Kondratenko v Kennards Storage Management Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Kondratenko v Kennards Storage Management Pty Ltd [2024] FCA 913  

File number(s): QUD 18 of 2024
Judgment of: MEAGHER J
Date of judgment: 15 August 2024
Catchwords: PRACTICE AND PROCEDURE – application for summary judgment pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) and r 26.01(1) of the Federal Court Rules 2011 (Cth) – whether the applicant has a reasonable prospect of successfully prosecuting the proceeding – whether a reasonable cause of action is disclosed – whether the proceeding is frivolous or vexatious – whether the proceeding constitutes an abuse of process – where applicant entered into a storage space hire agreement with the first respondent – where applicant claims non-compliance with Australian Consumer Law on the basis of incorrect billing statements – where any alleged overcharges credited – where first respondent apologised for the statement of account that omitted to include relevant entries – where no reasonable cause of action disclosed – where proceedings commenced for an improper purpose – summary judgment granted in favour of the respondents
Legislation:

Competition and Consumer Act 2010 (Cth)

Federal Court of Australia Act 1976 (Cth)

Federal Court Rules 2011 (Cth)

Personal Injuries Proceedings Act 2002 (Qld)
Cases cited:

Ashby v Slipper (2014) 219 FCR 322; [2014] FCAFC 15

Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11

Birch v National Australia Bank Ltd; Campbell v Illawarra Gold Club (No 5) [2014] NSWSC 949

Crocker v Toys ‘R US (Australia) Pty Ltd (No 3) [2015] FCA 728

Hamilton v Oades (1989) 166 CLR 486

Moti v R (2011) 245 CLR 456

New Asian Shipping Co Ltd v Omar Farooq Sultan [2005] QSC 228

Pathmanathan v Healthscope Operations Pty Ltd [2020] FCA 65

Pickering v Centrelink [2008] FCA 561

Re Cameron [1996] 2 Qd R 218

Shumack v Commonwealth of Australia [2009] FCA 775

Spencer v The Commonwealth of Australia (2010) 241 CLR 118

Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1

Walton v Gardiner (1993) 177 CLR 378; [1993] HCA 77
Division: General Division
Registry: Queensland
National Practice Area: Commercial and Corporations
Sub-area: Regulator and Consumer Protection
Number of paragraphs: 43
Date of hearing: 23 May 2024
Counsel for the Applicant: The Applicant appeared in-person
Counsel for the Respondents: Ms HL Lilley
Solicitor for the Respondents: Piper Alderman

ORDERS

QUD 18 of 2024
BETWEEN:

KONSTANTIN KONDRATENKO

Applicant
AND:

KENNARDS STORAGE MANAGEMENT PTY LTD

First Respondent

SAM KENNARD, CEO OF KENNARDS SELF STORAGE

Second Respondent

ORDER MADE BY:

MEAGHER J

DATE OF ORDER:

15 AUGUST 2024

THE COURT ORDERS THAT:

1.Pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) and r 26.01(1) of the Federal Court Rules 2011 (Cth), judgment be entered in favour of the respondents in relation to the whole of the proceeding.

2.Within 7 days of the date of this order, the applicant advise the first respondent and its solicitor of a…

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Details
Case
[2024] FCA 913
Decision Date

CaseChat Overview and Summary

The matter before the court involves an application for summary judgment by the applicant, Kondratenko, against the first respondent, Kennards Storage Management Pty Ltd, in relation to a storage space hire agreement. The applicant alleges that the first respondent did not comply with the Australian Consumer Law (ACL) due to incorrect billing statements. Specifically, the applicant claims that he was charged an incorrect amount for a security callout fee and that he had already paid a lock cutting and new lock charge. The first respondent has apologised for the error in the statement of account and has credited any alleged overcharges. The court was required to determine whether the applicant had a reasonable prospect of successfully prosecuting the proceeding, whether a reasonable cause of action was disclosed, whether the proceeding was frivolous or vexatious, and whether the proceeding constituted an abuse of process.

The court found that the applicant's claims were without merit and that the proceeding was frivolous and vexatious. The court examined the evidence provided by both parties and concluded that the applicant had no reasonable prospect of success in prosecuting the proceeding. The court noted that the first respondent had already credited any alleged overcharges and had apologised for the error in the statement of account. The court also found that the applicant's claims were contradicted by the available documents and other materials, and that the proceeding was commenced for an improper purpose. As such, the court granted summary judgment in favour of the respondents.

The court ordered that judgment be entered in favour of the respondents in relation to the whole of the proceeding. The applicant was required to advise the first respondent and its solicitor of a date, time, and location for the return of his remaining possessions within seven days of the date of the order. If the applicant did not comply with the order, the first respondent was authorised to dispose of the applicant's remaining possessions in the manner provided for in the Storage Agreement. The applicant was also ordered to pay the respondents' costs as agreed or assessed.

Orders

Orders of the court

1. Pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) and r 26.01(1) of the Federal Court Rules 2011 (Cth), judgment be entered in favour of the respondents in relation to the whole of the proceeding.

2. Within 7 days of the date of this order, the applicant advise the first respondent and its solicitor of a date, a time during business hours and a location within 15 kilometres of 1 Olympic Circuit, Southport Queensland that his remaining possessions may be returned to him.

3. If the applicant does not comply with order 2, the first respondent may dispose of the applicant’s remaining possessions in the manner provided for in the Storage Agreement dated 27 October 2023.

4. The applicant pay the respondents’ costs as agreed or assessed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

For the reasons that follow, the interlocutory application is allowed. BACKGROUND On or around 27 October 2023, the applicant entered into a storage space hire agreement with the first respondent in which the first respondent agreed to provide a storage space to the applicant (Agreement). For present purposes, it is useful to set out the following parts of the contract: •Cost incurred by the Operator for return cheque failed CC/DD, or security callout event caused by the Storer will be on charged to the Storer. …2.1 In consideration of the payments of the Monthly Storage Payments to be made by the Storer under this Agreement, the Operator will provide the Storer with use of the Space for the purpose of storing goods in the Space in accordance with this Agreement. …3.5 The Storer is also liable for and must pay the Operator’s reasonable actual cost incurred as a result of: …(c) any security call-out caused by the Storer accessing the Space or the Facility; and … 8. TERMINATION OF THE AGREEMENT BY NOTICE 8.1 The Storer may terminate the Agreement by giving the Operator at least 1 business day’s written notice, and the Operator may terminate the Agreement by giving the Storer 14 days’ written notice. …8.3 If after 7 days from the date of termination under this clause any Goods remain within the Space or the Facility, then those Goods will be deemed abandoned by the Storer and may be seized by the Operator and sold or disposed of in accordance with clauses 9.2 or 10. On 27 November 2023, following a declined automated credit card payment, the first respondent’s Southport office sent the applicant an email attaching a statement of account (First Statement). Ms Kellie Robley, Operations Manager of the first respondent, deposes that the First Statement was automatically generated by a computer system and incomplete. The First Statement had seven entries, the last of which was a ‘LockCut + NewLock’ charge of $25.00 on 17 November 2023. The First Statement also included a charge of $85.00 with the description of ‘Security Call Out’ on 4 November 2023. On the same day, the applicant emailed the first respondent expressing his concern that he had been informed that the security callout fee was $65.00, rather than $85.00 as appeared on the First Statement. He also informed the first respondent that he had already paid the $25.00 lock cutting and new lock charge and attached a receipt of the payment. On 5 December 2023, the applicant attended the first respondent’s facility and deposes as to the following exchanges he had with front desk staff: 9. Lisa at the front office firstly started by telling me they never received the email in their system - which is quite strange because every email after this was received without an issue and I have a record of my original email being sent - I believe this is another attempt to muddy the waters, bully me and attempt to agitate me in my vulnerable position.10. After I showed them the issue and explained that I have a receipt for the lock cutting fee on the 17th November - Lisa at the front office in yet another pattern of bullying behaviour - rather than accepting accountability for their mistake - attempted to change the story and instead insisted that the statement was not "incorrect" - as I had stated but rather that the statement was "incomplete". This did not make sense to me - as an invoice or charge that is attempted on a card which results in a higher amount being charged for an item that had all ready [sic] been purchased would in essence be an incorrect charge and any related statements would be incorrect either - the attempt to change the story and claim that the system never made a mistake was yet another bullying attempt of arrogance towards the vulnerable by Kennards that shows how far they would be willing to go to not accept accountability for their mistakes - the conversation between Lisa, her staff member and myself lasted for 40 minutes - as they continued to try to prove to me that it was not in fact the system that was incorrect but rather that the statement was simply incomplete.11. After 40 minutes of me explaining that the statement and charge was INCORRECT due to the fact that I had all ready [sic] paid for the lock cutting fee - and after Lisa and the other staff member realised I would not back down or be intimidated by their fake story – they resorted to keeping me locked out of my storage space and then THREATENING TO CALL THE POLICE. This is despite the fact that I had made no threat to them nor did I raise my voice - it is very clear they knew that as a homeless person this would be a useful tactic to get me to dissipate and allow them to continue their pattern of bullying – I left the office without being able to get access to my items and quite agitated in the fact that a simple truth had been systematically distorted and the full weight of Kennards corporate bullying tactics being brought down upon me simply for pointing out a simple fact that I had been double charged for the lock cutting fee.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Pursuant to r 26.01(1) of the Rules, a party may make an application seeking summary judgment: 26.01Summary judgment(1)A party may apply to the Court for an order that judgment be given against another party because:(a) the applicant has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding; or(b) the proceeding is frivolous or vexatious; or(c) no reasonable cause of action is disclosed; or(d) the proceeding is an abuse of the process of the Court; or(e) the respondent has no reasonable prospect of successfully defending the proceeding or part of the proceeding. The power conferred by section 31A of the Act reflects a broadening of the Court’s power to deal with unmeritorious claims. In Spencer v Commonwealth of Australia (2010) 241 CLR 118; [2010] HCA 28, French CJ and Gummow J stated the following at [24] in respect of the Court’s power to summarily dismiss proceedings on the basis that the pleadings fail to disclose a reasonable cause of action, that the action is frivolous or vexatious or constitutes an abuse of process: The exercise of powers to summarily terminate proceedings must always be attended with caution. That is so whether such disposition is sought on the basis that the pleadings fail to disclose a reasonable cause of action or on the basis that the action is frivolous or vexatious or an abuse of process. The same applies where such a disposition is sought in a summary judgment application supported by evidence. As to the latter, this court in Fancourt v Mercantile Credits Ltd said:“The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried.”More recently, in Batistatos v Roads and Traffic Authority (NSW) Gleeson CJ, Gummow, Hayne and Crennan JJ repeated a statement by Gaudron, McHugh, Gummow and Hayne JJ in Agar v Hyde which included the following:“Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways,51 but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.”There would seem to be little distinction between those approaches and the requirement of a “real” as distinct from “fanciful” prospect of success contemplated by s 31A. That proposition, however, is not inconsistent with the proposition that the criterion in s 31A may be satisfied upon grounds wider than those contained in pre-existing Rules of Court authorising summary dispositions.(Citations omitted) Further, in Spencer, Hayne, Crennan, Kiefel and Bell JJ considered the nature of the reasonable prospect of success test at [52]: Second, effect must be given to the negative admonition in subs (3) that a defence, a proceeding, or a part of a proceeding may be found to have no reasonable prospect of successful prosecution even if it cannot be said that it is “hopeless” or “bound to fail”. It will be necessary to examine further the notion of “no reasonable prospect”. But before undertaking that task, it is important to begin by recognising that the combined effect of subss (2) and (3) is that the enquiry required in this case is whether there is a “reasonable” prospect of prosecuting the proceeding, not an enquiry directed to whether a certain and concluded determination could be made that the proceeding would necessarily fail.

Ratio Decidendi

Legal Principle Established

In Pathmanathan v Healthscope Operations Pty Ltd [2020] FCA 65 at [8], Steward J helpfully summarised the principles relating to summary judgment: (1) the legislative purpose of s 31A is to strengthen “the power of the court to deal with unmeritorious matters by broadening the grounds on which federal courts can summarily dispose of unsustainable cases”: Second Reading Speech of the Migration Litigation Reform Bill 2005 (Cth); (2) the moving party bears the onus of persuading the court that the opponent has no reasonable prospect of success: Australian Securities and Investments Commission v Cassimatis (2013) 220 FCR 256 at 271 [46] per Reeves J.; Crayford Freight Services Ltd v Coral Seatel Navigation Co (1998) 82 FCR 328 at 333 per Burchett, Ryan and Marshall JJ; (3) assessment of whether a proceeding or a part of a proceeding has no reasonable prospect of success will necessarily require: (i) identification of the cause of action pleaded; (ii) identification of the pleaded facts said to give rise to that cause of action; (iii) a review of the evidence (if any) tendered in support of the claim for judgment; (iv) identification of the defence pleaded; (v) identification of any facts pleaded which are said to give rise to the defence; and (vi) a review of the evidence (if any) tendered in defence of the claim: Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372 at 406 –407 [126] per Gordon J.; (4) once a moving party has established a prima facie case that the opponent has no reasonable prospect of success, the opposing party must respond by pointing to specific factual or evidentiary disputes that make a trial necessary; general or non-particularised denials will be insufficient to defeat the motion; Jefferson Ford Pty Ltd at 407 [127] per Gordon J. citing Fortron Automotive Treatments Pty Ltd v Jones (No 2) [2006] FCA 1401 at [22] per French J. (as his Honour then was); (5) summary disposition of a proceeding is authorised on a variety of bases. It will, for example and without limitation, be appropriate in a case: (i) in which the pleadings disclose no reasonable cause of action and their deficiency is incurable; (ii) in which there is unanswerable or unanswered evidence of a fact fatal to the pleaded case and in any case which might be propounded by permissible amendment; or (iii) that is “frivolous or vexatious or an abuse of process”: Spencer v Commonwealth (2010) 241 CLR 118 at 131 [22] per French CJ and Gummow J.;(6) the determination of a summary dismissal application does not require a mini-trial based upon incomplete evidence to decide whether a proceeding is likely to succeed or fail at trial. Instead, it requires a critical examination of the available materials to determine whether there is a real question of law or fact that should be decided at trial: Cassimatis at 271 [46] per Reeves J.; and(7) an application for summary dismissal is likely to succeed if the moving party is able to demonstrate that the applicant’s success in the proceeding relies upon a question of fact that can be truly described as “fanciful, trifling, implausible, improbable, tenuous or one that is contradicted by all the available documents or other materials”: Cassimatis at 272 [47] per Reeves J.CONSIDERATION