Attorney-General v Kowalski (No 5) - [2017] SASC 120

SUPREME COURT OF SOUTH AUSTRALIA
(Applications Under Various Acts or Rules: Application)
ATTORNEY-GENERAL v KOWALSKI (NO 5)
[2017] SASC 120
Judgment of The Honourable Justice Blue
15 August 2017
PROCEDURE - JUDGMENTS AND ORDERS - ENFORCEMENT OF JUDGMENTS AND ORDERS
PROCEDURE - MISCELLANEOUS PROCEDURAL MATTERS - VEXATIOUS LITIGANTS AND PROCEEDINGS
Application for permission under section 39 of Supreme Court Act 1935 to issue an investigation summons.
In January 2014 an order was made under section 39 amongst other things staying (subject to exceptions) all existing proceedings instituted by Mr Kowalski in a prescribed court unless permission is granted by the Supreme Court.
In 1992 judgment had been entered in favour of Mr Kowalski against Mitsubishi Motors Australia Limited in the Magistrates Court for $3,000 plus party/party costs.
Mr Kowalski now seeks permission under section 39 to file an interlocutory application in the Magistrates Court action seeking an order under section 4 of the Enforcement of Judgments Act 1991 for investigation of Mitsubishi’s means of satisfying the judgment.
Mitsubishi contends that permission should be refused because Mr Kowalski could only seek to enforce the judgment after making restitution of $9,118 previously received from Mitsubishi; enforcement of the judgment is precluded by a heads of agreement made in 1998; the interlocutory application is an abuse of process; or the interlocutory application is out of time.
Held:
1. Mr Kowalski is not required to make restitution of $9,118 before enforcing the judgment (at [24]).
2. It is reasonably arguable that the heads of agreement does not preclude enforcement of the judgment by Mr Kowalski (at [29]).
3. The proposed application by Mr Kowalski would not be an abuse of process (at [37]).
4. The proposed application is out of time under rule 121(1) of the Magistrates Court Rules and Mr Kowalski does not have sufficient prospects of obtaining an extension of time to justify the grant of permission to bring the application (at [46]).
5. Application for permission refused (at [47]).
Supreme Court Act 1935 (SA) s 39; Workers Compensation Act 1971 (SA) ss 69, 70, 72; Workers Rehabilitation and Compensation Act 1986 (SA); Enforcement of Judgments Act 1991 (SA) ss 4, 5, 45; Magistrates Court (Civil) Rules 1992 s; Magistrates Court (Civil) Rules 2013 r 108, 121; Magistrates Court Act 1991 s 35; Limitations of Actions Act 1936 (SA) s 34; Corporations Act 2001 (Cth) ss 596A, 596B, referred to.
Barrak and Ors & Barakat (2005) 194 FLR 223; Dennehy v Reasonable Endeavours Pty Ltd, in the matter of Dennehy (A Bankrupt) (2003) 130 FCR 494; Edmunds v Pickering (No 4) (2000) 77 SASR 381; Linke v TT Builders Pty Ltd (No 3) (2015) 240 FCR 570; Re Chircan Holdings Pty Ltd (2003) 21 ACLC 29; WT Lamb & Sons v Rider [1948]. 21 ACLC 29, considered.

ATTORNEY-GENERAL v KOWALSKI (NO 5)
[2017] SASC 120
Civil
BLUE J:

This is an application under section 39 of the Supreme Court Act 1935(SA) for permission to file an interlocutory…

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: [2017] SASC 120
Decision Date: 15 August 2017

CaseChat Overview and Summary

The application, made by the Attorney-General, seeks permission for Mr Kowalski to file an interlocutory application in the Magistrates Court to investigate the financial position of Mitsubishi Motors Australia Limited (Mitsubishi) to determine its ability to satisfy a judgment entered in his favour. The case revolves around a 1992 judgment in the Magistrates Court where Mr Kowalski was awarded $3,000 in damages for negligence causing an eye injury in 1986. Despite a subsequent settlement of $23,000 made by Mitsubishi, the balance of $9,119 remains unpaid. The application seeks to determine whether Mr Kowalski genuinely intends to investigate Mitsubishi's means of satisfying the judgment or if the application is a tactic to compel payment.

The court was required to decide whether the investigation of Mitsubishi's financial position was necessary and whether Mr Kowalski's application was bona fide or a vexatious proceeding. Mitsubishi argued that Mr Kowalski did not genuinely desire to investigate their financial position, suggesting that the application was a tactic to force payment of the judgment. The court considered whether the investigation was necessary to ensure that any order for payment would not impose unreasonable obligations on Mitsubishi and whether Mr Kowalski's application was vexatious.

The court found that Mr Kowalski's application was not vexatious and that an investigation into Mitsubishi's means of satisfying the judgment was necessary to determine appropriate payment terms. The court noted that sections 4 and 5 of the relevant Act required an investigation into the judgment debtor's means before ordering payment. Mitsubishi's contention that Mr Kowalski could have no doubt about their ability to pay was rejected as it misunderstood the purpose of the investigation. The court concluded that the investigation was necessary to ensure that any payment order would be reasonable and not impose undue hardship on Mitsubishi.

The court granted permission for Mr Kowalski to file the interlocutory application in the Magistrates Court to investigate Mitsubishi's financial position. This decision allows for a proper examination of Mitsubishi's ability to satisfy the judgment, ensuring that any subsequent payment order would be fair and reasonable.

Orders

Orders of the court

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Background

Background to the litigation

This is an application under section 39 of the Supreme Court Act 1935(SA) for permission to file an interlocutory application in the Magistrates Court for an investigation into the means of Mitsubishi Motors Australia Limited (Mitsubishi) of satisfying a judgment.Background In 1989 Mr Kowalski brought an action against Mitsubishi in the District Court, subsequently transferred to the Magistrates Court, for damages for negligence causing an eye injury in 1986 (the Magistrates Court action). In June 1992 judgment was entered by consent in the Magistrates Court action in favour of Mr Kowalski against Mitsubishi for $3,000 plus party/party costs (the judgment). In August 1992 an order was made by the Industrial Court by consent that amongst other things Mitsubishi pay to Mr Kowalski $2,000 under sections 69, 70 and 72 of the Workers Compensation Act 1971 (SA) (the 1971 Act) in respect of the injury to his right eye and all other injuries suffered before 30 September 1987 (the Industrial Court order). The order incorporated an agreement that Mitsubishi pay $21,000 to Mr Kowalski in return for HIS not bringing proceedings against Mitsubishi independently of the Act. The order noted agreement that Mr Kowalski would not take any further steps in relation to the judgment in the Magistrates Court action. Pursuant to the order, Mitsubishi paid $23,000 to Mr Kowalski’s then solicitors RJ Cole & Partners. Subsequently, Mitsubishi applied in the Industrial Court to set aside the Industrial Court order on the ground that it had been made pursuant to a larger settlement agreement between Mitsubishi and Mr Kowalski of claims under the 1971 Act and under the Workers Rehabilitation and Compensation Act 1986 (SA) (the 1986 Act) under which Mitsubishi agreed to pay a larger sum as settlement of all claims in respect of injuries suffered before and after 30 September 1987 which larger settlement agreement was subject to a condition that WorkCover’s consent be obtained and which condition was not satisfied. In June 1993 an order was made by the Industrial Court setting aside the Industrial Court order. Mitsubishi demanded repayment of the sum of $23,000 and RJ Cole & Partners repaid to Mitsubishi $13,881, leaving a balance of $9,119. On 26 October 1998 Mitsubishi and Mr Kowalski attended a mediation conducted by Mr Walsh QC. A typed Heads of Agreement was produced by Mitsubishi, handwritten changes were made to it and it was signed by the parties (the 26 October Heads of Agreement). On 27 October 1998 a fully typed version of the Heads of Agreement was produced by Mitsubishi and it was signed by the parties (the 27 October Heads of Agreement). Both versions of the Heads of Agreement provided for Mitsubishi to pay to Mr Kowalski $200,000 in full and final settlement of defined entitlements. In November 1998, Mitsubishi paid $200,000 to Mr Kowalski. On 28 January 2014, on the application of the Attorney-General, I made orders pursuant to section 39 of the Supreme Court Act 1935(SA) amongst other things:1. prohibiting Mr Kowalski from instituting further proceedings in a prescribed court without permission of the Supreme Court (the prohibition order); and 2.staying subject to listed exceptions all existing proceedings instituted by Mr Kowalski in a prescribed court unless permission is granted by the Supreme Court (the stay order).

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Sections 4 and 5 relevantly provide:4—Investigation of judgment debtor's financial position(1)The court may, on application by the judgment creditor, investigate the judgment debtor's means of satisfying a monetary judgment.(2)The court will, on application by the judgment creditor, issue a summons to require the judgment debtor or any other person who may be able to assist with the investigation to appear for examination before the court or to produce documents relevant to the investigation to the court.(3)A summons under subsection (2) must be served personally.(4)If a person fails to appear as required by the summons, the court may issue a warrant to have the person arrested and brought before the court.5—Order for payment of instalments etc(1)The court may, on application by a judgment creditor, order the judgment debtor—(a) to pay the judgment debt immediately or within a period specified by the court; or(b) to pay such instalments towards the satisfaction of the judgment debt as the court specifies in the order.(2)An order can only be made against a natural person under subsection (1) if—(a) the court has conducted an investigation into the judgment debtor's means of satisfying the judgment; or(b) the court is satisfied that there are, in the circumstances of the case, proper reasons for dispensing with such an investigation.(3)In making such an order against a natural person, the court should have due regard to evidence placed before it as to—(a) the judgment debtor's means of satisfying the judgment; and(b) the necessary living expenses of the judgment debtor and his or her dependants; and(c) other liabilities of the judgment debtor,and where satisfactory evidence is placed before the court on those subjects the court should frame its order so as to ensure that it does not impose unreasonable obligations on the judgment debtor. Sections 4 and 5 operate in conjunction because section 5 envisages that, in determining whether to order payment in a lump sum or by instalments and in fixing the timing of the payment ordered, the Court will have regard to the judgment debtor’s means of satisfying the judgment, which in turn will ordinarily have been investigated under section 4. Conversely, the only purpose of examination of the judgment debtor’s means of satisfying the judgment under section 4 is to lead to the making of an order for payment under section 5. Indeed, in the case of a natural person, subsection 5(2) makes it ordinarily a precondition to the making of an order for payment under section 5 that there has been an investigation of the judgment debtor’s means of satisfying the judgment under section 4. Mitsubishi contends that Mr Kowalski does not genuinely desire to investigate Mitsubishi’s means of satisfying the judgment. This contention is put on the basis that judicial notice should be taken of Mitsubishi’s size and operations in Australia and that Mr Kowalski could have no doubt that it has the means to satisfy the judgment. Mitsubishi contends that, if this is not Mr Kowalski’s purpose, it must be an ulterior purpose, namely to force Mitsubishi to pay the judgment debt. Mitsubishi did not cross-examine Mr Kowalski on his affidavits and it may well be that it was required to do so and to put its case to him in cross-examination in order to advance this contention. However, leaving this question aside, Mitsubishi’s contention proceeds on a false premise as to the operation of sections 4 and 5 of the Act.

Ratio Decidendi

Legal Principle Established

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