Kowalski v Complete Exhaust Specialists Marion

REASONS FOR JUDGMENT 1 By an application filed in this Court on 2 September 2010, the applicant has applied for leave to appeal from a judgment of the Federal Magistrates Court of Australia. That judgment is published as Kowalski v Complete Exhaust Specialists Marion & Anor (No 2) [2010] FMCA 636. On 24 August 2010, the learned federal magistrate dismissed an application by the applicant naming three respondents and invoking ss 52 and 53 of the Trade Practices Act 1974 (Cth) ("the Trade Practices Act") as well as certain provisions of the Fair Trading Act 1987 (SA). 2 The substance of the applicant's claim is that the respondents, who conduct a business concerned with replacement of exhaust systems in motor vehicles, engaged in misleading and deceptive conduct when they advised the applicant's wife, and through her him, that the muffler on his motor vehicle needed replacement and that replacement of it would put an end to a knocking noise that occurred when he started the vehicle. In fact, the replacement of the exhaust did not prevent the knocking noise and the applicant complains that he was induced to spend money unnecessarily. 3 It appears that the applicant had started an earlier proceeding in the Federal Magistrates Court against the same respondents, and that that proceeding was dismissed as being beyond the jurisdiction of the Federal Magistrates Court under the Trade Practices Act. The reason for that was that there was no corporation among the respondents. The name Complete Exhaust Specialists Marion is apparently nothing more than a business name for a partnership conducted by the other two respondents. 4 The applicant then applied again to the Federal Magistrates Court. This time, he invoked s 6(3) of the Trade Practices Act, which extends the operation of that Act effectively to conduct engaged in that involves the use of, among other things, telephone services. It was this second application that the federal magistrate dismissed summarily. It is important to note that the basis on which the federal magistrate dismissed the application is that found in r 13.10(c) of the Federal Magistrates Court Rules 2001 ("the Federal Magistrates Court Rules"), ie that the proceeding or claim for relief is an abuse of the process of the Court. 5 In his reasons for judgment, the federal magistrate considered and rejected the proposition that there might be some estoppel preventing the applicant from making his application by reason of the earlier application. His Honour also flirted with the notion that the court again had no jurisdiction because the only specific reference to a telephone conversation in which any representation was made to the applicant was to a telephone conversation on 26 August 2009, the day after the muffler had been replaced in the applicant's vehicle. 6 In the end, as I read the federal magistrate's reasons for judgment, his Honour did not base his dismissal of the application on the absence of jurisdiction. The reasoning on which his Honour relied is found at [31]-[34] of his Honour's reasons for judgment. At [31], his Honour pointed out that, in the earlier proceeding, the applicant had been given the opportunity, prior to summary dismissal of that application, to consider the jurisdictional question. The applicant had chosen to rely upon the accrued jurisdiction of the Court, and not upon s 6(3) of the Trade Practices Act. His Honour expressed the view that the respondents were entitled to have the applicant disclose, on that occasion, all of the jurisdictional matters upon which he relied. His Honour said that there was a lack of fairness arising from the fact that the applicant had had his first claim dismissed because he relied unsuccessfully on the accrued jurisdiction and then expected the respondents to respond to a claim grounded on an entirely different jurisdictional basis. His Honour said that it was reasonable for the respondents, and for the court, to expect that the applicant should have played all of his jurisdictional cards at one time, unless there was some matter explaining why he did not. His Honour also said that the applicant was unable to provide him with an explanation for this course of action. 7 At [32], his Honour said that it was the combination of the reliance on a wholly new factual episode, and the highly tenuous link between the conduct said to give rise to the claim and the telephone call of 26 August 2009, together with the failure to raise those new matters when, in the course of the first claim, that persuaded him that it would be an abuse of the process of the court to enable the application to proceed. 8 At [33], his Honour said: A respondent should not be required to meet a case (the alleged jurisdictional basis of which has changed) when no explanation for the failure to promote the facts and jurisdictional contentions which are now being promoted at the time of the earlier application is provided. At [34], his Honour concluded that the application was dismissed summarily pursuant to r 13.10(c) of the Federal Magistrates Court Rules. 9 The principles on which this Court considers applications for leave to appeal from interlocutory judgments are well-established. They are expressed in Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397, an authority which has been followed on numerous occasions. The two relevant considerations are first, whether in all the circumstances, the decision is attended by sufficient doubt to warrant its being reconsidered by the Full Court. The second is whether substantial injustice would result if leave were refused, supposing the decision to be wrong. I interpolate there that an appeal from a judgment of the Federal Magistrates Court is not necessarily to be dealt with by a Full Court. By s 25(1AA) of the Federal Court of Australia Act 1976 (Cth), such an appeal may be dealt with either by a single judge or, if a judge considers it appropriate, by a Full Court. 10 There can be no doubt that, for the purposes of the application of these principles, this is an appeal from an interlocutory judgment. There has been no final determination of the proceeding in the Federal Magistrates Court on its merits. Rather, as I have said, the proceeding was dismissed on the ground that it amounted to an abuse of the process of that court. 11 Applying the first of the Decor principles, I take the view that the judgment of the federal magistrate is open to doubt. The applicant has an arguable case that the judgment ought to be overturned on appeal. It is quite clear from the reasons for judgment of the federal magistrate that the applicant's earlier application to the Federal Magistrates Court had been dismissed summarily. That meant that it was open to the applicant to institute another proceeding. His Honour was correct to say that there was no kind of estoppel arising from the first application that would prevent the applicant from instituting another proceeding. If it were the case that the Federal Magistrates Court lacked jurisdiction to deal with the earlier proceeding because the applicant was not suing a corporation, and if the applicant were able to rely on the extended application of the Trade Practices Act, there was nothing to prevent him from filing a second application. I take the view that it was at least arguably wrong that the applicant was under some obligation to put forward all of the possible jurisdictional bases for his claim when he was threatened with summary dismissal of his first application. If the court had jurisdiction, it was bound to accept the second application, there being nothing to prevent the applicant from filing it. 12 In saying this, I am not to be taken as saying that the Federal Magistrates Court necessarily had jurisdiction. Indeed, the question whether the Federal Magistrates Court had jurisdiction might have depended upon whether communications claimed to have occurred on 25 August 2009, in which representations were made about the cause of the knocking, were made by telephone or not. That is an issue of fact that would have to be determined by the Federal Magistrates Court. I express no view on it at all. 13 The applicant has provided a draft notice of appeal in which he sets out a number of grounds. Most of these grounds appear to be based upon allegations that the federal magistrate was biased against the applicant. Certainly, in some respects, these allegations of bias are unfounded. The applicant complains, for instance, that the federal magistrate did not permit the named respondents to be notified of his application before dismissing it himself as an abuse of process. The applicant claims that the federal magistrate entered the arena in doing this and argued the respondents' case for them. I do not take that view. It was open to the federal magistrate to control proceedings in his court and to take it upon himself to determine whether an application that the applicant had filed was a viable one before it was accepted by the court and served on the respondents. There was no bias necessarily in doing so. The applicant also makes complaints about the behaviour of the federal magistrate in other proceedings. I have no basis on which to say that the federal magistrate was biased because of anything that he did in any other proceeding. My acceptance of the proposition that the judgment is attended by sufficient doubt to warrant its consideration on appeal is simply based on the proposition that I think it arguable that the reasoning that led to the conclusion that the application was an abuse of the process of the Federal Magistrates Court was incorrect. 14 The difficulty arises when the second principle from the Decor case is applied. It should be pointed out at once that the dismissal on a summary basis of the applicant's application in the Federal Magistrates Court does not prevent him from filing another application. It is open to him to reagitate the same issues, if he can, in application after application, there being no form of estoppel that prevents him from doing so. If he raises new elements that might bring the proceeding within the jurisdiction of the Federal Magistrates Court, he is entitled to do so. It follows then that it is presently open to the applicant to return to the Federal Magistrates Court and make another application. If he can do so by presenting, in that application, facts that would bring it within the jurisdiction of the Federal Magistrates Court, then that court is bound to deal with it. 15 For this reason, it seems to me that there is no injustice, substantial or otherwise, in refusing leave to appeal from the dismissal of the application the subject of this proceeding. If leave to appeal were to be granted, this Court would have to hear the appeal. If this Court allowed the appeal, the end result would be that it would be obliged to return the proceeding to the Federal Magistrates Court to be dealt with. The effect would be that the applicant would be in the same position as if he went to the Federal Magistrates Court and made a similar application. All that would have occurred would be that he would have gone the long way round instead of the short way round, to reach the same point. 16 Against this proposition, the applicant has argued that the same federal magistrate would deal with any new application and would be likely to react to it in the way that he has. That is a matter that is entirely unpredictable. The same federal magistrate may or may not deal with any further application. Indeed, it might be said that there is a greater likelihood that another federal magistrate would deal with any new application than there is that another federal magistrate would be assigned to deal with the instant application if it were returned to the Federal Magistrates Court after a successful appeal. If it be the case that a successful application for bias against the federal magistrate could be made, and I do not suggest that it could, it is open to the applicant to make such an application at any time and, if he is unsuccessful, to rely upon that lack of success in a subsequent appeal if he should lose that proceeding. 17 The applicant says that his hand would be strengthened against the federal magistrate by a favourable decision from the Court on appeal. That does not appear to me to be a good enough reason to grant him leave to appeal. It does not seem to me to create a substantial injustice in refusing leave to appeal to say that a party would benefit from a favourable judgment on appeal. 18 I therefore conclude that, while the applicant has made out a case for saying that the judgment from which he seeks leave to appeal is attended by some doubt as to its correctness, the applicant would not suffer substantial injustice if leave were refused, supposing the judgment appealed from were incorrect. 19 For these reasons, I should dismiss the application for leave to appeal. The applicant has appeared unrepresented and has been unsuccessful. The respondents have not appeared, therefore there should be no order as to costs. 20 The orders I make are: