VIC Commercial Litigation - Vexatious Litigant Threatening My Business?

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Flyboat

Active Member
22 November 2015
9
0
31
I have had legal issues with a former client (FC). He initiated legal action against my company after he failed an exam (I run an education "prep" company). He issued a mountain of commercial litigation against my company. A search of Austlii, etc, reveals he litigates regularly against a number of people and gov't organisations

I have two questions:

1. This guy has managed to find another client (AC) who I am in commercial dispute with (hasn't got legal yet). Anyway, FC has had the alleged debt "assigned" to him. My business is in Victoria as is the AC, the FC lives interstate. What are the options of FC here in terms of legal action? In my view, it is just designed to create trouble, nuisance stuff.

2. After failing his exam, the FC actually wound up my company (never ignore a creditor's letter of statutory demand) for a debt of just over $2000. In my view, it was just motivated out of spite, nothing else, so my company got wound up, administrator all that fun stuff. The original action was initiated in the Federal Magistrates Court.

The FC now has an application in front of VCAT essentially trying to get me held personally responsible for his failure of the job entry exam, damages, etc. Classic second bite of the cherry, again in my view solely motivated by spite, etc.
 

James D. Ford - Solicitor

Well-Known Member
LawConnect (LawTap) Verified
Hi Flyboat

It sounds like you are dealing with an experienced litigator.

Regarding your queries:

1) If it is a valid assignment - then FC can sue you... to recover the "alleged" debt. It does not matter that FC lives interstate. Has this been made a part of the VCAT action?

2) The VCAT action - what is the basis of your personal liability? Did you provide any kind of personal or director's guarantee? Additionally, if FC was a client and paid money, how did he become a creditor who was owed money?

Kind regards
 

James D. Ford - Solicitor

Well-Known Member
LawConnect (LawTap) Verified
I note that he has not taken action against you in a Victorian Court:

In Victoria, before an application can be made to the Court (i.e., the Magistrates Court, the County Court or the Supreme Court) a lawyer must certify that a valid legal claim is being made... that is, that it has a "proper basis"...

Parties to litigation are required to comply with a number of new 'overarching obligations' once proceedings have been issued in a Victorian court. Parties are required to certify that they have read and understood the overarching obligations.

Overarching Obligations Certification

Certification must also be filed with any significant amendment to your pleadings, such as adding a new cause of action or adding new parties.

As stated, parties must certify that they have read and understood the overarching obligations. The 'Overarching Obligations Certification'must be completed and filed with the court with the first substantive document (ie writ, statement of claim or defence).

Proper Basis Certification

Pleadings filed with the court must be accompanied by a 'Proper Basis Certification', which certifies that each of the allegations, denials or non-admissions in your pleading has a proper basis. Your lawyer can complete and file this for you.

The above Certifications do not apply to Federal Court and VCAT
Given the above, the proceedings against your company for failure to pay the statutory demand, would have been under the Corporations Act - which is Commonwealth legislation, and the Federal Court has jurisdiction - therefore the above certifications do not apply.

VCAT is not a Court, it is a tribunal.
 

Flyboat

Active Member
22 November 2015
9
0
31
Appreciate the help James. Yes looks Iike it is an experienced litigator. What is interesting is that he has lost many of them with subsequent costs orders from higher courts etc, really lost a lot of $$$, but keeps going & going.

Regarding your queries:

1) If it is a valid assignment - then FC can sue you... to recover the "alleged" debt. It does not matter that FC lives interstate. Has this been made a part of the VCAT action?

Answer: No this is separate action to the VCAT, I just got the notifications the other day.

2) The VCAT action - what is the basis of your personal liability? Did you provide any kind of personal or director's guarantee? Additionally, if FC was a client and paid money, how did he become a creditor who was owed money?

Answer: No personal or directors guarantee was given when the training course was delivered in Jan 2011. FC commenced Fed Magistrates action in Sydney around the middle of 2012. I was trapped really because it would cost $30K to defend an action that was claiming
a course fee of around $3k. At some point later in 2012 a legal costs order was made the FMC against me for just over $2K. FC then issues a creditors letter of stat demand (whoever is reading - do not ignore these), then follows up with a wind-up application which is granted in NSWSC in March 2013. The guy just didn't want to settle. I offered all legal for his FMC & wind up application plus training course costs, but was rejected.

So training course conducted by my former Pty Ltd training company. Now the FC has issued an application in VCAT for much the same as his FMC application, asked for a refund of training costs, travel costs, because he failed his exam & didn't get the job he wanted, etc, etc.
 

James D. Ford - Solicitor

Well-Known Member
LawConnect (LawTap) Verified
Hi Flyboat,

1) You state that you got the notifications... what does this mean? I assume it just means you received notice of the assignment. And that no further legal steps have yet been taken by FC.

2) I am sure you can appreciate that I cannot advise you regarding these specific matters, as I simply do not have the required information to make any kind of assessment.


Kind regards
 

Flyboat

Active Member
22 November 2015
9
0
31
1) You state that you got the notifications... what does this mean? I assume it just means you received notice of the assignment. And that no further legal steps have yet been taken by FC.

Answer: Yes correct just received the notice of assignment via email, I didn't acknowledge receipt of

2) I am sure you can appreciate that I cannot advise you regarding these specific matters, as I simply do not have the required information to make any kind of assessment.

Answer: No worries, understand it is all just a legal chat forum, quite sure the VCAT action will fall over


Kind regards