Kowalski v R J Cole & Partners - [2015] SASCFC 35

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
KOWALSKI v RJ COLE & PARTNERS
[2015] SASCFC 35
Judgment of The Full Court
(The Honourable Justice Gray, The Honourable Justice Sulan and The Honourable Justice Bampton)
2 April 2015
PROCEDURE - COSTS - TAXATION - PROCEDURE
PROCEDURE - MISCELLANEOUS PROCEDURAL MATTERS - VEXATIOUS LITIGANTS AND PROCEEDINGS
Appeal against a decision of a Judge dismissing an appeal from a Master’s decision to stay an application to tax a bill of costs as an abuse of process. The respondent acted for the appellant between 1989 and 1994 in respect of a claim arising out of injuries sustained by the appellant at work. The appellant sued the respondent for negligence in respect of the respondent’s dealing with monies paid into its trust account. The appellant was unsuccessful. The respondent applied to have its bill of costs taxed. In 2005, the appellant succeeded in having the application struck out for want of prosecution. In 2007, the appellant applied to have the respondent repay monies taken from his trust account on account of its fees. The application was dismissed as no taxation of costs had taken place. Later in 2007, the appellant sought to set aside the order he obtained striking out the application for taxation of the respondent’s bill of costs. The application was unsuccessful. In 2013, the appellant made further application to tax the respondent’s bill of costs. The application was stayed by a Master as an abuse of process on the basis that the appellant was attempting to use the taxation process to advance an argument that he had no obligation to pay fees to the respondent.
Whether the proceeding is an abuse of process.
Held per Gray and Sulan JJ (dismissing the appeal):
1. Section 42 of the Legal Practitioners Act may only be invoked by a person who is liable to pay legal costs. The question of liability to pay legal costs is to be addressed by the court in which the proceedings against the solicitors have been brought.
2. The appellant does not accept that he is liable to pay any legal costs. He is seeking to use an application under section 42 of the Legal Practitioners Act to advance an argument that he is not liable to pay legal costs, rather than dispute the quantum of costs.
3. The proceeding is an abuse of process.
4. The Master’s order was an order in the nature of an injunction. Accordingly, the appellant’s appeal was an appeal as of right and permission to appeal was not required.
Per Bampton J (refusing permission to appeal):
Application seeking to appeal a judgment given on appeal from an interlocutory judgment of a Master staying an application for taxation as an abuse of process – appeal only lies with the permission of the Court – appeal argued before the Full Court without the Court first considering pursuant to SCR 290 whether permission to appeal should be granted.
1. Extension of time within which to seek permission…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2015] SASCFC 35
Decision Date: 2 April 2015

CaseChat Overview and Summary

This matter concerned an appeal to the Supreme Court of South Australia from an order of a Master of that Court, which had dismissed an application by Kazimir Kowalski against the law practice R J Cole & Partners. Mr Kowalski's application, made pursuant to section 42(1) of the *Legal Practitioners Act 1981* (SA), sought the adjudication and taxation of a bill of costs issued by R J Cole & Partners. Mr Kowalski contended that he had no liability to pay any costs or disbursements, citing grounds such as the absence of a retainer agreement, improper commencement of court proceedings, failure to provide a written costs agreement for time-based billing, disregard for court rules, and gross overcharging amounting to professional misconduct.

The central legal issue before the Master, and subsequently on appeal, was whether Mr Kowalski's application constituted an abuse of process. The Master had found that the predominant purpose of Mr Kowalski's application was to deny any liability to pay legal costs and to seek the return of all monies previously paid to the respondent, rather than to genuinely challenge the quantum of the bill of costs. This finding was affirmed by the Judge on appeal.

The Court reasoned that where a party's primary objective is to deny all liability and recover past payments on various grounds, the precise amount of the bill of costs becomes irrelevant. The proceedings were fundamentally about the question of liability, not quantum. The Judge agreed with the Master's thorough analysis and cited relevant authorities on abuse of process, including *Hamilton v Oades*, *Williams v Spautz*, *Walton v Gardiner*, *Batistatos v Roads and Traffic Authority (NSW)*, and *Moti v The Queen*. The Court noted that the appellant's conduct throughout the proceedings, including his submissions on appeal, consistently confirmed the Master's conclusion regarding his predominant purpose.

The appeal was dismissed, upholding the Master's order that the application was an abuse of process.

Orders

Orders of the court

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Background

Background to the litigation

This is an appeal from an order of a Judge of this Court dismissing an appeal from a Master. Background On 13 June 2013, Kazimir Kowalski, the appellant, made application for the fixing of legal costs against a law practice, R J Cole & Partners, the respondent. The application was made pursuant to section 42(1) of the Legal Practitioners Act 1981 (SA). It purported to seek an adjudication of a bill of costs of R J Cole & Partners for taxation between solicitor and client pursuant to section 41 of the Act. Annexed to the application was a bill of costs lodged for taxation in 1995. The application, inter alia, asserted:The respondent has not entered into a retainer agreement with the applicant, therefore, the applicant has no liability whatsoever to pay the respondent any legal costs or disbursements whatsoever. (See Cachia v Isaacs & Ors. (1985) 3 NSWLR 366). The respondent improperly commenced District Court Action No. 2760 of 1990, on behalf of the applicant, in the civil jurisdiction of the District Court instead of in the criminal jurisdiction of the Industrial Court of South Australia, therefore, pursuant to rule 101.05 of the Supreme Court Rules, the applicant does not have any liability whatsoever to pay the respondent any cost that have arisen from the respondent’s act or omissions. (See Cachia v Isaacs & Ors. (1985) 3 NSWLR 366).The applicant does not have any liability whatsoever to pay the respondent any costs or disbursements for the preparation of the Bill of Costs in Taxable Form. (See National Bank of Wales [1092] 2 Ch 412; Re McCook (1887) 3 WN (NSW) 86).The respondent costs are based on a time costs basis, however, the respondent has not entered into a written costs agreement with the applicant, therefore, the applicant has no liability whatsoever to pay the respondent any costs or disbursements whatsoever.During District Court action No. 2760 of 1990, there was an unexplained and a blatant disregard for the requirements of the rules of the District Court, by the respondent, its servants and its agent, therefore, the applicant does not have any liability whatsoever to pay the respondent any legal costs or disbursements. (See Trnka v Commonwealth (SC(SA), Legoe J, 28-11-1986, Unreported.)The respondent has grossly overcharged the applicant, which is professional misconduct, therefore, as an alternative to the taxation of the respondent’s Bill of Costs, the Supreme Court must make an order that the respondent makes a full refund of the legal costs and disbursements that the applicant has unconscionably paid to the respondent and which respondent has fraudulently and unconscionably obtained from the applicant. (See Harrison v TEW [1990] 1 ALL ER 321.)[Emphasis added.] The application came on for hearing before Judge Dart, a Master of the Court, on 4 February 2014. Judge Dart accepted a submission of R J Cole & Partners that the application should be dismissed as an abuse of process. We draw on the history of the proceedings as set out in Judge Dart’s reasons.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

GRAY AND SULAN JJ

Mr Kowalski appealed against the Master’s orders to a Judge of this Court. On 23 September 2014, the Judge dismissed the appeal.[1] In published reasons, the Judge summarised the history of the matter and then addressed the 38 grounds of appeal in eight groups. Relevantly, group six addressed the finding of the Master of abuse of process. In particular, the Judge reasoned:However, Judge Dart correctly found that the predominant purpose of the appellant was to deny any liability to pay any legal costs to the respondent and to seek the return of everything that he has previously paid (plus interest) on grounds of absence of liability to pay costs, absence of any retainer, fraud, theft, wrongdoing, etcetera. In such circumstances, the question of precisely how much would be owing under a bill of costs is irrelevant since he denies any liability to pay whatever the amount might be. In a word, the matter of liability rather than quantum is what the present proceedings are really all about.Judge Dart canvassed these matters thoroughly in his reasons and particularly at paragraphs [30] to [44]. His Honour cited relevant authority to which I might add references to Hamilton v Oades; Williams v Spautz; Walton v Gardiner, Batistatos v Roads and Traffic Authority (NSW) and Moti v The Queen. I agree with his Honour’s reasoning and I agree that his Honour had more than sufficient material to come to the conclusion that he did. I would simply add that the conclusion to which Judge Dart came as to the predominant purpose of the appellant has again been well and truly confirmed during the course of these appeal proceedings. In ground 37 of appeal, the appellant asserted that: “[M]aster Dart could have ordered a refund of the sum of over $40,000 of the respondent has illegally stolen from the appellant.” (This is a reference to the appellant’s estimate of everything that the respondent had received as costs and disbursements.)Prior to the hearing of the appeal, the appellant sent by facsimile transmission (fax) to Parker J (who was originally allocated to hear the appeal) a number of sets of written submissions which included repeated references to his case being that he claims a full refund of moneys appropriated for costs by the respondent (plus interest). For example, in a fax labelled by the appellant as “Faxed to Justice Parker on 28-8-14 at 6.31pm” the appellant stated at paragraph 5.1 “I did not have any liability whatsoever to pay the respondent any legal costs or disbursements on the grounds that …”. The appellant then sets out at great length at paragraph 5.1.1 to 5.1.7, and continuing at paragraph 6, the various reasons he advances, and the numerous authorities upon which he relies, to demonstrate that he had no such liability. Later the appellant stated: “I submit that Master Dart had a legal obligation, pursuant to s 42(3)(a) of the Legal Practitioners Act 1981 (SA) to “(a) order the refund of any amount overpaid” to me in the sum of about $43,000.00 plus compound interest since 31 August 1992 …”. (This is again a reference to the appellant’s estimate of everything that the respondent had received as costs and disbursements.) The appellant again vigorously put that same position orally on the hearing of the appeal on Monday, 1 September 2014.These grounds are rejected.[Footnotes omitted. Emphasis added.][1] Kowalski v R J Cole & Partners [2014] SASC 137.

Ratio Decidendi

Legal Principle Established

Established by: GRAY AND SULAN JJ

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