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Brookfield v RealEstate Now Pty Ltd QDC 226
DISTRICT COURT OF QUEENSLAND
Brookfield v RealEstate Now Pty Ltd and Another  QDC 226
IAN WALTER BROOKFIELD
REALESTATE NOW PTY LTD (ACN 153307432)
MARK WILLIAM MERGARD
Brisbane District Court
8 September 2021 (ex tempore)
8 September 2021
Porter QC DCJ
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – STAY OF PROCEEDING – ABUSE OF PROCESS – where first proceeding against company and its director was stayed pending resolution of committal process involving plaintiff as defendant and director as complainant – where second proceeding against the company alone were commenced while the stay of the first proceedings remained in place – whether omitting director addressed the reason for stay of first proceeding – whether Court could conclude that director would never be given leave to appear on behalf of the company in the second proceeding – whether the second proceeding was an abuse of process as comprising two proceedings advancing the same claim
Brookfield v Real Estate Now Pty Ltd (Subject to Deed of Company Arrangement)  FCA 1083
Brookfield v Real Estate Now Pty Ltd  FCA 993
Brookfield, in the matter of Real Estate Now Pty Ltd v Real Estate Now Pty Ltd  FCA 352
Di Carlo v Dubois  QCA 316
McHenry v Lewis  22 Ch 397
Merrin v Cairns Port Authority  QCA 278
Newton v Brisbane City Council  QCA 242
Simto Resources Limited v Normandy Capital Limited (1993) 10 ACSR 776
Startune Pty Ltd v Ultra-Tune Systems (Aust) Pty Ltd  1 Qd R 192
District Court of Queensland Act 1967 (Qld), ss. 51, 52
I. Brookfield appeared in person for the Plaintiff/Applicant
M. Mergard appeared in person with leave for the First Defendant/Respondent and Second Defendant/Respondent
- The plaintiff in this case is Mr Ian Brookfield. In the proceedings before me today, proceeding 1943/21, he is suing a company called Realestate Now Pty Ltd (Realestate Now). The sole director and sole shareholder, it seems, of that company is Mr Mark Mergard. The gravamen of Mr Brookfield’s claim is simply stated. He pleads, in this proceeding, the existence of a contract to sell a rent roll between a company called Blueprop Pty Ltd (Blueprop) and Realestate Now. He pleads relevant terms of that contract. He pleads that Realestate Now is indebted in respect of the purchase price and other amounts, which should have been paid, either pursuant to that contact or as a consequence of it. He claims, in place of Blueprop, on the basis of a deed of assignment (not particularised in the statement of claim) of the rights of Blueprop to him before its deregistration. I will call this the rent roll claim.
Previous winding up proceedings
- There is a long history to the rent roll claim. It reaches back to not long after the contract was entered into, allegedly, in July 2015. It was first asserted by Mr Brookfield in a winding up application, which he filed on 23 December 2016 in the Federal Court. That winding up application was defective in form in numerous ways, the most obvious of which was that Realestate Now was subject to a deed of company arrangement at the time.
- Attempts were made, according to the reasons of Justice Reeves in Brookfield v Real Estate Now Pty Ltd (Subject to Deed of Company Arrangement)  FCA 1083 (to which, with the consent of both parties, I have regard for the purpose of identifying the history of these dealings), to identify to Mr Brookfield the difficulties with his application, but he sought to proceed. The inevitable consequence was the dismissal of the winding up application and an order that he pay Realestate Now’s costs of that application. His Honour’s orders were made in September 2017. Mr Brookfield sought, again, to utilise the winding up jurisdiction in November 2017, a couple of months after Justice Reeves’ decision.
- In that case, the application related to a statutory demand that was served on the company but was set aside by Justice Brown of the Supreme Court on 8 September 2017. Her Honour set aside the statutory demand but did not deal with the substance of the rent roll claim. I tried to find Her Honour’s reasons prior to this case but was unable to locate them. However, with the consent of the parties, I have had regard to the judgments in the Federal Court, including that of Justice Derrington, which discuss her Honour’s decision. Furthermore, a costs order was made in favour of the company.
- The next step in the process seems to have been an attempt by Realestate Now to bankrupt Mr Brookfield on the costs orders obtained in the Federal Court. That matter (the application for a sequestration order) came before Judge Jarrett of the Federal Circuit Court sometime between, I assume, Justice Brown’s judgment in the Supreme Court and Justice Derrington’s judgment in June 2019. It is plain that one, or both, of the costs orders must have been agreed (more likely assessed, one might think, in this case), so that a judgment for a specific amount was obtained, which could be the object of a bankruptcy notice.
- Quite what occurred in that proceeding before it came before Judge Jarrett is not then entirely clear. Presumably, there was an act of bankruptcy and a sequestration order was sought on the basis of it.
- There are other ways the sequestration order could have come before Judge Jarrett, but as it turns out, it does not matter. What is important is that, before Judge Jarrett, his Honour refused to make a sequestration order, because he was satisfied that there was a debt owing from the company to Mr Brookfield, arising out of the rent roll claim, which exceeded the judgment for costs (of some $50,000). Strangely, on that application, the company did not dispute the existence of the rent roll claim. But there are tactical reasons, as far as I recall, why you might not do that. In any event, for the purposes of this application, while Judge Jarrett found that there was a debt due from Realestate Now to Mr Brookfield, his Honour did not give judgment for the rent roll claim.
- That conclusion was reached by Justice Derrington in Mr Brookfield’s third attempt to wind up Realestate Now. His Honour explains, in Brookfield v Real Estate Now Pty Ltd  FCA 993 at paragraphs 16 to 25 (in a way which, I say with respect, seems clearly correct), that Judge Jarrett’s decision did not give rise to an issue estoppel as to the existence or amount of that debt.
- In submissions before me, Mr Brookfield asserted that Judge Jarrett’s decision did amount to judgment on the rent roll claim, but in my respectful view, Justice Derrington’s decision was correct.
- The next step after Judge Jarrett’s decision was a further statutory demand. That statutory demand was allowed to go without an application to set aside being filed within the time limits strictly required under the Corporations Act 2001 (Cth), although an explanation was given that that was more the result of error than deliberately ignoring the demand. That statutory demand gave rise to the application to wind up, dealt with in Justice Derrington’s decision.
- His Honour gave leave to oppose the winding up order by challenging the debt the subject of the demand. In that case, all his Honour was concerned to determine is whether there is a serious question as to whether the company was truly indebted to Mr Brookfield. His Honour concluded at paragraph 30 that:
There are real grounds on which the debt is disputed. That being so the company should have leave to oppose the application on the grounds that it is solvent, including that the alleged debt claimed by Mr Brookfield is not owing.
- His Honour then analysed, in detail, whether Mr Brookfield could establish, in the proceedings before him, that he was a creditor of the company, and that the debt he asserted arising out of the rent roll claim was truly owing. His Honour concluded that there was a genuine dispute about that debt at paragraph 37, and that that debt was material to whether the company was insolvent.
- He also found at paragraph 38 that, apart from the matters raised before His Honour directly, there might be an argument as to whether Mr Brookfield had standing on the basis of arguments about the validity for the assignment.
- The consequence of his Honour’s analysis was that, as at 27 July 2019 (in the view, at least, of the Federal Court), there was a genuine dispute about the debt on grounds that are articulated in his Honour’s judgment. Most striking was the assertion, in that hearing, that the agreement on which Mr Brookfield relied was not executed by Realestate Now. Mr Mergard filed an affidavit in which it claimed the signature on the document relied upon by Mr Brookfield was not his. I say nothing about whether that is so or not.
- Relevantly in this case, it was submitted to Justice Derrington that he ought to find (this being the third attempt to wind up the company) that the winding up application should also be dismissed as an abuse of process. His Honour reviewed the circumstances in some detail but observed that the first two occasions seem to have been the result of misunderstandings of the proper legal process, and the third occasion (being the application before him) was justified where the applicant was a litigant in person who misunderstood the effect of Judge Jarrett’s decision.
- His Honour found that the repetition of the applications was caused by Mr Brookfield’s inability to follow the requirements of the Corporations Act, rather than any deliberate course of conduct involving frivolous applications. His Honour also found, in effect, that the rent roll claim was asserted bona fide by Mr Brookfield. He did not conclude that the application before him was an abuse of process.
- Finally, I should mention there was some suggestion that the involvement of the police in the civil proceedings was of some concern to his Honour. This arose in circumstances where Mr Brookfield was and is facing stalking-type charges, but his Honour was careful in what he said about this. The relevant officer was not present to give his side of the story. However, bearing in mind the nature of the offences (which it seems, at that stage, may have already been charged or were contemplated), his Honour observed that the circumstances were not such that it can be said the application was brought for the purpose of intimidation or harassment of the company of Mr Mergard or his wife.
- His Honour did not order costs in that case against Mr Brookfield because, as his Honour said, the company, to a degree, brought the proceedings on themselves by not applying to set aside the statutory demand.
- Mr Brookfield then brought a further application to wind up Realestate Now in the Federal Court. Justice Derrington’s decision was given on 27 June 2019. That application was set aside in March 2020. I note that the winding up application was filed on 20 November 2019, about five months after Justice Derrington’s decision. In this case, Justice Greenwood of the Federal Court gave ex tempore reasons in which he dismissed the winding up application, largely because it remained the case that there was a dispute about the underlying liability asserted by Mr Brookfield in respect of the rent roll claim. He ordered Mr Brookfield to pay Realestate Now’s costs of that application.
- In paragraph 12, relevantly, Justice Greenwood says:
It follows that recourse to the winding-up proceedings, in the context of the history of the matter, is an abuse of the process of winding-up in the classic sense of that term. Since Mr Brookfield has known that the debt has been disputed for a long time and that the inappropriateness of a winding-up proceeding to vindicate a disputed debt has been pointed out to Mr Brookfield by Brown J in the Supreme Court of Queensland and by Derrington J in this Court quite apart from exchanges between Mr Brookfield and the solicitors for the respondent, I am also satisfied that there is a proper basis for making an order that the costs be paid on an indemnity basis…
- I pause here to observe, therefore, that there are costs orders in favour of Realestate Now from the proceedings before Justice Reeves, Justice Brown and Justice Greenwood, the latter being an order on an indemnity basis. They remain unpaid.
- The other important point in Justice Greenwood’s decision is that he explained to Mr Brookfield that for a disputed debt, you have to go to Court, have a trial and get a judgment. He clearly has struggle to understand that.
- I mean no disrespect to Mr Brookfield’s diligent attempts at conducting his own proceedings when I say that events before the Federal Court, notwithstanding his diligence and courteous advocacy style, indicate that he suffers very greatly from being not legally represented and not legally trained.
The first proceeding in this Court
- That brings me to the next step in these proceedings. On 15 April 2021, about a year after Justice Greenwood’s judgment, Mr Brookfield commenced proceedings in this Court – proceeding 868/21. He brought proceedings against Realestate Now again and identified Mr Mergard as the second defendant. In his claim, he describes Mr Mergard as a warrantor and indicates that he is sued in a representative capacity. I do not quite understand what that means, except that it may be that under the contract that language was used. Importantly, the claim does not seek specific sums. The statement of claim seeks, in effect, what seems to be a declaration that the rent roll contract remains on foot, a declaration of entitlement to moneys due under it, specific performance of the terms of the agreement, a declaration of entitlement to $6050 a month plus interest, and to the purchase price, or the balance purchase price, plus interest. (I did not mention this in my oral reasons, but I observe that the claim and statement of claim must show on their face a claim within the jurisdiction of this Court. The monetary limit is $750,000, though that sum applies to each separate cause of action, not to some notional total of all claims in the proceeding).
- A defence was filed by Mr Mergard and Realestate Now, with Mr Mergard purporting to act for Realestate Now, and a counter-claim was advanced by Mr Mergard against Mr Brookfield and a number of other people.
- Various applications were brought, which came before me on 27 May 2021.
The charges against Mr Brookfield and his bail conditions
- The history of the rent roll claim to that point must be considered in the light of the criminal proceedings underway against Mr Brookfield as defendant. I do not have full details of those proceedings, but I have before me Exhibit 2 – an undertaking as to bail. The undertaking as to bail identifies four separate charges, which appear to have been laid around late 2019. The bail undertaking that I have before me is dated 30 August 2019.
- The offences alleged comprise two offences of unlawful stalking, one breach of a bail condition and one Commonwealth offence of using a carriage service to menace, harass, or cause offence. The date of the offences is between January 2016 and April 2019. The places are in and around Bundaberg. The complainant is Mr Mergard. The bail conditions relevantly require:
(4) THE DEFENDANT SHALL HAVE NO CONTACT WHATSOEVER EITHER DIRECTLY OR INDIRECTLY, INCLUDING BY PHONE, TEXT, EMAIL, MAIL, MESSENGER OR SOCIAL MEDIA, WITH COMPLAINANT MARK WILLIAM MERGARD OR MEMBER’S OF THE COMPLAINANT’S FAMILY KATRINA MARY MERGARD UNLESS THROUGH A SOLICITOR ACTING ON BEHALF OF MARK WILLIAM MERGARD OR KATRINA MARY MERGARD.
(5) THE DEFENDANT SHALL NOT APPROACH OR BE WITHIN 50M OF MARK WILLIAM MERGARD OR KATRINA MARY MERGARD UNLESS FOR THE PURPOSE OF ATTENDING COURT.
(7) THE DEFENDANT SHALL NOT USE SOCIAL MEDIA OR ANY OTHER COMMUNICATION MEDIUM, OF ANY TYPE WHATSOEVER, TOO PASS COMMENT WHETHER PRIVATELY OR PUBLICLY, ON MARK WILLIAM MERGARD, KATRINA MARY MERGARD, REAL ESTATE NOW, 1770 REEF OR ANY BUSINESS, COMPANY OR ENTITY ASSOCIATED WITH MARK WILLIAM MERGARD OR KATRINA MARY MERGARD.
The first proceeding is stayed
- When the applications came before me on 27 May 2021, I was confronted with a case where I had a litigant in person plaintiff, a litigant in person second defendant, and a company that sought leave to appear through its sole director. In my judgment, Brookfield v RealEstate Now Pty Ltd and Another  QDC 95, I set out the history of the matter as I understood it then – considerably less well than I understand it now. It was obvious to me, from events that had occurred to that point in those proceedings, that the parties were unable sensibly to conduct the proceedings and that one of the principal problems for that was difficulties relating to effecting service arising out of the bail conditions. In that regard, I observed as follows:
 I make that order even though neither party sought it, and notice of it was only given today, because it seems to me that a great deal of cost and time could be incurred in trying to create an acceptable, efficient and reliable communication structure, and a great expense in Judge time and effort, with a great deal of uncertainty attached to it and considerable difficulty for the plaintiffs and defendants, all to no purpose. It is true that civil proceedings should be conducted as efficiently and quickly as possible. In these specific circumstances, bearing in mind the nature of the parties, the nature of their efforts so far to conduct this litigation, and the evidence before me as to how utterly inadequately this simple application was conducted, it seems to me I should stay this proceeding until the resolution of the committal of Mr Brookfield.
 Now, I picked that date, first of all because the committal has been underway for some time, and it is reasonable to think, given the timescale already involved in the matters involved in these proceedings, that it will be resolved, one way or the other, reasonably promptly (and by that, I mean in the next six months or so). I picked the resolution of the committal proceedings as well because at that point, with the exception of the possible presentation of an ex officio indictment, Mr Brookfield will either be discharged and his bail conditions released, such that the proceedings can be conducted in the ordinary way, or at least without fear, on either side, of breaching bail conditions or aggravating circumstances relating to the criminal proceedings and so on, or Mr Brookfield will be committed.
 If he is committed, one would expect an indictment to be presented reasonably promptly, and one will know that this relationship will be affected by bail conditions into the foreseeable future. And at that point, it may well be worth thetime and effort to set up a structure which allows the civil proceedings to continue despite the criminal proceedings and bail conditions.
 Accordingly, I stay the proceedings until the resolution of Mr Brookfield’s committal proceedings. I direct that after that date, either party may apply to lift the stay on 21 days notice to the other side, such notice to be given in a manner consistent with any extant bail conditions.
- I stayed the proceedings until the resolution of Mr Brookfield’s committal proceedings, which were underway. I also directed that after the resolution of his committal proceedings, either party could apply to lift the stay on 21 days notice, such notice to be given in a manner consistent with any extant bail conditions.
- My main concern, at that time, was that it just was not possible in any efficient way for proceedings and documents to be served, and it was not really viable to expend a great deal of effort to come up with some structure that would accommodate the bail conditions, if that was even going to be possible. At that time, it was envisaged the committal might take another six months or so.
Mr Brookfield applies to lift the stay
- On 16 June 2021 (some three weeks after my ex tempore judgment was given), Mr Brookfield filed an application for the stay to be lifted and also filed an amended statement of claim. The amended statement of claim was in substantially the same form as the original pleading. The filing of that amended statement of claim was in breach of the stay.
- He also filed an affidavit in support of that application to lift the stay in which he identified that he had applied to cross-examine his witnesses and to vary his bail conditions to enable personal service between him and Mr Mergard (which was opposed by the Prosecution and refused by the Magistrate), and that the Magistrate adjourned the matter to 26 July 2021 to consider his application to cross-examine named witnesses.
- On 23 June 2021, an amended application was filed again to vary my stay and a further affidavit was filed, the gravamen of which was that the company, Realestate Now, was likely to not be of powder and shot and that Mr Mergard also was likely to be bankrupt or be unable to pay his debts because of his debt to, specifically, Mills Oakley (the solicitors who acted for him in the Federal Court proceedings) for $150,000. Mr Brookfield referred to other evidence that made it appear Realestate Now was not a company of substantial worth.
- For reasons I cannot explain, the third defendant added by counter-claim, a Mr Wall, filed a defence to the counter-claim of Mr Mergard and Realestate Now to which I have referred, despite the fact that I had stayed the proceedings. As I understood at the time that I gave my judgment, the counter-claim had not been served. I do not know what is going on there at all.
- Judge Rosengren refused to lift the stay. There are no written reasons, although bearing in mind the stay was only a few weeks old and the circumstances leading to the stay had not changed, one could imagine that might well have been a reason. Her Honour’s decision to refuse to lift the stay was made on 8 July 2021.
The current proceedings are commenced
- On 27 July 2021, Mr Brookfield commenced this proceeding against Realestate Now, again asserting the rent roll claim. A comparison of the two statements of claim reveals that they are virtually identical. Their only difference is that Mr Mergard has been omitted as the second defendant. Mr Mergard, or at least the company, filed a notice of intention to defend through Mr Mergard. It is evident that this second claim and statement of claim must have been served, presumably using an agent, creating a new proceeding with exactly the same problems as the proceeding I had already stayed, with one exception: Mr Mergard was not a party to it.
- The parties then both filed applications in the current proceeding. Mr Mergard, on behalf of the company, applied for security for costs (a matter which had already been foreshadowed in the 868/21 proceeding and was stayed because of my orders). He filed an affidavit in which he explained that he had assessed costs orders of $50,000 that were unpaid. There is, of course, one more costs order that I am aware of – the indemnity costs order made by Justice Greenwood. He then referred to the history of the winding up applications (which I have already covered) in the Supreme and Federal Court. He also referred to conduct by Mr Brookfield, which he says was insulting and harassing, and so on, and which I infer was the subject of his complaint to the police that has led to the charges and the committal.
- Mr Brookfield filed his own application, seeking:
- (a)Once again, to have the counter-claim by Mr Mergard excluded – a matter that I previously dealt with in 868/21;
- (b)Effectively, a declaration that Mr Mergard is not allowed to represent the company in these proceedings; and
- (c)An order that a receiver be appointed in the light of the quantum of the plaintiff’s claim.
- As to the second matter, he filed an affidavit in which he referred to a principle that a company can only be represented by a solicitor or barrister unless there are exceptional circumstances, and that a company’s financial ability, or lack thereof, is not a consideration which amounts to exceptional circumstances. That last proposition is incorrect.
- Mr Brookfield contends, really, that if the company does not have the money to engage lawyers, the Court can direct the shareholders or directors to place money into the company’s account. That is also not correct, although a Court can refuse leave and, in effect, force that to happen. He also contends that where the solvency of the company is in issue, the Court has a power to appoint a receiver. That assertion demonstrates that Mr Brookfield, even now, does not have (I say respectfully) even the most basic understanding about how corporate winding up law works. (I add to my oral reasons the observation that it is of course possible to appoint a receiver to a defendant before judgment in rare circumstances, but nothing about this case suggested to me that it was an appropriate order.)
Query raised as to abuse of process
- By coincidence, the applications came before me as applications Judge. It seemed to me that there was a good argument that the second proceeding was an abuse of the Court’s process. In McHenry v Lewis  22 Ch 397, the English Court of Appeal recognised that, prima facie, where the same matter is pursued in two different proceedings, such a proceeding is vexatious, and the Court will put the plaintiff to an election. That principle is of longstanding. It was adopted by Justice of Appeal Keane, as his Honour then was, in Di Carlo v Dubois  QCA 316 at footnote 8.
- I therefore wrote to the parties, addressing it to Mr Mergard for the defendant company, bearing in mind the question of leave, and indicated my preliminary concern about that, and invited submissions before I would hear the substance of the application. When the matter was called on, I gave Mr Mergard leave to appear in the first instance for the company solely in the question of abuse of process. This Court has power to control its own processes. Whatever might be the position at common law, that includes the power to permit a party to appear, with the leave of the Court, by a person who is not a lawyer.
Proceedings an abuse of process
- A company cannot appear in person. When a company appears by a director (or any other person), it is appearing by an agent. However, the effect of s. 51(1)(b) District Court of Queensland Act 1967 (Qld) is the same as the general law, which is the Court can permit, amongst others, the sole director and sole shareholder (or sole effective shareholder) to represent the company. The principle was articulated by Justice French in Simto Resources Limited v Normandy Capital Limited (1993) 10 ACSR 776 at 781, where his Honour observes:
The high threshold of exceptional or special circumstances which applies to the exercise of the discretion under the English rules and similarly formulated rules in Australia, no doubt derives from the characterisation of the discretion as a dispensing power. This will be coupled with the rationale for the restriction which in large part is related to the proposition that persons should not be represented in superior courts other than by legally qualified agents who not only possess the relevant skills to conduct the litigation but also are bound to observe certain duties to the court itself. Of course, any natural person may represent himself or herself. But a company being a fictitious legal person must always be represented by another. And that attracts the application of the principle that representation by an agent should be limited to legally qualified persons subject to the inherent and residual discretion of the court to waive the requirement in appropriate circumstances. The rationale to which I have referred emerges from such authorities as Tritonia Ltd v Equity and Law Life Assurance Society  AC 584.
- His Honour in that passage does refer to the high threshold of “exceptional or special circumstances.” However, those observations cannot be pushed too far. The fact is that the Court has a discretion to permit a company to be represented by another person. That discretion has to be exercised judicially on the facts of each particular case.
- It is impossible to say in advance that a person, who is a sole director and sole shareholder (him or herself without resources) of a company which does not have money to pay for lawyers, will not, as a matter of law, ever be allowed to appear for the company. In fact, unless there were characteristics of the individual director that disqualified them from being able to do so, on those assumed facts, there would be a compelling argument that justice might be difficult to do without, at least, hearing from the sole director.
- Those facts are the facts that arise in this case. Mr Brookfield’s principal argument as to why this proceeding is not an abuse of process is that he considered the primary reason, or the only reason, why the previous proceeding could not proceed was that Mr Mergard was involved. If he omitted Mr Mergard, and Mr Mergard had absolutely no right to be involved on behalf of the company in the proceeding, then there was no difficulty about service or Mr Mergard attending Court or anything else that might affect Mr Brookfield’s bail. Thus, the second proceeding could continue despite the stay of the first proceeding.
- The problem with that is obvious. It is impossible to bind the Court’s discretion as to whether Mr Mergard might be permitted to represent the company in the future. He was granted leave today and there is a realistic prospect in the circumstances that he might be granted leave in the future.
- There are other difficulties with Mr Brookfield’s proposition that the abuse of process is avoided because Mr Mergard is not a party and cannot be granted leave to appear for the company.
- The first problem is, as I have said, Mr Brookfield’s position that neither the company, nor Mr Mergard, can afford to fund a defence. In that circumstance, it is not a very compelling argument that I should declare right now that Mr Mergard will not be able to get leave to represent the company.
- The second problem is that the company has a judgment, it seems, for some $50,000 for costs against Mr Brookfield and that judgment has not been paid. The company also has at least one other indemnity costs order (at least that I know of) that appears unpaid. So, we have a situation where a plaintiff contends that I should, in effect, declare that a company, that does not have resources to represent itself, should not be permitted to be represented by its director in circumstances where the plaintiff owes $50,000 at least to the company on a judgment and has another unmet costs order.
- There is another difficulty. Justice Derrington has identified that there is an arguable defence to the debt. The effect of excluding Mr Mergard entirely is likely to be that there would be a default judgment on a debt which has been contested over and over again and never been proved. I should say there are some other difficulties with the statement of claim and the remedy sought, but for now, it is sufficient to observe that there are, it seems, arguable defences.
- There are other difficulties. I have real concern about permitting these proceedings to go ahead where, although the company is the defendant, Mr Mergard is the guiding mind and will, the sole director and shareholder of the company. The gravamen of the offences with which Mr Brookfield has been charged (and bearing in mind firmly the presumption of innocence) are stalking offences. One of the ways that stalking can occur is through the misuse of legal proceedings to harass. While I accept, at least for present purposes today, that there appears to have been a genuine argument advanced by Mr Brookfield why this proceeding was not an abuse of process, I have a great deal of concern about facilitating this litigation in the highly unique position where the plaintiff, and the guiding mind and will of the defendant, are involved in proceedings where Mr Brookfield is charged with stalking Mr Mergard in respect of their commercial relationship.
- A concrete instance of my anxiety about this arises in Mr Brookfield’s interpretation of his bail condition 5, that he does not approach or be within 50 metres of Mr Mergard unless for the purpose of attending Court.
- Mr Mergard, as the director of the company, of course, is perfectly entitled to attend Court even if he has solicitors, all the more so if he is representing the company. Mr Brookfield contended that it was permissible for him to approach within 50 metres of Mr Mergard if it was for the purpose of attending these proceedings. That seems a doubtful reading of that bail obligation in circumstances where the reason that Mr Mergard has to come to Court is because the plaintiff is suing a company of which he is sole director and shareholder. True it is that Mr Mergard can attend by telephone, but it does seem to not be within the spirit of that bail undertaking, and I am concerned that it is not the right thing for this Court to be facilitating that exception, where the defendant in the committal proceedings is the plaintiff in this proceeding.
- Mr Brookfield expressed real anxiety that this proceeding might be delayed by the stay for some time. I am less concerned about that than I otherwise would have been, because the matter has been delayed for some years because of his own erroneous attempts to pursue in the Federal and Supreme Court, by way of winding up, something which in substance he tried again in the application before the Court now. There is no limitations point that arises because his existing proceedings are stayed, but they have been commenced within time. He expressed anxiety about timing to me, because he thought it likely the company would go into liquidation sooner rather than later. If that was so, it is difficult to see why that encourages quick resolution of this case, given that if that occurs, he can put in a proof of debt with the liquidator, and then instead of having to conduct a trial, all he has to do is persuade the liquidator to accept the proof. If he proceeds with this case, he will either get a default judgment, which will lead to a winding up and further dealings between he and Mr Mergard, or the proceedings will be defended, and it will take some time for them to be completed.
- Another issue about delay is that, at least in the first instance, Mr Brookfield has some influence as to how long the committal might take. I say this meaning no disrespect, but as I have said, his technical legal skill is not high. He is representing himself in the committal proceedings, and it seems to me highly likely that they would move more quickly to a conclusion one way or the other if he had his own experienced criminal law solicitor acting for him in that regard. He could either fund that himself, or if he cannot fund it, he could approach Legal Aid. But I am hesitant to be excessively concerned about the potential delay in the committal where Mr Brookfield is acting for himself, given his history on technical legal issues.
- It would be very tempting for a Judge to jump to the conclusion that this entire second proceeding was a deliberate abuse of process to continue to harass Mr Mergard, but that is not a conclusion that I am willing to draw on the material before me today. Mr Brookfield appears to be genuinely concerned to pursue the rent roll claim. Nonetheless, abuse of process of the kind under consideration in this case does not require a subjective intention to harass. The general principle in McHenry v Lewis applies, and it is plain in the circumstances of this case that the proceeding that must be disposed of is the second proceeding, not the first, because anything else is simply to evade a stay order which the Court has already made.
- In those circumstances, I dismiss proceeding 1943/21. I make no order as to costs because, as is clear from the record, no costs were incurred by Realestate Now, because they did not have any solicitors.
 Brookfield, in the matter of Real Estate Now Pty Ltd v Real Estate Now Pty Ltd  FCA 352.
 Startune Pty Ltd v Ultra-Tune Systems (Aust) Pty Ltd  1 Qd R 192.
 Merrin v Cairns Port Authority  QCA 278.
 District Court of Queensland Act 1967 (Qld), s. 52(1)(b).
 See also Newton v Brisbane City Council  QCA 242 at pages 3 to 4.
- Published Case Name:
Brookfield v RealEstate Now Pty Ltd and Anor
- Shortened Case Name:
Brookfield v RealEstate Now Pty Ltd
 QDC 226
Porter QC DCJ
08 Sep 2021