FEDERAL COURT OF AUSTRALIA

Kowalski v Mitsubishi Motors Australia Ltd [2010] FCAFC 73  

THE COURT ORDERS THAT:

1.                  Leave to appeal from the orders of Besanko J on 3 September 2009 be refused.

2.                  Kazimir Kowalski pay the costs of the Respondents of the application for leave to appeal.

3.                  Kazimir Kowalski pay the costs of the Notice of Motion of the Respondent of 2 October 2009, and the costs of his Notice of Motion of 12 October 2009.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

the court

1                     This is an application for leave to appeal from a judgment by a single judge of the Court, Besanko J, pronounced on 3 September 2009 in proceedings between Mr Kowalski (the applicant) and Mitsubishi Motors Australia Limited (Mitsubishi).  Besanko J ordered:

1.         The applicant’s notices of motion dated 18 December 2008, 18 July 2009 and 4 August 2009 respectively, be dismissed.

2.         The applicant’s Amended Statement of Claim dated 30 November 2008 be struck out.

3.         The applicant’s proceeding be dismissed.

2                     The applicant’s Notice of Motion dated 18 December 2008 is set out in par [24] of these reasons.  The Notice of Motion dated 18 July 2009 is an application by the applicant seeking various declarations in the proceedings.   Besanko J held that, as declarations are a form of relief, they may only be made when an applicant establishes a cause of action, or an infringement of private rights.  Besanko J held that, as the applicant could not establish a cause of action, a claim for declarations must fail.  The Notice of Motion of 4 August 2009 is an application of the applicant that Besanko J disqualify himself for bias.

3                     On 4 September 2009, the applicant filed a document entitled “Notice of Appeal”, seeking to appeal from that decision.  In par 3.1 of the “Notice of Appeal”, the applicant sought:

Leave to appeal against Justice Besanko’s decision if it is an interlocutory decision.

4                     Mitsubishi filed a Notice of Motion on 2 October 2009 seeking that the applicant’s proceedings on the Notice of Appeal filed 4 September 2009 be dismissed as incompetent pursuant to O 52 r 18 of the Federal Court Rules,on the ground that the judgment appealed from is interlocutory and that, accordingly, leave to appeal is required pursuant to s 24(1A) of the Federal Court of Australia Act 1976 (Cth) (the Act).

5                     That Notice of Motion also sought that, in respect of the “Notice of Appeal” filed on 4 September 2009, it be removed from the file pursuant to O 41 r 5 of the Federal Court Rules on the grounds that it contains scandalous matter, or alternatively, that the scandalous matter be struck out.

6                     The applicant filed a Notice of Motion on 12 October 2009, in retaliation apparently to the Notice of Motion filed by Mitsubishi on 2 October 2009, seeking that that Notice of Motion be dismissed or set aside pursuant to O 52 r 18 of the Federal Court Rules on the grounds that the judgment appealed from was a final judgment, and therefore leave to appeal was not required, or alternatively, if the judgment was interlocutory, in par 3.1 of the applicant’s Notice of Appeal dated 4 September 2009, the applicant had applied to the Full Court of the Federal Court for leave to appeal against the judgment.

7                     It was also contended by the applicant in his Notice of Motion that his “Notice of Appeal” dated 4 September 2009 “does not contain any scandalous matter whatsoever”.

8                     On 9 November 2009, Mansfield J heard the Notice of Motion of Mitsubishi filed 2 October 2009, and the Notice of Motion of the applicant filed 12 October 2009, and ordered that in respect of the Notice of Motion of Mitsubishi of 2 October 2009:

2.         On the Notice of Motion of the Respondent of 2 October 2009:

(a)        as to paragraph 1 of the Notice of Motion, the motion be referred to the Full Court, to be heard and determined at the same time as the “Notice of Appeal” [of] the Applicant;

(b)        as to paragraph 2 of the Notice of Motion, the words “he perverted the course of justice and” (or words to that effect) in paragraphs 2.1 to 2.17 and 4.1 to 4.20 of the “Notice of Appeal” be struck out.

(c)        The costs of the motion be referred to the Full Court for determination.

9                     In respect of the Notice of Motion of the applicant of 12 October 2009, Mansfield J ordered that the motion be referred to the Full Court for determination to the extent necessary, and that the costs of the motion be reserved to the Full Court for determination.

10                  Mansfield J also declined to grant leave to the applicant to appeal from the order concerning par 2 of Mitsubishi’s Notice of Motion.

11                  The decision of Besanko J to strike out the Amended Statement of Claim and dismiss the proceedings was an interlocutory decision: Re Luck (2003) 78 ALJR 177; [2003] HCA 70, and therefore leave to appeal is required pursuant to s 24(1A) of the Act. 

12                  The applicant seeks leave to appeal “if necessary” in his “Notice of Appeal”.   It is necessary.  It is therefore appropriate to deal with the applicant’s application for leave to appeal from the judgment of Besanko J of 3 September 2009.

13                  Mitsubishi opposes the grant of leave, submitting that the decision of Besanko J to dismiss the proceedings is not attended with sufficient doubt to warrant the grant of leave: Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397.  It was submitted that the Amended Statement of Claim contained bare assertions about alleged causes of action, but there was no pleading of material facts to allege any arguable cause of action and accordingly the pleading was required to be struck out pursuant to O 11 r 16 of the Federal Court Rules.

14                  Order 11 r 16 provides:

16                Where a pleading:

(a)        discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading;

(b)        has a tendency to cause prejudice, embarrassment or delay in the proceeding; or

(c)        is otherwise an abuse of the process of the Court;

the Court may at any stage of the proceeding order that the whole or any part of the pleading be struck out.

15                  Mitsubishi further submitted that there was no material before Besanko J, and none referred to in the appeal papers to raise any, or any sufficient doubt, that it was a proper exercise of Besanko J’s discretion not to allow a further opportunity to re-plead, having regard to the interests of justice to both parties: Aon Risk Services Australia Ltd v Australian National University (2009) 83 ALJR 951 at [94], [102] and [112].   Mitsubishi submitted that it would be futile to grant leave in those circumstances.

16                  Mitsubishi further submitted that because the material before Besanko J and the Full Court discloses no arguable causes of action, even supposing some error by Besanko J, no substantial injustice would be occasioned if leave were to be refused.

17                  Mitsubishi further indicated that the applicant has not sought to put before the Court any further proposed pleading which is said to cure the defects in the pleading before Besanko J.

18                  Finally, Mitsubishi submitted that the refusal by Besanko J to disqualify himself was not attended with sufficient doubt to warrant a grant of leave.  Accordingly, it was submitted that leave ought not be granted and the “appeal” should be dismissed as incompetent.

19                  The applicant made two applications to Besanko J that his Honour disqualify himself.  Mansfield J refused an application for leave to appeal from the refusal of the first application, on 3 February 2009.  The applicant made a further application after the decision of Besanko J on Mitsubishi’s motion for dismissal was reserved.

20                  The applicant submitted that Besanko J gave judgment on Mitsubishi’s motion to dismiss the proceedings before the applicant’s application for leave to appeal from his Honour’s refusal to disqualify himself from hearing Mitsubishi’s motion could be heard.

21                  The delivery of judgment by Besanko J in those circumstances discloses neither error nor any proper complaint of actual or apprehended bias. 

22                  The primary judge was not bound to await the outcome of the application for leave to appeal.  The failure of a judge to disqualify himself or herself may be brought as a ground of appeal from the final orders of that judge.  It is not ordinarily to be the subject of a separate application for leave to appeal, and the primary judge need not await the fate of any such application.

background

23                  On 15 December 2008, Mitsubishi issued a Notice of Motion seeking the following orders:

1.         The applicant’s amended originating process filed pursuant to leave granted by the Honourable Justice Besanko on 4 December 2008 be set aside for want of jurisdiction.

2.         The proceeding be summarily dismissed pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) on the basis that it has no reasonable prospects of success.

3.         The proceeding be summarily dismissed pursuant to O 20 r 5 of the Federal Court Rules on the basis that [it] is frivolous or vexatious and is an abuse of the process of the Court.

4.         In the alternative to Orders 1 and 2, the Amended Statement of Claim filed pursuant to leave granted by the Honourable Justice Besanko on 4 December 2008 be struck out pursuant to O 11 r 16 of the Federal Court Rules on the basis that it discloses no reasonable cause of action, is frivolous and vexatious and is embarrassing.

24                  On 18 December 2008, the applicant by way of a Notice of Motion sought the following orders:

1.         Paragraph 1 of the respondent’s Notice of Motion dated 15 December 2008 be struck out or dismissed on the grounds that the Federal Court’s jurisdiction has been enlivened by the Trade Practices Act 1974(Cth).

2.         Paragraph 2 of the respondent’s Notice of Motion dated 15 December 2008 be struck out or dismissed on the grounds that the applicant has a very good prospect of success because the Federal Court must not aid wrongdoers like the respondent in this case.

3.         Paragraph 3 of the respondent’s Notice of Motion dated 15 December 2008 be struck out or dismissed on the grounds that the applicant’s claims against the respondent are not frivolous or vexatious or an abuse of the process of the Court, however, the Federal Court must not aid wrongdoers like the respondent in this case.

4.         Paragraph 4 of the respondent’s Notice of Motion dated 15 December 2008 be struck out or dismissed on the grounds that the applicant’s claims against the respondent disclose a very good cause of action against the respondent and the claims are not frivolous or vexatious or embarrassing, however, the Federal Court must not aid wrongdoers like the respondent in this case.

5.         Costs of and incidental to this Notice of Motion on an indemnity basis because the Federal Court must not aid wrongdoers like the respondent in this case.

25                  On the applicant’s motion of 12 November 2008 that Besanko J disqualify himself from further application, his Honour gave reasons for dismissing that application: Kowalski v Mitsubishi Motors Australia Limited [2008] FCA 1873.  The reasons for refusing the applicant’s application are set out in those reasons, and on 3 February 2009 Mansfield J refused an application by the applicant for leave to appeal from that decision.

26                  The proceedings involving Mitsubishi are quite separate from proceedings the applicant has brought against the Repatriation Commission, but in the Repatriation Commission proceedings, an application that Besanko J should disqualify himself in those proceedings was dismissed: Kowalski v Repatriation Commission [2009] FCA 794. 

27                  The further claim by the applicant that Besanko J should disqualify himself in the Mitsubishi proceeding because in dismissing the applicant’s appeal in the Repatriation Commission proceedings Besanko J “fabricated [my] decision”, is quite without substance.

28                  There was no denial by Besanko J of any right of the applicant to be heard.  The fact that a judge does not accept submissions made by a party does not provide a sufficient basis for an allegation of actual or ostensible bias.

the applicant’s case before the primary judge

29                  The applicant brought a proceeding in the Federal Court against Mitsubishi.  He had filed an Amended Application and an Amended Statement of Claim, and Mitsubishi had been excused from filing a defence pending determination of Mitsubishi’s Notice of Motion seeking that the Amended Statement of Claim be struck out and the proceeding be dismissed.  The relief claimed by the applicant in the Amended Application and Amended Statement of Claim was:

1.                  An order that the respondent pay the applicant his “correct statutory and legally entitled workers compensation benefits plus compound interest since 16 August 1991, to be determined by the Honourable Federal Court”; and

2.         An order that the respondent pay the applicant “compensation and punitive damages for the unwarranted stress and the anxiety that MMAL has deliberately and consciously placed the applicant under from 16 August 1991 up to 4 December 2008, by refusing to pay the applicant his correct statutory and legally entitled Compensation benefits, to be determined by the Honourable Federal Court”.

30                  Besanko J observed that it was not apparent on the face of those claims how federal jurisdiction was engaged.

31                  The Amended Application and Amended Statement of Claim refer to sections in the Trade Practices Act 1974 (Cth) (s 51AC and s 52), the Fair Trading Act 1987 (SA) (s 58(b) and (g)) and the Misrepresentation Act 1972 (SA) (ss 4,6,7 and 8) and to alleged breaches of contract, misrepresentation, unconscionable conduct, fraud, breach of trust or bad faith, “wilful default”, undue influence and negligence.  The Amended Application and Amended Statement of Claim also refer to various sections in Part 5.8A of the Corporations Act 2001 (Cth), but, in the course of his oral submissions, the applicant said that he was not pursuing a claim in relation to these sections.

32                  The origin of the long history of litigation by the applicant against Mitsubishi is that the applicant was an employee of the respondent.  He claimed and claims that he suffered a number of injuries in the course of his employment for which the respondent was and is liable to pay compensation.  He has instituted a number of actions against Mitsubishi, and an important event in that history is an agreement called a “Heads of Agreement” entered into on 25 October 1998 signed not only by Mitsubishi and the applicant, but the applicant’s wife.

33                  In the recitals, it is recorded that:

Kowalski and [Mitsubishi] have reached an agreement in relation to the resolution of all issues and wish to record the terms of settlement.

34                  The primary judge records at [19] of his reasons:

At the time the Heads of Agreement was entered into, there were outstanding matters between the parties in the specialist workers compensation tribunals and courts in the State of South Australia. As a result of the parties entering into of the Heads of Agreement, various steps were carried out in relation to those matters. Later, the applicant sought to have those acts or their effects reversed on the ground that the respondent had been guilty of fraud and misrepresentation. His attempts were unsuccessful: Kowalski v Mitsubishi Motors Australia Ltd [2001] SAWCT 93; Kowalski v Mitsubishi Motors Australia Ltd [2002] SAWCT 76. There is no dispute that the respondent paid the moneys it was liable to pay under the Heads of Agreement.

35                  It is not in dispute that on 19 April 2005, Bleby J in the Supreme Court of South Australia made a “vexatious litigant” order in respect of litigation against Mitsubishi or related corporations, prohibiting the applicant from bringing any proceeding against those parties without the leave of the Court.  That prohibition did not apply to litigation in the federal courts.  

36                  In these proceedings in the Federal Court, the primary judge concluded that the relevant pleading did not appear to involve the pleadings of material facts [Order 11 rule 2A of the Federal Court Rules].  However, the essence of the applicant’s claims were that Mitsubishi had breached a particular clause of the Heads of Agreement requiring the preparation and execution of documents to bring the agreement into effect; that Mitsubishi had breached or contravened s 23 of the Health and Other Services (Compensation) Act 1995 (Cth); and that Mitsubishi had breached the various statutory provisions and common law doctrines consequent on its view as to its liability to  pay compensation to the applicant.

37                  Each of these three bases was considered by Besanko J.  His Honour, after giving considered reasons leading to his conclusions, found:

41        The amended statement of claim does not identify an arguable cause of action which is within the jurisdiction of this Court. As pleaded, the references to s 51AC and s 52(1) of the Trade Practices Act represent no more than a colourable attempt to engage federal jurisdiction.

42            The difficulty in giving judgment on any of the claims under s 31A of the Federal Court of Australia Act 1976 (Cth) is in discerning precisely what claims are being made. It is very difficult to discern where one “claim” ends and another begins.

43            In my opinion, the appropriate order is an order dismissing the proceeding. There are two possible routes to that conclusion. First, under O 20 r 5 of the Federal Court Rulesa proceeding may be dismissed if it is an abuse of the process of the Court. A proceeding is an abuse of process where it is foredoomed to fail: Walton v Gardiner [1992] HCA 12; (1993) 177 CLR 378 at 393 per Mason CJ, Deane J and Dawson J. As presently pleaded, the proceeding is doomed to fail.  Not only is the proceeding doomed to fail as presently pleaded, but I am satisfied that there is no claim of the type advanced. The applicant has already amended once and he has put forward a number of affidavits and written submissions in respect of his “claims”, all of which I have read carefully. There is no suggestion that he has a claim either at all or at least a claim which would engage the jurisdiction of this Court. The other route to the same conclusion is that I have no doubt that the amended statement of claim does not identify an arguable cause of action and is embarrassing under O 11 r 16 of the Federal Court Rules. It must be struck out. A party faced with such conclusions is often given the opportunity to replead his or her case. However, that opportunity is not always given and ultimately, whether it is given, depends on the circumstances of the case. It is not appropriate to afford such an opportunity in this case. The applicant has had ample opportunity to articulate a case and, in all the material he has put forward, there is nothing to suggest that he has a claim.

38                  In his submissions to this Court, the applicant has plainly misunderstood that in a pleading, assertions or statements of his position in relation to points in contention do not constitute a pleading of material facts.

39                  By way of examples only, the applicant pleaded in paragraph 3.3 of the Amended Statement of Claim:

3.3               On 28 February 2003 Justice Ryan, Justice Dowsett and Justice Selway said on page 13 in par 20 of their decision in Kowalski v Trustee, Mitsubishi Motors Australia Limited Staff Superannuation Pty Ltd [2003] FCAFC 18 that “It should also be pointed out that the appellant’s claim against the Employer would seem to be based primarily upon common law. … It may be that the appellant could plead some claim based upon the Trade Practices Act 1975 (Cth) but he has not yet done so. … Of course, the appellant is unrepresented and considerable allowance must be made for this.  Presumably that is why Mansfield J did not base his reasons in relation to the Employer on any issue of jurisdiction.” (Emphasis in the original).

40                  And in paragraph  8 of the Amended Statement of Claim:

In October and November 1998 and after that date MMAL had a statutory and a legal obligation to correctly determine the amount of workers compensation benefits that it had a statutory and a legal liability to pay to the applicant according to the terms, provisions and the spirit of the Workers Rehabilitation and Compensation Act 1986 (SA), however, MMAL deliberately and consciously failed to do so, therefore, from 16 August 1991 and from October and November 1998 MMAL has deliberately and consciously placed the applicant under unwarranted stress and the anxiety.  The applicant repeats paragraph 4 herein.

41                  In paragraph 5 of the applicant’s written submission, it is said:

Justice Besanko erred in law, he pervert [sic] the course of justice and he was bias at law against the appellant because he falsely alleged in par 30 of his decision that “It is no easy task to discern the real matters raised by the applicant in his amended statement of claim …” (Emphasis in the original).

42                  In paragraph 6 of those submissions, it is said:

Justice Besanko erred in law, he perverted the course of justice and he was bias at law against the appellant because he falsely alleged in par 31 of this decision that “The obligation in s 23 of the Health and Other Services Act occupies a central place in the applicant’s claims …” (Emphasis in the original).

43                  Paragraph 7 is a duplication of paragraph 6.

44                  The reason why each of these grounds is pursued is said to be:

…because of the grounds found in par’s 1 to 1.3 above and the facts found in AB-D [Volume D of the Appeal Books] p1 and 2 and p 43-53, Justice Besanko’s allegation is not true or correct.

45                  In respect of each of the grounds referred to in paragraphs 5, 6, and 7, whether the stated finding is true or correct does not provide any basis to impugn the primary judge’s conclusion.

46                  The written submissions of the applicant also allege that “Justice Besanko erred in law, he perverted the course of justice and he was bias at law against the applicant” in respect of various findings his Honour made, set out in paras [8] to [16] of the applicant’s written submissions.

47                  The applicant in those paragraphs sought to impugn the primary judge’s “findings”, which were expressed as follows:

[36]      I include in my consideration of this claim not only an arguable failure to comply with s 23 of the Health and Other Services Act, but also an arguable failure to prepare and execute a Form 5 (see [23]).

…

[37]      Although it is not entirely clear, it may be that the applicant claims that the mere fact that the respondent failed to comply with s 23 of the Health and Other Services Act gives him the right to claim relief against the respondent.

…

[38]      … the pleading is deficient because no material facts relevant to causation are pleaded and it is embarrassing because it contains pleas of evidence and irrelevant material.

…

[39]      I agree with the respondent’s submission that these pleas are plainly deficient because there are no material facts pleaded in support of the claim. That conclusion alone supports an order striking out the relevant pleas.

…

[40]      … Leaving aside questions of whether the respondent engaged in conduct in “trade or commerce”, of whether, for the purposes of s 51AC of the Trade Practices Act, the conduct was engaged in in [sic] connection with the supply or acquisition of goods or services, of whether it is an essential element of any claim by the applicant that an order be made setting aside the Heads of Agreement including an order that the applicant repay the moneys paid thereunder, and of whether the relief claimed is the proper relief and can be granted by this Court, nothing has been put by the applicant in all the material he has put before the Court to suggest the circumstances I have identified could arguably give rise to a characterisation of conduct of the respondent as unconscionable within s 51AC of the Trade Practices Act or misleading or deceptive or likely to mislead or deceive within s 52(1).

…

[41]      The amended statement of claim does not identify an arguable cause of action which is within the jurisdiction of this Court. As pleaded, the references to s 51AC and s 52(1) of the Trade Practices Act represent no more than a colourable attempt to engage federal jurisdiction.

…

48                  In paragraph 15 of the applicant’s submissions, the applicant submitted:

Justice Besanko erred in law, he perverted the course of justice and he was bias at law against the appellant because he falsely alleged in par 43 of his decision that

“In my opinion, the appropriate order is an order dismissing the proceeding … As presently pleaded, the proceeding is doomed to fail.  Not only is the proceeding doomed to fail as presently pleaded, but I am satisfied that there is no claim of the type advanced. … There is no suggestion that he has a claim either at all or at least a claim which would engage the jurisdiction of this Court.  The other route to the same conclusion is that I have no doubt that the amended statement of claim does not identify an arguable cause of action and is embarrassing under O 11 r 16 of the Federal Court Rules.  It must be struck out….”(Emphasis in the original).

49                  Each of these findings, which the applicant alleges constitutes a “false allegation” by Justice Besanko, is said to be based on “the grounds found in par’s 1 to 1.3 above and the facts found in AB-D p2 and p43-53”.

50                  On a close examination of all of the material which the applicant wishes to rely on, in our judgment, the conclusions by the primary judge were correct for the reasons which he gave.  The Amended Statement of Claim was liable to be struck out because it contained no pleading of material facts to support the alleged claims, as well as pleading much embarrassing or irrelevant matter, and as the additional material, including the further evidence put before this Court and the submissions of the applicant, did not disclose any arguable claim, the proceedings were doomed to fail, as the primary judge determined. 

51                  In those circumstances, and having regard to the fact that the Amended Statement of Claim was the second attempt to draft a basis for his proceeding, it was open to the primary judge not to grant a further opportunity to replead.  It is clear on the evidence before his Honour that such an opportunity would have been futile.

52                  The pleading by the applicant does not disclose any arguable cause of action, and the primary judge was right so to conclude.

53                  The applicant’s application for leave to appeal should be dismissed with costs. 

54                  It is appropriate in the circumstances, in respect of the reservation of costs of the Notices of Motion determined by Mansfield J on 9 November 2009, that the applicant pay the costs of those Notices of Motion, which had been reserved by Mansfield J to this Full Court.

Associate:

Dated:         21 June 2010