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Federal Court of Australia |
Last Updated: 24 July 2007
FEDERAL COURT OF AUSTRALIA
Kowalski v MMAL Staff Superannuation Fund Pty Ltd ACN 064 829 616
FEDERAL JURISDICTION – Trade
Practices Act claim summarily dismissed – claim not colourable or
trivial or insubstantial – jurisdiction over the remainder of the
controversy
PRACTICE AND PROCEDURE – respondent filed Notice
of Motion seeking orders that the originating process be set aside under O 9 r 7
of the Federal Court Rules on the basis of no jurisdiction – that
the proceedings be dismissed as frivolous, vexatious or an abuse of process
– that
the applicant’s proceedings be declared vexatious and an
order be made under O 21 r 1 or r 2 – that the applicant provide
security
for costs – proceeding dismissed in part
Trade Practices Act 1974 (Cth)
ss 51AF, 52, 82, 87
Australian Securities and Investments Commission
Act 2001 (Cth) Pt 2 Div 2
Federal Court of Australia Act 1976
(Cth) ss 31A(2), 56
Federal Court Rules O 9 r 7, O 20 r
2, O 21 r 1, O 21 r 2, O 28 r 2
Kowalski v
Mitsubishi Motors Australia Ltd (1998) 88 FCR 55 cited
Kowalski v
Mitsubishi Motors Australia Staff Superannuation Fund Pty Ltd [2002] FCA 1153 considered
Kowalski v Mitsubishi Motors Australia Staff
Superannuation Fund Pty Ltd [2003] FCAFC 18 considered
Mitsubishi
Motors Australia Ltd v Kowalski [2005] SASC 154 cited
Nixon v Philip
Morris (Australia) Ltd [1999] FCA 1107; (1999) 95 FCR 453 cited
Harris v Digital Pulse
Pty Ltd [2003] NSWCA 10; (2003) 56 NSWLR 298 cited
Burgundy Royale Investments
Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 cited
Concrete
Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594 cited
State
Superannuation Board v Trade Practices Commission [1982] HCA 72; (1982) 150 CLR 282
cited
Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) ATPR
41-743 cited
WG & B Manufacturing Pty Ltd v Tesla Farad Pty Ltd
(1999) 48 IPR 111 cited
Unilan Holdings Pty Ltd v Kerin (1992) 35
FCR 272 cited
Fencott v Muller [1983] HCA 12; (1983) 152 CLR 570 cited
Lindsey
v Philip Morris Ltd [2004] FCA 797 cited
Bremer Vulkan
Schiffbau Und Maschinenfabrik v South India Shipping Corp Ltd [1981] AC 909
cited
Ramsey v Skyring (1999) 164 ALR 378 cited
Freeman v
National Australia Bank Ltd (2006) 230 ALR 213 cited
Jones v Skyring [1992] HCA 39;
(1992) 66 ALJR 810 cited
Commonwealth Bank of Australia v Heinrich
[2003] FCA 540 applied
Equity Access Ltd v Westpac Banking Corporation
(1989) ATPR 40-972 cited
Toohey’s Ltd v Commissioner of Stamp
Duties (1960) 60 SR (NSW) 539 cited
Concrete Constructions (NSW) Pty
Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594 cited
Hearn v O’Rourke [2003] FCAFC 78;
(2003) 129 FCR 64 cited
Village Building Co Ltd v Canberra
International Airport Pty Ltd [2004] FCAFC 240; (2004) 210 ALR 114 cited
Unilan Holdings
Pty Ltd v Kerin (1993) 44 FCR 481 cited
Allsop, "Federal Jurisdiction
and the Jurisdiction of the Federal Court of Australia in 2002" (2002) 23 Aust
Bar Rev 29
KAZIMIR KOWALSKI v MMAL STAFF
SUPERANNUATION FUND PTY LTD ACN 064 829 616
No SAD 11 of
2007
FINN J
24 JULY
2007
ADELAIDE
|
AND:
|
THE COURT ORDERS THAT:
1. the proceeding be dismissed insofar as it claims relief under the provisions of the Trade Practices Act 1974 (Cth);
2. the orders sought in paras 1, 2 and 4 of the notice of motion be dismissed and that the notice of motion otherwise be adjourned to a date to be fixed;
3. the applicant have leave to file and serve an amended application and Statement of Claim on or before Friday, 17 August 2007; and
4. the matter be adjourned for further directions to Monday,
27 August 2007 at 9.00 am.
Note: Settlement and entry of orders is
dealt with in Order 36 of the Federal Court Rules.
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BETWEEN:
|
KAZIMIR KOWALSKI
Applicant |
|
AND:
|
MMAL STAFF SUPERANNUATION FUND PTY LTD
ACN 064 829 616 Respondent |
|
JUDGE:
|
FINN J
|
|
DATE:
|
24 JULY 2007
|
|
PLACE:
|
ADELAIDE
|
REASONS FOR JUDGMENT
1 This matter has a long history. The applicant, Kazimir Kowalski, has been in dispute with Mitsubishi Motors Australia Ltd ("MMAL") from when his employment with that company ceased on 16 March 1994. It is unnecessary for present purposes to outline the very many proceedings he has brought against MMAL and, on occasion, related entities including the present respondent, Mitsubishi Motors Australia Staff Superannuation Fund Pty Ltd ("MMA Super") in various Courts and Tribunals in South Australia including in two instances actions in the Federal Court – both of which were summarily dismissed: see Kowalski v Mitsubishi Motors Australia Ltd (1998) 88 FCR 55 and Kowalski v Mitsubishi Motors Australia Staff Superannuation Fund Pty Ltd [2002] FCA 1153; affd [2003] FCAFC 18. A history of those proceedings (more than forty in number) is contained in the judgment of Bleby J in Mitsubishi Motors Australia Ltd v Kowalski [2005] SASC 154. In that particular matter he was declared to be a vexatious litigant and has been prohibited from instituting further proceedings against MMAL or a related entity in State courts in South Australia without the leave of the Supreme Court.
2 The present proceedings in this Court is in substance the same as that which he sought to institute against MMA Super in the District Court of South Australia. The leave he initially obtained to commence that proceeding was subsequently set aside and, on 24 January 2007, it was struck out. Acting, apparently, on the advice of a person who happens to be a lawyer, Mr Kowalski filed the present proceeding on 25 January 2007.
3 The Statement of Claim (which is presently under challenge) is substantially the same as an Amended Statement of Claim that he had filed in the District Court proceedings. Though the matters pleaded relate essentially to complaints about the conduct of MMA Super in its administration of the superannuation fund in which he claims to have certain entitlements, the manner in which he has sought to bring what is essentially a trusts matter within this Court’s jurisdiction is by pleading a contravention of s 52 of the Trade Practices Act 1974 (Cth) although he does not in express terms claim relief under either s 82 or s 87 of the Act. However, s 87 was raised in his submissions.
4 Mr Kowalski is unrepresented in this matter.
THE PRESENT MOTION
5 MMA Super seeks various alternative orders on the motion before me. The first is that the originating process be set aside under O 9 r 7 of the Federal Court Rules on the basis that the Court has no jurisdiction to entertain the matter. The contention put here is that the TP Act claim is a colourable one or else it is trivial or insubstantial and does not in consequence attract federal jurisdiction. I simply note that it appears not to be said that if the claim is trivial or insubstantial this deprives the Court of jurisdiction over the controversy other than the TP Act claim.
6 The second alternative order is that the proceedings be dismissed as being frivolous, vexatious or an abuse of process. The basis of this order appears to be that no reasonable cause of action under the TP Act is disclosed, the Statement of Claim is otherwise defective and the proceedings has been brought in the Federal Court to avoid both the orders of Bleby J and Mr Kowalski’s disagreement with the State Supreme Court over waiver of fees. Although MMA Super has relied upon O 20 r 2 of the Federal Court Rules, the contention seems in part to raise s 31A of the Federal Court of Australia Act 1976 (Cth) for consideration.
7 The third alternative raised is that, of my own motion, I should declare Mr Kowalski’s proceedings to be vexatious and then I should make an order against him under O 21 r 1 of the Rules, or else I should do so under O 21 r 2 on MMA Super’s motion.
8 The final alternative raised is that, if the proceedings is to remain on foot, I should make an order for security for costs under s 56 of the Federal Court Act and O 28 r 2 of the Rules. Reliance here is placed on his unpaid costs orders in proceedings in the State courts, on an order for security made in the Supreme Court and on what is known of his assets.
9 I should note that after I had reserved my decision on the motion Mr Kowalski sought leave to file an Amended Statement of Claim. I have not given that leave and have had no regard to this document. He later filed a further affidavit exhibiting a bundle of documents to support his claim. Again I have disregarded these for the purposes of the motion. MMA Super’s solicitors also filed an affidavit containing some further evidence It also was disregarded.
BACKGROUND
10 Before dealing with each of the above in turn it is necessary to refer to the factual setting in which this matter arises. In so doing I have relied in part upon non-contentious factual material disclosed in the judgment of Justice Bleby and in that of the Full Court of this Court in affirming the 2002 Kowalski decision. Both of these judgments have been exhibited in the proceeding for the purpose, as I understand it, of providing the context for the present motion.
1. MMA Super
11 This company is a subsidiary of MMAL. It is no longer the trustee of the MMA Staff Superannuation Fund, that fund having been transferred to AMP Superannuation Ltd by a deed of 15 June 2006. MMA Super’s APRA return for 2006 indicates it was wound up as a superannuation entity on the date of the above transfer.
12 Mr Kowalski in the application seeks an order that MMA Super pay him "his correct statutory and legally entitled Total and Permanent Disablement Benefit plus compound interest since 16 March 1994 in the sum of about $280,000.00". I simply note in passing there is an unanswered question before me as to whether this relief is, in the circumstances, being sought against the wrong respondent.
13 The trust rules of the fund that was administered by MMA Super and on which Mr Kowalski seeks to rely as they relate to his alleged entitlements, provide (Rule C.7) that in the event of his retirement "from the employ of [MMAL] before his Normal Retirement due to his Total and Permanent Disablement", he be paid a lump sum in accordance with the relevant rules which lump sum, it is claimed in his pleading, represented an entitlement of $181,195.00 as at 1 July 1991. Rule 1(6) of the fund’s Trust Deed defined "Total and Permanent Disablement" as follows:
"‘Total and Permanent Disablement’ means in relation to a Member disablement due to illness accident or injury as a result of which –
(a) he has been continuously absent from employment with the Employer for a period of at least six months (or such lesser period as the Trustee may determine in any particular case); and
(b) he is, in the option of the Trustee after consideration of medical evidence satisfactory to them, incapacitated to such an extent as to render him unlikely ever to engage or work for reward in any occupation for which he is reasonably suited by education, training or experience."
14 It is the above alleged entitlement Mr Kowalski seeks to have enforced, or to be compensated for not receiving, in this proceeding. For the sake of completeness I would add that the Rules provided separately for resignation otherwise than as provided for specifically in the Rules: Rule C.9.
2. Mr Kowalski’s employment and its termination
15 The applicant commenced employment with MMAL in January 1964. According to his Statement of Claim he suffered a psychological injury/mental breakdown at work on 16 August 1991. Apparently he did not thereafter go to work. Again according to his pleading, in April 1993 a psychiatrist informed MMAL that, in his opinion, "as a consequence of [Mr Kowalski’s] psychological medical condition and the fact that his employer had failed to provide any rehabilitation to [him], [he] would never be able to work again". On 16 March 1994, MMAL notified him in writing that it considered his employment contract frustrated. The notice stated:
"As you continue to be unfit for your normal duties with us, your contract of employment with the company is frustrated. On that ground, your contract of employment with the company is now at an end, and accordingly you are no longer required to report for work."
16 In his pleading Mr Kowalski acknowledged that MMAL informed MMA Super’s actuaries "that the applicant had resigned [from] his employment" and that in August 1994 MMA Super paid him a resignation benefit in the sum of $27,664.54. Though this sum has not been explained in the material before me it seems likely to have been a lump sum payment on resignation under Rule C.9 noted above.
3. The mediation agreement
17 From April 1994 industrial disputes and then litigation commenced between Mr Kowalski (and his union) and MMAL. On 27 October 1998, as indicated in the judgments both of Bleby J and of the Full Court, Mr Kowalski and MMAL signed a mediation agreement which, insofar as presently relevant, provided:
"WHEREAS:
...
2. Kowalski and MMAL have entered the mediation with the intent of trying to resolve all issues both current and future in dispute between them.
3. Kowalski and MMAL have reached an agreement in relation to the resolution of all issues and wish to record the terms of settlement.
THE PARTIES HAVE AGREED THAT:
1. Kowalski on behalf of himself and his dependants hereby agrees to accept the sum of $200,000 in full and final settlement of any entitlements he may have to superannuation, sick leave, compensation and damages arising out of or in the course of his employment with MMAL. In particular, the said sum to be paid with a denial of liability, includes payment in full and final settlement of:
1.1 Any injuries or disabilities in respect of an eye injury in December 1986, a middle finger injury in May 1988, a back and or left leg injury in May 1989, stress or mental breakdown in August 1991 and a heart attack in December 1997.
1.2 Any outstanding sick leave.
1.3 Any matters related to the termination of his employment with MMAL.
1.4 Any superannuation payable by the MMAL Staff Superannuation Fund.
2. The said sum of $200,000 is to be paid to Kowalski as follows:
2.1 The sum of $64,692.43 to be paid from the Superannuation Fund by way of an ill health benefit being the entitlement with respect to the period from 7 March 1970 to the date of cessation of his employment.
2.2 The sum of $125,308.57 to be paid by MMAL as an ex gratia payment as compensation for permanent disability impairing his future earning capacity arising from the injuries and disabilities mentioned above.
2.3 The sum of $10,000 to be paid by MMAL in consideration of Kowalski forgoing any claims or future claims in any way arising from his employment.
...
4. In consideration of the matters set out in para 1 and para 2 above, Kowalski and his dependants agree:
4.1 Not to institute any legal proceedings and or legal complaints with any Court, Tribunal or body in respect of the matters set out in paragraph 1 ..."
18 MMAL Super, though not a party to the agreement, made the payment referred to in cl 2.1 of the agreement above. I note in passing that in his pleading Mr Kowalski refers verbatim to correspondence in 2004 from MMA Super’s legal adviser which indicated that in October 1998 no formal application for a Total and Permanent Disablement benefit ("a TPD") was made to the trustees and in consequence such was not considered or rejected at that time.
4. The Federal Court litigation in 2002
19 These proceedings raised what later appeared in the Full Court to be alternative claims against MMA Super and MMAL. I need only refer to the claim against MMA Super. It was described by the primary judge, Mansfield J, on a motion for summary judgment to dismiss the claim as follows (Kowalski TJ at [10]):
"As against the Superannuation Trustee, the claim includes a claim for punitive damages for the loss of the applicant’s entitlement to superannuation benefits ‘for a period of 14 years from the date that he was constructively dismissed on 27 October [1998] to the age of 65,’ and punitive damages for the loss of a Total and Permanent Disability Benefit (TPDB) to which he claims he was legally entitled by reason of his suffering a heart attack on 26 December 1997 and by reason of a depressive illness which developed in January 1998, and compensation for pain and suffering. He asserts having made a claim for TPDB under the Trust Deed and Rules on 26 October 1998, as well as for punitive damages for past economic loss and loss of superannuation benefits from 16 August 1991 to 27 October 1998. His affidavit in support of the Application includes reference to a letter from the Superannuation Trustee dated 20 August 2001 pointing out that the applicant did not claim total and permanent disablement in respect of the condition that actually caused him to cease work on 19 August 1991, and his claim made in 1998 was in respect of disablement following a heart condition in December 1997 that arose after his employment had ceased, so that he was at that time no longer a member of the Fund nor entitled to benefits under it in respect of that condition."
20 Of that claim and of his Honour’s reasons for dismissing it for want of jurisdiction, the Full Court noted (Kowalski FC at [22]):
"The learned primary Judge upheld the contention of the Superannuation Trustee that this Court had no jurisdiction to grant any of the relief sought by the appellant against it. His Honour carefully examined all of the statutory provisions which could conceivably afford the appellant a remedy against the Superannuation Trustee but concluded, correctly, in our view, that none of them was available. Moreover, having requested the appellant to identify what basis he had for seeking to claim against the Superannuation Trustee we are satisfied that no claim within jurisdiction could be made against it, as, for example, under the Trade Practices Act."
(Emphasis added.)
21 I have emphasised the last part of this quotation for the reason that it is relied upon by MMA Super in the present motion as showing that the TP Act claim is colourable.
22 I would also note in passing the following observation in the Full Court’s decision concerning Mansfield J’s consideration of the mediation agreement. It said (Kowalski FC at [25]):
"His Honour next acknowledged that there might be considerable merit in alternative contentions on behalf of the Superannuation Trustee that it was entitled to the benefit of the Heads of Agreement not withstanding that it was not a party to them and that, by entering into them and accepting the payment from the Superannuation Trustee, the appellant was estopped from asserting any claim to further entitlement under the Trust Deed and the Rules. However, he declined to base the summary dismissal of the action against the Superannuation Trustee on [this] ground ..."
23 The significance of this observation will become apparent when I refer to the trust claims below.
5. Other matters
24 It would appear from the Statement of Claim that in early November 2005 Mr Kowalski formally applied to MMA Super for a TPD and that he later supplied it with a bundle of medical and other documents to establish that he was entitled to the above benefit. The pleading goes on to allege that:
"16. The respondent is fully aware that the applicant has been continuously absent from employment for the last 15 years and that the insurance policy between the life insurer and the respondent was cancelled on the basis of non-renewal in February 1992, therefore, as the respondent’s statutory and a legal obligation, when determining claims for a TPD benefit, is to act fairly, in good faith and reasonably, the respondent had a statutory and a legal obligation to the applicant, after having considered all of the medical evidence that was satisfactory to it, to find that the applicant was incapacitated to such an extent as to render him unlikely ever to engage or work for reward in any occupation for which he is reasonably suited by education, training or experience, however, the respondent has refused to determine the applicant’s claim for a TPD, dated 3 November 2005, or to pay to the applicant his legally entitled Total and Permanent Disablement Benefit in the sum of 5 times the Plaintiff’s Superannuation Salary plus compound interest from 16 March 1994, therefore, the respondent has breached the relationship of potential beneficiary and trustee of a superannuation fund that it had entered into with the applicant on or before 17 March 1970, the respondent has breached its fiduciary duty to the applicant, it has breached s 52 of the Trade Practices Act, 1974 (Cth), it has breached s 4, s 6, s 7 and s 8 of the Misrepresentation Act 1972 (SA), it has breached the Fair Trading Act 1987 (SA), it has failed to act in good faith and it has been negligence."
6. Mr Kowalski’s circumstances
25 I refer to this matter given the order sought by MMA Super for security for costs. I have been referred to the sums paid under the mediation agreement and to a decision in July 2006 in the State Supreme Court refusing Mr Kowalski a waiver of filing and transcript fees in respect of an appeal which he sought to lodge. I have also been referred to a "Memorandum of Costs Orders" prepared by MMA Super’s legal advisers which lists seven proceedings (including the 2002 proceeding in this Court and the subsequent Full Court appeal) in which it is said the costs orders made against Mr Kowalski are yet to be satisfied.
26 For his part Mr Kowalski simply swears to his own impecuniosity.
THE STATEMENT OF CLAIM
27 I have referred already to the sequence of events upon which Mr Kowalski founds his claims. These are, as best I can understand them, as follows:
(i) On his employer’s notification that his employment contract was at an end, he became entitled to a TPD.
(ii) When he was paid $27,664.54 by MMA Super by way of a resignation benefit –
"... the respondent did not consider any of the medical evidence that was available to it at the time and which was satisfactory to the respondent to proved that the applicant was incapacitated to such an extent as to render him unlikely ever to engage or work for reward in any occupation for which he is reasonably suited by education, training or experience, therefore, as the respondent failed to exercise its powers under subparagraph (b) of the definition of Total and Permanent Disability Benefit, the respondent did not act fairly, in good faith or reasonably."
(iii) When MMA Super made the 1998 payment to Mr Kowalski as provided for in the mediation agreement, it again was guilty of the same omissions as in (ii) above.
(iv) The 2004 correspondence indicating that no formal application was made for a TPD in October 1998 proved that MMA Super again was guilty of the above omissions.
(v) A like claim has been made in respect of the formal application of 3 November 2005. I have set out in full above the terms of para 16 of the Statement of Claim. That para alone appears to raise a claim under the TP Act.
The relief he seeks for the wrongs he asserts comprises the following:
(a) a declaration that as from 16 March 1994 he was entitled to a TPD plus compound interest;
(b) an order that MMA Super pay him that entitlement;
(c) an order that MMA Super pay him compensation and punitive damages for unwarranted stress and anxiety that MMA Super has deliberately placed him under by refusing to pay him his entitlement.
28 I would observe that the relief of punitive damages sought in para (c) above is not tied to any particular cause of action, it apparently being assumed, incorrectly, that all of his claims lead to this end: e.g. for the position under s 82 and s 87 of the TP Act, for example see Nixon v Philip Morris (Australia) Ltd [1999] FCA 1107; (1999) 95 FCR 453; for breach of fiduciary duty, see Harris v Digital Pulse Pty Ltd [2003] NSWCA 10; (2003) 56 NSWLR 298.
THE ORDERS SOUGHT
(1) Dismissal for want of jurisdiction
29 As I have indicated, it is only the claim (seemingly for damages) under the TP Act which gives this matter its federal character and this Court jurisdiction over it. MMA Super’s contention, though, is that the TP Act claim here was made colourably, i.e. for the improper purpose of fabricating jurisdiction: on colourable claims see Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 at 219; and see generally Allsop, "Federal Jurisdiction and the Jurisdiction of the Federal Court of Australia in 2002" (2002) 23 Aust Bar Rev 29 at 41 ff. In aid of this contention MMA Super seeks comfort in the brief observation made by the Court in Kowalski FC (at [22]) to the effect that in that case no claim within jurisdiction could be made against MMA Super "as, for example, under the Trade Practices Act".
30 The question so raised is not whether a s 52 claim is doomed to failure (I leave out of consideration the question raised by MMA Super as to whether the s 52 could be applicable in any event to a superannuation trustee given s 51AF of the TP Act and the provisions of Pt 2 Div 2 of the Australian Securities and Investments Commission Act 2001 (Cth)). Rather, it is whether the claim was made in good faith.
31 The substance of the present Statement of Claim first saw light of day in the District Court proceedings to which I have referred. Even then and in that forum a claim was made that MMA Super "had breached the Trade Practices Act". This hardly suggests an invocation of the TP Act to fabricate jurisdiction. I accept he probably initiated proceedings in this Court because of the casual advice he received.
32 As to the Full Court’s observation in Kowalski FC referred to above, I do not consider than in the circumstances it provides much by way of support to MMA Super. The Court’s observation may well be said to provide an indication of the substantial difficulties that may be confronted by an applicant in trying to bring within the scope of s 52 conduct of the type alleged in a trustee-beneficiary relationship. While there are obvious difficulties in the way of demonstrating in a case such as the present that the conduct of MMA Super was in trade of commerce: cf Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594 at 602-604; a matter to which I will return below, I am satisfied Mr Kowalski properly and genuinely believed that the TP Act had previously been found to be capable of being applied to a superannuation trustee – hence his reliance on State Superannuation Board v Trade Practices Commission [1982] HCA 72; (1982) 150 CLR 282, albeit it was a case concerned with Part IV of the Act.
33 I am satisfied that Mr Kowalski’s lighting upon the TP Act as a proper instrument to be used in his long running dispute has been made in good faith. Whether it transpires to be utterly misconceived is, for present purposes, not to the point.
34 Distinctly, MMA Super submits that, even if not colourable, the TP Act claim ought be characterised as "trivial and insubstantial" and seemingly be disregarded for jurisdictional purposes. Reliance in this is placed on Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) ATPR 41-743 at [46]-[47]; WG & B Manufacturing Pty Ltd v Tesla Farad Pty Ltd (1999) 48 IPR 111. The description "trivial and unsubstantial" does not in this setting signify that the TP Act claim is unarguable: see e.g. Unilan Holdings Pty Ltd v Kerin (1992) 35 FCR 272; Allsop, at 42. Rather it requires a judgment to be made about the character the claim has as an aspect of the whole of the controversy between the parties: Fencott v Muller [1983] HCA 12; (1983) 152 CLR 570 at 609-610.
35 Though, as I have indicated, the TP Act claim appears to relate only to the refusal to consider the 3 November 2005 application for a TPD, the conduct there complained of would seem to be an integral aspect of the controversy raised in this matter. The claim itself may be quite wrongheaded, but considered in the context of the controversy as a whole it cannot be said to be a trivial or insubstantial aspect of it.
36 I reject the first of the orders sought by MMA Super.
(2) Abuse of process
37 As put the contention of MMA Super is that the TP Act claim discloses no reasonable cause of action. While the same is not said of the allegations of failure by MMA Super to perform its duties, it is said nonetheless that the clear inference is there to be drawn that the proceedings as a whole were issued to avoid the effect of the orders of Justice Bleby and of Mr Kowalski’s disagreement with the State Supreme Court over waiver of fees and as such are an abuse of process. It has not been suggested, though, that the trust claims have been determined in another forum on their merits. The contrary was conceded in oral argument, although again some comfort was sought to be derived from what was said by the Court about the trust claims in Kowalski FC. Neither has it been suggested that in the plethora of proceedings brought to date any issue estoppel has arisen. Again it is conceded that, unlike in Lindsey v Philip Morris Ltd [2004] FCA 797 where an abuse of process was found, the present is not a matter in which Mr Kowalski has been attempting to re-litigate despite prior actual decisions on the evidence.
38 I can deal with this contention shortly. While I am satisfied for reasons I give below that the TP Act claim is unarguable, it has not been suggested that the same is the case with the non-TP Act or "trust claims" as I will for convenience call them. At best it is said that the pleading is vague, not particularly revealing and, in the case of the claim against MMA Super to be provided with his entitlement, has been brought against the wrong respondent.
39 If the trust claims had been previously determined on the evidence, there would, in my view, be obvious grounds for the submission that Mr Kowalski was abusing the processes of this Court. Such, though, is not the case. While Mr Kowalski has been declared a vexatious litigant in the State Courts, he has in this Court advanced trust claims which MMA Super has not sought to have dismissed as having no reasonable prospects of success: see Federal Court of Australia Act 1976, s 31A(2). In these circumstances, unless I am satisfied that the present proceeding is vexatious, I can see no justification for characterising as an abuse of process Mr Kowalski’s invocation of the jurisdiction of this Court.
40 I will return below to the TP Act and trust claims. I am satisfied there is no proper basis for making the second order sought in the motion.
(3) A vexatious proceeding
41 Under O 21 r 1 of the Federal Court Rules I am empowered of my own motion to order that any proceeding may not be instituted or continued by a person without the leave of the Court:
"If [that] person institutes a vexatious proceeding and the Court is satisfied that the person has habitually, persistently and without reasonable grounds instituted other vexatious proceedings in the Court or any other Australian court (whether against the same person or against different persons)".
42 MMA Super has invited me, optimistically, to exercise this power against Mr Kowalski if I am satisfied that the conditions giving rise to the discretion to make an order have been made out.
43 In the alternative it is sought, with even greater optimism, to have an order made against Mr Kowalski under O 20 r 2. It provides:
"Where any person (in this rule called the vexatious litigant) habitually and persistently and without any reasonable ground institutes a vexatious proceeding against any person (in this rule called the person aggrieved) in the Court, the Court may, on application by the person aggrieved, order that the vexatious litigant shall not, without leave of the Court, institute any proceeding against the person aggrieved in the Court and that any proceeding instituted by the vexatious litigant against the person aggrieved in the Court before the making of the order shall not be continued by him without leave of the Court."
44 By way of background to the application of these provisions, it is important to have regard to the fundamental principle on which they entrench. This is that every person has a "constitutional right" of access to a court of competent jurisdiction to obtain redress in consequence of an alleged breach of his or her rights by some other person: Bremer Vulkan Schiffbau Und Maschinenfabrik v South India Shipping Corp Ltd [1981] AC 909 at 977; Ramsey v Skyring (1999) 164 ALR 378 at 389; Freeman v National Australia Bank Ltd (2006) 230 ALR 213 at 218-219. The purpose of the powers given under the Rules is to reinforce the power of the Court to protect its own processes against unwarranted usurpation of its time and resources and to avoid the loss caused to those who have to face actions which lack any substance: Jones v Skyring [1992] HCA 39; (1992) 66 ALJR 810 at 814. This said, an order under the Rules will not lightly be made because of its serious impact on the right of access to the courts of this country.
45 The present matter is not one in which an order ought be made under either rule. Considering first O 21 r 2, the present is only the second proceeding instituted in this Court against MMA Super by Mr Kowalski, the other being the 2002 Kowalski proceeding. That proceeding was dismissed on jurisdictional grounds against MMA Super without a final determination of the merits of Mr Kowalski’s claim. In the present matter, it is conceded that the trust claims do not involve the re-visiting of claims previously decided adversely to Mr Kowalski. While criticism has been directed at the pleading of those claims, it has not been argued that they disclose no reasonable cause of action, though vague and undeveloped allusions have been made to such matters as limitation of action, etc. I will return to this below.
46 Having regard to Mr Kowalski’s proceedings in this Court – and it is their character in this Court that is to be objectively judged: Commonwealth Bank of Australia v Heinrich [2003] FCA 540; (albeit regard may properly be had to proceedings in other courts for the light they might throw on that question of characterisation) – it is impossible to conclude that he has habitually, persistently and without any reasonable ground instituted a vexatious proceeding against MMA Super in this Court.
47 In relation to O 21 r 1, I am not satisfied that the first condition required to be made out – i.e. Mr Kowalski has instituted a vexatious proceeding in this court – is satisfied. I will not repeat what I have said above about the proceeding.
48 I will not make any orders under O 21.
(4) Security for costs
49 I will adjourn further consideration of this matter because, as I will indicate below, I intend to dismiss summarily the TP Act claim, but to leave on foot the non-TP Act claims, though I will require that at least the Statement of Claim be amended. It is appropriate to leave the question of security until after that process has occurred bearing in mind in particular that in the present proceedings almost no attention has been given to the question whether the trust claims have any reasonable prospect of success. That question arises as a factor to be considered on a security application: see Equity Access Ltd v Westpac Banking Corporation (1989) ATPR 40-972; and on any possible application made under s 31A of the Federal Court of Australia Act.
DISPOSITION
50 I had deferred consideration of MMA Super’s contention that the TP Act claim disclosed no reasonable cause of action, although I have indicated that it ought be summarily dismissed as having no reasonable prospect of success: see Federal Court of Australia Act, s 31A(2). My reasons for this conclusion have been anticipated inferentially in the observations made in Kowalski FC to which I earlier referred. Assuming for present purposes s 52 of the TP Act (and not Pt 2 Div 2 of the ASIC Act) is potentially applicable to MMA Super in the circumstances, the conduct impugned must, to be actionable, have been engaged in, "in trade or commerce". The allegations made relate to whether MMA Super, as trustee at the relevant time of the superannuation fund, has properly discharged (if at all) its obligations to Mr Kowalski as a member of the trust in accordance with the provisions of the trust. Whatever may have been the consequences of that conduct for the purposes of the law of trusts – the trust seems to have been of a type relatively similar to that considered in Toohey’s Ltd v Commissioner of Stamp Duties (1960) 60 SR (NSW) 539 at 548 – it cannot properly be said that conduct itself was "in trade or commerce".
51 As is now well settled, the phrase "in trade or commerce" has a restrictive operation. It does not encompass conduct in the course of the myriad of activities which are not, of their nature, of a trading or commercial character but which are undertaken in the course of, or as incidental to, the carrying on of a trading or commercial business. Rather, the phrase refers only to conduct which is itself one aspect or element of activities or transactions which, of their nature, bear a trading or commercial character: Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594 at 602-604; Hearn v O’Rourke [2003] FCAFC 78; (2003) 129 FCR 64. In Concrete Constructions the allegedly misleading conduct that was relied upon and which resulted in physical injury being sustained, consisted of internal communications made in the course of the ordinary activities of employees of a construction company when constructing a building. This conduct was held not to be in trade or commerce.
52 In this matter it can properly be said that MAAL had its own commercial interests and purposes in mind in having a superannuation fund established for its employees that was to be administered by MAA Super. But what it did in constituting the trust was to facilitate the bringing about of the relationship of trustee and beneficiary between MAA Super and the funds members. That relationship was not intrinsically a commercial relationship nor did the conduct complained of otherwise bear a trading or commercial character: cf Village Building Co Ltd v Canberra International Airport Pty Ltd [2004] FCAFC 240; (2004) 210 ALR 114 at [52]. This is not to say that, in the management of the fund, MAA Super may not have engaged in conduct that was in trade or commerce as, for example, in the making and management of the trust’s investments. The relevant conduct in question here related simply to MAA Super’s performance of the obligations it had to Mr Kowalski under the trust. That conduct, in the context of their relationship, was not an aspect of an activity or transaction that bore a trading or commercial character. It related simply to the provision by MAA Super of such entitlements as Mr Kowalski had under the trust instruments by virtue of his membership of the fund to which he had had access in virtue of his employment with MAAL.
53 I will order that that part of the proceeding that relates to a claim for relief under the Trade Practices Act 1974 (Cth) be dismissed. I should emphasise that my so doing does not alter the federal character of what remains, my jurisdiction to determine the whole controversy arising when the claims were originally made: see Unilan Holdings Pty Ltd v Kerin (1993) 44 FCR 481 at 481-2; Allsop, at 41 ff.
54 Finally, let me refer to the trust claims. I have already indicated some of the criticisms that have been made of these and of the relief sought. I will give Mr Kowalski the opportunity to address these also to more clearly and accurately indicate what his claims are and what, in summary, are the material facts on which he relies. The mantra-like repetition of alleged wrongdoing hardly illuminates what it is alleged was actually done or omitted to be done that gave rise to his causes of action. My giving this leave should not be interpreted as suggesting that the trust claims have reasonable prospects of success. That matter has not been agitated before me. I can only say, as Mansfield J suggested in Kowalski TJ, there are obvious obstacles confronting their prosecution.
55 I will order that:
(1) the proceeding be dismissed insofar as it claims relief under the provisions of the Trade Practices Act 1974 (Cth);
(2) the orders sought in paras 1, 2 and 4 of the notice of motion be dismissed and that the notice of motion otherwise be adjourned to a date to be fixed;
(3) the applicant have leave to file and serve an amended application and Statement of Claim on or before Friday, 17 August 2007; and
(4) the matter be adjourned for further directions to Monday, 27 August 2007 at 9.00 am.
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URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/1069.html