Kowalski v Bourne
[2017] SASCFC 24
•24 March 2017
SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Civil)
KOWALSKI v BOURNE
[2017] SASCFC 24
Judgment of The Full Court
(The Honourable Justice Blue, The Honourable Justice Nicholson and The Honourable Justice Hinton)
24 March 2017
WORKERS' COMPENSATION - PROCEEDINGS TO OBTAIN COMPENSATION - DETERMINATION OF CLAIMS - APPEALS, JUDICIAL REVIEW AND STATED CASES - RIGHT OF APPEAL
ESTOPPEL - ESTOPPEL BY JUDGMENT - RES JUDICATA OR CAUSE OF ACTION ESTOPPEL
ESTOPPEL - ESTOPPEL BY JUDGMENT - ANSHUN ESTOPPEL
LIMITATION OF ACTIONS - LIMITATION OF PARTICULAR ACTIONS
PROFESSIONS AND TRADES - LAWYERS - COMPLAINTS AND DISCIPLINE - DISCIPLINARY PROCEEDINGS - SOUTH AUSTRALIA
Appeal against judgment of Full Court of Industrial Relations Court.
The appellant issued a summons in the Industrial Relations Court against the respondent claiming that he breached section 41 of the Workmen’s Compensation Act 1971 by recovering costs in respect of proceedings under the Act in the absence of an order of the Court awarding those costs.
The respondent brought a strike out application on the ground that no reasonable cause of action was disclosed or the proceeding was an abuse of process seeking to relitigate matters previously determined in earlier proceedings.
The Judge summarily dismissed the summons on the ground that the Court did not have jurisdiction to entertain the claim; it was statute-barred in any event; and it was an abuse of process because the appellant was engaging in oppressive and unfair conduct by relitigation of the costs issued.
The Full Court of the Industrial Relations Court held that the Judge erred on the issues of jurisdiction and time limitation. However, the Full Court held that the proceeding was an abuse of process because it was brought for the improper purpose of harassing the respondent and made an order staying the proceeding in lieu of the Judge’s dismissal of it.
The appellant appeals against the judgment of the Full Court on the ground that it erred in law in holding that the proceeding was an abuse of process as brought for an improper purpose. The respondent seeks permission to file a notice of contention that the Full Court erred on the jurisdiction and time limitation issues; erred in failing to hold that res judicata precluded the proceeding; and erred in failing to find that the matter should have been raised by the appellant in previous proceedings and the summons was therefore an abuse of process.
Held:
1. (Per Blue J at [33], [86] and [87], Nicholson and Hinton JJ agreeing)
Permission should be granted to the respondent to file the notice of contention except the res judicata contention.
2. (Per Blue J at [53], Nicholson J agreeing)
The Industrial Relations Court had jurisdiction to entertain the claim.
(Per Hinton J at [144])
The Industrial Relations Court did not have jurisdiction to entertain the claim.
3. (Per Blue J at [60], Hinton J agreeing)
The claim was not statute-barred.
(Per Nicholson J at [115])
The claim was statute-barred.
4. (Per Blue J at [79], Hinton J agreeing)
The Full Court erred in law in holding that the proceeding was an abuse of process as brought for an improper purpose because this was not the basis of the strike-out application by the respondent, had not been decided by the Judge below, and the appellant was not afforded procedural fairness in relation to this question.
(Per Nicholson J at [102])
The Full Court did not err in holding that the proceeding was an abuse of process.
5. (Per Blue J at [85]-[86], Nicholson and Hinton JJ agreeing)
The claim was not barred by res judicata principles and permission to file a notice of contention on this ground should be refused.
6. (Per Blue J at [95], Hinton J agreeing)
The Judge below erred in holding that the proceeding was an abuse of process on the relitigation ground given the manner in which that contention was advanced by the respondent before the Judge.
7. (Per Nicholson J at [116] and Hinton J at [151])
Appeal allowed. Order of the Full Court set aside and in lieu thereof appeal from the Judge be dismissed.
(Per Blue J at [100])
The appeal should be allowed, the judgment of the Full Court set aside, the respondent’s strike-out application dismissed and the matter remitted to the Industrial Relations Court to hear and determine the proceeding.
Limitations of Actions Act 1936 (SA) s 35, s 38; Solicitors Act 1957 (UK) s 69(2)(iii); Worker’s Rehabilitation and Compensation Act 1986 (SA) sch 1; Workmen’s Compensation Act 1971 (SA) s 21, s 41, s 47, s 125, s 130; Workers Compensation Rules 1980 (SA) r 120(1), r 122, r 123(1), r 125, r 126, r 127; Trade Practices Act 1974 (Cth); Fair Trading Act 1987 (SA); Legal Practitioners Act 1981 (SA) s 42; Industrial Conciliation and Arbitration Act 1972 (SA) s 15(1)(e); Attorneys and Solicitors Act 1870 (UK); Legal Practitioners (Miscellaneous) Amendment Act 2013 (SA) s 42; Fair Work Act 1994 (SA) s 8; Industrial and Employees Relations Act 1994 (SA) s 8; Magistrates Court (Civil) Rules 2013 (SA) r 104; Magistrates Court Act 1991 (SA) s 40, referred to.
Adelaide Assemblers Ltd v Kutos and Freeway Motors Ltd (1974) 9 SASR 102; Attorney-General v Knight [2014] VSC 549; Clare v Joseph [1907] 2 KB 369; Electrical Trades Union v Tarlo [1964] Ch 720; McDonald v The State of South Australia [2011] FCA 297; Re P’s Bill of Costs (1982) 45 ALR 513; Spalla v St George Motor Finance Ltd (No 6) [2004] FCA 1699; State Bank of New South Wales v Stenhouse Ltd (1997) Aust Torts Reports 81-423; The King v War Pensions Entitlement Appeal Tribunal; Ex parte Bott (1933) 50 CLR 228; The Queen v Industrial Court of South Australia; Ex parte General Motors-Holden Pty Ltd (1975) 10 SASR 582; Union v Tarlo [1964] Ch 720; Woolf v Snipe (1933) 48 CLR 677, discussed.
4WD Pty Ltd v McNamara [2009] SASC 274; Australian Education Union v Department of Education and Children's Services (2012) 248 CLR 1; Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256; Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853; Clare v Joseph [1907] 2 KB 369; Clyne v New South Wales Bar Association (1960) 104 CLR 186; DA Starke Pty Ltd v Yardoo Pty Ltd (2009) 262 LSJS 248; Emeritus Pty Ltd v Mobbs (unreported, New South Wales Supreme Court, 27/6/1991); Ex parte The Amalgamated Engineering Union (Australian Section); Re Jackson (1937) 38 SR (NSW) 13; Harrison v Tew [1990] 1 ALL ER 321; In re A Solicitor [1961] 1 Ch 491; Jago v District Court (NSW) (1989) 168 CLR 23; Knight v FP Special Assets Ltd (1992) 174 CLR 178; Kooky Garments Ltd v Charlton [1994] 1 NZLR 587; Kowalski v Bourne [2011] SAIRC 62; Kowalski v Bourne [2012] SASC 6; Kowalski v Bourne and RJ Cole & Partners [2015] SAIRC 17; Kowalski v Cole & Ors; Kowalski v Bourne [2015] SASCFC 169; Kowalski v Stanley & Partners & Anor [2014] SASC 198; Metropolitan Bank Ltd v Pooley (1885) 10 App Cas 210; Myers v Elman [1940] AC 282; New South Wales Crime Commission v Fleming (1991) 24 NSWLR 116; O'Keefe v Williams (1907) 5 CLR 217; Plaintiff M47/2012 v Director-General of Security (2012) 251 CLR 1; R v Dick [1982] Tas R 252; R v Turner [1970] 2 QB 321; Re a Barrister & Solicitor (1979) 40 FLR 1; Re a Solicitor [1960] VR 617; Re Feez Ruthning’s Bill of Costs [1989] 1 Qd R 55; Richfort Pty Ltd v Baluyut (1999) 9 NTLR 58; Rogers v Legal Services Commission of South Australia (1995) 64 SASR 572; Sanderson v Glass (1742) 2 Atk 296; Storer & Co v Johnson (1890) 15 App Cas 203; Tomlinson v Ramsey Food Processing Pty Limited [2015] HCA 28; Voth v Manildra Flower Mills Pty Ltd (1990) 171 CLR 538; Walton v Gardiner (1993) 177 CLR 378; Williams v Spautz (1992) 174 CLR 509; Wentworth v Graham [2003] NSWCA 307; Kowalski v Cole & Others [2011] SAIRC 61; Kowalski v Cole & Others [2011] SAIRC 61, considered.
KOWALSKI v BOURNE
[2017] SASCFC 24Full Court: Blue, Nicholson and Hinton JJ
BLUE J: This is an appeal against a judgment of the Full Court of the Industrial Relations Court on appeal from a judgment of a single Judge of that Court.
The appellant Kazimir Kowalski issued a summons in the Industrial Relations Court against the respondent Tim Bourne claiming that he breached section 41 of the Workmen’s Compensation Act 1971 (SA) (the Act) by recovering costs in respect of proceedings under the Act in the absence of an order of the Court awarding those costs (the Bourne proceeding).
On Mr Bourne’s strike out application, the Judge dismissed Mr Kowalski’s claim.[1] The Judge held that the Industrial Relations Court had no jurisdiction to entertain the claim; the claim was statute-barred in any event; and the prosecution of the proceeding was an abuse of process having regard to Anshun principles and alternatively to the wider concept of abuse of process by relitigation.
[1] Kowalski v Bourne [2011] SAIRC 62.
On Mr Kowalski’s appeal, the Full Court changed the form of the Judge’s order from dismissal to a stay and otherwise dismissed the appeal.[2] The Full Court held that the Judge erred on the issues of jurisdiction and time limitation. The Full Court held that the proceeding was an abuse of process because it was brought for the improper purpose of harassing Mr Bourne.
[2] Kowalski v Bourne and RJ Cole & Partners [2015] SAIRC 17 at [97]-[98].
Mr Kowalski appeals to this Court against the order of the Full Court. Section 47 of the Act confers a right of appeal to this Court from any order or decision of the Full Court of the Industrial Relations Court on a matter of law.[3]
[3] Kowalski v Cole & Ors; Kowalski v Bourne [2015] SASCFC 169 at [31]-[32] per Kourakis CJ, Blue and Nicholson JJ.
Mr Kowalski contends that the Full Court erred in holding that the proceeding was an abuse of process. Mr Bourne seeks permission to file a notice of contention submitting that the Full Court erred in holding that the Industrial Relations Court had jurisdiction to entertain Mr Kowalski’s claim and that the claim was not statute-barred; and that the Full Court erred in failing to hold that the matters the subject of the Bourne proceeding had been finally determined in a previous proceeding or should have been raised by Mr Kowalski in previous proceedings and the Bourne proceeding was therefore an abuse of process.
Although the Act was repealed with effect on 30 September 1987 by the Worker’s Rehabilitation and Compensation Act 1986 (SA), under the transitional provisions of the latter Act, the Act continues to apply in respect of a disability attributable to trauma occurring before 30 September 1987.[4]
[4] Clause 2(1) of the First Schedule.
Background
In 1986, Mr Kowalski suffered an eye injury while employed by Mitsubishi Motors Australia Ltd (Mitsubishi). This injury was governed by the Act. In January 1988, Mr Kowalski retained Stanley & Partners, and in particular Mr Bourne, to act for him in claims for workers compensation and at common law.
In August 1989, Mr Bourne filed a summons in the District Court on behalf of Mr Kowalski against Mitsubishi (the eye injury action). The action was for damages for negligence and in the alternative sought an assessment of the amount to which Mr Kowalski was entitled for workers compensation under the Act.
In January 1991, Mr Bourne advised Mr Kowalski that he should file an application in the Industrial Court to finalise Mr Kowalski’s workers compensation claim and prepared an application in the general form and a letter to Mitsubishi’s solicitors for that purpose.
In February 1991, Mr Kowalski instructed RJ Cole & Partners to take over from Stanley & Partners the conduct of his eye injury claims and they did so in mid-1991. In February 1991, Stanley & Partners rendered accounts to Mr Kowalski for $2,302.[5]
[5] All dollar figures are rounded down to the nearest whole dollar. The total included a bill for $150 for unrelated defamation advice
In September 1991, Mr Kowalski informed Mr Bourne that he required Stanley & Partners to tax their costs.[6] A bill in taxable form was prepared. In November 1991, Stanley & Partners rendered an account for an additional $4,009 for the costs of preparing the bill in taxable form and some other work not included in the original accounts to charge Mr Kowalski a total of $6,311 as shown in the bill.
[6] This was conveyed by RJ Cole & Partners acting for Mr Kowalski.
In July 1992, RJ Cole & Partners filed an application in the general form in the Industrial Court to finalise Mr Kowalski’s workers compensation claims in respect of the eye injury and other injuries governed by the Act (the 1992 workers compensation proceeding).
In January 1993, Stanley & Partners filed in the Magistrates Court an action against Mr Kowalski for $6,311 plus costs. Mr Kowalski signed a consent to judgment for the total claim and Stanley & Partners entered judgment for $6,684. In July 1993, Mr Kowalski paid that amount to Stanley & Partners.
In April and again in November 1995, Mr Kowalski applied unsuccessfully in the Magistrates Court to set aside the consent judgment.
In December 1996, Mr Kowalski filed an application for directions in the 1992 workers compensation proceeding seeking repayment of costs paid in respect of proceedings under the Act on the ground that no order had been made for payment by Mr Kowalski of costs to Stanley & Partners. In January 1997, Judge McCusker dismissed Mr Kowalski’s application for want of jurisdiction.
In April 2010, Mr Kowalski filed an originating application in the Federal Magistrates Court against Mr Bourne claiming damages for misleading and unconscionable conduct, and related causes of action, in respect of Mr Bourne’s conduct in April 2010 denying liability to repay to Mr Kowalski $6,684. Mr Lindsay FM heard the trial of the proceeding in August 2010 and gave an ex tempore judgment dismissing the application on the ground that, whatever the merits were in relation to Mr Bourne’s conduct in the 1990s, there was no breach of the Trade Practices Act 1974 (Cth) or the Fair Trading Act 1987 (SA) in April 2010. Mr Kowalski’s appeal to the Federal Court was subsequently dismissed by Logan J.
In March 2011, Mr Kowalski issued the Bourne proceeding in the Industrial Relations Court. At about the same time, he issued a similar proceeding against RJ Cole & Partners seeking similar relief (the RJ Cole & Partners proceeding).
On 13 May 2011, Mr Bourne filed an application to strike out the claim on the grounds that no reasonable cause of action was disclosed or it was an abuse of process as seeking to relitigate matters previously determined in earlier proceedings. Mr Bourne exhibited the reasons for judgment of Logan J. RJ Cole & Partners filed a similar application in the RJ Cole & Partners proceeding.
In June 2011, the Judge heard argument on the strike out application in the RJ Cole & Partners proceeding. At the conclusion of that argument, the Judge heard argument on the strike out application in the Bourne proceeding.
In August 2011, the Judge delivered reasons for judgment dismissing the summons in the Bourne proceeding.[7] The Judge made the same order for similar reasons in the RJ Cole & Partners proceeding.[8]
[7] Kowalski v Bourne [2011] SAIRC 62.
[8] Kowalski v Cole & Others [2011] SAIRC 61.
In August 2011, Mr Kowalski filed in the Industrial Relations Court a notice of appeal to the Full Court against the judgment of the Judge. Mr Kowalski also appealed against the judgment in the RJ Cole & Partners proceeding. In November 2014 and March 2015, the Full Court heard the two appeals together.
In May 2015, the Full Court delivered combined reasons for judgment in both proceedings.[9] The Full Court held that the Judge erred on the issues of jurisdiction and time limitation. The Full Court held that the Bourne and RJ Cole & Partners proceedings were an abuse of process because they were brought for the improper purpose of harassing Mr Bourne and RJ Cole & Partners.
[9] Kowalski v Bourne and RJ Cole & Partners [2015] SAIRC 17.
Legal costs charged by solicitors to clients
Before turning to the issues raised on appeal and by the notice of contention, it is desirable to consider the relationship between solicitors and clients and the control exercised by courts over that relationship and in particular over costs charged by solicitors to clients.
Under the general law and independently of the statute, a solicitor is an officer of the court.[10] As such, a solicitor owes various duties to the court independently of, and paramount to, the solicitor’s duties to his or her client.[11] As such, a solicitor is subject to the overriding supervision of the court.[12] This jurisdiction predated statutory regulation and the inherent jurisdiction of this Court over solicitors survives subject only to statutory exclusion. An example of supervision exercised by the court is the enforcement of undertakings given by solicitors.
[10] Myers v Elman [1940] AC 282 at 291 per Viscount Maugham, at 317 per Lord Wright and at 334 per Lord Porter.
[11] See for example Clyne v New South Wales Bar Association (1960) 104 CLR 186 at 200 per Dixon CJ, McTiernan, Fullagar, Menzies and Windeyer JJ (duty not to mislead the court); R v Turner [1970] 2 QB 321 at 326 per Lord Parker CJ (duty not to communicate privately with the judge); R v Dick [1982] Tas R 252 at 255 per Cosgrove J (duty to assist the court); Kooky Garments Ltd v Charlton [1994] 1 NZLR 587 at 590 per Thomas J (duty to be independent).
[12] Myers v Elman [1940] AC 282 at 335 per Lord Porter; Re a Solicitor [1960] VR 617 at 618 per Dean J; Re a Barrister & Solicitor (1979) 40 FLR 1 at 17.
Supervision is exercised by the court over solicitors in relation to costs charged to clients.[13] The jurisdiction is exercised because solicitors are officers of the court.[14] The court has inherent jurisdiction to examine the fairness and reasonableness of a costs agreement and set it aside if it is not fair and reasonable.[15] The rationale for the existence of this jurisdiction is that, due to the special relationship of confidence between solicitor and client, a presumption of undue influence arises and the onus lies on the solicitor to rebut it. In Clare v Joseph,[16] Fletcher Moulton LJ said:
[Under the general law] agreements between solicitor and his client as to the terms on which the solicitor’s business was to be done were not necessarily unenforceable. They were, however, viewed with great jealousy by the Courts, because they were agreements between a man and his legal adviser as to the terms of the latter’s remuneration, and there was so great an opportunity for the exercise of undue influence, that the Courts were very slow to enforce such agreements where they were favourable to the solicitor unless they were satisfied that they were made under circumstances that precluded any suspicion of an improper attempt on the solicitor’s part to benefit himself at his client’s expense.[17]
[13] Woolf v Snipe (1933) 48 CLR 677 at 678-679 per Dixon J; Re Feez Ruthning’s Bill of Costs [1989] 1 Qd R 55 at 82 per Macrossan J and 90 per McPherson J; Richfort Pty Ltd v Baluyut [1999] NTCCA 98; (1999) 9 NTLR 58 at [28] per Mildren J (with whom Gallop J agreed); 4WD Pty Ltd v McNamara [2009] SASC 274 at [19] per Anderson J.
[14] Re Feez Ruthning’s Bill of Costs [1989] 1 Qd R 55 at 82 per Macrossan J; Richfort Pty Ltd v Baluyut (1999) 9 NTLR 58 at [28] per Mildren J (with whom Gallop J agreed).
[15] Sanderson v Glass (1742) 2 Atk 296 at 298 per Lord Harwicke; Clare v Joseph [1907] 2 KB 369 at 376 per Fletcher Moulton LJ and 378 per Buckley LJ; Emeritus Pty Ltd v Mobbs (unreported, New South Wales Supreme Court, 27/6/1991, Studdert J BC9101842 at 12, 19); New South Wales Crime Commission v Fleming (1991) 24 NSWLR 116 at 123 per Gleeson CJ.
[16] [1907] 2 KB 369. This case was decided after the enactment of the Attorneys and Solicitors Act 1870 (UK) but the Court of Appeal held that the position was essentially the same under the inherent jurisdiction before its enactment.
[17] At 376.
The court has inherent jurisdiction, predating and independently of statute, to determine by taxation the amount payable by a client to a solicitor.[18] In Woolf v Snipe,[19] Dixon J said:
The superior Courts of law and equity possess a jurisdiction to ascertain, by taxation, moderation, or fixation, the costs, charges, and disbursements claimed by an attorney or solicitor from his client, and that jurisdiction is derived from three sources and falls under three corresponding heads.
First, a jurisdiction exists founded upon the relation to the Court of attorneys and solicitors considered as its officers. This jurisdiction, commonly called the general jurisdiction of the Court, enables it to regulate the charges made for work done by attorneys and solicitors of the Court in that capacity, and to prevent exorbitant demands. That such a jurisdiction was exercised by the Court of Chancery was never doubted... The Courts of law appear to have exercised a like jurisdiction, … but the existence of the authority was disputed by the Court of King's Bench in Dagley v Kentish, and for a few years it fell into disuse... After the Judicature Act the existence of the Court's general jurisdiction was completely established.[20]
[18] Storer & Co v Johnson(1890) 15 App Cas 203 at 206 per Lord Halsbury; Woolf v Snipe (1933) 48 CLR 677 at 678-679 per Dixon J.
[19] (1933) 48 CLR 677.
[20] At 678-679. [citations omitted]
In Electrical Trades Union v Tarlo,[21] Wilberforce J said:
I think it is undisputed that section 50 of the Solicitors Act, 1957, has not taken away the general jurisdiction with which the court has always possessed over solicitors as officers of the court, and… the court has inherent jurisdiction to secure that the solicitor, as an officer of the court, is remunerated properly, and no more, for work he does as a solicitor.[22]
[21] [1964] Ch 720.
[22] At 734.
In Re P’s Bill of Costs,[23] Evatt CJ and Fogarty J held that, subject to statute excluding the jurisdiction or covering the field, the Family Court has jurisdiction over costs charged by solicitors to clients for work undertaken in the Family Court, saying
Although the Family Court is a creature of statute it is a Court of Record and has inherent powers in appropriate circumstances. Those are powers which arise as a necessary adjunct to the existence of the court itself, and such as are necessary to control and regulate the proceedings before it and to avoid injustice…
Specifically here the power of such a court to regulate by its rules and orders costs to be charged by a practitioner practising in that court is of long standing: see Woolf v Snipe, supra, and the cases therein referred to. It is seen as a necessary part for the court’s inherent power to control its own processes and, as part of that power, to determine any dispute of fact or law necessary for that purpose.[24]
[23] (1982) 45 ALR 513.
[24] At 519-520 per Evatt CJ and Fogarty J.
It is an incident of the jurisdiction of the court over costs charged by solicitors to clients that the court can order repayment by a solicitor of an amount overcharged to and paid by a client.[25] Where the jurisdiction to tax costs is statutory, the statute may impose a time limit for applications to tax costs.[26] Otherwise, there is no time limit.[27] For example, there was no time limit until 2014[28] for applications to tax costs under section 42 of the Legal Practitioners Act 1981 (SA).[29]
[25] Harrison v Tew [1990] 1 All ER 321 at 330 per Lord Lowry (with whom Lord Ackner, Lord Oliver of Aylmerton and Lord Jauncy of Tullichettle agreed).
[26] See, eg, Solicitors Act 1957 (UK) section 69(2)(iii).
[27] See, eg, In re A Solicitor [1961] 1 Ch 491 at 501 per Cross J.
[28] The Legal Practitioners (Miscellaneous) Amendment Act 2013 (SA) repealed section 42 and enacted Schedule 3 Part 7 in its place. Paragraph 37(4) of that schedule now imposes a time limit for an application for adjudication by a client.
[29] DA Starke Pty Ltd v Yardoo Pty Ltd [2009] SASC 90, (2009) 262 LSJS 248 at [19] per Judge Withers; Kowalski v Stanley & Partners [2014] SASC 198 at [19] per Judge Dart.
It is desirable to determine first Mr Bourne’s contentions that the Full Court erred in holding that the Industrial Relations Court had jurisdiction to entertain Mr Kowalski’s claim and erred in holding that it was not statute-barred.
Jurisdiction
Mr Bourne seeks permission to file, out of time, a notice of contention including contentions that the Full Court erred in holding that the Industrial Relations Court had jurisdiction to entertain Mr Kowalski’s claim and erred in holding that it was not statute-barred. Mr Kowalski opposes permission to file the notice of contention out of time.
In the Industrial Relations Court, Mr Bourne adopted the submissions made by RJ Cole & Partners on these two issues. On Mr Kowalski’s appeal to this Court in relation to the RJ Cole & Partners proceeding, RJ Cole & Partners filed a notice of contention raising these two issues. No prejudice is occasioned to Mr Kowalski by permitting Mr Bourne to file the notice of contention raising these two issues out of time. Permission to do so should be granted.
Section 41 of the Act provides:
41. Costs
(1)Subject to subsection (1a) of this section, in any proceedings under this Act the Court may award costs against any party thereto or order that such costs be taxed by the Court which may be constituted by an industrial magistrate upon the scale fixed by the Rules of Court.
(1a) The Court shall not order or award, against a workman who is a party to any proceedings under this Act, the costs of another party unless it is satisfied that in relation to those proceedings some special reason exists why it is proper that those costs be so ordered or awarded.
(1b) Where it appears to the Court that costs to a party have been improperly or without reasonable cause incurred by reason of the misconduct or default of a legal practitioner the Court may call on the legal practitioner to show cause why those costs should not be paid by the legal practitioner personally or, as the case requires, be repaid by the legal practitioner to the party incurring them and thereupon the Court may make such order as the justice of the case may require.
(2)No legal practitioner acting for a workman shall be entitled to recover from that workman any costs in respect of any proceedings under this Act or to claim a lien in respect of such costs on or to deduct such costs from any sum awarded as compensation unless those costs have been awarded by the Court.
(3)No agreement by a person claiming compensation to pay any amount by way of costs greater than the amount awarded by the Court shall be binding on that person and any amount paid by that person by way of costs in excess of the amount so awarded shall be recoverable by that person as a debt due to him.
(4)In this section “proceedings under this Act” includes any matter or thing relating to the preparation of an agreement referred to in Division III of Part III of this Act and any other matter or thing whether or not of the same kind as the foregoing prescribed by the Rules of Court.
Subsections (2) and (3) in conjunction effectively provide that ordinarily a solicitor for a worker is to recover costs for work in respect of proceedings under the Act from the worker’s employer on the scale fixed by Rules of Court pursuant to an award of costs by the Court, unless and except to the extent that the Court authorises the payment by the worker of costs to his or her solicitor in an amount fixed by the Court or taxed by the Court upon the scale fixed by the Rules of Court.
The evident purpose of subsections (2) and (3) is that a worker will only be ordered to pay his or her solicitor’s costs out of his or her own pocket if there is a special reason for making such an order. It is possible to envisage various circumstances in which there might be good reason to make such an order. They include when a proceeding is brought against the advice of the solicitor and proves unsuccessful; when the employer/employer’s insurer becomes insolvent; or when a proceeding is settled on the basis of the employer paying an undissected lump sum inclusive of costs.
Section 21 of the Act provides:
The Industrial Court of South Australia shall have jurisdiction to hear and determine any question or dispute concerning any matter or thing arising out of or connected with the liability to pay, or the amount of compensation under this Act and all matters and things ancillary thereto.
Section 130 of the Act provides:
The power to make rules under section 175 of the Industrial Conciliation and Arbitration Act, 1972, as amended from time to time, shall include power to make Rules of Court, notwithstanding that those Rules of Court may be inconsistent with that Act for any purpose for which this Act authorizes Rules of Court (not being rules of the Supreme Court) to be made and also for generally regulating the practice of the Court, the practice of the Full Industrial Court generally and in relation to appeals and officers of the Court, and for carrying into effect this Act so far as it relates to or affects the Court or officers of the Court and such rules may also prescribe such forms and scales of fees, costs and expenses as may be necessary or convenient for the purposes of this Act.
Rule 122 of the Workers Compensation Rules 1980 (SA) (the Rules) provides:
Costs may be awarded as between a legal practitioner and his client pursuant to subsection (2) of section 41 of the Act by order made either upon oral application at a hearing of a proceeding or on an application in the general form to be served on the worker in such manner as the judge shall direct. The provisions of this Part of these rules shall apply mutatis mutandis to any such order or a taxation in pursuance thereof except that costs shall be allowed upon the ‘solicitor and client’ basis.
Notwithstanding the foregoing provisions of this rule, if a legal practitioner and his client shall agree in writing upon lump sum for costs prior to the taxation of a bill of costs they may lodge such agreement with the Taxing Officer who may, if he is satisfied after due investigation of the circumstances that the said agreement is just and proper, allow the legal practitioner’s costs in the agreed sum. Such investigation as aforesaid shall constitute a “proceeding” before the Taxing Officer within the meaning of paragraph (c) of rule 126.
Subrule 120(1) of the Rules provides that generally costs of any proceeding under the Act shall be in the discretion of the Court. Subrule 123(1) provides that the Court may either assess a lump sum allowance for costs or direct that costs be taxed by a Taxing Officer in accordance with the itemised scale of costs set forth in Appendix 2. Rule 125 contains a set of rules applying on a taxation of costs unless the Court otherwise directs, rule 126 sets out procedures for taxations and rule 127 confers a right of review in respect of any decision of the Taxing Officer.
Reasoning of the Judge
The Judge adopted his reasons in the RJ Cole & Partners proceeding for concluding that the Court had no jurisdiction to entertain Mr Kowalski’s claim. In those reasons, the Judge referred to the decisions of this Court in Adelaide Assemblers Ltd v Kutos and Freeway Motors Ltd[30] and The Queen v Industrial Court of South Australia; Ex parte General Motors-Holden Pty Ltd.[31] The Judge held that those decisions established that the jurisdiction of the Industrial Court under the Act is primarily concerned with issues relating to compensation as between workers and employers and, in the absence of express provisions, it is not the intention of the Act to confer on the Court common law or equitable jurisdiction of a quite different nature.
[30] (1974) 9 SASR 102.
[31] (1975) 10 SASR 582.
The Judge accepted that issues concerning costs in respect of a claim for compensation could be taken to be ancillary to the Court’s principal jurisdiction within the meaning of section 21. However, the Judge held that, considering each subsection in turn, it was not the evident intention or effect of subsections 41(2) or (3) to confer on the Court power to make orders as between worker and solicitor relating to the repayment of costs improperly recovered.
Reasoning of the Full Court
The Full Court considered that the Judge’s reliance on the decision of this Court in Adelaide Assemblers Ltd was misplaced because it dealt with a substantially different issue to that arising in the present case. The Full Court held that there was nothing preventing Mr Bourne from making an application under subrule 122(1) for an order that Mr Kowalski pay the costs in respect of proceedings under the Act. The Full Court concluded:
In our view the Court had jurisdiction to hear the appellant’s claim under ss 21 and 41 of the WCA because the issue of the application of s 41 to the costs as between him and Stanley and Partners and RJ Cole was a matter or thing ancillary to the questions and disputes between the appellant and Mitsubishi within the meaning of s 21 of the WCA. Because the Court had power to make an order as to costs as between legal practitioner and client under rule 122(1) of the Rules the combination of that rule and s 41 of the WCA gave the Court a supervisory jurisdiction over costs as between solicitor and client.
Analysis
On the appeal to this Court, Mr Bourne effectively adopts the reasoning of the Judge and contends that the Full Court erred. Mr Kowalski contends that the Full Court was correct.
Section 21 of the Act confers on the Court a primary jurisdiction and an ancillary jurisdiction. The primary jurisdiction relates to matters arising out of or connected with liability and quantum of compensation payable under the Act. The ancillary jurisdiction relates to all matters and things ancillary to compensation payable under the Act. What is ancillary is to be determined as a matter of statutory construction having regard to the provisions of the Act as a whole and their evident purpose.
The subject matter of section 41 is matters ancillary to compensation, namely legal costs, but it addresses not only costs as between party and party but also costs as between worker and solicitor. Section 41 vests a supervisory jurisdiction in the Industrial Relations Court over costs charged by solicitors to workers. It does not expressly confer jurisdiction on the Court to order that costs be or not be payable by a worker to a solicitor, fix the amount of such costs or tax such costs but such jurisdiction is clearly conferred as a matter of necessary intendment. It is inherent in the conferral of that jurisdiction that the Court has consequential power to order payment by the worker to the solicitor of the amount unpaid of any costs awarded in favour of the solicitor or to order payment by the solicitor to the worker of any amount recovered by the solicitor from the worker in excess of the amount (if any) authorised by the Court under the section.
A solicitor who has acted for a worker in respect of proceedings under the Act is entitled under rule 122 to apply for an order that costs be payable by the worker to the solicitor and for the fixing or taxation of such costs. It is the clear intent of section 41 and the Rules that a worker is also entitled to make an application in respect of costs charged by his or her solicitor.
As a matter of statutory construction, the Industrial Relations Court has jurisdiction over costs as between worker and solicitor. The Court has power to order that costs be payable or not payable by a worker to a solicitor, to fix or tax such costs, and to order the payment by the worker to the solicitor, or the solicitor to the worker, of an amount accordingly.
In Adelaide Assemblers Ltd v Kutos and Freeway Motors Ltd,[32] Kutos had worked successively for Adelaide Assemblers and for Freeway Motors. The Full Industrial Court held that he was entitled to payment of workers compensation at $65 per week and each of Adelaide Assemblers and Freeway Motors had a liability to pay this amount to him (but he was not entitled to double payment). Each employer filed a purported contribution notice against the other claiming contribution in equity or at common law for co-ordinate liabilities. This Court held that the Industrial Court lacked equitable or common law jurisdiction to order contribution. Hogarth ACJ, Bright and Walters JJ said:
In our view, the absence of any reference anywhere in the Act to questions as between one employer and another (except in the case of successive employers of a man suffering from injury arising out of industrial disease such as we have already referred to) suggests strongly to us that Parliament did not have in mind that jurisdiction of this nature would be exercised by the Industrial Court. To read the Act otherwise would be to introduce a limited jurisdiction in common law and equity, a jurisdiction of an entirely different nature from the statutory jurisdiction already exercised by that Court.[33]
[32] (1974) 9 SASR 102.
[33] At 107-108.
The reasoning in Adelaide Assemblers Ltd does not apply to the jurisdiction of the Industrial Relations Court in relation to costs charged by solicitors to workers because section 41 makes it clear that such costs are ancillary to compensation within the meaning and for the purposes of section 21.
In The Queen v Industrial Court of South Australia; Ex parte General Motors-Holdens Pty Ltd,[34] this Court considered section 15(1)(e) of the Industrial Conciliation and Arbitration Act 1972 (SA). That provision conferred on the Industrial Court jurisdiction to hear and determine whether a dismissal of an employee was harsh, unjust or unreasonable and to direct the employer to re-employ the employee and order the payment of wages between dismissal and re-employment. Walters and Wells JJ (Bray CJ dissenting) held that as a matter of statutory construction the provision conferred a single jurisdiction to order reinstatement and interim wages and did not confer jurisdiction to make a bare declaration that the dismissal was harsh, unjust or unreasonable without ordering reinstatement. Walters and Wells JJ said that there was no hint in the legislation of an intention to confer power on the Industrial Court to give declaratory judgments in the absence of substantive relief (such power being equitable in origin).
[34] (1975) 10 SASR 582.
The reasoning of this Court in Ex parte General Motors-Holdens Pty Ltd does not apply to the jurisdiction of the Industrial Relations Court in relation to costs charged by solicitors to workers because section 41 clearly confers jurisdiction on that Court in respect of those costs.
The Full Court was correct in holding that the Industrial Relations Court had power to entertain Mr Kowalski’s claim.
Time limitation
Section 38 of the Limitation of Actions Act 1936 (SA) provides that an action for the recovery of money based on restitutionary grounds must be commenced within six years after the cause of action arose. Section 35(c) provides that actions founded on tort shall, save as otherwise provided in that Act, be commenced within six years next after the cause of action accrued and not after.
The Judge held that, if Mr Kowalski had a claim within the jurisdiction of the Industrial Relations Court for recovery of costs consequent on a proven breach of subsection 41(2) of the Act, it would be properly characterised as an action founded on the tort of breach of statutory duty or for the recovery of money based on restitutionary grounds and a six year limitation period would apply. The Judge held that such causes of action would have accrued in July 1993 when Mr Kowalski paid the sum of $6,684. The Judge held that Mr Kowalski’s claim was therefore statute barred.
The Full Court held that the Judge erred in reaching this conclusion. The Full Court said:
Our difficulty with that approach is that it fails to recognise that the right of a worker to recover costs pursuant to s 41 of the WCA is not a claim based on restitution or breach of statutory duty. It is a claim based upon a statutory jurisdiction given to this Court to supervise claims for costs by legal practitioners practising in the jurisdiction conferred by the WCA.
On the appeal to this Court, Mr Bourne effectively adopts the reasoning of the Judge and contends that the Full Court erred. Mr Kowalski contends that the Full Court was correct.
The jurisdiction exercised by the Industrial Relations Court over solicitors in relation to costs charged by them to workers in respect of proceedings under the Act is a supervisory jurisdiction within a limited field, analogous to the broad supervisory jurisdiction exercised by the Supreme Court over legal practitioners generally. The power of the Industrial Relations Court is an incident of that jurisdiction and in particular of the power of that Court to control costs charged by solicitors to workers in respect of proceedings under the Act. That power does not involve a common law or equitable cause of action whether in tort, restitution or otherwise. The position is the same as in respect of an order by this Court for a refund of costs after an adjudication: that order is incidental to the adjudication; it is not a judgment on a cause of action for breach of statutory duty or for restitution.
Sections 35 and 38 of the Limitation of Actions Act 1936 (SA) have no application to the Bourne proceeding instituted by Mr Kowalski in the Industrial Relations Court.
The Full Court was correct in holding that the proceeding was not statute barred.
Abuse of process
Mr Bourne’s strike out application was supported by an affidavit in which he identified the grounds of the application and exhibited the evidence upon which he relied. In relation to the abuse of process ground, Mr Bourne said that the issue sought to be raised by Mr Kowalski had previously been the subject of litigation comprising:
1.the applications in the Magistrates Court to set aside the consent judgment in April and November 1995;
2.the application for directions in the Industrial Court seeking repayment of costs paid in respect of proceedings under the Act; and/or
3.the originating application in the Federal Magistrates Court claiming damages for misleading and unconscionable conduct in April 2010 heard by Mr Lindsay FM and the appeal against the dismissal of that application heard by Logan J.[35]
[35] Mr Bourne also referred to complaints to the Legal Practitioners Conduct Board and a charge laid in the Legal Practitioners Disciplinary Tribunal, but provided no details of those matters and does not rely in this Court upon them.
Mr Bourne exhibited the reasons for judgment of Logan J which contained secondary evidence of the litigation in 1 and 3 above. He did not exhibit any evidence relating to the litigation in 2 above.
Courts generally possess inherent or implied power to stay proceedings before them on the ground of abuse of process.[36]
[36] Jago v District Court(NSW) (1989) 168 CLR 23 at 28-30 per Mason CJ, 57-58 per Deane J and 74-77 per Gaudron J; Walton v Gardiner (1993) 177 CLR 378 at 392-393 per Mason CJ, Deane and Dawson JJ. In the case of superior courts (or courts of traditional or general jurisdiction), the power is often described as inherent and in the case of inferior courts (or courts of limited jurisdiction), the power is often described as implied. Nothing turns on whether it is inherent or implied in the present case.
There are several established categories of abuse of process in respect of civil proceedings, including:
1.a proceeding brought for an improper purpose;[37]
2.a proceeding brought without reasonable grounds;[38]
3.a proceeding brought in a clearly inappropriate forum;[39]
4.a proceeding unjustifiably duplicating one pending in another forum causing oppression or injustice;[40]
5.a proceeding unjustifiably seeking to litigate anew a case already disposed of by an earlier proceeding causing oppression and vexation.[41]
[37] Williams v Spautz (1992) 174 CLR 509 at 529 per Mason CJ, Dawson, Toohey and McHugh JJ.
[38] Walton v Gardiner (1993) 177 CLR 378 at 393 per Mason CJ, Deane and Dawson JJ; Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27, (2006) 226 CLR 256 at [10] per Gleeson CJ, Gummow, Hayne and Crennan JJ quoting Metropolitan Bank Ltd v Pooley (1885) 10 App Cas 210 at 80 per Lord Blackburn.
[39] Walton v Gardiner (1993) 177 CLR 378 at 393 per Mason CJ, Deane and Dawson JJ.
[40] See, for example, Voth v Manildra Flower Mills Pty Ltd (1990) 171 CLR 538 at 552-566 per Mason CJ, Deane, Dawson and Gaudron JJ; Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256 at [9]-[15] per Gleeson CJ, Gummow, Hayne and Crennan JJ.
[41] Walton v Gardiner (1993) 177 CLR 378 at 393 per Mason CJ, Deane and Dawson JJ.
The category of abuse of process invoked by Mr Bourne in his strike out application was the fifth category, namely that Mr Kowalski was unjustifiably seeking to litigate anew a case already disposed of by judgment in earlier proceedings causing oppression and vexation (the relitigation ground). Mr Bourne relied on the judgments in the litigation listed at [61] above.
Reasoning of the Judge
The Judge referred to his Honour’s consideration of the relevant principles in his reasons in the RJ Cole & Partners proceeding. In those reasons, the Judge referred to the principles applied to determine whether a proceeding is an abuse of process on the relitigation ground. The Judge said:
Proceedings may constitute an abuse of process by relitigation in different ways. The invocation of the procedures of the Court to relitigate controversies already decided by a court may be prevented by the application of doctrines of res judicata or issue estoppel. The scope of these doctrines is confined. The first will apply only where a court with relevant jurisdiction has given judgment already on the cause of action raised in the later litigation; the second where a party, for the purpose of a claim, alleges or denies the existence of facts which have necessarily been decided by a prior judgment. The application of these doctrines has been extended to prevent the pursuit of issues or claims which ought reasonably to have been litigated in the course of earlier proceedings between the parties in accordance with Anshun principles.
The Court’s jurisdiction to protect a party from an abuse of process involving an attempt to relitigate a claim already disposed of is not limited to cases where the technical requirements of the above doctrines and the Anshun extension can be made out.
The Judge referred to authorities on abuse of process on the relitigation ground, namely State Bank of New South Wales v Stenhouse Ltd,[42] Spalla v St George Motor Finance Ltd (No 6)[43] and McDonald v The State of South Australia.[44]
[42] (1997) Aust Torts Reports 81-423.
[43] [2004] FCA 1699.
[44] [2011] FCA 297.
The Judge said:
Regard must be had to the public policy underlying these doctrines, including that there is a general public interest in preventing a party to proceedings being subjected to unfairness or oppression through having the same issue litigated again, in maintaining of confidence in and respect for the authority of the courts, and in avoiding a waste of judicial resources on unmeritorious claims.
The Judge observed that Mr Bourne did not contend that any of the previous proceedings resulting in a final judgment or determination of any of the issues now raised and hence did not rely upon res judicata or issue estoppel. The Judge rejected Mr Bourne’s contention that Anshun estoppel applied. The Judge said:
There is no basis for a conclusion that there is an abuse of process by reference to the doctrines of res judicata or issue estoppel. Nor is there a basis for the application of the Anshun principle, as the precise nature of the various proceedings in the State courts has not been made clear to me, and thus I am unable to determine whether or not it was unreasonable of the applicant not to have raised the allegation of a breach of s 41 of the WCA in those proceedings.
The Judge nevertheless held that the conduct and maintenance of the proceeding was an abuse of process on the relitigation ground. The Judge concluded:
Over the last 18 years the applicant has sought to impugn the conduct of the respondent on the costs issue and generally by pursuit of a variety of claims and grievances. He has been unsuccessful in the various proceedings which he has initiated. His attempt to again pursue such issues by means of the vehicle of a second application under s 41 of the WCA is indicative of a pattern of oppressive and unfair conduct by relitigation of the costs issue.
Reasoning of the Full Court
The Full Court took a different approach. The Full Court delivered one set of reasons encompassing both appeals by Mr Kowalski in the Bourne and RJ Cole & Partners proceedings.
The Full Court did not uphold the Judge’s conclusion that the proceeding was an abuse of process on the relitigation ground. The Full Court referred to the decision of Forrest J in Attorney-General v Knight[45] in relation to proceedings being vexatious on the improper purpose ground. The Full Court concluded that the proceeding was brought for an improper purpose, being the first category referred to at [64] above.
[45] [2014] VSC 549.
The Full Court observed that section 41 of the Act applies only to a relatively small proportion of the costs charged by Mr Bourne; an order may have been made for payment of such costs if Mr Bourne had applied for an order; Mr Bourne may have overlooked the need to do so and the costs were incurred many years before Mr Kowalski’s application was made.
The core of the Full Court’s reasoning for concluding that the proceeding was instituted for an improper purpose was in the following passage:
In Attorney-General v Knight Forrest J sets out the various categories of vexatious litigation He said:
“In Attorney-General v Wentworth, Roden J considered vexatious proceedings to divide into three, general, categories:
It seems then that litigation may properly be regarded as vexatious for present purposes on either objective or subjective grounds. I believe that the test may be expressed in the following terms:
(1) they are instituted with the intention of annoying or embarrassing the person against whom they are brought; or
(2) they are brought for collateral purposes, and not for the purpose of having the court adjudicate on the issues to which they give rise; or
(3) irrespective of the motive of the litigant, they are so obviously untenable or manifestly groundless as to be utterly hopeless.
Although the ultimate question is not whether the proceeding has been instituted or conducted vexatiously, the way a proceeding is conducted may tend to prove that its nature and substance is vexatious. In my view, this is more likely to be the case where the proceeding falls into the first or second of Roden J’s categories because those categories are concerned with the intentions or purposes that lie behind the litigation.”
(footnotes omitted; emphasis ours)
Throughout his submissions on appeal the appellant has continued to assert that Mr Bourne and RJ Cole committed fraud. He described Mr Bourne as a wrongdoer and a criminal. He described Mr Bourne and counsel for RJ Cole as pathological liars. He said of Mr Bourne: “Now, he’s sitting on the Parole Board deciding whether criminals get out of gaol. He’s one of the biggest criminals I’ve been involved in.” He said that RJ Cole had “acted illegally, corruptly, fraudulently”.
Like the learned judge we conclude that having regard to the way in which the appellant has conducted this appeal demonstrates that he has a much wider objective. These proceedings have very little to do with money and very much to do with annoying, insulting and embarrassing Mr Bourne and RJ Cole.
Like Kourakis J in Kowalski v Bourne it appears to us from the history of litigation between the appellant and Mr Bourne and the content of the appellant’s submissions that Mr Kowalski bears a great personal animosity towards Mr Bourne. For the same reasons is also appears that the appellant bears a great personal animosity towards RJ Cole. It appears that the appellant is anxious to bring proceedings to harass them in any jurisdiction in which it is possible to do so. In our view the irresistible inference to be drawn is that the proceedings were instituted for that purpose.
Error by the Full Court
Mr Kowalski contends that the Full Court erred in law in concluding that the proceeding was brought for the improper purpose of harassing Mr Bourne.
Section 47 of the Act confers a right of appeal to the Full Court from any order or decision of the Court. Such an appeal is by way of rehearing. Normally such appeals are heard on the evidence adduced at first instance and, although the appeal court has discretion to admit new evidence on appeal, that course is unusual. In this case, Mr Bourne did not seek to adduce any new evidence on appeal and the Full Court did not admit any new evidence. Although the Full Court has a discretion to permit a party to raise a new argument on appeal not raised in the Court below, that course is unusual.
Mr Bourne did not invoke the improper purpose ground in his strike out application filed in May 2011. Insofar as that application relied on abuse of process, it invoked only the relitigation ground. The Judge upheld the abuse of process contention on the basis of that ground.
If the Full Court contemplated making a finding that the proceeding was instituted for the improper purpose of harassing Mr Bourne, procedural fairness required that Mr Kowalski be informed thereof and given an opportunity to adduce evidence and make submissions in relation thereto. If the Full Court contemplated relying on Mr Kowalski’s own conduct during the hearing of the appeal as evidence that his purpose was to harass Mr Bourne, procedural fairness required that he be informed thereof and given an opportunity to adduce evidence and make submissions in relation thereto.[46] If the Full Court contemplated making a finding that the RJ Cole & Partners proceeding was instituted for the improper purpose of harassing RJ Cole & Partners and using that finding in turn to find an improper purpose in respect of Mr Bourne, procedural fairness required that Mr Kowalski be informed thereof and given an opportunity to adduce evidence and make submissions in relation thereto.[47] This did not occur.
[46] If the Full Court relied upon findings made by Kourakis J in Kowalski v Bourne [2012] SASC 6 (which is not clear from its reasons), procedural fairness required that Mr Kowalski be informed thereof and given an opportunity to oppose this, to adduce evidence and to make submissions in relation thereto.
[47] The Full Court appears to have relied upon Mr Kowalski's conduct in relation to RJ Cole & Partners and its finding that Mr Kowalski's purpose was to harass RJ Cole & Partners as evidence of his purpose in bringing the Bourne proceeding or alternatively to have made a composite finding of harassment of both RJ Cole & Partners and Mr Bourne. The question whether Mr Kowalski's conduct in relation to RJ Cole & Partners was admissible or could be relied upon on the question of his motivation in bringing the Bourne proceeding was not explored with the parties or considered by the Full Court because of the manner in which the Full Court dealt with the matter. Before relying on Mr Kowalski's conduct in relation to RJ Cole and Partners in making a finding on Mr Kowalski's motivation in bringing the Bourne proceeding, procedural fairness required that Mr Kowalski be informed thereof and given an opportunity to oppose this, to adduce evidence and to make submissions in relation thereto.
The Full Court made an error of law by not affording procedural fairness to Mr Kowalski before finding that the proceeding was instituted for the improper purpose of harassing Mr Bourne. Subject to consideration of Mr Bourne’s application for permission to file a notice of contention, the appeal must be allowed and the orders of the Full Court set aside.
Application for permission to amend the notice of contention
Mr Bourne seeks permission to file a notice of contention including contentions that the Full Court erred in failing to hold that the matters the subject of the proceeding had been finally determined in a previous proceeding and in the alternative in failing to hold that those matters should have been raised by Mr Kowalski in previous proceedings and the proceeding was therefore an abuse of process. Mr Kowalski opposes permission to amend. The application for permission should be considered separately as different considerations arise in respect of each contention.
Res judicata
Mr Bourne seeks permission to file a notice of contention including a contention that the Full Court erred in failing to hold that the proceeding was precluded by res judicata arising from the judgment of Judge McCusker in January 1997.
Mr Bourne did not advance this contention before the Judge, which was a matter recorded in the Judge’s reasons for judgment. Mr Bourne did not advance this contention on the appeal to the Full Court of the Industrial Relations Court.
In any event, there is no merit in this contention. The elements of res judicata are:
1. a prior judgment of a court (or judicial tribunal);
2. the court (or judicial tribunal) had jurisdiction to determine the matter;
3. the judgment is final and conclusive and “on the merits”;
4. identity of parties;
5. identity of causes of action.[48]
[48] McDonald v State of South Australia [2011] FCA 297 at [36] per Besanko J.
As to the second element, the doctrine applies only to judgments of a court (or judicial tribunal) of competent jurisdiction in the matter.[49] As to the third element, the doctrine applies only to judgments “on the merits”.[50]
[49] O'Keefe v Williams (1907) 5 CLR 217 at 227 per Griffiths CJ; Ex parte The Amalgamated Engineering Union (Australian Section); Re Jackson (1937) 38 SR (NSW) 13 at 19-20 per Jordan CJ; Rogers v Legal Services Commissionof South Australia (1995) 64 SASR 572 at 592 per Lander J (with whom Cox and Prior JJ agreed). It does not necessarily have to be exercising judicial power: Tomlinson v Ramsey Food Processing Pty Limited [2015] HCA 28 at [20]-[21] per French CJ, Bell, Gageler, and Keane JJ.
[50] Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853 at 918 per Lord Reid, 927 per Lord Hodson, 948 per Lord Upjohn; Rogers v Legal Services Commissionof South Australia (1995) 64 SASR 572 at 592-597 per Lander J (with whom Cox and Prior JJ agreed).
Judge McCusker dismissed Mr Kowalski’s application for want of jurisdiction. No res judicata arose as a result of that decision.
For the above reasons, permission for Mr Bourne to file a notice of contention including this particular contention relying on res judicata should be refused.
Abuse of process on relitigation ground
Mr Bourne seeks permission to file a notice of contention including a contention that the Full Court erred in failing to hold that the matters the subject of the proceeding should have been raised by Mr Kowalski in previous proceedings and the proceeding was therefore an abuse of process (the relitigation ground). Mr Bourne relies on the set aside applications in the Magistrates Court, the previous proceeding heard by Judge McCusker and the proceeding in the Federal Magistrates Court. Mr Bourne’s contention is essentially the contention he made to the Judge at first instance. Permission to file the notice of contention raising this issue should be granted for the same reasons as in respect of the first two contentions addressed at [33] above.
In the Industrial Relations Court, Mr Bourne largely adopted the submissions made by RJ Cole & Partners on this issue. Mr Bourne advanced this issue before the Judge and was successful at first instance on this issue. No prejudice is occasioned to Mr Kowalski by permitting Mr Bourne to file the notice of contention raising this issue out of time. Permission to do so should be granted.
What was the case Mr Kowalski was to meet? The material relied upon by the parties should have been clearly identified for the benefit of the Judge and tendered. It would then be clear to this Court to what material both Judge and Full Court had regard. Further, it could not be assumed that any and all documents obtained from the records of courts, tribunals and other decision makers would and should be received for all purposes, nor that judgements referred to may be relied upon for all they contain.
I agree with Blue J for the reasons he gives refusing permission to pursue ground four and dismissing ground five of the Notice of Contention.
Conclusion
I would uphold the first ground of the Notice of Contention, set aside the orders of the Full Court and substitute an order dismissing the appeal from the Judge.