing regimes in relation to vexatious litigants under the intervention order legislation, including the Family Violence Protection Act 2008 and the Personal Safety Intervention Orders Act 2010.

The central definitions in the Act are "vexatious application" and "vexatious proceeding" that are defined in s3 as:

(a) an interlocutory application / proceeding that is an abuse of the process of a court or tribunal;

(b) an interlocutory application made / proceeding commenced to harass or annoy, to cause delay or detriment, or for another wrongful purpose;

(c) an interlocutory application made or pursued / proceeding commenced or pursued without reasonable ground;

(d) an interlocutory application pursued / proceeding conducted in a way so as to harass or annoy, cause delay or detriment, or achieve another wrongful purpose;

The definitions are then applied to the relevant available orders throughout the Act.

A summary of each type of order, including relevant sections of the Act, is set out below.

LLRO:

• It is directed at preventing a person from making or continuing an interlocutory application, or a specified type of an interlocutory application, in a proceeding (s12).
• It may be applied for by the Attorney-General, a person against whom a vexatious application has been made or a person with sufficient interest in the matter (s10).
• It may be made by any court or VCAT if satisfied that the person, who is a party to a proceeding, has made two or more interlocutory applications in the proceeding and the interlocutory applications are vexatious applications (s11).
• When making a LLRO, a Court or VCAT can take into account any matter it considers relevant including any interlocutory application made by the person or an entity controlled by the person in any Australian court or tribunal, the existence of a LRO or associated order against the person, and any other matter relating to the way in which the person conducts or has conducted litigation (s11).
• An interlocutory application to which the order relates is stayed, or if made in contravention of the order, is of no effect (s13).
• The making of a LLRO in respect of a proceeding does not affect the person's right to make or continue an interlocutory proceeding in another proceeding in a Victorian court or tribunal or to commence or continue another proceeding in a Victorian court or tribunal (s14).

ELRO:

• An ELRO issued by the Supreme Court of Victoria against a person may restrict the commencement or continuation of a proceeding in any Victorian court or tribunal in respect of a matter, person, or entity described in the order (s20), and issued by another jurisdiction is restricted to that jurisdiction only (s21, s22, s23, s24).
• An ELRO may be applied for by the Attorney-General, a person against whom a vexatious proceeding has been commenced or continued, or a person with sufficient interest in the matter (s16).
• It may be made by any court or VCAT if satisfied that the person has frequently commenced or conducted vexatious proceedings against a person or other entity or in relation to a matter (s17).
• A proceeding the subject of an ELRO is either stayed, or if commenced in contravention of the order, is of no effect (s25).
• A proceeding issued by a person in respect of a matter, person, or entity not specified in an ELRO is not affected by the ELRO (s26).
• With the exception of the Supreme Court, a proceeding issued in a jurisdiction that did not issue the ELRO is not affected by the ELRO (s26).

GLRO:

• It restricts the continuation or commencement of any proceeding in a Victorian court or tribunal without leave of either the Supreme Court or the Victorian court or tribunal in which the proceeding is being heard (s30).
• It may only be applied for by the Attorney-General (s28).
• It may only be made by a Judge of the Supreme Court of Victoria (s29).
• It may only be made if the Judge is satisfied that the person has persistently and without reasonable grounds commenced or conducted vexatious proceedings (s29).
• The Judge may take into account any matter he or she considers relevant including any proceeding commenced or conducted by the person or an entity controlled by the person in any Australian court or tribunal, the existence of an LRO or associated order against the person or any other matter relating to the way in which the person conducts or has conducted litigation (s29).
• It stays a proceeding the subject of the GLRO and renders of no effect a proceeding commenced in contravention of the GLRO (s32). 

Acting in concert order:

• It may be applied for by a person who applied for a LRO to which the other person is subject, or by a person named in an interlocutory application or a proceeding that, if made or commenced by the person subject to the LRO, would contravene the terms of the LRO (s34).
• A number of orders may be made by a court or VCAT including a LRO on the same terms as the person with whom the person is acting in concert, that the interlocutory proceeding is struck out or the proceeding stayed and that costs are payable (s35).
• A GLRO is not available for an acting in concert order (s35).

Appeal restriction order:

• It restricts a person from making an appeal against a decision of a court or tribunal either refusing leave to make or continue an interlocutory application or refusing leave to commence or continue a proceeding (s37).
• An order made by the Supreme Court relates to all courts or tribunals and an order made by a court or tribunal other than the Supreme Court relates to that court or tribunal only (s37, s38).
• It stays an application for leave to appeal and renders an application for leave to appeal made in contravention of the order of no effect (s40).

Leave to proceed where an LRO is in force

A person must obtain leave to proceed if a proceeding or interlocutory application is sought to be made that would otherwise contravene the relevant LRO. That person must disclose matters relevant to the application, including his or her history of leave to proceed applications, a history of each interlocutory application or proceeding commenced that is vexatious or which has been stayed or dismissed on the basis that each has no merit, and an explanation of how the application for leave to proceed is materially different to each application previously made and disclosed (s56). 

With the exception of an ELRO made under the intervention order legislation, a person protected by the LRO (including the person who made the LRO to which the application for leave relates or the person named in the interlocutory application or proceeding to which the application for leave relates) must not be given notice of a leave application by a person the subject to a LRO unless the relevant court or VCAT considers that leave to proceed should be granted (s59, s60). In the event that notice is given, that person may be heard (s62). An application for leave to proceed is determined by written submissions or by oral hearing and an oral hearing is required only if there are exceptional circumstances and it is appropriate to do so in the interests of justice (s63).

Discussion

Given the new system provides a lowered threshold for obtaining a LRO, it will be interesting to see the use and threatened use of the LRO in proceedings. For instance, where there is an ongoing discovery battle in a proceeding where, on one view, a party is unwilling to hand over documents and the other party is bombarding that party with applications for further and better discovery, will a threat to obtain an ELRO by the respondent to those proceeding arise? The definition of "vexatious application" does not appear to be cumulative, so such an application (on the respondent's view) may justifiably be regarded as a proceeding made or pursued to "harass or annoy, cause delay or detriment, or achieve another wrongful purpose". Whether or not the threat is justified, a LRO could become another tool to seek to subjugate the other party in litigation, like allegations of breaches of overarching obligations, threats of indemnity costs and threats of personal cost orders against legal practitioners.

Of course, there are likely to be significant efficiencies made by the enactment of this Act, given the examples provided in the legislative guide to the Act and the lowering of the threshold. If this sort of vexatious litigation is restricted, then the courts, VCAT and the parties to proceedings in those jurisdictions are likely to benefit. 

On another topic, it makes sense that a person protected by a LRO is not bothered by applications for leave to proceed, since a vexatious litigant who is prone to issuing multiple vexatious proceedings would also be prone to issuing multiple applications for leave to proceed. However, it is unclear whether the balance is correctly struck in not giving the person protected by a LRO a right to be heard before the court has made its mind up. That is, the Act requires disclosure by the person the subject of the LRO of the various matters that are relevant for the leave to proceed application, and a court or VCAT can decide a leave to proceed application on the basis of that material alone without having heard from the person protected by the LRO. Also, the Act expresses a preference for determination to occur on written submissions and without an oral hearing.

The author, like many others, looks forward to reading the first case published under the Act to see how it works in practice.