FEDERAL COURT OF AUSTRALIA

Kowalski v Mitsubishi Motors Australia Ltd [2011] FCA 631

THE COURT ORDERS THAT:

1.    The Notice of Motion filed on 29 April 2011 is dismissed.

2.    Leave to appeal the decision of the primary Judge is refused.

3.    The Applicant is to pay the costs of the Respondents.

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.

THE COURT ORDERS THAT:

1.    The Notice of Motion filed on 29 April 2011 is dismissed.

2.    Leave to appeal the decision of the primary Judge is refused.

3.    The Applicant is to pay the costs of the Respondent.

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    On 7 April 2011 a Judge of this Court declared that the present Applicant, Mr Kazimir Kowalski, “has habitually, persistently and without reasonable grounds instituted vexatious proceedings in this Court”: Soden v Kowalski [2011] FCA 318. That declaration was made in each of the two proceedings then being heard. One proceeding had been instituted by the Registrar of this Court (Mr Warwick Soden); the other had been instituted by Mitsubishi Motors Australia Ltd, MMAL Staff Superannuation Fund Pty Ltd and AMP Superannuation Ltd (“Mitsubishi parties”). The two proceedings had been heard concurrently. A number of orders were also then made in each of the two proceedings, including an order that Mr Kowalski “not institute any further proceeding in this Court without the leave of the Court”.

2    Thereafter, on 15 April 2011 Mr Kowalski filed a Notice of Appeal in each of the two proceedings. The Notices of Appeal identified both Questions of Law and Grounds of Appeal. Each is an extensive document setting forth over 50 Questions of Law and over 50 Grounds of Appeal. The Questions and Grounds were variously expressed but included questions such as whether the primary Judge “pervert[ed] the course of justice” and “fabricate[d]” the decision reached. Other Questions were expressed in terms of whether the primary Judge erred in failing to accept submissions and whether the primary Judge “err[ed] in law” in making statements made in the reasons for decision. However expressed, the Notices of Appeal attempt to take issue with most (if not all) of the conclusions reached by the primary Judge.

3    On 29 April 2011 in each proceeding Mr Kowalski filed a Notice of Motion. The Notices of Motion, inter alia, sought an order that “[a]ll of the orders … made on 7 April 2011 be stayed pending the final determination of the applicant’s appeal against … perverted orders by the Full Court of the Federal Court and if it becomes necessary, by the High Court of Australia”.

4    The Notices of Motion came on for hearing on Monday 16 May 2011. Mr Kowalski appeared in person and the Respondents in both proceedings appeared by Counsel. At the conclusion of oral submissions the parties were advised that judgment would be delivered at 4:00 pm that day. During the course of considering the submissions advanced, however, it became apparent that what was initially considered to be a straight-forward case was perhaps more complex than first thought. Further written submissions were invited. Submissions from Mr Kowalski were received as recently as yesterday.

5    It is now concluded that the Notices of Motion should be dismissed and that leave to appeal the decision of the primary Judge should be refused.

The Orders of the Primary Judge

6    The orders as made by the primary Judge in each of the two proceedings were in substantially similar terms.

7    In the proceeding instituted by the Registrar of this Court, those orders were relevantly:

…

2.    Kazimir Kowalski, the respondent in this proceeding, not institute any further proceeding in this Court without the leave of the Court.

3.    Any proceeding instituted prior to this order by Kazimir Kowalski, the respondent in this proceeding, not be continued without the leave of the Court.

…

In the proceeding instituted by the Mitsubishi parties, the orders were relevantly as follows:

3.    Kazimir Kowalski, the respondent in this proceeding, not institute any further proceeding in this Court against any or all of the applicants, Mitsubishi Motors Australia Ltd, MMAL Staff Superannuation Fund Pty Ltd and AMP Superannuation Ltd without the leave of the Court.

4.    Any proceeding instituted prior to this order by Kazimir Kowalski, the respondent in this proceeding, against any or all of the applicants, Mitsubishi Motors Australia Ltd, MMAL Staff Superannuation Fund Pty Ltd and AMP Superannuation Ltd not be continued by him without the leave of the Court.

The terms of those orders followed closely the terms of Order 21 rules 1 and 2 of the Federal Court Rules. Separate orders are directed to the ability to “institute” a proceeding as opposed to the ability to “continue” a proceeding “instituted prior to this order”.

Vexatious Litigants and the Federal Court Rules

8    Order 21 of the Federal Court Rules is titled “Vexatious Litigants”. That Order provides for the making of orders in respect to such litigants and also deals with applications to rescind or vary orders that have been made and imposes a requirement to obtain the leave of the Court to “institute” or “continue” a proceeding.

9    Rule 1 of Order 21 thus provides that the Court may make an order declaring a person to be a vexatious litigant where it is “satisfied that the person has habitually, persistently and without reasonable grounds instituted other vexatious proceedings in the Court…”

10    Rule 2 provides that the Court may make such an order where a person has “habitually and persistently and without any reasonable grounds institute[d] a vexatious proceeding against any person”, being a “person aggrieved”.

11    The primary Judge in the present proceedings relied upon both rules 1 and 2 of Order 21. Rule 1 was invoked by the Registrar; rule 2 was invoked by the Mitsubishi parties.

12    Rules 4 and 5 of Order 21 address those circumstances where an order has been made. Rule 4 provides as follows:

Rescission or variation of order

The Court may from time to time rescind or vary any order made by it under rule 1 or 2.

Rule 5 provides as follows:

Leave to start or continue proceeding

(1)    If the Court has made an order under rule 1 or rule 2 against any person, the person may be given leave to institute or continue a proceeding only if the Court is satisfied that:

(a)    the proceeding is not an abuse of process; and

(b)    there is prima facie ground for the proceeding.

(2)    Unless the Court orders otherwise, an application by a person who is subject to an order under subrule 1 (2) or rule 2 may be determined by the Court without an oral hearing.

A “proceeding” is defined in s 4 of the Federal Court of Australia Act 1976 (Cth) as meaning “a proceeding in a court, whether between parties or not, and includes an incidental proceeding in the course of, or in connexion with, a proceeding, and also includes an appeal”. The definition, it has been said, “is a very wide definition indeed”: Fiorentino v Irons (1997) 79 FCR 327 at 330 per Foster J. See also: Cambridge Consolidated NL v Zephyr Minerals NL (1999) 88 FCR 147. The width of the definition is evidenced by the fact that it is sufficiently broad to encompass the issue of a subpoena: King v GIO Australia Holdings Ltd [2001] FCA 1773, 116 FCR 509.

13    When considering whether leave should be granted pursuant to Order 21 rule 5, McKerracher J in Yap v Granich Partners [2008] FCA 1380 cited with approval the following observations of Kirby J in Re Attorney-General (Cth); Ex parte Skyring (1996) 135 ALR 29 at 31 to 32 where His Honour refused leave to Mr Skyring to commence further proceedings in the High Court of Australia:

I approach the application by Mr Skyring for leave to proceed on the three proceedings ... with the following considerations in mind:

First, it is always important for every judge to keep an open mind in case a person who has been rejected by courts in the past may have, hidden amongst the verbiage of his or her arguments, a point which has not been previously seen and which may have merit. Vigilance, and not impatience, are specially required where that person is not legally represented.

Secondly, it is regarded as a serious thing in this country to keep a person out of the courts. The rule of law requires that, ordinarily, a person should have access to the courts in order to invoke their jurisdiction. It is a rare thing to declare a person a vexatious litigant. It is extremely rare in this court to use the power, whether under the inherent power or under O 63, to require leave before a person may commence proceedings invoking the court’s jurisdiction.

Thirdly, the court must never shy away from the determination of a point sought to be argued simply because it may have major ramifications. ...

Fourthly, I do not pause to consider the appropriateness of the particular process that Mr Skyring has commenced, seeking relief by way of the writs of certiorari and mandamus. It is not necessary for me, in the decision which I have arrived at, to determine whether they are in each case, or in any of the cases, the appropriate process of the court to invoke its jurisdiction ...

Fifthly, no question arises as to the validity of the rule under which Mr Skyring approaches the court for leave to proceed.

McKerracher J declined leave to Mrs Yap to issue proceedings after she had been declared a vexatious litigant: Granich & Associates v Yap [2004] FCA 1567. Mrs Yap was again refused leave in yet a further proceeding: Yap v Australian Securities & Investments Commission [2009] FCA 1159. Gilmour J there also cautioned that “where the applicant is unrepresented … the judicial mind must remain open”: [2009] FCA 1159 at [14].

14    Although there is an obvious need to be forever vigilant to ensure that persons are not wrongfully denied access to this Court, there is also the need to protect the public interest in preserving the integrity of the Court’s own processes and the interests of those other persons who may face loss from actions having no substance. Thus, in Ramsey v Skyring [1999] FCA 907, 164 ALR 378 Sackville J referred to the “fundamental principle of the legal system … that every person has a right of access to a court …” and went on to observe in the course of making an order under Order 21 rule 1 as follows:

[52] Nonetheless, provisions such as O 21, r 1 give effect to an important countervailing policy. As Toohey J pointed out in relation to the equivalent High Court provision, the rule is designed to protect the court's own processes against unwarranted usurpation of its time and resources and to avoid loss caused to those who face actions which lack substance: Jones v Skyring (66 ALJR 810 at 814). Linked with that objective is the need to protect the community, including litigants who wish their disputes to be resolved in an orderly and expeditious manner, against disruption of the court system flowing from the repeated institution of groundless proceedings. The serious consequences of an order made pursuant to O 21, r 1 are acknowledged in the stringent requirements of the rule itself. Only if these requirements are satisfied does the court have power to make such an order. Even if the requirements are satisfied, the court must consider whether an order should be made.

See also: Jones Lang Lasalle (Qld) Pty Ltd v Dart [2005] FCA 1614 at [25] per Kiefel J.

The Notices of Appeal

15    Given the terms of the orders as made by the primary Judge and Order 21 rule 5, an initial question arose as to whether the leave of the Court was required to enable Mr Kowalski to file each of the Notices of Appeal. Mr Kowalski’s position at the hearing was that the appeals had in fact been filed and should now be listed for hearing.

16    It is ultimately concluded that leave was probably required to even file the Notices of Appeal but that it is unnecessary to express any more concluded view because such leave as is required so as to permit Mr Kowalski to appeal from an interlocutory decision should be refused.

17    In the absence of the terms of the orders of the primary Judge and Order 21 rule 5, no question would arise as to the right of Mr Kowalski to appeal. Section 24(1)(a) of the Federal Court of Australia Act confers jurisdiction upon the Court to “hear and determine appeals from judgments of the Court constituted by a single Judge exercising the original jurisdiction of the Court”. The term “judgment” is also defined by s 4 of the Federal Court of Australia Act as including “a judgment, decree or order, whether final or interlocutory”. The terms bear the same meaning which the words “all judgments, decrees, orders…” have in s 73 of the Commonwealth of Australia Constitution Act: Ah Toy v Registrar of Companies (1985) 10 FCR 280 at 285 per Toohey, Morling and Wilcox JJ. And, where a judgment is an interlocutory judgment, s 24(1A) provides that an appeal “shall not be brought … unless the Court or a Judge gives leave to appeal”.

18    The judgment of the primary Judge was unquestionably a “judgment” for the purposes of s 24(1) and, if it be an interlocutory judgment, it is equally an “interlocutory judgment” for the purposes of s 24(1A) and would by virtue of that provision require leave before the appeals could be “brought”. Any requirement of “leave” pursuant to s 24(1A) may presently be left to one side.

19    Initial attention was directed to the requirement for such “leave” as may be required pursuant to the terms of the orders of the primary Judge and the terms of Order 21 rule 5. Those orders were made under rules 1 and 2 of Order 21. And both the terms of those orders and rule 5 required the leave of the Court if Mr Kowalski sought to “institute … a proceeding”.

20    Notwithstanding the terms of Order 21 rule 5 and the definition of the term “proceeding” as including an “appeal”, neither Respondent contended that “leave” was required in order to permit Mr Kowalski to file either of the Notices of Appeal. Their position was that “Order 21 rule 5 does not apply. … [T]he reference to ‘a proceeding’ in Order 21 rule 5 does not include a reference to an application for leave to appeal an order made pursuant to Order 21 rules 1 and 2”. Mr Kowalski’s position was that the question did not arise as the Notices of Appeal had in fact been accepted for filing. Indeed, after the conclusion of the hearing of the Notices of Motion both appeals have since been listed for hearing in August 2011. Contrary to the submission of Mr Kowalski, it is not considered that the mere setting down of his appeals for hearing renders the Court as presently constituted functus such that it is denied any power to determine the matters raised by the Notices of Motion.

21    Notwithstanding the terms in which the orders were sought in his Notices of Motion, Mr Kowalski nevertheless sought (if necessary) the leave of the Court pursuant to rule 5 to either file his Notices of Appeal or to “continue” his appeals – if “leave” was required. A “stay” of the existing orders, upon his approach, would leave him free to prosecute his appeals. The Respondents did not oppose the Court resolving the question as to whether leave was required and, if required, whether leave should be granted.

22    The decision of the Victorian Court of Appeal in Kay v Attorney-General (Vic) [2000] VSCA 176, 2 VR 436 provides considerable support for a conclusion that Mr Kowalski did not require the leave of the Court in order to file his Notices of Appeal. Mr Kay had been declared a vexatious litigant pursuant to s 21(2) of the Supreme Court Act 1986 (Vic). At that time, that section provided in relevant part as follows:

21. Vexatious litigants

(1)    The Attorney-General may apply to the Court for an order declaring a person to be a vexatious litigant.

(2)    The Court may, after hearing or giving the person an opportunity to be heard, make an order declaring the person to be a vexatious litigant if it is satisfied that the person has-

(a)    habitually; and

(b)    persistently; and

(c)    without any reasonable ground-

instituted vexatious legal proceedings in the Court, an inferior court or a tribunal against the same person or different persons.

(3)    An order under subsection (2) may provide that the vexatious litigant must not without leave of-

(a)    the Court; or

(b)    an inferior court; or

(c)    a tribunal constituted or presided over by a person who is a barrister and solicitor of the Court-

do the following-

(d)    continue any legal proceedings in the Court, inferior court or tribunal; or

(e)    commence any legal proceedings in the Court or any specified inferior court or tribunal; or

(f)    commence any specified type of legal proceedings in the Court or any specified inferior court or tribunal.

(4)    Leave must not be given unless the Court, or if the order under subsection (2) so provides, the inferior court or tribunal is satisfied that the proceedings are not or will not be an abuse of the process of the Court, inferior court or tribunal.

(5)    The Court may at any time vary, set aside or revoke an order made under subsection (2) if it considers it proper to do so.

Section 17(2) of the Victorian Supreme Court Act provided that “… an appeal lies to the Court of Appeal from any determination of the Trial Division constituted by a Judge”. When considering these provisions in Kay, Chernov JA concluded:

[25] …

(b) Does the applicant require leave under his Honour's order?

…

[27] There is some force in the argument that, ordinarily, the filing of a notice of appeal or an application for leave to appeal amounts to the commencement of a “legal proceeding” … But it is also arguable that, ordinarily, such a step within the same Court is properly characterised as the continuation of a legal proceeding. Be that as it may, however, this still leaves open the question whether the institution of an appeal which seeks to challenge the correctness or the validity of the decision to declare the appellant a vexatious litigant, amounts to the commencement or to the continuation of “legal proceedings in the Court” for the purposes of s 21(3). Clearly, if such proceedings do not fall within the subsection, the judge has no power to restrain the vexatious litigant from instituting the appeal process. Put another way, the question is whether on its true construction, the subsection empowers the judge to restrain the vexatious litigant from appealing against the correctness of the decision without first obtaining leave to do so from that or another judge. In my opinion, the answer is, no.

[28] The purpose of s 21(3) is to empower the Court to make the orders contemplated by it so that practical effect may be given to the declaration made under s 21(2) that the person in question is a vexatious litigant. Thus, the restraining orders that are made under that provision give content to the order made under s 21(2). But the power to make the restraining orders under s 21(3) is predicated upon there being in existence a valid order made under s 21(2) declaring the person to be a vexatious litigant. Put another way, s 21(3) operates on the assumption that the order made under s 21(2) is a valid order. Consequently, s 21(3) is concerned with restraining orders in respect of proceedings other than those which seek to attack the validity or correctness of the orders made under s 21(2), such as proceedings which are extant at the date of the order, including those in respect of which an appeal may be contemplated, as well as proceedings which the vexatious litigant may seek to bring in the future. But, as I have said, the subsection is not concerned with an appeal which challenges the validity or correctness of the s 21(2) order.

[29] If s 21(3) operates in the manner contended for by Mr Robins, it will materially diminish the right of appeal conferred by s 17(2) of the Act and deprive the Court of Appeal of the control that it now has over appeals and, in particular, appeals from interlocutory orders. Clear language would be required if the legislature intended to produce such a situation and, in my opinion, such clarity of language is lacking in the provision. Moreover, if s 21(3) operates as Mr Robins submitted, it could lead to absurd and, arguably, unjust results which could not have been intended by the legislature. Thus, if, as Mr Robins contends, the order in question is an interlocutory order, the vexatious litigant would have to obtain leave to appeal against that order from this Court under s 17A(4)(b) of the Act. But before he could make an application for such leave, he would have to have secured leave to do that from a judge. Thus, there would be two hearings about the prospects of success of the proposed appeal, assuming that the judge grants leave. If no such leave is granted, the litigant would be shut out from applying to the Court of Appeal for leave to appeal unless the order of the judge refusing leave is set aside. The setting aside of that refusal could only be pursued by way of appeal in respect of which leave would have to be obtained from this Court. But before an application for such leave could be sought, leave to proceed would have to be obtained from a judge because, on Mr Robins’ argument, such an application would amount to a commencement of legal proceedings “in the Court”. And so on. Consequently, there would be a multiplicity of interlocutory proceedings with a possibility that the real issue — the correctness or otherwise of the s 21(2) order — may never reach the Court of Appeal. It is difficult to accept that s 21(3) of the Act was intended to operate so as to give rise to the possibility of such results.

[30] Thus, in my opinion, s 21(3) does not empower a judge to make his decision under s 21(2) appeal-proof in the way contended for by Mr Robins. It follows that, in my view, the applicant does not require leave of a judge to prosecute his application for leave to appeal in this proceeding.

Ormiston and Batt JJA agreed with Chernov JA. This conclusion has been followed in Shaw v Mcginty [2006] WASCA 231 at [11] to [17] per Wheeler JA (Steytler P and Buss JA agreeing). In Klewer v Attorney-General (NSW) [2010] NSWCA 219 McColl and Campbell JJA and Sackville AJA referred to (inter alia) the decision in Kay and considered it “appropriate to proceed on the basis, without finally deciding the issue, that the applicant does not require leave under s 14(2) of the [Vexatious Proceedings Act 2008 (NSW)] to file a summons seeking leave to appeal …” from orders restraining Ms Klewer from instituting “without the leave of the Court … any legal proceedings in any Court …”.

23    At least one other decision has referred to it being “manifestly unjust” to deny a litigant an opportunity to file a Notice of Appeal challenging the very order making him a vexatious litigant: Commonwealth Bank v Heinrich (No 2) [2003] SASC 436. That order had been made pursuant to s 39 of the Supreme Court Act 1935 (SA). Section 39(6) defined “proceedings” as meaning “civil or criminal proceedings… instituted in the court or some other court of the State”. Debelle J there observed:

[5] …

2. Is leave required under s 39(1)?

[6] As Mr Heinrich is entitled to appeal, the question then arises whether, when an order has been made pursuant to s 39(1) of the Act, it is necessary for the person bound by that order and who wishes to appeal against the order to obtain leave pursuant to s 39(1) of the Act. Expressed another way, the question is whether the terms of s 39(1) require Mr Heinrich to obtain leave to appeal against both of the orders made on 12 September under that provision.

[7] If the matter is considered without resort to authority, ordinary principles of fairness dictate that leave under s 39(1) should not be required. The judge who has made an order pursuant to s 39(1) could have erred in a material respect and it would be manifestly unjust to deny the person against whom the order had been made the right to appeal against that decision. Expressed another way, if the order under s 39(1) should not have been made, the person subject to that order should not be denied the right to appeal from that order. In this case, that position should obtain in respect of both of the orders especially as both orders were sought in the same proceeding. In other words, had the application for a permanent stay been made in a separate proceeding issues before the application under s 39 of the Act, Mr Heinrich would have had a right of appeal in any event.

…

[10] For these reasons, although, as a general rule, an appeal may constitute the institution of legal proceedings, an exception should be made in the case of an appeal from an order made pursuant to s 39(1) of the Act. I expressly limit this conclusion to an appeal against orders made under s 39(1). There are compelling reasons to conclude that all other appeals should be regarded as the institution of legal proceedings.

[11] For these reasons, it is unnecessary for Mr Heinrich to obtain leave to appeal pursuant to s 39(1) of the Act in order to institute an appeal against the order made pursuant to s 39.

24    A potential source of distinction between these decisions, however, is the width of the definition of the term “proceeding” in s 4 of the Federal Court of Australia Act and, in particular, the fact that that term is expressly defined to include “an appeal”. By way of contrast, s 3 of the Victorian Supreme Court defines a “proceeding” as meaning “any matter in the Court other than a criminal proceeding”.

25    Although unnecessary to express any concluded opinion, it is respectfully suggested that this difference in definition may well be a sufficient basis upon which the decision in Kay may be distinguished. As observed, for example in Heinrich (No 2), an appeal is normally regarded as the institution or commencement of a legal proceeding. Whatever may be the merit in making an “exception” in those jurisdictions where a “proceeding” is given a limited definition, in circumstances where that term is defined as including “an appeal”, no like process of construction may be available. No conclusion may be available that the term “proceeding” is to be given the meaning as defined in s 4 of the Federal Court of Australia Act when used elsewhere for the purposes of the Act and the Rules but a different meaning when that term is used in Order 21. It follows that rule 5 of Order 21 (and the orders of the primary Judge) may well preclude Mr Kowalski from instituting an appeal without first obtaining the leave of the Court. On such a view, each of the Notices of Appeal should not have been accepted for filing.

26    Further support for a conclusion that leave is required before a Notice of Appeal may be filed may perhaps be found in the observations of Toohey J in Jones v Skyring (1992) 109 ALR 303 at 310 and in the observations of Sackville J in Ramsey v Skyring [1999] FCA 907 at [58] to [59], 164 ALR 378 at 390 to 391. See also: Jones Lang Lasalle (Qld) Pty Ltd v Dart [2005] FCA 1614 at [35] to [36]. It is, however, unnecessary to pursue these issues further.

27    But even if this tentative conclusion were to be incorrect such that no leave is required to file a Notice of Appeal calling into question the decision of the primary Judge, questions would remain as to whether or not “leave” would nevertheless be required either because:

    the appeals are from an interlocutory decision, being a decision requiring leave pursuant to s 24(1A) of the Federal Court of Australia Act; and/or

    the prosecution of the appeals would be the continuation of a proceeding within the meaning of Order 21 rule 5 of the Federal Court Rules.

An Interlocutory or Final Decision?

28    The question as to whether a judgment is final or interlocutory, it has been said, is a question “productive of much difficulty”: Carr v Finance Corporation of Australia (No 1) (1981) 147 CLR 246 at 248. The test to be applied is whether the judgment or order, as made, finally disposes of the rights of the parties: Licul v Corney (1976) 180 CLR 213 at 225 per Gibbs J. And the resolution of the question, it has also been acknowledged, should not involve the expenditure of significant intellectual energy on the distinction between final and interlocutory judgments: Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2000] FCA 1572 at [42], 104 FCR 564 at 583 per French J (Beaumont and Finkelstein JJ agreeing). The policy of the provision, according to his Honour was “plain enough”. The time and resources of the Court and the parties should not lightly be taken up with appeals about decisions in connection with proceedings which do not finally determine the rights of the parties. See also: Mayne Nickless Limited v Multigroup Distribution Services Pty Limited [2001] FCA 1620 at [25], 114 FCR 108 at 118 per Wilcox, French and Drummond JJ.

29    Notwithstanding some decisions to the contrary, it is concluded that in this Court an order declaring a person to be a vexatious litigant and requiring that person to obtain the leave of the court to institute or continue a proceeding is unquestionably an interlocutory order.

30    A provision of “critical” significance in reaching this conclusion is Order 21 rule 4. That is a provision comparable to s 21(5) considered in Kay. Chernov JA there referred to the decision of the New South Wales Court of Appeal in Pedler v Hunters Hill Municipal Council [1976] 2 NSWLR 411 where that Court concluded that a judgment declaring a person to be vexatious was final. Emphasis was there placed upon the fact that the order had been made at the conclusion of independent proceedings and had not been made in the course of an existing proceeding or made as a preliminary order in advance of the substantive hearing. After having referred to that decision, Chernov JA continued:

[35] In my opinion, however, Pedler can be distinguished from the present case since his Honour seems to have taken no account in his reasoning of s 84(3) being the analogue in New South Wales of s 21(5). In my view, this provision is critical to the determination of whether a s 21(2) order is final or interlocutory. I mention for completeness that, so far as I am able to tell, Pedler has not been relevantly applied in any subsequent case dealing with orders by which a person was declared to be a vexatious litigant.

[36] In my view, having regard particularly to the operation of s 21(5) the order in question cannot be said to have a legal effect which finally determines the rights of the parties. Either party can, at any time, seek to have the order varied, set aside or revoked, albeit not on the basis that the decision was erroneous, but by demonstrating a change in relevant circumstances. Any complaint that the decision is wrong in law can, of course, be sought to be pursued by an appeal process, but in the end, even if the order were to remain extant notwithstanding any appeal, it can be varied, set aside or revoked under s 21(5). In those circumstances, it is difficult to see how it can be said that it finally disposes of the rights of the parties inter se.

In Klewer at [18] McColl and Campbell JJA and Sackville AJA queried whether the finding in Pedler that the order was a final one was part of the ratio decidendi of the case.

31    But such subtleties, with respect, matter not in the present proceeding. Given the terms of rule 4 and the ability of the Court “from time to time [to] rescind or vary any order made by it under rule 1 or 2”, it is likewise concluded that the judgment of the primary Judge in the present proceeding is interlocutory. The judgment and orders cannot be regarded as “final” where rule 4 contemplates that an application may be made to “rescind or vary” an order.

32    In von Reisner v Commonwealth of Australia [2008] FCA 1108 at [2] Branson J also treated an order made under Order 21 rule 1(1)(b) as interlocutory. See also: Scott v Human Rights and Equal Opportunity Commission [2009] FCA 415. And, similarly, in Re Luck [2003] HCA 70 at [6], 203 ALR 1 at 3 McHugh ACJ, Gummow and Heydon JJ said that “[f]or more than a century, courts, including courts of the highest authority, have consistently held that an order staying an action on the ground that it is frivolous, vexatious or an abuse of process is an interlocutory order”. See also: Hall v Nominal Defendant (1966) 117 CLR 423 at 440 per Taylor J.

33    If leave is required to file a Notice of Appeal (as tentatively concluded) and if it be further concluded that decisions of the present kind are interlocutory and not final, it should be acknowledged that there is a potential for “a multiplicity of interlocutory proceedings” of the kind referred to by Chernov JA in Kay: [2000] VSCA 176 at [29].

34    Notwithstanding this potential, it is, with great respect, not considered to be the procedural difficulty envisaged by His Honour. There is no reason, for example, why a single hearing could not be held to address all questions of leave that may be necessary if a litigant seeks to challenge a finding that he is vexatious. Although the criteria may be different when considering rule 5 and s 24(1A), no difficulty has been experienced in the present proceeding in resolving all questions. Indeed, Mr Kowalski was understood to be eager to have all such questions as may be necessary to be resolved undertaken in the one hearing.

Vexatious Litigants – Leave & The Principles To Be Applied

35    The conclusion that the decision of the primary Judge is interlocutory and not final necessarily exposes Mr Kowalski to the requirement to seek leave pursuant to s 24(1A) of the Federal Court of Australia Act if he is to be permitted to prosecute his appeal. If that leave is refused, it most probably becomes unnecessary to further consider:

    the grant or refusal of leave pursuant to Order 21 rule 5 to continue the proceeding; or

    the variation or rescission of the orders pursuant to Order 21 rule 4; or

    granting a stay of the orders as made by the primary Judge.

But all such matters were addressed in submissions and should be addressed.

36    Self-evidently, whatever the source of requirement to obtain leave, the discretion is to be exercised judicially and not arbitrarily or irrationally.

37    It is not considered that leave should be given either pursuant to s 24(1A) or (if necessary) pursuant to Order 21 rule 5.

38    When exercising the discretion pursuant to s 24(1A) different principles are to be applied to the criteria expressly set forth in Order 21 rule 5(1). The considerations to be taken into account when exercising the discretion conferred by s 24(1A) may be broadly stated as being:

(i)    whether in all the circumstances the judgment of the primary judge is attended by sufficient doubt to warrant it being reconsidered by the Full Court; and

(ii)    whether substantial injustice would result if leave were refused supposing the decision would be wrong.

See: Jarrett v Seymour (1993) 46 FCR 557 at 559 per Lockhart and Beaumont JJ. These two considerations or limbs of the test to be applied are “cumulative” and each must be made out: Rawson Finances Pty Limited v Deputy Commissioner of Taxation [2010] FCAFC 139 at [5] per Ryan, Stone and Jagot JJ. But the two limbs of the test are not unrelated: Cabcharge Australia Ltd v Australian Competition and Consumer Commission [2010] FCAFC 111 at [20] per Kenny, Tracey and Middleton JJ. The “sufficiency of the doubt in respect of the decision and the question of substantial injustice should not be isolated in separate compartments”: Sharp v Deputy Commissioner of Taxation (1988) 19 ATR 908 at 910, 88 ATC 4184 per Burchett J. It is of importance, however, to constantly recall that the discretion conferred is “unfettered” and one conferred in “unqualified terms”: Décor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 399 per Sheppard, Burchett and Heerey JJ. A touchstone of the exercise of the discretion must be to ensure that justice is done as between the parties.

39    Whether it be s 24(1A) or Order 21 rule 5 which is under consideration, it must be recognised at the outset that the orders made on 7 April 2011 are orders not frequently made. As stated by the primary Judge, such orders deprive “the person subject to the order of a right that is fundamental to the preservation of a civil society governed by the rule of law, namely the right to call on the Court to resolve a dispute or adjudicate a claim simply by filing an application in the prescribed form”: [2011] FCA 318 at [35].

40    It must further be recognised at the outset that the reasons for decision of the primary Judge, with respect, expose a detailed consideration of the basis upon which the orders were made and a detailed consideration of the principles to be applied in circumstances where a litigant is declared to be vexatious. In contrast to other proceedings (eg, von Reisner v Commonwealth of Australia [2009] FCAFC 97, 177 FCR 531), the primary Judge in the present proceeding expressly made findings as to the proceedings which had been previously instituted by Mr Kowalski and concluded:

REQUIREMENTS OF O 21

Vexatious proceedings

[192] Since 16 October 1998 there have been 45 judgments delivered in this Court in proceedings instituted by Mr Kowalski. The numbers alone indicate that significant resources of the Court have been devoted to those proceedings. Mere numbers, however, are not sufficient to meet the criteria in O 21 rr 1 and 2.

[193] As mentioned above at [60] I have confined my detailed analysis to the proceedings which gave rise to the 34 judgments on which both applicants have relied to support their applications. The proceedings are grouped under the relevant Federal Court file numbers, however as can be seen a number of proceedings, for example, an application and an interlocutory application, may share the same file number: see, for instance, SAD 234 of 2002 at [68] and [69] above.

[194] … The applicants submit that all except four of those proceedings were vexatious. There is one proceeding that, contrary to the applicants’ submissions, I have found not to be vexatious; see [147] above. I have accepted that the remaining 25 proceedings were vexatious.

Habitually, persistently and without reasonable grounds

[195] Insofar as I need to be satisfied that Mr Kowalski, without having reasonable grounds for doing so, habitually and persistently institutes vexatious proceedings, the facts speak for themselves. My analysis of the individual proceedings amply demonstrates that Mr Kowalski, almost as a matter of course, persists in pressing his claims even when those claims have been determined by his entering into a contract, such as under the Heads of Agreement, or by judicial decision. He is not deterred by findings that his claims are unsustainable and that his applications are groundless. He has not been deterred by a succession of costs order made against him, many of which have been for the payment of indemnity costs.

[196] Mr Kowalski’s response to an adverse decision whether procedural or substantive almost invariably appears to be, not merely that the decision-maker is in error but is biased or corrupt. The number of applications to disqualify themselves made to judges who have presided over the various proceedings bears witness to this approach. …

[197] The proceedings I have considered have been largely, but not solely, directed to the Mitsubishi parties and I have no hesitation in finding that those parties are persons aggrieved within the meaning of O 21 r 2.

The reasons for decision also separately address the manner in which the discretion conferred by the Federal Court Rules should be exercised: [2011] FCA 318 at [198] to [204]. Mr Kowalski has had the applications filed seeking order under Order 21 considered with meticulous attention to the facts and principles and the requirements separately imposed by Order 21 of the Federal Court Rules.

41    For the purposes of both s 24(1A) and Order 21 rule 5 it is also relevant to consider the content of the Notices of Appeal. For the purposes of s 24(1A) a consideration of the content of the Notices of Appeal may throw light on whether the decision of the primary Judge is attendant with error; and, for the purposes of Order 21 rule 5, it is necessary to consider whether the Notices of Appeal are an abuse of process and whether they disclose a “prima facie ground”.

42    When consideration is thus given to the content of the Notices of Appeal, it is apparent that neither the Questions of Law nor the Grounds of Appeal assist in identifying any appellable or other error committed by the primary Judge which has any real prospects of success on appeal. During the course of his oral submissions, Mr Kowalski emphasised (inter alia) his contentions that:

    proceedings he had instituted had been dismissed in advance of any defence being required to be filed;

    an affidavit relied upon in the proceeding instituted by the Registrar of this Court had not been sworn by the Registrar but had been sworn by a person “authorised to swear” the affidavit; and

    the primary Judge had erred in marking for identification documents he wished to be marked as exhibits; erred in rejecting questions he wished to ask in cross-examination; erred in adjourning the proceedings from time to time; and erred in not permitting him the opportunity to advance submissions.

Counsel for the Respondents rejected any suggestion that the primary Judge had erred in any of the respects asserted by Mr Kowalski. Counsel on behalf of the Mitsubishi parties accepted (for example) that some questions sought to be asked in cross-examination were rejected and accepted that the hearing was adjourned from time to time. But those matters (and the other matters relied upon by Mr Kowalski), it was submitted, did not expose any appellable error. In part, the contentions of Mr Kowalski are addressed in the reasons for decision of the primary Judge where it was concluded:

[203] At the hearing of the present proceedings Mr Kowalski’s conduct was such that it was necessary to have frequent short adjournments to allow him to calm down. He persisted in interrupting and talking over counsel and the court, making insulting and scandalous comments about the whole of the applicants’ legal teams and which were addressed to the public in the courtroom. His conduct was so disruptive that it was extremely difficult for counsel to make their submissions and for me to follow them. The transcript captures some of these difficulties but it cannot capture their full flavour. It was greatly to the credit of Mr Duggan, who appeared for the Registrar, and Ms Heath, who appeared for the Mitsubishi parties, that in the face of Mr Kowalski’s disruptive behaviour both retained their composure and professional demeanour. Nonetheless it was difficult for them to maintain continuity in their submissions and difficult for me to understand them.

[204] As a consequence of the continual interruptions by Mr Kowalski, oral submissions on behalf of the applicants that would have been expected to be completed on the first day of the hearing, extended until the afternoon of the second day. Mr Kowalski was repeatedly warned that his disruptive behaviour was likely to result in him having less time than expected for his submissions. As it happened, although Mr Kowalski complained about being given a limited time to make submissions, in fact he was not cut short and was able to make full oral submissions.

Notwithstanding the conviction with which Mr Kowalski advanced his submissions, they are without substance. The orders made did not depend upon whether or not defences had been filed; nor did they depend on such rulings as to evidence as were made by the primary Judge.

43    The further pursuit of the Notices of Appeal, it is concluded, is but a further instance of Mr Kowalski declining to accept the authority of decisions that have been made against him and his pursuit of proceedings without any reasonable prospects of success. The terms in which the Questions of Law and Grounds of Appeal are expressed, it may be noted, only provide further support for the observations made by the primary Judge as to the “insulting and scandalous comments” made by Mr Kowalski – albeit those comments being made in the context of comments previously directed to the legal representatives for those seeking the orders as made: [2011] FCA 318 at [203]. The terms in which those Questions of Law and Grounds of Appeal are expressed also provide further support for the conclusion expressed by the primary Judge that Mr Kowalski “almost as a matter of course, persists in pressing his claims even when those claims have been determined …”: [2011] FCA 318 at [195].

44    This Court generally operates in public (Federal Court of Australia Act, s 17(1)) and the manner in which it conducts its proceedings and its reasons for decision are open to public scrutiny in a fair and balanced manner. Scrutiny extends to a freedom for any litigant to be appropriately critical of decisions made and reasons provided. And, where criticism of an individual Judge is warranted, no litigant should be hesitant to voice such criticism: Dowling v Fairfax Media Publications Pty Ltd (No 2) [2010] FCAFC 28 at [106] to [123]. “Fair criticism of the decisions of the Court”, it has been said, “is not only lawful, but regarded as being for the public good; but the facts forming the basis of the criticism must be accurately stated, and the criticism must be fair and not distorted by malice”: King v Wilson; Ex parte Kisch (1935) 52 CLR 248 at 257 to 258 per Evatt J. His Honour had there also previously referred to “the duty of the Court to protect the public against every attempt to overawe or intimidate the Court by insult or defamation, or to deter actual and prospective litigants from complete reliance upon the Court’s administration of justice”: (1935) 52 CLR 248 at 257.

45    Where – as in the present case – a litigant voices unfounded and baseless allegations against a Judge of this Court, there should be no hesitation in quickly rejecting the criticisms advanced. In the present proceeding, there is no foundation whatever for any suggestion that the primary Judge had “pervert[ed] the course of justice” or “fabricat[ed]” the decision reached. And, notwithstanding the oral submissions of Mr Kowalski, there is no basis for contending that there has been any “fraud” on the part of the primary Judge. Such comments are but the expression of frustration of a disappointed litigant with no appreciation for the careful attention given by the primary Judge to the detail of the case being mounted against him by the now Respondents.

46    For the purposes of s 24(1A), it may be doubted whether Mr Kowalski suffers any real prejudice in being denied the leave necessary to continue appeals having no merit. But it may be accepted that denying Mr Kowalski an opportunity to test on appeal the orders made against him may well be perceived as a prejudice. It may even be assumed (albeit with considerable reservation) that Mr Kowalski suffers “substantial injustice” in being denied further access to this Court. But, for the purposes of s 24(1A), it is further concluded that the decision of the primary Judge is not attendant with any doubt, let alone “sufficient doubt”, to warrant leave being granted. The refusal of leave to appeal from the interlocutory decision of the primary Judge is a sufficient basis in itself for the dismissal of Mr Kowalski’s Notices of Motion – no matter how the relief there sought may otherwise have been expressed.

47    For the purposes of Order 21 rule 5 it is nevertheless further concluded that the Court cannot be satisfied that the Notices of Appeal are not an abuse of process or that any “prima facie ground” emerges upon which the decision of the primary Judge may be open to question. Indeed, the Notices of Appeal, it is respectfully concluded, are themselves most probably an abuse of the process of the Court and certainly raise no “prima facie ground”.

48    The absence of any merit in the arguments sought to be further advanced by Mr Kowalski also dictates the conclusion that there should be no rescission or variation of the orders made by the primary Judge or a stay of those orders.

49    In reaching these conclusions, separate consideration has been given to whether the orders as made should be varied or “stayed” such that Mr Kowalski remains precluded from instituting any fresh proceeding against different respondents or raising different causes of action – but to permit him to appeal the decision of the primary Judge. But such a variation of the orders has been considered, only to be rejected. The simple fact is that the orders as made by the primary Judge have been made after meticulous attention to detail and expose no error.

Conclusions

50    If the tentative conclusion be correct that Mr Kowalski needed to obtain leave pursuant to Order 21 rule 5 before instituting his appeals, it follows that the Notices of Appeal should not have been accepted for filing. It is, however, unnecessary to express any more concluded view because the decision of the primary Judge is an interlocutory decision requiring leave pursuant to s 24(1A) of the Federal Court of Australia Act and such leave is refused.

51    If it were necessary to express any further conclusion in respect to the submissions advanced, it would be further concluded that there should be no variation or rescission of the orders made (either in whole or in part) and that leave to continue the appeals should be refused.

52    The Notices of Motion, accordingly, are to be dismissed. It also follows that the dates for hearing of the appeals in August 2011 should be vacated.

53    There is no reason why costs should not follow the event. Consideration has been given to whether costs should be ordered to be paid on an indemnity basis but it has been concluded that no such order should be made. The issues in need of resolution were such that it was proper for them to be raised and resolved and there is thus no reason why costs should be paid on any basis other than a party/party basis.

ORDERS

In SAD 70 of 2011:

54    The Orders of the Court are:

1.    The Notice of Motion filed on 29 April 2011 is dismissed.

2.    Leave to appeal the decision of the primary Judge is refused.

3.    The Applicant is to pay the costs of the Respondents.

In SAD 71 of 2011:

55    The Orders of the Court are:

1.    The Notice of Motion filed on 29 April 2011 is dismissed.

2.    Leave to appeal the decision of the primary Judge is refused.

3.    The Applicant is to pay the costs of the Respondent.

Associate:

Dated:    7 June 2011