Manolakis v Wesfarmers Limited [2009] FMCA 22 (6 February 2009)

Last Updated: 11 February 2009

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MANOLAKIS v WESFARMERS LIMITED

[2009] FMCA 22

TRADE PRACTICES – Application for summary dismissal of claim – or in alternative as applicant in default of procedural step proceedings should be dismissed – application based on grounds initiating application is incompetent due to bankruptcy of applicant – applicant has failed to file and serve statement of claim – applicant claims remedies prima facie based on Racial Discrimination Act – no terminated complaint from Human Rights Commission – application for security for costs made in the event claim not dismissed – matters to be considered.

Trade Practices Act 1974, ss.51AB, 51AC, 51ACA, 52, 53 and 60 Racial Discrimination Act 1975 Federal Magistrates’ Court Rules, Rules 13.03 and 13.10 Human Rights & Equal Opportunity Commission Act 1986, ss.46PO Bankruptcy Act 1966, ss.4;58;116 Federal Magistrates Act 1999, s.80

Manolakis v Wesfarmers Limited trading as K-Mart [2008] FCA 928 Manolakis v Carter [2008] FCAFC 183 Worchild v University of Queensland Law Society [2006] FCA 1078 Faulkner v Bluett (1981) 51 FLR 115 Equity Access Pty Ltd v Westpac Banking Corporation (1989) ATPR 40-972

Applicant:

ANASTASIOS MANOLAKIS

Respondent:

WESFARMERS LIMITED

File Number:

ADG 10 of 2008

Judgment of:

Brown FM

Hearing date:

12 December 2008

Date of Last Submission:

12 December 2008

Delivered at:

Adelaide

Delivered on:

6 February 2009

REPRESENTATION

Counsel for the Applicant:

Applicant in person

Counsel for the Respondent:

Mr Henchliffe

Solicitors for the Respondent:

Minter Ellison

ORDERS

(1) The application filed on 15 January 2008 is dismissed.
(2) The applicant pay the respondent’s costs to be agreed and failing agreement to be taxed.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE

ADG 10 of 2008

ANASTASIOS MANOLAKIS

Applicant

And

WESFARMERS LIMITED

Respondent

REASONS FOR JUDGMENT

Introduction

1. On 15 January 2008, Anastasios Manolakis “the applicant” commenced proceedings against Wesfarmers Limited “the respondent”. The respondent trades as K-Mart and operates a chain of department stores under that name.
2. At some time in August 2007, the applicant bought a car battery at the K-Mart store in Firle, a suburb of Adelaide. The purchase price was $50.99. The applicant claims that the battery was defective in some way.
3. A dispute arose between the parties when the applicant returned the battery to the K-Mart store in Firle and sought a refund. The refund was not forthcoming.
4. In his application, which the applicant prepared himself, he seeks the following orders, which I have attempted to summarise:
   • A public apology from Wesfarmers Limited;
   • A refund for the battery;
   • Unspecified damages as a result of what is alleged to be K-Mart’s deceptive and misleading conduct in the representation of its refund policy;
   • Unspecified damages for “acting in a bias manner against an individual of non-anglo saxan (sic) appearance”;
   • A specific apology from the two K-Mart staff members who dealt directly with him;
   • Costs.
5. The grounds of the application, again I summarise, are said to lie in sections 51AB, 51AC, 51ACA, 52, 53 and 60 of the Trade Practices Act 1974.
6. These provisions deal with unconscionable conduct on the part of corporations engaged in trade or commerce; the breach of any applicable industry codes of conduct by such a corporation; misleading or deceptive conduct by a corporation engaged in trade and commerce; false and misleading representations made by such a corporation; and the prohibition of a corporation from using force, harassment or coercion in connection with the supply of goods and services.
7. The applicant apparently also seeks remedies under the Racial Discrimination Act 1975, although he has not made a formal complaint about any racially motivated conduct by the respondent to the Human Rights Commission. In this regard he seeks to “bypass” the Commission and pursue an action for damages against the respondent, in this court, for such allegedly illegal discriminatory conduct.
8. The respondent has not as yet formally filed a response to the application. Although it is clear that it seeks the dismissal of the application or in the alternative that the applicant provide security for costs before he is permitted, by the court, to proceed with this action.

The procedural history

9. It is necessary to set out the procedural history of the matter to date.
10. The application first came before Simpson FM on 12 February 2008. On that occasion, the parties were referred to mediation. It was also ordered that the action proceed by way of pleadings. Accordingly, within fourteen days of the conclusion of the process of mediation, the applicant was directed to file and serve a statement of claim.
11. Thereafter, following the expiration of fourteen days, the respondent was directed to file a defence.
12. Up to this stage the applicant had filed a brief hand-written affidavit. His affidavit is not easy to read but as far as I can decipher it, says as follows:
    • “K-Mart refused to refund me as K-Mart policy a sum of approximately $60.00. Employees of K-Mart mislead, misrepresented abused their positions of power, acted in a racist manner towards me etc.”
13. The process of mediation, ordered by Simpson FM, did not result in any resolution of the matter. On 6 May 2008 the applicant filed but apparently did not serve a statement of claim.
14. The matter returned to court before Simpson FM, on 13 May 2008. His Honour ordered that the applicant’s statement of claim, filed on 6 May 2008, be struck out.
15. The reason why the statement of claim was struck out appears in a transcript of the proceedings. His Honour said as follows:
    • “Well, I propose, Mr Manolakis, to strike out the statement of clam. It doesn’t disclose a cause of action and it contains offensive material. I propose to make a further order that this statement of claim be kept in a sealed envelope on the court file, not to be opened by anybody other than myself. I’m going to give you the opportunity, Mr Manolakis, to file a proper statement of claim, and on this occasion I want you to file the document and serve it on the other side well prior to the occasion that we come back on the next occasion, and the respondent will have the opportunity of making such application as they think is appropriate when they look at your amended statement of claim. Okay?”
16. The time for the filing and service of the amended statement of claim was extended to 10 June 2008 and a further directions hearing was allocated on 14 July 2008.
17. In the meantime, the respondent’s solicitors wrote an open letter to Mr Manolakis proposing a settlement of the matter. The respondent asserted that the battery in question was neither faulty nor of unmerchantable quality. It also denied that it had failed to offer the applicant a refund in respect of it.
18. However, in an attempt to resolve the matter, the respondents indicated that they would consent to judgment being entered in the applicant’s favour, in the sum of $51.00, together with costs to be taxed or agreed. It is the respondent’s position that Mr Manolakis has not responded to this proposal.
19. The applicant did not comply with the order requiring him to file an amended statement of claim. Rather, he sought leave to appeal, in the Federal Court of Australia, in respect of Simpson FM’s interlocutory decision.
20. This application came before Mansfield J on 19 June 2008. The application for leave to appeal was refused and the applicant was ordered to pay the respondent’s costs of the application.
21. In his reasons for judgment, Mansfield J said as follows:
    • “In my view, Federal Magistrate Simpson therefore correctly struck out the statement of claim. There is no doubt as to the appropriateness of his order. In addition, the strike out of the statement of claim does not cause injustice to the applicant as he can re-plead the statement of claim, limited to the facts relevant to the transaction which is identified in the application, and to its consequences.
    • The time fixed by the Federal Magistrates Court to amend the statement of claim has expired, but no doubt in the circumstances his Honour would further extend that time provided a statement of claim in appropriate form is now filed and served promptly. There is still over three weeks within which the applicant might file and serve his amended statement of claim. As 10 days was allowed for that purpose previously, he would do well to do so by 30 June 2008.”
22. The applicant has not as yet filed such a statement of claim nor formally sought an extension of time in which to do so. As a result of this omission, on the applicant’s part, the respondent initiated the interlocutory application currently before me.
23. In this application, filed on 10 July 2008, the applicant seeks the following orders:
    • “1. That the applicant give security for the respondent’s costs of these proceedings in accordance with Rule 21.01 of the Federal Magistrates’ Court Rules 2001.
    • 2. That the applicant file and serve an Amended Statement of Claim on or before 31 July 2008.
    • 3. That in the absence of an Amended Statement of Claim being filed and served on or before 31 July 2008, the applicant’s claim be dismissed for want of prosecution.
    • 4. That the applicant’s claim be stayed, pending compliance with any order for security for costs as against the plaintiff.
    • 5. That this application be listed as specially returnable for hearing before Federal Magistrate Simpson at the same time as the directions hearing on Monday 14 July 2008 at 9:30am.”
24. This application was made returnable before Simpson FM on 14 July 2008. On this date, Mr Manolakis made an oral application that Simpson FM disqualify himself from any further involvement with the proceedings. I am unsure as to the basis of this application.
25. His Honour fixed both applications, before himself, on 13 August 2008. On this date, Simpson FM disqualified himself from further hearing of the matter, which was transferred to my docket.
26. In the meantime, the applicant apparently sought to appeal the judgment of Mansfield J made on 19 June 2008. The District Registrar of the Federal Court for the South Australian District Registry refused to accept the purported notice of appeal due to irregularities in its form.
27. This decision of the District Registrar was also subject to some litigation instigated by the applicant in the Federal Court, which was resolved by Besanko J on 31 October 2008. His Honour dismissed an application for review of the District Registrar’s decision and ordered that the applicant pay the respondent’s costs.
28. The matter first came before me on 10 October 2008. I determined that the application for security for costs and the related applications be fixed for hearing on 12 December 2008.
29. Mr Manolakis has not filed any documents in response to this application, nor given any indication that he seeks an extension of time in which to file a statement of claim.
30. On 28 November 2008, Wesfarmers has sought to modify its position. It now seeks the dismissal of the applicant’s claim on the grounds that it is incompetent. In this regard it relies on rule 13.10 of the Federal Magistrates Court Rules. If this application is unsuccessful, the respondent seeks in the alternative that the applicant provide security for costs before he is permitted to proceed further with his application.

The application for summary dismissal

31. In support of its application for summary dismissal, the respondent relies on the following documents:
    1. Affidavit of Jane Louise Schammer filed 10 July 2008;
    2. A further affidavit of Ms Schammer filed 10 July 2008;
    3. A further affidavit of Ms Schammer filed 28 November 2008.
32. Ms Schammer is the solicitor retained by the respondent in these proceedings. In her second affidavit, she estimates the respondent’s costs, if the matter proceeds to hearing, would be in the vicinity of $9,400.00 but quite possibly more. She also deposes that Mr Manolakis has not as yet paid the costs awarded against him as a result of Mansfield J’s order made on 19 June 2008.
33. In her third affidavit, Ms Schammer deposed that Mr Manolakis had been made bankrupt on 22 March 2004. However, she had been advised by the relevant trustee that Mr Manolakis had not as yet filed a statement of his affairs and accordingly his bankruptcy had not as yet commenced.
34. The trustee referred to in Ms Schammer’s affidavit indicates that the bankrupt estate, in respect of which he has been appointed is that of Tom Manolakis. In discussions with me, the applicant declined to confirm whether he was one and the same person as Tom Manolakis. Rather, it seems to be his position that the onus is on the respondent to prove that this is the case.
35. In any event, the applicant sought to adjourn the proceedings. In support of this application, he produced a summons issued by the Adelaide Magistrates’ Court apparently requiring him to appear before the court to answer a charge to failing to file a statement of affairs arising from a bankruptcy order made against him.
36. In all the circumstances of this case, I declined to adjourn the proceedings, which have been on foot for a considerable period of time. In my view, the applicant has had ample time to file a statement of claim and has been long on notice that the respondent required one.
37. The respondent’s case rests on five basis:
    • The application filed 15 January 2008 should be dismissed as incompetent;
    • The application should be dismissed as the applicant is in default of the order requiring filing of a statement of claim;
    • The proceedings are incompetent because the applicant is a bankrupt;
    • There has been no termination of any complaint by the President of the Human Rights Commission;
    • In the event that all of these submissions are rejected by the court, the respondent seeks security for costs, from the applicant, in the sum of around $9,000.00.
38. Part 13 of the Federal Magistrates Court Rules deals with the power of the court to end proceedings early, prior to a formal adjudication. Two rules are relevant in the context of the current proceedings – rule 13.03 and rule 13.10.
39. Rule 13.03 reads as follows:
    • “13.03 Default in taking required step etc
    • (1) This rule applies if a party fails to take a step required by these Rules or to comply with an order of the Court.
    • (2) Subject to any other order or transfer the Court may, on the application of another party in the proceeding or of its own motion, make an order:
    • (a) that the step be taken within a stated time; or
    • (b) to end the proceeding or dismiss a response.
    • (3) The Court may make the order sought or another order that it considers appropriate.”
40. Rule 13.10 reads as follows:
    • “13.10 Disposal by summary dismissal
    • The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:
      • (a) the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or
    • (b) the proceeding or claim for relief is frivolous or vexatious; or
    • (c) the proceeding or claim for relief is an abuse of the process of the Court.”
41. The applicant has still failed to produce a statement of claim some eight months after it was ordered. Rather, he has concentrated his efforts on the appeal process. Mansfield J, in his judgment, indicated the matters which the applicant might find useful to plead.[1] His Honour also provided reasons as to why the applicant’s case, as presently particularised, was unsatisfactory.
42. The applicant has taken no apparent heed of what was said in these reasons for judgment. The respondent has put him on notice that it requires a statement of claim and in its absence will seek the dismissal of the applicant’s case. Again, the applicant has paid no heed to this warning.
43. Pursuant to rules 13.03 and 13.10 the court has power to deal with defective pleadings, applications which have no reasonable prospects of success and cases where a party is in default of one of the court’s procedural orders. These powers all have relevance to this particular case.
44. Mr Manolakis is acting on his own behalf. I appreciate that he has no legal qualifications and many aspects of trade practices and discrimination law are arcane. These comments also apply to the rules of the court and its procedures. However, whatever sympathy the court may feel for Mr Manolakis, at his attempts to grapple with the legal process, such sympathy should not be a licence for it to do away with the proper procedural protections to which a respondent is entitled.
45. I have no reason to doubt the depths of Mr Manolakis’ feelings towards K-Mart and how aggrieved he feels himself to be following his alleged treatment by the staff there. However, his claims of misbehaviour, as currently stated, are ill-defined and directed to every vague cause of action which occurs to him. His complaints of illegality by the respondent are imprecise and “scatter-gun”.
46. In this context, the comments of the Full Court of the Federal Court in Manolakis v Carter[2] are apposite:
    • “Whatever the difficulties facing an applicant in person may be, those difficulties cannot justify a departure from the Rules relating to the institution and conduct of proceedings and to pleadings such that anything will go. Justice requires fairness to all parties. A respondent is entitled, at the least, to know the case that is brought against him or her and the rudimentary facts upon which that case is based.
    • Courts do not exist to allow self-represented litigants to make scatter-gun claims against all and sundry and to indulge themselves by using proceedings they have instituted as vehicles for what might be seen to be private ‘Royal Commissions’.
    • Nor do courts exist to allow the frustrations of self-represented litigants to be relieved by the making of abusive or contemptuous tirades directed at those whom they perceive to have wronged them, judicial officers who may have decided not to find for them, or judges whose duty it is to hear them, when such litigants sense that the expressions of their grievances are not being favourably received by the court.
    • An aggrieved self-represented applicant must, like any other litigant, address:
      • ● his or her standing to make claims against other persons,
      • ● the jurisdiction of the court in which he or she wishes to make those claims,
      • ● the precise identity of the parties against whom the claims are to be made,
      • ● the relief that is to be sought, and
      • ● the facts which are said to found an entitlement to that relief.”
47. As the applicant’s case presently stands, I do not consider that Mr Manolakis has satisfactorily addressed all these issues, notwithstanding that he has been given ample opportunity to do so. This is, of itself, sufficient grounds for his application to be dismissed.
48. One aspect of the applicant’s case apparently relates to remedies claimed to be available to him under the Racial Discrimination Act 1975. However, it is apparent that the applicant has not made any complaint of having suffered any illegal discriminatory conduct at the hands of the respondent or any of its servants and agents to the President of the Human Rights Commission.
49. Accordingly, no such complaint has been terminated by the President. As a result, the applicant has no standing to bring this aspect of his case, before this court, pursuant to section 46PO of the Human Rights & Equal Opportunity Commission Act 1986.
50. The applicant has provided no particulars of how he claims to have been harassed and intimidated by the respondent and its servants. He has provided no details as to why he is entitled to damages, from the respondent, for this alleged behaviour. In my view, the respondent is clearly entitled to those particulars.
51. These particulars have relevance to another aspect of the respondent’s case. The respondent argues that, as an undischarged bankrupt, the applicant is incompetent to bring these proceedings. This argument turns on section 58(1) of the Bankruptcy Act 1966, which provides that upon a debtor becoming bankrupt his property vests forthwith in the Official Trustee.
52. Pursuant to section 58(1)(b) property acquired after a bankruptcy is declared also to vest in the Official Trustee concerned. The definition of property provided by section 5 of the Act is wide and includes real or personal property “of every description”.
53. It is the respondent’s case that the right to sue in respect of claims to property comes within the parameters of property divisible amongst creditors provided by section 116(1) of the Bankruptcy Act.
54. Accordingly, it is argued that the right to seek monetary restitution for the allegedly faulty battery is a right which has vested in the applicant’s Trustee in Bankruptcy and so the applicant is incompetent to pursue this claim.
55. There is an exception provided by section 116(2)(g) which entitles a bankrupt to recover damages or compensation “for personal injury or wrong done to the bankrupt ...”. The difficulty is that Mr Manolakis has provided no particulars of either personal injury or wrong allegedly done to him by the respondent.
56. Essentially, it is the respondent’s case that, if Mr Manolakis’ case is taken at its highest, it would only entitle him to monetary compensation for the value of the allegedly faulty battery alone, not some other compensation for hurt feelings or other injury.
57. Spender J summarised the cases regarding a bankrupt’s competence to commence proceedings in Worchild v University of Queensland Law Society[3] In particular, His Honour referred to Faulkner v Bluett[4] where it was said by Lochart J that “where the essential cause of action is the personal injury done to the person or feelings of the bankrupt the right to sue remains with the bankrupt” but otherwise a right to sue for a direct pecuniary loss vested with the trustee concerned.
58. In the absence of any particulars concerning personal injury done to Mr Manolakis and in the absence of a terminated complaint by the Human Rights, it is difficult to see how Mr Manolakis has standing to bring this application.
59. As a result of my determinations to date, it is not strictly necessary for me to deal with the application for security for costs. Pursuant to section 80 of the Federal Magistrates Act 1999 the court has a wide discretion to make orders requiring a party to give security for the payment of any costs that may be awarded against him or her.
60. The general rule is that, in the exercise of its discretion, the court should not make an order for security for costs against an individual plaintiff on the grounds of impecuniosity alone. Otherwise meritorious, but impecunious litigants might be inequitably excluded from achieving or maintaining their entitlements because of poverty alone.
61. In Equity Access Pty Ltd v Westpac Banking Corporation[5], Hill J set out the factors, which are most usually relevant to the making of an order for costs. They include the following:
    • The chances of success of the applicant’s case;
    • The degree of risk that the applicant concerned could not satisfy a cost order;
    • Whether the application for security for costs was being used oppressively;
    • Whether the impecuniosity of the claimant concerned arose out of the act in respect of which the applicant seeks relief;
    • Whether any aspects of public interest militated against the making of an order for security for costs;
    • Whether there are any particular discretionary matters peculiar to the circumstances of the case concerned.
62. In this case, clearly there would be a grave risk that the applicant would not satisfy any claim for costs made against him. As I understand matters, there are currently two unsatisfied costs orders made against him arising from proceedings related to this one.
63. As matters presently stand, I am not persuaded that there are any aspects of public interest which should dictate that the applicant’s case should be ventilated unfettered by any order regarding security for costs.
64. At first blush, his case relates to a battery worth less than $100.00. He is apparently unwilling to accept a refund from the respondent in respect of it. He has provided no details of any other injuries suffered by him and is apparently reticent to pursue the proper legislatively mandated avenues for redress in respect of alleged racial discrimination.
65. In all these circumstances, it would be my view that this is an appropriate matter for an order for security of costs to be made. However, as I have decided to dismiss the application for other reasons, it is not necessary for me to make a specific order in this regard.
66. I see no reason why costs should not follow the event.
67. For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.

I certify that the preceding 67Error! Style not defined.!Syntax Error, !Error! Style not defined.Error! Style not defined.!Syntax Error, !sixty-sevensixty-seven (67) paragraphs are a true copy of the reasons for judgment of Brown FM

Associate: P Smith
Date: 6 February 2009

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[1] See Manolakis v Wesfarmers Limited trading as K-Mart [2008] FCA 928 at paragraph 6
[2] Manolakis v Carter [2008] FCAFC 183
[3] Worchild v University of Queensland Law Society [2006] FCA 1078
[4] Faulkner v Bluett (1981) 51 FLR 115
[5] Equity Access Pty Ltd v Westpac Banking Corporation (1989) ATPR 40-972 at 50,365