Kowalski v Mitsubishi Motors Australia Limited

Background 5 I have considered the respondent's submissions of 10 September 2010 and the applicant's submissions in response of 20 September (two parts) and 27 September 2010 as well as his submissions on whether the issues raised have been previously determined in other proceedings of 27 August 2010. There is some overlaps in the sets of submissions. The respondent has, in its submissions, referred to a number of other decisions in proceedings between the applicant and the respondent in the FCA, the SCSA, the DCSA and the WCT and the WCAT, as well as the AIRC (all of which are a matter of record). It has also referred to the pleadings in certain of those proceedings to identify the issues raised in them. I have not had regard to those pleadings. 6 The submissions indicate that a number of facts are not in issue, or can be assumed in favour of the applicant for the purposes of these reasons. 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.

The Current Claims 23 It is appropriate now to refer to the applicant's claims as expressed in the application and the amended statement of claim. 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. 30 As noted, the respondent applied for the proceeding to be summarily dismissed, or alternatively that the amended statement of claim be struck out. By my direction, its application was determined on written submissions. I order that compliance with the Federal Court Rules be dispensed with to the extent necessary to enable the submission to be addressed without a formal notice of motion. The parties have not been disadvantaged in any way by the procedure adopted, and it is efficient to proceed in that way.

Consideration 31 The applicant in his submissions of 27 August 2010 has addressed the question whether the matters he now raises have been previously heard and determined. He submits that his present causes of action, namely: · "fraud on the applicant and various Courts", particularly in relation to the matters referred to in [18] and in [28] at (3) and (5) above; · contravention of s 51AA(1) of the TP Act, and · "in equity" have not previously been determined. The submission then asserts that the applicant is "not dealing with any subject matter" that has been formally or finally determined by a Court" after a full trial on the merits. 32 It is not correct to say that none of the applicant's claims have been determined after a full trial on the merits. The decision of the WCT given on 14 August 2001 referred to in [18] and [19] above included detailed findings by a Deputy President of the WCT after a hearing that: 1. the respondent did not place unconscionable pressure on the applicant leading to the Heads of Agreement, but acted in good faith in its conduct leading to the Heads of Agreement, notwithstanding the applicant's assertions that certain material information was withheld from him; 2. the Heads of Agreement is not void or unenforceable by reason of s 114 of the WRC Act, and that the Heads of Agreement did not purport to modify or exclude any compensation entitlements of the applicant under the WRC Act but (as recognised by the consent orders made by Review Officers under the WRC Act on 3 and 5 November 1998) reflected the respondent's assertion that he hade no ongoing entitlements under that Act; 3. consequently, the payment made under the Heads of Agreement was not in redemption of any liability to make payments under the WRC Act, so that rr 3(4) or 33 of the Rules of the WCT did not apply and the Heads of Agreement was not required to be registered under the WCT Act to be enforceable. 33 That decision was upheld by the Full Bench of the WCAT, as noted at [19] above. 34 The nature and effect of that decision of the WCT was explained by Bleby J in the SCSA proceeding in his Honour's judgment given on 19 April 2005, in particular at [279]-[293], in which he determined that the applicant should be declared a vexatious litigant: Mitsubishi Motors Australia Ltd v Kowalski [2005] SASC 154. I respectfully agree with his Honour's findings as to the nature and effect of that WCT decision. 35 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. 36 It is at least arguable that the applicant has not formally raised previously the alleged fraud on the FCA or (as he puts it in his submissions) "on various Courts". I assume such a claim might be legally maintainable by the applicant, and might if made out entitle him to have set aside earlier decisions of the FCA: see O 35 r 7(2)(b) of the Federal Court Rules. However, there is no pleaded basis on which such a claim could possibly succeed. One asserted foundation for it is the conduct of the respondent in the course of or surrounding the mediation leading to the Heads of Agreement. That is not conduct concerning the conduct of any proceedings in the FCA. The same conduct has been asserted unsuccessfully by the applicant against the respondent; there have been findings adverse to the assertion as noted above. Another asserted foundation for it is the claimed failure of the respondent to comply with s 23 of the HOSC when - he asserts - the respondent was obliged to do so; there have been findings adverse to that assertion as noted above. Another asserted foundation for it is the claim that the respondent has "fraudulently" informed the FCA that the WCT had jurisdiction to make orders and declarations in relation to the Heads of Agreement when (he asserts) it did not have such jurisdiction. As to that, the applicant in his submissions (and in his amended statement of claim) misstates the position. In the proceeding upon which the applicant relies to establish his assertion he has quoted - no doubt accidentally - a little selectively from the decision of the WCAT referred to above. That proceeding was an appeal from the WCT decision referred to at [19] above: Mitsubishi Motors Australia Ltd v Kowalski [2000] SAWCT 123 at [15]: The Tribunal has jurisdiction to set aside an order because s 88H expressly gives that power. However, the Tribunal's jurisdiction is limited to the setting aside of the consent order. It has no jurisdiction to make any orders or declarations whatsoever in relation to the Heads of Agreement. 37 As there indicated, the WCT and then the WCAT decided over Mitsubishi's objection that the WCT had jurisdiction to decide the status of the Heads of Agreement to the extent necessary to decide whether certain provisions of the WRC Act applied having regard to the terms of the Heads of Agreement and to decide whether to set aside the consent orders referred to in [17] above. 38 The applicant's amended statement of claim quotes only part of that passage. It is no doubt correct that the WCT did not have jurisdiction at large in relation to the Heads of Agreement. But it could, and did, consider the Heads of Agreement to determine their effect in relation to the issues before it. The validity and effect of the Heads of Agreement was relevant to those issues because the applicant claimed to set aside the consent orders made by Review Officers on 3 and 5 November 1998 so that he could pursue further compensation claims against the respondent. The WCAT accepted that the Heads of Agreement was valid and binding, notwithstanding the applicant's contentions that it was invalid by reason of its effect in the face of s 119 of the WRC Act, or its non-registration under the WRC Act, or despite rr 3(4) or 33 of the Rules of the WCT not having been complied with. There is nothing in the respondent's conduct as pleaded in the amended statement of claim which takes the matter beyond that position. 39 The "fraud" is particularised in paras 54-55 of the amended statement of claim, extending over some five pages. 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 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. His detailed written submissions do not provide any such material. 40 The applicant in Part A of his submissions of 20 September 2010 has indicated the material he may present in evidence if this application is to proceed to trial. Some of that material is clearly inadmissible; for instance, a book review of a book entitled "Serial Liars". I have considered that material, which was enclosed with the submission. None of it has the necessary content to advance the applicant's case in this respect. Indeed, none of it could advance the applicant's contentions more generally in the circumstances of this matter. 41 As to the other claims, the FCA does not have jurisdiction to hear and determine claims under the WRC Act. That jurisdiction rests, in the first instance, with Review Officers and the WCT. The decision of the WCT, upheld by the WCAT, was that the Heads of Agreement operated effectively to preclude the applicant from having the consent orders of 3 and 5 November 1998 set aside and from further pursuing those claims. Moreover, the applicant is presently bound by the terms of the Heads of Agreement and his attempts to avoid its terms (albeit whilst retaining its benefits to him) have to date been unsuccessful. Those attempts have included the matters now asserted in the amended statement of claim: the alleged fraud or misrepresentations by the respondent in, and in relation to the mediation; the alleged failures to comply with the WRC Act or the Rules of the WCT or to recognise and give effect to the applicant's asserted rights under the WRC Act. 42 Finally, I note that the applicant has also referred to a letter of 28 July 2010 to the respondent, apparently sent under s 42A of the WRC Act, asking it to review the ex gratia payment to determine whether it was the correct payment for his future loss of earning capacity and for his entitlement to weekly payments of compensation under the WRC Act. That letter has no significance to the present proceeding. If it is a request under the WRC Act, then such rights (if any) as he may have to have the request considered would arise under that Act. This Court does not have jurisdiction to determine rights under the WRC Act. If it is a request outside that statutory source, there is no basis shown by which the request is made pursuant to a legal right enforceable in this Court.

Orders 43 For these reasons, I consider that the application as explained by the amended statement of claim is simply not arguable. As indicated earlier in these reasons, the application is dismissed. The applicant is to pay the respondent its costs of the application. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.