Attorney-General v Kowalski (No 6)

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SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

ATTORNEY-GENERAL v KOWALSKI (NO 6)

[2017] SASC 122

Judgment of The Honourable Justice Blue

17 August 2017

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

WORKERS' COMPENSATION - PROCEEDINGS TO OBTAIN COMPENSATION

PROFESSIONS AND TRADES - LAWYERS - DUTIES AND LIABILITIES - SOLICITOR AND CLIENT - NEGLIGENCE

TORTS - NEGLIGENCE - ESSENTIALS OF ACTION FOR NEGLIGENCE - DUTY OF CARE - SPECIAL RELATIONSHIPS AND DUTIES - EMPLOYER AND EMPLOYEE

Application under section 39 of the Supreme Court Act 1935 (SA) for permission to apply to reinstate an appeal or file a fresh appeal against dismissal of a professional negligence action.

In May 1989 Mr Kowalski suffered an injury to his back at work.  Mitsubishi made weekly payments of workers compensation for his time off work and paid his medical expenses.  Mr Kowalski retained RJ Cole & Partners in relation to a claim that his workers compensation payments take into account his overtime.

In April/May 1990 Mr Dowd, a solicitor employed by RJ Cole & Partners, advised Mr Kowalski that common law negligence proceedings should be instituted against Mitsubishi because a common law claim enabled a claim for damages for pain, suffering and loss of enjoyment of life as opposed to workers compensation.  Mr Dowd took instructions from Mr Kowalski that the system of draining oil from engines permitted oil to drain onto the floor on occasions and Mr Kowalski had slipped on a pool of oil on the floor. RJ Cole & Partners issued a summons in the District Court against Mitsubishi claiming damages for negligence. 

Mitsubishi filed a defence denying liability and specifically denying that there was oil on the floor when Mr Kowalski allegedly slipped as pleaded in the statement of claim.

In July 1991 Mr Dowd briefed a barrister, Michael Bell, to provide an opinion concerning liability and quantum. Mr Bell expressed the opinion that after apportionment for contributory negligence damages were likely to be assessed in the range $16,000 to $19,000. Mr Bell expressed the opinion that, on an assessment under section 43 of the Workers’ Rehabilitation and Compensation Act 1986 (SA) Mr Kowalski would be likely to receive between $15,000 and $18,750.

In September 1991 the action was listed for trial.  At that point, RJ Cole & Partners had not taken any steps, apart from having taken  brief statements from Mr Kowalski in May and December 1990, to seek to prove that in May 1989 oil was drained from Mitsubishi engines into watering cans and on occasions some of the oil missed the watering can and spilt on to the floor.  

The trial proceeded before Judge Lee in the District Court in December 1991 and March 1992.  No evidence was called at trial to support Mr Kowalski’s evidence that oil was drained from Mitsubishi engines into watering cans and spilt…

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Details
Case
[2017] SASC 122
Decision Date

CaseChat Overview and Summary

The case of Attorney-General v Kowalski (No 6) involved an application by Kazimir Kowalski under section 39 of the Supreme Court Act 1935 (SA) to reinstate or file a fresh appeal against the dismissal of a professional negligence action against RJ Cole & Partners. The dispute centred around the dismissal of Kowalski's action for professional negligence against his former solicitors. Kowalski had been employed by Mitsubishi Motors Australia Limited from 1964 to 1994, and the Workers Rehabilitation and Compensation Act 1986 (SA) applied to his case. Kowalski claimed that his former solicitors had been negligent in their handling of his case, particularly in relation to the preparation for trial and the assertion of claims. The central legal issues were whether the solicitors breached their duty of care in their professional conduct and if Kowalski's claims had sufficient merit to warrant the reinstatement of his appeal.

The court examined whether the dismissal of Kowalski's professional negligence action against RJ Cole & Partners was justified. It focused on the adequacy of the preparation for trial and the solicitors' failure to obtain detailed instructions and corroborative evidence. The court found that it was reasonably arguable that the solicitors did not take sufficient steps to ensure proper trial preparation and that a competent solicitor would have acted differently. The court held that Kowalski's claims regarding the solicitors' inadequate trial preparation were sufficiently arguable to warrant the reinstatement of his appeal. The court concluded that Kowalski had a reasonable prospect of success on appeal, particularly in relation to the recovery of costs charged by RJ Cole & Partners.

The outcome of the appeal was that permission was granted to Kowalski to reinstate or file a fresh appeal against the dismissal of his professional negligence action. The court ordered that the appeal be reinstated on the condition that it was limited to the claim for recovery of costs charged by RJ Cole & Partners. The court did not find merit in Kowalski's other claims and did not grant permission for those claims to be pursued on appeal.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

This is an application by Kazimir Kowalski under section 39 of the Supreme Court Act 1935(SA) for permission to apply to reinstate an appeal or file a fresh appeal in the same terms against the dismissal by a District Court Judge of a professional negligence action against RJ Cole & Partners.Background Between 1964 and 1994 Mr Kowalski was (apart from national service) employed by Mitsubishi Motors Australia Limited (Mitsubishi).[1] [1] Exhibit P89 Transcript of trial before Judge Lee, pages 3-5.Workers Compensation The Workers Rehabilitation and Compensation Act 1986 (SA) (the Act) came into force generally on 30 September 1987. It replaced the Workers Compensation Act 1971 (SA) (the former Act). The Act provided that a worker was entitled to compensation if he or she suffered a disability arising out of or in the course of employment.[2] Where the employer was an exempt employer (as was Mitsubishi), compensation was payable by the employer and otherwise by WorkCover.[3] The compensation scheme was a “no fault” scheme in that a worker was entitled to compensation regardless of whether the disability was the result of the employer’s negligence (or the worker’s negligence). [2] Workers Rehabilitation and Compensation Act 1986 (SA) section 30.[3] Workers Rehabilitation and Compensation Act 1986 (SA) section 63(1). There were three primary categories of compensation payable under the Act in respect of a compensable disability:1. weekly income maintenance payments (income maintenance) during incapacity as a result of the compensable disability,[4] which could be commuted to a lump sum representing the capital value of future weekly payments for permanent incapacity (subject to a prescribed cap);[5] 2. payment of expenses for medical, hospital or other treatment or other incidental matters (collectively medical expenses compensation) reasonably incurred as a result of the compensable disability;[6]3. lump sum compensation for non-economic loss when permanent disability resulted from the compensable disability (non-economic loss compensation), being a percentage (depending on the nature and degree of the disability) of a prescribed sum that was $75,100 in respect of injuries suffered in 1989.[7][4] Workers Rehabilitation and Compensation Act 1986 (SA) section 35.[5] Workers Rehabilitation and Compensation Act 1986 (SA) section 42.[6] Workers Rehabilitation and Compensation Act 1986 (SA) section 32.[7] Workers Rehabilitation and Compensation Act 1986 (SA) section 43. Decisions in respect of compensation were initially made by the exempt employer or WorkCover as applicable[8] and were subject to review initially by a Review Officer[9] and then on appeal by the Workers Compensation Appeal Tribunal.[10] [8] Workers Rehabilitation and Compensation Act 1986 (SA) sections 53 and 63(1).[9] Workers Rehabilitation and Compensation Act 1986 (SA) sections 77, 95 and 96.[10] Workers Rehabilitation and Compensation Act 1986 (SA) sections 78 and 97. A worker was not liable to pay the costs of WorkCover or the exempt employer if unsuccessful in a proceeding for compensation before a review authority (Review Officer or Workers Compensation Appeal Tribunal) unless the review authority held the proceeding to be frivolous or vexatious and exercised a discretion to order payment of such costs.[11] A worker was entitled to reimbursement of his or her own legal costs incurred in a proceeding for compensation if successful or if the review authority certified that the worker acted reasonably in bringing the proceeding.[12] Accordingly, provided that a worker acted reasonably in bringing a proceeding for compensation, the worker recovered his or her own legal costs and was not liable to pay the opponent’s legal costs.[11] Workers Rehabilitation and Compensation Act 1986 (SA) section 92(3).[12] Workers Rehabilitation and Compensation Act 1986 (SA) section 92(2).

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The only head of damages which has sufficient prospects of success to justify the grant of permission under section 39 is the claim for recovery of the costs charged by RJ Cole & Partners in respect of the common law action.Conclusion Mr Kowalski’s contention that Judge Anderson erred in rejecting his section 43 negligence case is reasonably arguable and if successful on appeal I consider that an order would be made on appeal that he recover the costs charged by RJ Cole & Partners in respect of the common law action but no other damages.Inadequate trial preparation caseLiability Mr Kowalski contends that Judge Anderson erred in rejecting his inadequate trial preparation case.[141] [141] General ground of appeal 2; Specific grounds of appeal 3, 10, 12, 16, 31, 32, 34, 35 and 72 (FDN 105). Judge Anderson’s conclusion that Mr Dowd was not negligent in pleading and preparing the matter for trial are principally encompassed in the following passages:He [Mr Dowd] sought medical reports, but issued proceedings without receiving them all. He did so without showing the final statement of claim to the plaintiff. Whilst, with the benefit of hindsight, such a step may have been prudent, to proceed in that way is neither negligent nor otherwise a breach of this second retainer.…The Plaintiff’s present Statement of Claim and evidence contains many complaints about how that matter was prepared initially, how it was conducted through the pre-trial stages and at trial, how other evidence and witnesses were not obtained, and that it was listed and heard when the Plaintiff was not emotionally stable………No issue estoppel can have arisen because of the nature of the matter in contention, namely causation, and because of the manner in which the Review was concluded. Despite all that the Plaintiff said at trial, in those proceedings, whether or not there was an incident on 9 May 1989 was not in issue. Thus, on this basis there was no issue at large in the common law proceedings which had previously been determined by a tribunal so as to give rise to an issue estoppel.…In my opinion, the plaintiffs common law claim from commencement to conclusion, was conducted in a proper manner by Mr Dowd and those whom he used as counsel and particularly Mr Ward at trial.When looking at the conduct of a file by an experienced and busy common law solicitor, as Mr Dowd was, and as Mr Bryant of counsel offered in evidence, it might nearly always be possible to find that more diligence may have been appropriate in certain instances or at certain times throughout the life of the matter. However, a shortcoming in diligence on occasions is a long way short of establishing a breach of the duty solicitor owes to his client.…The Plaintiff has failed to show, in relation to the second retainer, that the Defendants or any of them, are in breach of their contract of retainer with him or have been negligent in the performance of the duty to him. Before instituting the back injury action in August 1990, Mr Dowd only took superficial instructions from Mr Kowalski relevant to alleging negligence by Mitsubishi causing Mr Kowalski’s back injury. It is reasonably arguable that a competent solicitor would have taken detailed instructions from Mr Kowalski and, given that it was common ground between Mr Kowalski and Mitsubishi at trial, would have ascertained that the question whether oil trays were or were not installed on engine stands was a red herring or peripheral at best. The real issues were whether in May 1989 fixed engine stands were used to any extent to drain oil horizontally out of engines or rotating engine stands were exclusively used to drain oil vertically out of engines; whether oil drained out of engines using rotating engine stands spilt on the floor on occasion; and whether Mitsubishi implemented an adequate system to clean up spills as soon as reasonably practicable after they occurred. It is arguable that a competent solicitor would have sought corroborating evidence in respect of the draining of oil out of engines and the cleaning up of oil spills, including from fellow Mitsubishi employees working in or observing the rework area, either by seeking details of fellow employees from Mr Kowalski or, if that did not produce satisfactory corroboration, engaging a private investigator to make inquiries of potential witnesses.

Ratio Decidendi

Legal Principle Established

On 25 September 1991, the action was listed for trial to commence on 5 December 1991. Preparation for trial On 9 October 1991 Mr Dowd briefed barrister Richard Ward as counsel for Mr Kowalski to appear at the trial.[62][62] Exhibit P72. On 22 October 1991 RJ Cole & Partners filed in the District Court a notice of acting for Mr Kowalski in the eye injury action.[63] On 14 November 1991 the action was transferred to the Magistrates Court on their application.[64][63] Exhibit P108.[64] Exhibit P109. On 20 November 1991 Mr Dowd attended on Mr Kowaski to prepare a consolidated statement.[65] The consolidated statement did not contain any further details concerning the slip on 9 May 1989 or negligence by Mitsubishi. [65] Exhibit P86. On 3 December 1991 Mr Kowalski spoke to Mr Dowd and suggested that Mr Dowd take statements from Gary Hayworth and Peter Doughty.[66][66] Exhibit P174. On 3 December 1991 Mr Dowd took a statement from Mr Hayworth saying that he fitted trays to the trolleys which hold engines and he believed that it was after Mr Kowalski’s fall. On 4 December Mr Dowd sent the statement to Mr Ward.[67] On 5 December Mr Dowd took a further statement from Mr Hayworth in which Mr Hayworth said that he knew that oil trays were fitted after Mr Kowalski’s accident because he had heard about his accident at the time and that there had often been oil on the floor.[68][67] Exhibit P87.[68] Exhibits P96.Trial before Judge Lee On 5 December 1991 the trial commenced before Judge Lee and continued on 6, 9 and 10 December. Evidence was given by Mr Kowalski, Dr Balkwill, Mr Hone, Mr Moss and Mrs Kowalski. The trial was then adjourned to a date to be fixed.[69][69] Exhibit P89 Transcript of trial before Judge Lee. During his evidence in chief, Mr Kowalski said that before his accident engine stands were used to support the engine vertically and oil was drained out sideways into a bucket and sometimes spilt on the floor; whereas after his accident rotating engine stands were used in which the oil drained downwards which was a much safer method.[70] Mr Kowalski said that after his accident he saw engine stands fitted with drip trays but he had not seen such drip trays before his accident.[71] In cross-examination, Mr Kowalski said that he could not be definitive that the rotating engine stands were not also used (in addition to the fixed stands) before his accident or that engine stands with drip trays were not also used (in addition to stands without trip trays) before his accident.[72][70] Exhibit P89 Transcript of trial before Judge Lee, pages 23-35; 65-66. [71] Exhibit P89 Transcript of trial before Judge Lee, page 65. [72] Exhibit P89 Transcript of trial before Judge Lee, pages 125-129. On 14 January 1992 Mr Kowalski telephoned Mr Dowd. Mr Kowalski explained that the existence of a drip tray on the engines would not have affected oil spilled onto the ground during draining because the oil was drained out of the side of the engine beyond the drip tray.[73][73] Exhibit P100.