Kowalski v Dolphin & Anor [2011] FMCA 15 (13 January 2011)

Last Updated: 3 May 2011

FEDERAL MAGISTRATES COURT OF AUSTRALIA

KOWALSKI v DOLPHIN & ANOR

[2011] FMCA 15

TRADE PRACTICES – Dismissal of application on basis that no evidence capable of making out alleged breaches of the Trade Practices Act (Cwlth) or Fair Trading Act (SA).

Trade Practices Act 1974 (Cth), ss.52 and 53 of the Trade Practices Act 1974 Fair Trading Act 1987 (SA), ss.56, 57 & 58 Legal Practitioners Act 1981

ACCC v Dukemaster Pty Ltd [2009] FCA 682

Applicant:

KAZIMIR KOWALSKI

First Respondent:

STEVEN PETER DOLPHIN

Second Respondent:

LIESCHKE & WEATHERILL

File Number:

ADG 89 of 2010

Judgment of:

Lindsay FM

Hearing date:

7 December 2010

Date of Last Submission:

7 December 2010

Delivered at:

Adelaide

Delivered on:

13 January 2011

REPRESENTATION

The Applicant:

In person

Counsel for the Respondents:

Mr Agresta

Solicitors for the Respondents:

Iles Selley Lawyers

ORDERS

(1) That the application be dismissed.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE

ADG 89 of 2010

KAZIMIR KOWALSKI

Applicant

And

STEVEN PETER DOLPHIN

First Respondent

LIESCHKE & WEATHERILL

Second Respondent

REASONS FOR JUDGMENT

1. This is an application by Mr Kowalski for orders pursuant to ss.52 and 53 of the Trade Practices Act 1974 (Cwlth) and under ss. 56, 57 and 58 of the Fair Trading Act 1987 (SA).
2. The application is contained in an amended application filed on 17 May 2010.
3. The matter proceeded to trial before me on 7 December 2010. Mr Kowalski relied upon a number of affidavits and submitted to cross-examination. He called the first respondent upon subpoena.
4. An earlier application on the part of the respondents for me to summarily determine the application was abandoned by them.
5. The facts are of short compass.
6. The second respondent was the legal firm who acted on behalf of the applicant in relation to a WorkCover appeal. Mr Weatherill was the member of the firm principally involved with the matter. That was in 1995. They rendered him a bill on 15 November 1995 in the sum of $3,120. On 16 November 1995 they applied monies held in their trust account in the sum of $2,000 on behalf of the applicant to their account for fees. They waived their entitlement to recover the balance of their fee.
7. On 14 February 1996 Mr Kowalski asked for a bill of costs in taxable form. On 5 March 1996 the firm sent him a memorandum of fees based on Supreme Court scale. Subsequently he asked for his $2,000 to be returned.
8. These events were the subject of a complaint Mr Kowalski made to the Legal Practitioners’ Conduct Board. The Board made a finding of no unprofessional conduct on the part of Mr Weatherill and a further finding that there had been no overcharging. The Board’s findings are confirmed in a letter from them to the complainant of 13 August 1996. My knowledge of these matters arises from my reading of the decision of the Legal Practitioners’ Disciplinary Tribunal of 10 June 2010 (Exhibit 7).
9. The first respondent did not join the firm of Lieschke & Weatherill until January 2002, approximately six years after these events.
10. The applicant wrote to the respondents a series of letters between 12 June 2007 and 4 July 2007 in which he raised the events of 1995 and 1996, alleged certain failures on the part of the respondents to comply with their obligations in respect of the sending of accounts and the application of trust monies, and requested a return of the sum of $2,000.
11. Mr Dolphin made certain enquiries and spoke with Mr Weatherill and replied to those letters by way of letter dated 5 July 2007.
12. I set out the text of that letter in full:
    • We confirm receipt of your facsimile correspondences’ to us of 15, 15 (sic), 25 June and 4 July 2007.
    • We reject your assertions in relation to any impropriety entirely. All trust monies were lawfully dealt with by us at the relevant time.
    • Any action brought by you will be strenuously denied.
13. It is the sending of that letter which constitutes the conduct said by Mr Kowalski to give rise to his claim.
14. The claim cannot be sustained.
15. For the purposes of s.52 the conduct in which the second respondent engaged can only be the conduct of the first respondent. No other conduct by a member of the firm is alleged.
16. At p.561 of Miller’s Annotated Trade Practices Act the learned author sets out a summary of the principles to be applied in relation to claims pursuant to s.52 of the Trade Practices Act extracted from ACCC v Dukemaster Pty Ltd [2009] FCA 682:
    • A contravention of s 52(1) is established by “conduct” which is misleading or deceptive or likely to mislead or deceive. “Conduct” can include making a statement which is misleading or deceptive or likely to mislead or deceive.
    • The “conduct” must lead, or be capable of leading, a person into error and the error or misconception must result from “conduct” of the corporation and not from other circumstances for which the corporation is not responsible.
    • “Conduct” is likely to mislead or deceive if there is a “real or not remote chance or possibility regardless of whether it is less or more than fifty per cent”.
    • Section 52(1) is concerned with the effect or likely effect of “conduct” on the minds of those in relation to whom the question of whether the “conduct” is or is likely to be misleading or deceptive falls to be tested.
    • The test is objective and the court must determine the question for itself, but s 52 is not designed for the benefit of persons who fail to take reasonable care of their own interests.
    • It is wrong to select particular words or acts which although misleading in isolation do not have that character when viewed in context.
    • Contravention of s 52(1) does not depend on the corporation’s intention or its belief concerning the accuracy of the statement of fact unless the statement involved the state of the corporations’ mind. The question is whether the statement conveys a meaning that is false. A false meaning will be conveyed if what is stated concerning the past or present fact is inaccurate but also if, although literally true, the statement conveys a meaning which is false.
    • A statement which involves the state of mind of the make ordinarily conveys the meaning (expressly or impliedly) that the make of the statement had a particular state of mind when the statement was made and, commonly, that there was a basis for that state of mind.
    • A statement of opinion will not be misleading or deceptive merely because it turns out to be incorrect. An incorrect opinion does not of itself establish that the opinion was not held by the person who expressed it or that it lacked any or any adequate foundation. An expression of an opinion which is identifiable as an expression of opinion conveys no more than that the opinion his held and perhaps that there is a basis for the opinion. If that is so, an expression of opinion however erroneous misrepresents nothing.
    • However, an opinion may convey that there is a basis for it, that it is honestly held and when it is expressed as the opinion of an expert, that it is honestly held upon rational grounds involving an application of the relevant expertise. If the evidence shows that the opinion was not held or that it lacked any or any adequate foundation, particularly if the opinion was expressed as an expert, a statement of opinion may contravene s 52.
17. In order to found a breach of s.52 the conduct can be constituted by a statement but the statement must be misleading or deceptive or be likely to mislead or deceive. Mr Dolphin gave evidence that upon receiving Mr Kowalski’s correspondence he searched for the file. Unsurprisingly, given the 11 years that had elapsed since the controversy relating to the account, the file had been destroyed. He made enquiries of Mr Weatherill as to the matter and he became aware of the outcome of the proceedings before the Legal Practitioners’ Conduct Board in 1996. It was on the strength of those enquiries that he wrote to Mr Kowalski on 5 July 2007.
18. There is nothing in the evidence which established that such conduct was misleading or deceptive or was likely to mislead or deceive.
19. Moreover, Mr Kowalski conceded in cross-examination that he did not rely upon the assertions made in Mr Dolphin’s letter. The letter was not capable of misleading Mr Kowalski. Mr Kowalski had a longstanding view in relation to the conduct of the firm of Lieschke & Weatherill in 1995/1996 which was not influenced by nor capable of being influenced by anything Mr Dolphin said in July 2007 in a letter. Mr Kowalski had and has a fixed view about the conduct. Nothing Mr Dolphin said in the letter was capable of leading him into error or misconception in relation to the matters referred to in it.
20. The relevant account is dated 15 November 1995. The monies in trust were applied to that account on 16 November 1995. Mr Kowalski requested a bill of costs in taxable form on 14 February 1996. We know this because Mr Kowalski has annexed all of the relevant correspondence to an affidavit filed by him on 20 April 2010.
21. One of the annexures to that affidavit is an account that was sent by Lieschke & Weatherill on 5 March 1996 in which there is a reference to a telephone attendance upon him on 16 November 1995 “in relation to bill of costs”. I infer, as anyone reading the record of this correspondence can reasonably infer, that on 16 November 1995 Mr Kowalski received the account dated the 15 November 1995.
22. It is possible that Mr Kowalski does not understand the way in which Division 8 of Part 3 of the Legal Practitioners Act 1981 operates but I do not think that likely. After the hearing in the Legal Practitioners’ Conduct Board in 1996 and then in the Legal Practitioners’ Disciplinary Tribunal in 2010 he should be familiar with those provisions. A legal practitioner cannot bring an action to recover legal costs unless a bill has been delivered. Within six months of the delivery of a bill a person may request a detailed itemisation of the bill. The Supreme Court may be asked to tax and settle that bill of costs. Monies can be applied from a trust account to meet a bill once it is rendered.
23. A reading of the correspondence annexed to Mr Kowalski’s affidavit of 20 April 2010 does not indicate any breach of these provisions.
24. The observation in the preceding paragraph is in a sense otiose.
25. It is sufficient to dispose of this application for me to find, as I do find, that the letter Mr Dolphin wrote on 5 July 2007 to Mr Kowalski did not mislead or deceive Mr Kowalski and was not capable of misleading or deceiving him.
26. Mr Kowalski conceded in cross-examination that he has suffered no loss or damage as a result of that correspondence.
27. It may be the case, furthermore, that the nature of the communications between Mr Dolphin and Mr Kowalski in July 2007 is not conduct which can be described as conduct “in trade or commerce”. It is unnecessary for me to determine that matter. That would have been a relevant matter in terms of both ss. 52 and 53 of the Trade Practices Act claim.
28. Mr Dolphin’s letter of 5 July 2007 does not contain any false or misleading representations in connection with the supply or possible supply of goods and services such as would constitute a breach of s.53 of the Trade Practices Act. Mr Dolphin rejected Mr Kowalski’s assertions of impropriety and contended that the trust monies were dealt with lawfully. That was the information he had been given by Mr Weatherill. It was consistent with the findings of the Legal Practitioners’ Conduct Board in 1996.
29. In reliance no doubt upon the accrued jurisdiction of the Court, Mr Kowalski has also alleged that the sending of the letter by Mr Dolphin constituted a breach of ss.56, 57 and 58 of the Fair Trading Act. For the same reasons I find the conduct alleged did not constitute a breach of ss. 52 and 53 of the Trade Practices Act, I find that such conduct did not constitute a breach of ss. 56 or 58 of the Fair Trading Act.
30. There is nothing that Mr Dolphin did by sending the letter or in connection with his sending of the letter that constituted unconscionable conduct in terms of s.57 of the Fair Trading Act and no conduct capable of constituting fraud arises from the evidence in relation to those matters.
31. Paragraphs 1 and 3 of the Amended Application also seek orders in addition to the Trade Practices Act 1974 (Cwlth) and Fair Trading Act 1987 (SA) remedies, that the respondents “are guilty” of a miscellany of matters not referrable to any specific jurisdiction of the Court. In particular, it is said that the sending of the letter of 5 July 2007 constituted:
    • (1) impropriety;
    • (2) misappropriation or theft;
    • (3) breach of fiduciary duty;
    • (4) breach of contract;
    • (5) breach of good faith;
    • (6) breach of s.31(1),(2),(6),(7a) and 8 of the Legal Practitioners Act 1981 (SA);
    • (7) unconscionable conduct.
32. The way in which the remedies sought in paragraphs 1 and 3 differ from each other was never made clear to me by Mr Kowalski.
33. I recognise that (as I did with the Fair Trading Act claim) the accrued jurisdiction of the Court may bet be exercised even if no order is ultimately made pursuant to that aspect of Commonwealth jurisdiction which attracted the accrued jurisdiction in the first place. Once the accrued jurisdiction is engaged to deal with the single justiciable controversy, it remains available as a source of jurisdiction even if the head of Commonwealth jurisdiction is not ultimately exercised. I am prepared to assume that the accrued jurisdiction would have been attracted to this matter.
34. But I find that the evidence disclosed nothing about the letter of 5 July 2007 or the circumstances relating to it capable of making out any of these disparate claims.
35. The application is dismissed.
36. I indicated during the course of closing submissions that, notwithstanding the problems identified in the course of the hearing with respect to the applicant’s claim, that if any evidence, in affidavit, documentary or oral form, had come before me indicating fraud on the part of a legal practitioner whether in the 1995/1996 or 2010 phase of this matter, or indicating impropriety in connection with the rendering of an account or the application of trust monies, by a legal practitioner, I would have referred that evidence and that conduct to the Legal Practitioners’ Conduct Board.
37. No such evidence came to my attention at any stage of these proceedings.

I certify that the preceding 37Error! Style not defined.!Syntax Error, !Error! Style not defined.Error! Style not defined.!Syntax Error, !thirty-seventhirty-seven (37) paragraphs are a true copy of the reasons for judgment of Lindsay FM

Date: 13 January 2011