ATTORNEY-GENERAL (SA) v Kowalski (No 8) - [2020] SASC 208

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
ATTORNEY-GENERAL (SA) v KOWALSKI (No 8)
[2020] SASC 208
Judgment of The Honourable Justice Blue
28 October 2020
PROCEDURE - MISCELLANEOUS PROCEDURAL MATTERS - VEXATIOUS LITIGANTS AND PROCEEDINGS
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - RIGHT OF APPEAL
APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA
APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - WHEN APPEAL LIES - FROM LOCAL COURT
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - JUDGMENTS AND ORDERS - GENERALLY - CONSENT JUDGMENTS AND ORDERS
PROFESSIONS AND TRADES - LAWYERS - REMUNERATION - TAXATION OF COSTS AND FEES - GENERAL PRINCIPLES
Application for permission pursuant to section 39 of the Supreme Court Act 1935 to appeal against a judgment of a Magistrate dismissing an application to set aside a consent judgment.
Held:
1. It is reasonably arguable that the Magistrate erred in failing to have regard to the affidavit filed in support of the set aside application (at [55]).
2. The appeal would not be instituted for an ulterior purpose (at [107]).
3. Permission pursuant to section 39 to institute the appeal granted (at [108]).
Supreme Court Act 1935 (SA) s 39; Legal Practitioners Act 1981 (SA) s 42; Workmen’s Compensation Act 1971 (SA) s 41; Magistrates Court Act 1991 (SA) s 38, referred to.

ATTORNEY-GENERAL (SA) v KOWALSKI (No 8)
[2020] SASC 208
Civil
BLUE J:

Mr Kowalski seeks permission, pursuant to section 39 of the Supreme Court Act 1935 (SA) to institute an appeal against a judgment of a Magistrate dismissing his application to set aside a consent judgment in favour of Stanley & Partners.
Timothy Bourne was invited to make submissions on the application and appeared to oppose the grant of permission. The partnership of Stanley & Partners has been dissolved but Mr Bourne was a partner at all material times and was the partner responsible in relation to acting for Mr Kowalski and subsequent litigation by and dealings with Mr Kowalski.
Background
In January 1988 Mr Kowalski instructed Mr Bourne of Stanley & Partners in relation to an eye injury suffered in the course of his employment at Mitsubishi Motors Australia Limited (Mitsubishi). There was no written costs agreement under subsection 42(6) of the Legal Practitioners Act 1981 (SA) (the Legal Practitioners Act) (as it was in 1988) providing for Stanley & Partners to charge at rates other than those prescribed by the relevant court scale.
In August 1989 Mr Bourne on behalf of Mr Kowalski instituted an action in the District Court against Mitsubishi (the District Court action). The claim was for damages for breach of duty and in the alternative an assessment of workers compensation under the Workmen’s Compensation Act 1971 (SA) (the Workmen’s Compensation Act).
In January 1991 Mr Bourne prepared a draft application in the Industrial Court seeking finalisation of Mr Kowalski’s workers compensation claims with respect to the eye…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] SASC 208
Decision Date: 28 October 2020

CaseChat Overview and Summary

The case of Attorney-General (SA) v Kowalski (No 8) involves the plaintiff, Mr Kowalski, seeking permission to appeal a decision of the Magistrate, who had dismissed his application to set aside a consent judgment. The dispute centred around a legal bill rendered by Stanley & Partners, Mr Kowalski's former solicitors, and the validity of a consent judgment entered into in 1993. The court had to determine whether Mr Kowalski's application to set aside the consent judgment was an abuse of process and whether he should be granted permission to appeal the Magistrate's decision.

The legal issues before the court included whether Mr Kowalski's application to set aside the consent judgment was an abuse of process, and if not, whether permission should be granted for an appeal. The court also had to consider the Magistrate's failure to have regard to the 1 May affidavit and the exhibits to the 11 April affidavit. The court needed to decide if these omissions constituted an error that could be grounds for appeal, and if the appeal itself would constitute an abuse of process.

The court found that the Magistrate's failure to consider the 1 May affidavit and the exhibits to the 11 April affidavit was an error. These documents contained crucial evidence regarding Mr Kowalski's mental capacity at the time the consent judgment was entered into. The court held that the Magistrate's omission was a material error as it affected the fairness and correctness of the decision. The court also concluded that an appeal by Mr Kowalski would not be an abuse of process, as the potential merits of the appeal were not frivolous or without foundation. The court granted permission for the appeal on the specific ground that the Magistrate had failed to consider relevant evidence.

The court's decision was that permission should be granted to Mr Kowalski to institute an appeal against the Magistrate's decision, limited to the ground that the Magistrate erred in failing to have regard to the 1 May affidavit or the exhibits to the 11 April affidavit. The court emphasised that the decision did not imply any opinion on whether the appeal should be allowed or the orders that should be made on appeal. These matters would be determined by the Judge hearing the appeal.

Orders

Orders of the court

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Background

Background to the litigation

Timothy Bourne was invited to make submissions on the application and appeared to oppose the grant of permission. The partnership of Stanley & Partners has been dissolved but Mr Bourne was a partner at all material times and was the partner responsible in relation to acting for Mr Kowalski and subsequent litigation by and dealings with Mr Kowalski.Background In January 1988 Mr Kowalski instructed Mr Bourne of Stanley & Partners in relation to an eye injury suffered in the course of his employment at Mitsubishi Motors Australia Limited (Mitsubishi). There was no written costs agreement under subsection 42(6) of the Legal Practitioners Act 1981 (SA) (the Legal Practitioners Act) (as it was in 1988) providing for Stanley & Partners to charge at rates other than those prescribed by the relevant court scale. In August 1989 Mr Bourne on behalf of Mr Kowalski instituted an action in the District Court against Mitsubishi (the District Court action). The claim was for damages for breach of duty and in the alternative an assessment of workers compensation under the Workmen’s Compensation Act 1971 (SA) (the Workmen’s Compensation Act). In January 1991 Mr Bourne prepared a draft application in the Industrial Court seeking finalisation of Mr Kowalski’s workers compensation claims with respect to the eye injury and a draft letter to Mitsubishi’s solicitors serving the application. In February 1991 Mr Kowalski terminated his instructions to Stanley & Partners. On 25 February 1991 Stanley & Partners rendered a bill to Mr Kowalski totalling $2,152[1] for the work undertaken in relation to his eye injury. The bill was in the following terms:[1] All dollar figures are rounded to the nearest whole dollar unless otherwise shown.RE DAMAGES AND COMPENSATION – MITSUBISHI MOTORSToOur professional charges herein and including all officeand telephone attendances and correspondence incidentalto claim, preparing, filing and serving district courtproceedings, obtaining medical and other evidencein support of claim, negotiating with solicitors for Mitsubishi, drafting Industrial Court proceedings,and all other work incidental thereto, exceeding but say, $2,000.00To: Our disbursementsPhotocopies $148.60STD Call $3.42$2,152.02 Stanley & Partners’ time cost ledger shows that the bill was prepared based on time costing and the total time-based charges recorded in the time cost ledger were $2,102. On 25 February 1991 Stanley & Partners rendered a bill for $150 for work in relation to a defamation claim. In August 1991 Mr Kowalski suffered a severe mental breakdown and was unable to continue work at Mitsubishi. In due course, he was referred to a psychiatrist, Dr Karl Jagermann, for treatment. He did not ever return to work. In March 1994 Mitsubishi informed him that his employment was terminated because his contract of employment had been frustrated as a result of his psychiatric illness. In September 1991 Mr Kowalski, by his new solicitors R J Cole & Partners, required Stanley & Partners to tax their costs and they agreed to do so. Stanley & Partners engaged legal costs consultants, HJ & SW Briggs, to prepare a draft bill of costs in taxable form. The consultants prepared a draft bill totalling $6,331, which included preparation of the bill itself for $2,487.

Evidence

Evidence Before The Court

It is reasonably arguable that the course adopted by the Magistrate resulted in the hearing miscarrying from the perspective of both parties. From the perspective of Mr Kowalski, the Magistrate did not have regard to the 1 May affidavit filed in support of his set aside application. From the perspective of Mr Bourne, any question as to whether Dr Jagermann’s report should have been tendered was not prompted by the manner in which the Magistrate dealt with, or did not deal with, the affidavits.Capacity of evidence to prove mental incompetence Mr Bourne contends that, if Dr Jagermann’s 26 January report had been tendered at the hearing on 28 October 2019, it was not capable of proving that Mr Kowalski was mentally incompetent to consent to judgment on 29 January 1993. The Magistrate did not address this issue because he did not refer to the 1 May affidavit and did not refer to paragraphs 17 or 18 of the 11 April affidavit. First, Mr Bourne contends that, if matters had proceeded differently, he would have objected to receipt of paragraph 17 of the 1 May affidavit on the ground that the full report should be tendered and not an extract reproduced in Mr Kowalski’s affidavit. This is hypothetical because the hearing on 28 October 2019 arguably miscarried for the reasons identified above. However, hypothetically, if the Magistrate had not made the arguable errors identified in the previous section and Mr Bourne had objected to receipt of paragraph 17 on this ground, it is reasonably arguable that Dr Jagermann’s report should have been received if it had been tendered. The report was available because it was already exhibited to the 11 April affidavit which had been filed. Secondly, Mr Bourne contends that Dr Jagermann’s report should not have been received because Dr Jagermann could not be cross-examined because he is now deceased. This is a factor relevant to delay (addressed below) but does not render Dr Jagermann’s report inadmissible. It is reasonably arguable that Dr Jagermann’s report should have been admitted notwithstanding that he is now deceased. Thirdly, Mr Bourne contends that on its face Dr Jagermann’s report is not capable of proving that Mr Kowalski was mentally incompetent to consent to judgment on 29 January 1993. He contends that it merely demonstrates that Mr Kowalski was under financial pressure to make decisions about his claim for compensation and/or damages but falls short of suggesting that he did not have the competence to conduct the litigation. Dr Jagermann’s report was provided to Mr Kowalski’s general practitioner to report on his condition and mental capacity. The fact that it was not a medico-legal report provided for the purpose of litigation does not detract from its weight. It was directed principally to Mr Kowalski’s mental capacity to enter into a settlement agreement with Mitsubishi but nevertheless expressed an opinion upon Mr Kowalski’s mental capacity to enter into any form of legal agreement. Moreover, in the passage extracted at [18] above, Dr Jagermann specifically referred to Mr Kowalski “being taken to court by another firm of solicitors for non-payment of their charges”, which was clearly a reference to the action instituted by Stanley & Partners against Mr Kowalski.

Decision

Reasons for decision

I am satisfied that an appeal by Mr Kowalski against the Magistrate’s decision would not be an abuse of process.Conclusion I grant permission pursuant to section 39 of the Supreme Court Act to Mr Kowalski to institute an appeal against the decision of the Magistrate. The permission is limited to a single ground of appeal, namely that the Magistrate erred in failing to have regard to the 1 May affidavit or the exhibits to the 11 April affidavit. Although Mr Kowalski can raise on appeal defences to the action on the merits to address any contention by Mr Bourne that setting aside the consent judgment would be futile, such defences are not capable in themselves of forming grounds of appeal. I stress that the question I am required to decide is not whether an appeal against the Magistrate’s decision should be allowed or the orders that should be made on appeal. These will be questions to be decided by the Judge who hears the appeal and nothing in these reasons for judgment is intended to bind that Judge. My decision is confined to deciding that the appeal would not comprise a vexatious proceeding within the meaning of section 39 and permission under section 39 should be granted to institute the appeal.

Ratio Decidendi

Legal Principle Established

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