FEDERAL COURT OF AUSTRALIA

Kowalski v Mitsubishi Motors Australia Limited [2011] FCA 270

THE COURT ORDERS THAT:

1.    The application for leave to appeal is dismissed.

2.    The applicant is to pay the respondent’s costs of and incidental to the application, to be taxed on an indemnity basis (if not agreed).

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

1    Mr Kowalski seeks leave to appeal against a judgment delivered in the Court’s original jurisdiction on 4 November 2010 (see: Kowalski v Mitsubishi Motors Australia Limited [2010] FCA 1171). On that date it was ordered:

1.    Pursuant to O 19 r 2(2)(d) of the Federal Court Rules, compliance with the Rules is dispensed with to enable the application by the respondent to have the application of the applicant summarily dismissed without a formal notice of motion for such an order.

2.    The application of the applicant be summarily dismissed.

3.    The applicant pay to the respondent its costs of the application.

2    Leave to appeal is necessary because the judgment below is interlocutory: s 24(1A) of the Federal Court of Australia Act 1976 (Cth) (Federal Court of Australia Act); Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 at [43] (Johnson Tiles Pty Ltd v Esso Australia Pty Ltd) per French J (with whom Beaumont and Finklestein JJ agreed) and, to the extent that s 31A of the Federal Court of Australia Act formed a foundation for the orders, see also s 24(1D)(b)) of that Act. It is settled that leave to appeal against an interlocutory order will only be granted if:

(a)    the decision below is attended with sufficient doubt to warrant its consideration on appeal;

(b)    substantial injustice would result if leave is refused. (see Johnson tiles Pty Ltd v Esso Australia Pty Ltd, supra)

3    The claims made in the application which was summary dismissed were helpfully and fairly summarised by the learned primary judge in the following way:

24    The applicant alleges that prior to or during the mediation he sought clarification of the amount payable to him for compensation under the WRC Act, and that the respondent through its workers compensation manager said the respondent had no statutory obligation to redeem any liability to pay compensation to the applicant, but would make an ex gratia payment to him. He asserts that he then had an entitlement to a redemption benefit, so the respondent by its expressed attitude committed “a fraud” on him; he specifically refers to an entitlement to redemption in respect of the May 1998 finger injury and the May 1999 back and leg injury.

25    The applicant also alleges that the respondent was obliged to, but failed to, inform the Health Insurance Commission or Medicare of the terms of the Heads of Agreement in accordance with s 23 of the HOSC Act. He says that on 27 July 2005, the respondent told the applicant that the Health Insurance Commission had no interest in the matter, when that was not the case. That is said to found an action by the applicant against the respondent for “unconscionable conduct” in breach of s 51AA(1) of the TP Act. He asserts that on 27 September 2005 he received from the Health Insurance Commission a “deemed” notice of past benefits notice of charge in the sum of $30,072. Further correspondence between the applicant and the respondent on that matter is also pleaded, including the applicant’s assertion that the respondent contravened s 32(1) of the HOSC Act by not reporting to it the terms of the Heads of Agreement.

26    The respondent has asserted in correspondence that the ex gratia settlement sum paid under the Heads of Agreement was not regarded by the respondent as compensation, that the payment was not a redemption of any entitlement to periodic payments under the WRC Act, and that it did not make any advance payment on account of the agreed settlement sum. On the basis of that position, the applicant asserts an ongoing entitlement to compensation under the WRC Act, and to redemption of periodic payments. He also asserts that his entitlement to such payments alternatively requires the respondent to review the ex gratia payment, and it has not done so in breach of s 42A(9)(a) of the WRC Act. He claims the respondent’s failure to do either of those things breaches various provisions of the WRC Act and means it has acted “in the utmost bad faith”.

27    The applicant also asserts that the respondent has committed a fraud on him and on this Court. He specifies the several injuries or disabilities in respect of which he has made claims (the May 1998 injury, the May 1989 injury, the heart attack in December 1997 and his depression and back problems). The “particulars of the fraud” largely repeat earlier allegations in the statement of claim.

28    Additional or more specific allegations include the following:

(1)    that “fraud, under the Act [the WRC Act], means activities undertaken by a person or persons to deceive to avoid liabilities or to obtain benefits or other entitlements for which there is no legitimate justification”;

(2)    that the respondent could not lawfully settle the applicant’s claims under the WRC Act other than in accordance with the WRC Act and could not do so “on a commercial basis”;

(3)    that one term of the Heads of Agreement required the respondent to prepare and execute the documents necessary to give effect to it, but the respondent has not prepared and signed a “Workers Compensation Form 5 Standard Minutes of Order or a Deed of Release”;

(4)    that the respondent over the last 5 years has informed this Court and the applicant that “the Workers Compensation Tribunal did have the jurisdiction to make orders and declarations in relation to the Heads of Agreement dated 27 October 1998” when the WCAT had said that Tribunal had no such jurisdiction – the applicant in this context also specifically invokes s 51AA(1) of the TP Act;

(5)    that the respondent’s alleged failure to comply with s 23 of the HOSC Act as asserted in [25] above was because the respondent committed a “fraud” on the applicant (presumably by agreeing to the terms of the Heads of Agreement and paying the agreed ex gratia sum with a denial of liability, and taking the view that no part of that sum was paid by way of compensation when the applicant had unresolved and ongoing compensation claims which were not formally redeemed by a lump sum or sums but which the respondent says he cannot pursue) – in this context also the applicant specifically invokes s 51AA(1) of the TP Act;

(6)    that the respondent has negligently failed to pay and/or redeem its liability to pay compensation to the applicant under the WRC Act, and “unconscionably and fraudulently” told the applicant and this Court that it did not have any liability to do so, so as to cause the applicant further stress and to aggravate his depression and anxiety and so that he is entitled to:

(a)    an order for weekly payments of compensation from 16 August 1991 to age 65 and interest; and

   (b)    punitive damages.

29    The applicant, under the heading referring to relief in the amended statement of claim, then seeks:

(1)    a declaration that on 22 December 2008 the respondent acted unconscionably and breached s 51AA(1) of the TP Act;

(2)    a declaration that “in the last 5 years” the respondent “committed a fraud” on this Court and on him;

(3)    a declaration that that fraud “vitiates all of the Federal Court’s decisions that have been made in respect of the applicant and [the respondent]”;

(4)    a declaration that the applicant is entitled to weekly payments of compensation from 16 August 1991 under the WRC Act until the respondent redeems its liability under that Act to make those payments, and interest, and an order for payment of that compensation (in the absence of redemption until the applicant turns 65) and interest;

(5)    an order for costs on an indemnity basis, on the ground that the respondent has “committed a fraud” on this Court and on him.

4    Mr Kowalski submitted that none of these claims had been “formally or legally determined by any Court of competent jurisdiction on the merits of the case”. He further submitted that Mitsubishi Motors Australia Limited (Mitsubishi Motors) had committed a fraud on him and on various courts. He added that his claim against Mitsubishi Motors was based on “equity”. In effect, his submission was that the learned primary judge had failed to appreciate these matters in summarily dismissing these claims. Mitsubishi Motors’ response was to submit that the learned primary judge had correctly summarily dismissed the application for the reasons given by his Honour.

5    It is instructive in terms of determining whether leave to appeal should be granted to consider the background context in which Mr Kowalski’s present claims arise. Here again, the reasons for judgment of the learned primary judge (at [7]-[22]) are of assistance for the helpful and fair summary they offer:

7    The applicant was employed by the respondent until March 1994. As the respondent was an exempt employer under the WRC Act, it was liable to pay compensation to the applicant under that Act if he suffered a compensable disability arising out of or in the course of his employment according to and subject to the terms of the WRC Act. He asserts that the respondent had “a statutory and (sic) obligation not to act fraudulently or unconscionably” to deceive the applicant or to avoid liabilities or to obtain benefits or other entitlements under the WRC Act to which it was not entitled.

8    The applicant alleges that in May 1988 he injured his right middle finger at work. He also alleges that in May 1989 he injured his back and left leg at work. Then on 16 August 1991, he alleges, he suffered a compensable “psychological injury/mental breakdown”. He further alleges that a medical practitioner on 28 April 1993 informed the respondent that, as a result of that condition, the applicant would not be able to return to work. On 16 March 1994, the respondent wrote to the applicant terminating his employment on the ground that he continued to be unfit for his normal duties; a statement of termination specified 31 March 1994 as the termination date. I shall treat the termination date as 16 March 1994. Nothing turns on the few weeks’ difference for the purposes of this application. The injuries other than the May 1988 injury are disputed by the respondent. The Heads of Agreement also refers to an eye injury in December 1986.

9    In December 1997, the applicant suffered a heart attack, and subsequently had open heart surgery. On 7 April and 7 June 1998 he claimed compensation from the respondent for aggravation of his pre-existing coronary heart disease and depression. Although it is not expressly pleaded, the applicant also apparently had ongoing disputes with the respondent about his entitlements to compensation and in other respects including a claim for damages or loss for unfair dismissal arising from his termination.

10    The respondent’s submissions accept that the applicant was employed by it when he suffered a finger injury in May 1988 and a back injury in May 1989. The applicant received compensation for the finger injury, including ultimately a lump sum. It says that after an incident on 9 May 1989, the applicant complained of cramps in his left leg relating to the back injury, resulting in short periods of incapacity. Those claims were, it says, resolved by payment of the claimed compensation by 2 September 1991. The payment then did not include any redemption or final lump sum payment. A claim for damages on the basis that the back injury was caused by the respondent’s negligence was then outstanding, but in July 1992 that claim in the DCSA was dismissed: Kowalski v Mitsubishi Motors Australia Ltd (unreported, District Court of South Australia, Lee J, 3 July 1992). Subsequently, the applicant made further claims for compensation in respect of the back injury. They were unsuccessful: Mitsubishi Motors Australia Ltd v Harbord and Kowalski (unreported, Supreme Court of South Australia, Debelle J, 21 November 1996). The SCSA ultimately held that the DCSA decision resulted in an issue estoppel adverse to the applicant on the question whether the applicant had in fact suffered that injury as he alleged: Mitsubishi Motors Australia Ltd v Harbord and Kowalski (1997) 69 SASR 75.

11    The applicant did not return to work again after 16 August 1991. An issue arose on that day about his entitlement to certain claimed payments for absences. He claimed compensation for incapacity for psychological distress arising from that issue. That claim was dismissed by a Review Officer under the WRC Act on 9 March 1994, and that decision was upheld by the WCAT and the SCSA: Kazimir Kowalski v Mitsubishi Motors Automotive Ltd [1995] SAWCAT 63 and Mitsubishi Motors Australia v Kowalski (unreported, Supreme Court of South Australia, Cox, Perry and Williams JJ, 6 February 1996). Subsequently, claims for further compensation in respect of the stress injury under the WRC Act were unsuccessful because the earlier decision of the Review Officer and on appeal had resolved the issue adversely to the applicant.

12    Following the termination of the applicant’s employment on 16 March 1994, the applicant challenged that termination and alternatively sought reinstatement. The AIRC ultimately by the Full Commission, refused those claims. In 1997, the applicant sought from the FCA an extension of time in which to bring unfair dismissal proceedings against the respondent. That application was unsuccessful because, having regard to the termination date, the FCA had no power to make the order sought: Kowalski v Mitsubishi Motors Australia Limited (1998) 88 FCR 55.

13    Then, in the sequence of events came the mediation of outstanding issues and claims on 26 October 1998 leading to the Heads of Agreement the following day.

14    The Heads of Agreement record that a payment of $200,000 was to be made by the respondent to the applicant with a denial of liability and in full and final settlement of any eye injury in December 1986, the finger injury in May 1988, the back and left leg injury in May 1989, the alleged stress or mental breakdown in August 1991 and the heart attack in December 1997. As recorded by Bleby J in Mitsubishi Motors Australia Ltd v Kowalski [2005] SASC 154 at [145]-[147], at the time of the Heads of Agreement the respondent denied any outstanding liability under the WRC Act to the applicant in relation to his claimed work-related injuries save for small amounts for the eye and finger injuries and it had significant claims for costs against the applicant ordered to be paid by the applicant to it.

15    The applicant duly received the $200,000.

16    However, that did not bring the applicant’s claims against the respondent to an end.

17    As noted, following the applicant’s heart attack in 1997 and alleged consequential depression, he sought compensation from the respondent in respect of it. Proceedings for compensation under the WRC Act had been instituted. They were dismissed by consent in November 1998 following, and in accordance with, the Heads of Agreement and payment to the applicant of $200,000.

18    In November 1999, the applicant applied to the WCT to have the consent orders referred to in [17] set aside (and subsequently also for orders that he could further pursue compensation claims in respect of other alleged compensable injuries), on the grounds that the mediation leading to the Heads of Agreement was not conducted in good faith and so was affected by fraud or unconscionable conduct, and in any event that the settlement by the Heads of Agreement could not resolve or exclude any liability to pay compensation under the WRC Act. He also claimed that the consent orders of November 1998 were void because the respondent had not complied with r 3(4) of the WCT Rules or had not registered the Heads of Agreement or had not complied with s 119 of the WRC Act.

19    On 14 August 2001 that application was dismissed. Each of the applicant’s claims was rejected: Kowalski v Mitsubishi Motors Australia [2001] SAWCT 93. An appeal to the WCAT was dismissed: Kowalski v Mitsubishi Motors Australia [2002] SAWCT 76. As it is relevant to a matter discussed below, I note also that on 2 January 2000, the preliminary question as to whether the WCT had jurisdiction to hear the application was determined and it was decided that notwithstanding the inquiry involving consideration of the Heads of Agreement which included terms not strictly involving workers compensation, it had jurisdiction: Kowalski v Mitsubishi Motors Australia Ltd [2000] SAWCT 2. Mitsubishi appealed from this preliminary determination. Its appeal was dismissed by the WCAT on 15 August 2000: Mitsubishi Motors Australia Ltd v Kowalski [2000] SAWCT 123. The application to set aside the consent orders was then heard and on 14 August 2001 it was dismissed.

20    Various proceedings were then instituted in this Court asserting the applicant’s employment had not terminated in March 1994 (the statement of claim now asserts that it was terminated in March 1994), claiming wages thereafter, and for compensation in respect of some of the alleged injuries or conditions. Those proceedings were dismissed, and in the one instance of an appeal, the appeal to the Full Court was unsuccessful: Kowalski v Mitsubishi Motors Australia Ltd Staff Superannuation Fund Pty Ltd [2002] FCA 1153 and Kowalski v Trustee, Mitsubishi Motors Australia Limited Staff Superannuation Fund [2003] FCAFC 18. They were dismissed because the applicant was bound by the terms of the Heads of Agreement or was abusing the processes of the Court by seeking to re-agitate matters already determined adversely to him.

21    On 19 April 2005, the SASC declared the applicant a vexatious litigant: Mitsubishi Motors Australia Ltd v Kowalski [2005] SASC 154. The decision was upheld on appeal by the Full Court of the SASC: Kowalski v Mitsubishi Motors Australia Ltd [2005] SASC 433. In essence, the conclusions and the reasons for decision of the WCT referred to at [18] and [19] above were the reasons why the SASC made that order.

22    The applicant then returned to the FCA. One application sought to invoke the Trade Practices Act 1975 (Cth) (the TP Act) in a non-specific way, making allegations of fraud, breach of trust, misrepresentation and non-compliance with statutory requirements in relation to the Heads of Agreement. The other was an appeal from the Administrative Appeals Tribunal about its finding concerning the asserted responsibility of the respondent to the Health Insurance Commission or Medicare under the Health and Other Services (Compensation) Act 1995 (Cth) (the HOSC Act), because the Heads of Agreement included resolution of his compensation claims or some of them, and also invoking in a non-specific way the TP Act apparently to enliven the jurisdiction of the FCA. Those proceedings were each summarily dismissed: Kowalski v Mitsubishi Motors Australia Ltd [2009] FCA 991 and Kowalski v Chief Executive Officer of Medicare Australia [2010] FCA 413.

6    Subject to one exception, once this wider context, including the issues and outcomes and the reasons for those outcomes in various courts and tribunals, is exposed, the present proceeding can be seen to be utterly devoid of merit, nothing more than an attempt to re-agitate issues which were determined or could have been raised for determination in earlier proceedings. At the heart of the present proceeding is yet another endeavour by Mr Kowalski to overturn, in part, the Heads of Agreement, referred to in the passages quoted, to which he and Mitsubishi Motors are parties. Mr Kowalski has never sought to overturn the whole of that agreement for that would entail his having to repay to Mitsubishi Motors the $200,000 paid to him by way of consideration for the various releases he provided to that company by its terms. The end to which his endeavour is directed is, as the initiating application records, to establish that, “on 26 October 1998 [Mitsubishi Motors] had a statutory and legal obligation to redeem its statutory and legal liabilities [to him] pursuant to s 42 of the Workers Rehabilitation and Compensation Act 1986 (SA) (WRC Act).

7    Mr Kowalski’s original endeavour to overturn the effect of the Heads of Agreement came to an end on 14 August 2001 when South Australia’s Worker’ Compensation Tribunal (WCT), after a trial on the merits, dismissed his application: Kowalski v Mitsubishi Motors Australia [2001] SAWCT 93. One of the orders which Mr Kowalski sought before the WCT in that case was “an order pursuant of s 88H of the WRC Act setting aside the determination of Conciliation Officer Richer made on 3 November 1998 on the ground that is was obtained by Mitsubishi's fraud, misrepresentation and unconscionable conduct”. On that date, Conciliation Officer Richer had made a determination pursuant to s 97 of the WRC Act in the following terms:-

Order/s:

Matter 4163/1998 is an expedited decision application referred to me pursuant to s 97 of the Act.

Upon hearing submissions from the parties and by consent I make this determination dismissing the claim for `Aggravation, Acceleration, Exacerbation, Deterioration of a pre-existing coronary heart disease and depression and heart attack (Myocardial Infarction)' as stated in the claim form of 7/4/98 and further claimed on 2/8/98 and 13/10/98.

I note that the parties have entered into an agreement resolving all matters in dispute. The consent in this matter is made on the express understanding that if the terms are not met Mr Kowlaski is entitled to make an application under   s 88 H of the act (sic) to have the orders dismissing the action revoked.

8    Section 88H of the WRC Act provides:

88H—Power to set aside judgments or orders

(1)    The Tribunal may amend or set aside a judgment or order of the Tribunal—

(a)    by consent of the parties; or

(b)    in order to correct an error; or

(c)    if the interests of justice require that the judgment or order be amended or set aside.

(2)    The power under subsection (1) may only be exercised by the President or a presidential member or conciliation officer to whom the President has delegated the power.

The learned primary judge, with respect, correctly noted (at [32]) of the WCT decision that the tribunal had found that Mitsubishi Motors “had not placed any unconscionable pressure on [Mr Kowalski] leading to the Heads of Agreement, but acted in good faith in its conduct leading to the Heads of Agreement, notwithstanding [Mr Kowalski’s] assertions that certain material information was withheld from him.”

9    The learned Deputy President constituting the WCT observed (at [73]) of Mr Kowalski’s evidence that, “My strong impression is that in his attempt to portray Mitsubishi in the worst possible light, the worker too readily and too often allowed himself to fall prey to opportunism and prevarication. In the net result, I did not find him a reliable witness.” In the present proceeding, a similar “opportunism” is manifest, not in relation to Mr Kowalski’s evidence, but rather in the basis in law upon which he has sought, yet again, to overturn the Heads of Agreement.

10    Having heard the evidence which Mr Kowalski then gave in support of his application, the WCT concluded (at [74]) that, “it is clear that the worker was a willing party to the mediation and that he was happy with the settlement outcome” and (at [79] and [80]) that there was no evidence that Mitsubishi Motors, either directly or via its solicitor acted other than in good faith in its dealings with Mr Kowalski or that it misinformed either him or the tribunal.

11    The WCT (at [118] – [119]) dealt with Mr Kowalski’s arguments in relation to redemption in the following way:

Redemption

118    The worker further contends that the settlement reached by the parties amounted to, or included, a redemption of Mitsubishi's liability in respect of weekly payments pursuant of s 42 of the Act, that Mitsubishi had failed to comply with s 42 with respect to the mandatory redemption requirements, and that therefore the `redemption' agreement should be declared a nullity.

119    It remains unclear what parts of the Agreement the worker was asking to have declared null and void in reliance on this contention. Suffice to say, however, that the settlement did not effect, and did not purport to effect, a redemption of Mitsubishi's asserted liabilities in respect of weekly payments pursuant to the Act or otherwise.

12    An appeal by Mr Kowalski from the WCT decision failed.

13    These same arguments with respect to redemption were one feature of Mr Kowalski’s unsuccessful defence to an application which Mitsubishi Motors made to the Supreme Court of South Australia for an order pursuant to s 39 of the Supreme Court Act 1935 (SA) that he be prohibited from instituting proceedings in any court (including the Supreme Court, the District Court, the Magistrates’ Court, Workers Compensation Tribunal and the Industrial Court), any application or other document, including any subpoena or summons to witness against that company or any corporation related to Mitsubishi Motors or any of its employees or agents without leave of that court. This is the proceeding before Bleby J referred to in the passages quoted above: Mitsubishi Motors Australia Ltd v Kowalski [2005] SASC 154 (Mitsubishi Motors Australia Ltd v Kowalski). The learned primary judge (at [34]) observed of the latter that the nature and effect of the WCT decision had been explained by Bleby J at, in particular, [279] to [293] in that case. He expressed agreement with his Honour’s findings as to the nature and effect of that decision. Having separately considered the same, so, with respect, do I.

14    The learned primary judge considered it sufficient in relation to Mr Kowalski’s calling in aid of s 51AA of the Trade Practices Act 1974 (Cth) (as that Act was then known) (TPA) to refer (at [12]) to unconscionable conduct leading to the Heads of Agreement having been an issue heard and determined in the WCT.

15    By s 51AA of the TPA, a corporation is prohibited from engaging in conduct which is unconscionable according to the unwritten law, from time to time, of a State or Territory. For present purposes, that means that the content of the conduct prohibited by s 51AA of the TPA is measured by what constitutes unconscionable conduct “according to principles of law and equity expounded from time to time in decisions respecting the common law of Australia”: Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (2003) 214 CLR 51 at [38] per Gummow and Hayne JJ. Given this, it becomes unnecessary to decide whether or not the WCT could be regarded as a “court” invested with federal jurisdiction in respect of matter arising under s 51AA of the TPA by s 86(2) of that Act. That is because in any event the content of the conduct which would constitute unconscionable conduct for the purposes of s 51AA of the TPA would necessarily be no different to that which the WCT could, according to the common law of Australia, have treated as unconscionable for the purpose of reaching its decision in respect of Mr Kowalski’s endeavour before that tribunal on that basis to impeach consent orders based on the Heads of Agreement.

16    Thus, though the express reference by the learned primary judge to s 51AA of the TPA is, with respect, compressed, once what lies behind the reference in that section to the “unwritten law” is understood, there is no basis for gainsaying his Honour’s conclusion (at [12]) that a claim of unconscionability by Mr Kowalski has already been the subject of a full trial on the merits.

17    The learned primary judge did not limit his consideration of Mr Kowalski’s claim as to unconscionability just to noting that such an issue had expressly been the subject of a full trial on the merits in the WCT. His Honour (at [35]) stated:

In addition, it is important to note that with one exception the applicant’s claims have, in my view, all previously been made in the proceedings referred to, albeit that the label the applicant now attaches to his asserted causes of action may be a little different from a label he has previously used. Variously expressed, he has in fact unsuccessfully asserted to the FCA and the WCT, and has raised as an issue in the SASC, that the Heads of Agreement cannot or should not preclude him from pursuing claims against the respondent under the WRC Act in respect of the several asserted compensable injuries referred to above. He has variously claimed that the Heads of Agreement were procured by the respondent by unconscionable or misleading conduct, including by alleged failures to disclose information to him. He has variously claimed that the Heads of Agreement are unenforceable or invalid, at least to the extent that they preclude him from pursuing compensation claims under the WRC Act, because of provisions of the WRC Act or the Rules of the WCT or because the respondent has not complied with s 23 of the HOSC Act. Those claims have been expressed in terms which, in my view, did involve the causes of action now identified by the applicant.

Subject to the same reservation as the learned primary judge, I respectfully agree with his Honour’s observation that Mr Kowalski’s “claims have been expressed in terms which, in my view, did involve the causes of action now identified by [him].”

18    As to Mr Kowalski’s reliance on s 23 of the Health and Other Services Compensation Act 1995 (Cth) (HOSC Act), I should add that this section creates a notification obligation after, materially, the making of a settlement agreement. Non-compliance with that obligation is an offence: s 26(1) HOSC Act. The intent of the notification requirement is to afford currently the Chief Executive Officer of Medicare Australia or, in days gone by, the Health Insurance Commission an opportunity to give a notice of charge specifying the amount, if any, payable to the Commonwealth in respect of compensation. Section 32 of the HOSC Act, also referred to by Mr Kowalski, complements this requirement by making it an offence to make payment under, materially, a settlement without first discharging the notified liability to the Commonwealth. Conduct after, materially, the making of the Heads of Agreement cannot, axiomatically, constitute unconscionable conduct with respect to the making of that settlement agreement.

19    Section 22 of the HOSC Act does, inter alia, include a restriction in respect of the making of a settlement without giving prior notification to a compensable person that he or she may be liable to pay an amount under that Act. Mr Kowalski did not refer to this section in his written submission. In these circumstances it is not necessary to do other than observe that, insofar as any non-observance of this requirement may have intruded (and it is unnecessary to put it any higher than that) as a reason for setting aside the consent orders based on the Heads of Agreement, it was an issue that could have been raised by Mr Kowalski in his original endeavour before the WCT.

20    The exception in respect of issues already agitated which the learned primary judge reserved was Mr Kowalski’s allegation of “fraud” on this Court. He also alleged that Mitsubishi Motors had committed fraud on him but, having regard to the way this was alleged in the statement of claim, this was but a different way of characterising other alleged behaviours of that company before the making of the Heads of Agreement which either were or could have been raised in earlier proceedings, particularly in those in the WCT.

21    The learned primary judge assumed (at [35]) in Mr Kowalski’s favour that an order of this court made in earlier proceedings might be later set aside if it had been obtained by fraud, citing in support O 35 r 7(2)(b) of the Federal Court Rules. There was, with respect, neither error in the making of this assumption nor in citing that authority. Neither though was there any error in his Honour’s conclusion, at [35], elaborated upon at [35]-[39], that there was no pleaded basis in Mr Kowalski’s statement of claim upon which a claim of fraud on this Court could possibly succeed. In particular, Mr Kowalski seems unable to understand and is certainly unable to accept that the WCT had, for the purposes of exercising its jurisdiction under s 88H of the WRC Act to set aside an order made by consent, jurisdiction to examine the Heads of Agreement insofar as that provided the basis upon the consent order had been obtained. The WCT was not a court of equity but it did not have to be to examine the Heads of Agreement for the purpose of exercising its jurisdiction under s 88H of the WRC Act, and in particular, in deciding whether to make the order in the terms (quoted above) which Mr Kowalski had sought. Mitsubishi Motors did not in this proceeding and has not earlier put the position any higher than this.

22    Further, as the learned primary judge, at [39] observed:

There is no specific allegation of a communication to the FCA, other than the general one at para 55.1.1 as described in [27] and [28] at (4) above. There is additionally at para 75.1 the allegation that the respondent informed the FCA that it did not have any liability to redeem any obligations to pay weekly compensation to the respondent. The position is, as the [Workers Compensation Appeal Tribunal (WCAT)] said, that the WCT had jurisdiction to decide how the Heads of Agreement operated and as to its legal effectiveness in the context of the applicant’s attempt to set aside the consent orders of 3 and 5 November 1998 and to pursue compensation claims against the respondent. It also had jurisdiction, if those consent orders were set aside, to hear and determine the compensation claims. The applicant did not there, nor has he elsewhere, sought an order that the Heads of Agreement should be set aside in their entirety, so that he should repay the $200,000 payment he received and the respondent should not treat them as giving rise to binding obligations. The respondent has consistently said that it did not, by the Heads of Agreement redeem any liability to pay compensation to the applicant because it disputed any liability to pay weekly compensation by that time. Consequently, it has consistently said that it had no obligation under s 23 of the HOSC Act. There is nothing to indicate that it does not hold those views. It has relied upon the WCT and WCAT decisions referred to at [18] and [19] and provided references to them; it cannot therefore be shown to have deliberately mislead the FCA as to their conduct or effect. There is nothing asserted to the effect that the FCA has misapprehended the relevant facts or has misapprehended the relevant law solely because of the conduct of the respondent: cf Autodesk Inc v Dyason [No 2]; (1993) 176 CLR 300. Indeed, the assertion is at such a level of generality as to be unsustainable as a proper pleading. In the absence of any material identified by the applicant, which would have to be the specification of a particular judgment of the FCA which showed both the specific conduct asserted against the respondent, its acceptance by the FCA, the fact that that conduct was fraudulently engaged in, and that its acceptance was a significant factor in the result of that case, and of course that the conduct was in fact wrong, there is no reason to allow the applicant to replead.

I respectfully agree.

23    I also agree with the further observation of the learned primary judge that this Court does not have jurisdiction to hear and determine claims under the WRC Act.

24    The learned primary judge did not find it necessary to explore the extent to which, if at all, s 31A of the Federal Court of Australia Act offered a more liberal test than O 20 r 5(1)(a) or (b) of the Federal Court Rules for summarily dismissing Mr Kowalski’s application. Mitsubishi Motors had relied on either or each of these bases. Though the bases for summary dismissal under that provision of that Act and those paragraphs of that rule overlap, they are not identical. Common to each source of power of summary dismissal is that it must be exercised with caution for the result of its exercise is to shut out a party from a trial on the merits of law and fact raised in a case.

25    It has been observed of s 31A of the Federal Court of Australia Act that it requires a practical judgment as to whether the party against whom summary dismissal is sought has more than a “fanciful” prospect of success: Spencer v The Commonwealth (2010) 241 CLR 118 at [25] (Spencer v The Commonwealth) per French CJ and Gummow J. Also in that case and pertinently for the present, given the alternative bases for summary dismissal relied upon, Hayne, Crennan, Kiefel and Bell JJ stated, at [52]-[54]:

52    … [As to s 31A] the inquiry required in this case is whether there is a "reasonable" prospect of prosecuting the proceeding, not an inquiry directed to whether a certain and concluded determination could be made that the proceeding would necessarily fail.

53    In this respect, s 31A departs radically from the basis upon which earlier forms of provision permitting the entry of summary judgment have been understood and administered. Those earlier provisions were understood as requiring formation of a certain and concluded determination that a proceeding would necessarily fail. That this was the basis of earlier decisions may be illustrated by reference to two decisions of this Court often cited in connection with questions of summary judgment: Dey v Victorian Railways Commissioners and General Steel Industries Inc v Commissioner for Railways (NSW).

54    In Dey, the defendants moved for summary judgment on the grounds that the action was frivolous, vexatious and an abuse of process. In a passage often later cited, Dixon J said that "[a] case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury". What Dixon J meant by "very clear" was identified by his observation that "once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process" (emphasis added). And there would be a "real question" unless the defendant could "show that it was so certain that [the question] must be answered in the [defendant's] favour that it would amount to an abuse of the process of the court to allow the action to go forward for determination according to the appointed modes of procedure" (emphasis added). The test identified by Dixon J in Dey can thus be seen to be a test requiring certain demonstration of the outcome of the litigation, not an assessment of the prospect of its success.

[Footnote references omitted]

26    It was not necessary in this case for the learned primary judge to seek to determine whether any different result might follow, depending upon whether one acted under s 31A, as opposed to the rules. That is because, even applying the more stringent requirement of a certain and concluded determination that the proceeding would necessarily fail, described in the passage from Spencer v The Commonwealth just quoted, such a determination necessarily followed, for the reasons given by the learned primary judge. Those reasons are not, for the reasons given by me above, attended with sufficient doubt to warrant a grant of leave to appeal.

27    I should add the following.

28    My perusal of the reasons for judgement of Bleby J in Mitsubishi Motors Australia Ltd v Kowalski, including the summary offered by his Honour of the plethora of litigation in the courts and tribunals of South Australia, of the reasons for judgement of the learned primary judge and of Mr Kowalski’s written submissions as well as my cumulative observations of Mr Kowalski’s at times agitated demeanour and discursive and diffuse oral submissions in the course of the hearing of this application and one which I heard earlier in the day, which included a reference to his anxiety condition, led me at the conclusion of the hearing of this application to foreshadow that I may require submissions from the parties, upon delivery of judgment, on an additional subject. That subject was whether I should direct the District Registrar to draw any outcome of this proceeding and of earlier litigation against Mitsubishi Motors to the attention of South Australia’s Public Advocate with a submission that that official consider seeking from the Guardianship Board under s 35 of the Guardianship and Administration Act 1993 (SA) a limited administration order with respect to so much of Mr Kowalski’s estate as entailed any litigation against that company. I indicated that, were I to require such submissions, I would direct the District Registrar to notify the parties prior to delivery of judgment. I raised this out of concern for Mr Kowalski’s health and welfare, for he seemed obsessed about a perceived injustice done to him in respect of alleged compensation entitlements and as a result of the Heads of Agreement but without insight as to the ramifications of a prior hearing and determination in proceedings in which he did, or could have raised, issues he was again seeking to agitate in this proceeding.

29    Upon reflection, I have decided not to request the making of any such submissions. Upon the refusal of leave to appeal there will no longer be an interrogative note attending the order dismissing the present application. Mr Kowalski’s legal estate will not include the chose in action represented by this proceeding against Mitsubishi Motors.

30    The remedy in respect of a person who habitually, persistently and without reasonable prospects institutes proceedings in this Court or in any other Australian court lies in the making of an order under O 21 of the Federal Court Rules that the person not be permitted to institute or to continue a proceeding in the Court without the leave of the Court. Such an order is not one to be made lightly. I have not been called upon to make such an order in this proceeding. The subject is though apt for consideration in a separate proceeding.

31    That said, Mr Kowalski is already the subject of a vexatious litigant order by the South Australian Supreme Court. In the era prior to the establishment of this Court, a vexatious litigant order of a State Supreme Court would effectively operate across the whole range of attempts by that litigant to engage judicial power in that State, be it in State or in invested federal jurisdiction, save only in respect of the original jurisdiction of the High Court. At present, an order of the kind made by the South Australian Supreme Court operates only in respect of the courts and tribunals of South Australia, and in respect of federal jurisdiction, only to the extent that those bodies are invested with federal jurisdiction. To subject Mr Kowalski to a kindred restriction in respect of proceedings in this Court would require a separate application being heard and determined here.

32    There may, I respectfully suggest, be a need, as a matter of law reform, for the proper authorities to consider whether the making, by any Australian superior court, of an order of the kind already made by the South Australian Supreme Court ought to have the consequence that the person the subject of that order is, upon the filing of a sealed copy thereof in any other Australian court and service on that person of a notice of its filing, subject to a like restriction in that other court unless, within a specified time after service of the notice, that person shows cause to a particular other court why it should not have that consequence in that other court. Further or alternatively, there may also be a need to consider whether the Guardianship and Administration Act and its equivalents in other States and Territories ought to be amended so as expressly to permit the making of an administration order which would, on the application of an Attorney-General and in the case of persons who persistently institute vexatious proceedings, subject that person to a requirement that they not be able to institute any further court proceeding other than by the Public Trustee or some such official. Such legislation might additionally provide that the decision of the Public Trustee as to whether or not to institute particular litigation was reviewable by a body such as the Guardianship Board.

33    The right to seek justice according to law in an Australian court is a very important civic right and not one lightly to be restricted. However, there are cases where it is clear to the point of demonstration that such a right has already fully been enjoyed and its attempted repetition can amount to oppression of the other party and an unwarranted diversion of scarce judicial resources from the resolution of other disputes. Further, the obsessive behaviour highlighted thereby can be a trait that is likely to be manifested with respect to any litigation.

34    The formal order will be that the application for leave to appeal is dismissed. I shall hear from the parties as to costs, including as to whether, in the circumstances, this case, exceptionally, is one for the award of costs on an indemnity basis.

Associate:

Dated:    24 March 2011