Kowalski v Cole

REASONS FOR JUDGMENT 1 This is an application for leave to appeal from the decision of the Federal Magistrates Court (Federal Magistrate Simpson) given on 14 December 2009 in Kowalski v Cole [2009] FMCA 1222. 2 The first and second respondents are solicitors in general practice in South Australia. They operate as an incorporated legal practice as the third respondent, a company known as R.J. Cole and Partners Pty Ltd. It is convenient to treat them together as "the respondents". The respondents have represented the applicant in a number of proceedings since 1989. 3 The proceeding before the Federal Magistrate primarily related to the respondents dealings with the applicant when they represented him between 1989 and 1994. The applicant alleged that the respondents, in acting in certain legal proceedings and dealing with trust monies, failed to comply with their fiduciary obligations, breached s 31 of the Legal Practitioners Act 1981 (SA) (LP Act), ss 51AB, 51AC and 52 of the Trade Practices Act 1974 (Cth) (TP Act), ss 8, 8A and 9 of the Fair Trading Act 1987 (SA) (FT Act) and ss 4, 6, 7 and 8 of the Misrepresentation Act 1972 (SA) (M Act). Clearly, the web in terms of causes of action was widely cast. Thus, the application and amended statement of claim indicate that the applicant sought orders declaring the respondents are guilty of misappropriation or theft, fraud, breach of trust, breach of fiduciary duty, breach of contract and breach of the statutory provisions referred to. 4 The particular monetary relief was a claim for repayment or payment of the following sums: · the sum or $11,935.50 that the respondents allegedly received from him ($1,935.50 payment for fees paid in his trust account, and $10,000 which was also part payment for legal fees and disbursements) ; · the sum of $18,634.66 (being part of the sum of $23,000 the respondents received on his behalf in anticipation of a settlement of one of his claims) transferred from the trust account to their office account on 31 August 1992, for their fees and disbursements, allegedly without the applicant's authority; · the sum of $3,000 that the respondents allegedly received on behalf of the applicant to meet a consent judgment, dated 24 June 1992, for compensation relating to an eye injury claim but allegedly have not accounted to him for; and · compound interest on those sums since 31 August 1992 or some other date, now totalling, the applicant says, in all some $100,710. 5 In the alternative the applicant appears to seek damages under ss 82 and 87 of the TPA, amounting to $33,570.16, plus compound interest since 31 August 1992, again totalling in all some $100,710. He also seeks punitive damages for harassment and unwarranted stress and anxiety that the respondents have allegedly placed on him since 12 June 2002. 6 The Federal Magistrate held that the applicant's amended statement of claim did not comply with Order 11 Rules 1, 2, 3 and 16 of the Federal Court Rules 1979 (Cth) (FC Rules) and should therefore be struck out (the FC Rules apply as there is no equivalent to Order 11 in the Federal Magistrates Court Rules 2001 (Cth) (FMC Rules): see FMC Rule 1.05(2)). 7 His Honour further held that the proceeding be dismissed summarily pursuant to s 17A(2) of the Federal Magistrates Act 1999 (Cth) (FM Act) on the basis that the proceedings are "frivolous, vexatious or an abuse of process" as the applicant seeks to re-litigate matters that have already been determined in other proceedings. 8 There is a preliminary issue that needs to be addressed. The applicant has asserted that he does not need leave to appeal from the decision of the Federal Magistrate to the Full Court of the Federal Court, because the decision was a final judgment and was not interlocutory in nature. 9 However, it is clear that leave to appeal is required, as the decision was an interlocutory one. It is also clear that the application for leave to appeal can be heard by a single judge. It is interlocutory in nature, since it rests on his Honour's finding that the application is frivolous or vexatious and fails to disclose a reasonable cause of action. As was said in Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 at [43] per French J (with whom Beaumont and Finkelstein JJ agreed) "[i]f a proceeding is dismissed because it is frivolous or vexatious or because no reasonable cause of action is disclosed the decision is treated as interlocutory": see also Scott v Human Rights and Equal Opportunity Commission [2007] FCA 2055 at [16] per Kenny J; Finikiotis v Sims Partners [2005] FCA 1774 at [10] per Lander J and Rana v University of South Australia (2004) 136 FCR 344 at 346 per Lander J. Interlocutory decisions require leave to appeal pursuant to s 24(1A) of the Federal Court of Australia Act 1976 (Cth) (FCA Act). 10 Section 25(2) of the FCA Act provides that applications for leave or special leave to appeal to the Court may be heard and determined by a single judge or by a Full Court. Order 52 r 2AA of the FC Rules provides that an application for leave to appeal as mentioned in s 25(2) of the FCA Act must be heard and determined by a single Judge unless a judge directs that the application be heard and determined by a Full Court. 11 The discretion whether or not to grant leave to appeal is an unfettered one, but it is generally accepted that the Court should consider whether in all the circumstances the decision is attended with sufficient doubt to warrant it being reconsidered, and whether substantial injustice would result if leave to appeal were refused, supposing the decision to be wrong: Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-399. In his written and oral submissions, the applicant has not suggested any other factors of significance to the exercise of the discretion.