Kowalski v R J Cole & Partners - [2016] SASC 118

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
KOWALSKI v R J COLE & PARTNERS
[2016] SASC 118
Judgment of The Honourable Justice Lovell
4 August 2016
EQUITY - TRUSTS AND TRUSTEES - POWERS, DUTIES, RIGHTS AND LIABILITIES OF TRUSTEES - GENERAL MATTERS - DUTY NOT TO MIX TRUST MONEY WITH OWN
Appeal against decision of Magistrate declaring trust monies held by respondent in trust for third party - whether funds were trust monies held in trust for the appellant - appeal out of time - whether appellant should be granted an extension of time - whether appeal should be dismissed for want of prosecution.
Held: Appeal allowed.
1. Extension of time granted.
2. Application to strike out appeal for want of prosecution dismissed.
Smart Company Pty Ltd (in liq) v Clipsal Australia Pty Ltd (No 6) [2011] FCA 419, applied.
Byrnes v Kendle (2011) 243 CLR 253; Legal Services Board v Gillespie-Jones (2013) 249 CLR 493; Ulowski v Miller [1968] SASR 277; BQ & HM Doe Pty Ltd v National Australia Bank [1999] SASC 124; Stollznow v Calvert [1980] 2 NSWLR 749; Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274, discussed.
Beverage Bottlers (SA) Ltd (in Liquidation) v Abode Enterprises Pty Ltd [2009] SASC 272, considered.

KOWALSKI v R J COLE & PARTNERS
[2016] SASC 118
Magistrates Appeal: Civil
LOVELL J.

This appeal is part of a long and very unhappy piece of litigation. The appellant (“Mr Kowalski”) seeks to appeal a decision of Magistrate Ward (“Mr Ward ASM”) made on 16 July 2007.
By way of background, Blue J on 20 January 2014 dealt with the 109 matters being proceedings instituted by Mr Kowalski within the meaning of s 39 of the Supreme Court Act 1935 (SA). His Honour found that 63 of the proceedings instituted by Mr Kowalski were done without reasonable grounds as Mr Kowalski had persistently instituted vexatious proceedings. Blue J declared that Mr Kowalski should be prohibited from instituting future proceedings without permission of the Court and that existing proceedings other than those not found to be vexatious should be stayed. The matter before me is one that his Honour found should not be stayed.
There was an argument before Blue J that an extension of time was required as the notice to appeal was allegedly filed out of time. His Honour made inquiries and the following chronology was accepted by the parties to the appeal.
1.On 24 July 2007 Mr Kowalski lodged for filing a notice of appeal against the judgment of Mr Ward ASM of 16 July 2007.
2.On or before 2 August 2007 the registry sent a letter to Mr Kowalski saying that the notice of appeal should be expressed to be an appeal “to a single Judge of the Supreme Court of South Australia” rather than merely to “the Supreme Court of South Australia”. This letter cannot be located by the registry but its existence is inferred from the subsequent documents.
3.On 2 August 2007 Mr Kowalski sent to the registry by facsimile the replacement first page of the notice of appeal making the requested change.
4.On 14 September 2007 registry sent a letter to Mr Kowalski referring to his facsimile dated 2 August 2007 and stating he should lodge a fresh notice of appeal.
5.On 21 September 2007, Mr Kowalski lodged a fresh notice of appeal accordingly.
Exactly when R J Cole & Partners (“the respondent”) to this appeal was served with the fresh notice of appeal is not clear but it was accepted before me that certainly by January 2008 the respondent was aware of the appeal. Thereafter the respondent, although being aware of the notice of appeal allowed the matter to remain.
The question of the need for an extension of time, an application to strike out the appeal for want of prosecution and the merits of the appeal were argued before me on 22 March 2016.
Background
Due to the length of time from the lodging of the notice of appeal to my hearing of the matter no transcript of the trial before Mr Ward ASM is available. Both parties before me argued the matter on the basis of the findings made by Mr Ward ASM and I will approach the appeal on the same basis. The background facts were largely uncontroversial.
The issues before Mr Ward ASM involved an amount of money in the trust account of the respondent (plaintiff in the action) in the sum of $9118.45. The respondent sought a declaration that that sum was not “trust monies” and that the respondent was entitled to the same. The alternative claim was that the monies were trust monies (in the name of the appellant) but that the respondent had a claim against the same for the balance of its costs and disbursements to be agreed or taxed. In light of his findings Mr Ward ASM did not decide this latter question.
By way of counter-claim the appellant (defendant in the action) pleaded that the Magistrates Court did not have jurisdiction to make such a declaration. He further pleaded that the money was his, that it did not belong to the respondent (plaintiff in the action) and that the respondent’s claim was statute barred. There was also a counter-claim with a number of different components namely that he sought repayment of $12,354.50 being monies paid by way of costs to the respondent by Mr Kowalski (defendant in the action) plus interest. He sought repayment of the sum of $9118.45.
In the notice of appeal Mr Kowalski also challenged the dismissal of his counter-claims but this was not pursued before me. This appeal only deals with the declaration made by Mr Ward ASM that the sum of $9118.45 held in the plaintiff’s trust account were not “trust monies, and have not been trust monies since 26 October 1998”.[1]
[1] Reasons for Decision of Mr Ward ASM 16 July 2007 at [70].
In the final event Mr Kowalski appealed the judgment on two grounds. First, that Mr Ward ASM did not have jurisdiction to make a declaration. Secondly, the sum of $9118.45 was trust monies and held in trust for him.
Background to the claim and counter-claims
As mentioned this matter has a very unhappy history. The background is complicated but largely undisputed. It is necessary to set out the background in some detail.
In 1989 Mr Kowalski injured his back in an accident at work. In a separate incident he alleged he sustained an injury to his eye and in another incident an injury to his finger. Resolution of these claims proved difficult and became the subject of litigation. Some of the litigation was conducted by Stanley and Partners but the appellant changed solicitors and engaged the respondent to rectify an underpayment relating to an overtime allowance. He received advice that he may have a common law claim against Mitsubishi, his employer, and an action was brought on his behalf in the District Court of South Australia. The action was unsuccessful. The respondent, before judgment, rendered a memorandum of costs to Mr Kowalski in the sum of $18,634.66. The bill was sent to Mr Kowalski on 30 March 1992 and payment was deferred to a later date.
After delivery of the judgment against Mr Kowalski the respondent entered into negotiations with Mitsubishi in an attempt to resolve all outstanding matters. A conditional agreement was reached for a sum of approximately $55,000 but that agreement was subject to the approval of the general manager of the WorkCover Corporation.
Whilst the parties were awaiting the approval of the general manager the Industrial Court authorised a part-payment of the sum of $23,000 to Mr Kowalski’s solicitors. That sum was paid to the respondent and paid into the respondent’s trust account on 31 August 1992. The respondent immediately deducted the amount of its costs of $18,634.66 and did not advise Mr Kowalski that it had done so until much later. Indeed it is clear that they deliberately misled him at various times as to what monies they held in their trust account on his behalf. As Mr Ward ASM stated this was “regrettable”.[2]
[2] Reasons for Decision of Mr Ward ASM 16 July 2007 at [16].
The Industrial Court, when ordering the part-payment of $23,000, had accepted an undertaking from the respondent not to payout that sum or any part of it until the general manager had in fact given his approval. The respondent was arguably in breach of this order when it transferred money from the trust account to its firm account for its “costs”.
The general manager withheld his approval of the $55,000 settlement which meant that the sum of $23,000 had to be repaid.
At that stage the parties did nothing about the recovery of the $23,000. It is apparent that Mr Kowalski was ignorant of his obligation to do so as the relationship between the parties had broken down.
The respondent misled Mr Kowalski in correspondence on 15 March 1993 by informing him that they held “$23,000 in our trust account…”[3] In fact at that time only $3881.55 remained in Mr Kowalski’s name in the trust account and that had been the case since 2 September 1992.
[3] Reasons for Decision of Mr Ward ASM 16 July 2007 at [20].
In March 1994 the solicitors for Mitsubishi pressed the respondent for the return of the $23,000. Mr Kowalski forwarded a trust account cheque in the sum of $3881.55 to Fountain and Bonnig, solicitors for Mitsubishi, as “part payment of sum owing”[4] leaving a nil balance in the trust account in the name of Mr Kowalski.
[4] Reasons for Decision of Mr Ward ASM 16 July 2007 at [22].
Mr Ward ASM then found that the respondent set about attempting to repay the $23,000 to Mitsubishi in “what I regard as a dishonest way”.[5] It pressured Mr Kowalski into paying the money to Mitsubishi. As Mr Ward ASM found there could be no complaint about that if the respondent had explained the true position to Mr Kowalski. However the respondent demanded that Mr Kowalski pay its outstanding accounts rendered on 30 March 1992 and 31 August 1992. It did that by letter of 25 March 1994 where it insisted that a sum of $19,305.82 was outstanding with respect to their accounts. This of course was not true as they had taken the money for that account from their trust account much earlier.
[5] Reasons for Decision of Mr Ward ASM 16 July 2007 at [23].
Mr Kowalski, who did not know the true position, apparently responded and offered to pay $10,000 in “part payment of the amount owing”. He paid the $10,000 on 14 June 1994. The respondent then paid that amount to the solicitors for Mitsubishi meaning that $13,881.55 of the original $23,000 had been repaid[6] leaving the amount of $9118.45 to be paid to Mitsubishi. Mr Kowalski made no more payments.
[6] Reasons for Decision of Mr Ward ASM 16 July 2007 at [26].
On 4 December 1995 the respondent itself paid the balance of $9118.45 back into the trust account in the name of Mr Kowalski where it remained until shortly after the decision of Mr Ward ASM. Mr Ward ASM was unable to see why the respondent (plaintiff in the action) “felt obliged to, and did pay, this sum into trust in the defendant’s name”.[7] The money simply remained in the trust account and the respondent did nothing to actually repay Mitsubishi. It is this amount that was the subject of the action.
[7] Reasons for Decision of Mr Ward ASM 16 July 2007 at [29].
Further litigation and negotiations occurred between Mr Kowalski, the respondent and Mitsubishi. Eventually Mr Kowalski and Mitsubishi negotiated and Mitsubishi agreed to pay $200,000 in full settlement of Mr Kowalski’s claims. It was a term of the settlement that Mitsubishi agreed not to seek repayment of monies previously paid including the monies paid to the respondent. Mitsubishi clearly has no claim to any of the money in the trust account.
Before Mr Ward ASM both Mr Kowalski and the respondent claimed an interest in the remaining sum of $9118.45.
Having discussed Mr Kowalski’s counter-claims and having rejected them Mr Ward ASM returned to the question of the monies in the trust account. He stated:[8]
[8] Reasons for Decision of Mr Ward ASM 16 July 2007 at [64]-[71].
Who has the best claim to the monies?
To recap, the money was paid into the plaintiff’s trust account by the plaintiff and kept there in the defendant’s name. As I have said in para.29, I do not know why the plaintiff has paid the money into the trust account. It was the defendant’s obligation to repay the $23,000 to Mitsubishi. The money was initially held preparatory to extinguishing the defendant’s debt to Mitsubishi. Later, however, that debt was extinguished by agreement between the defendant and Mitsubishi (para.36 of these reasons).
It is plain that the money was held in trust for Mitsubishi. It is unfortunate that the name of the trust account was the defendant’s name. That fact is capable of creating a presumption that the money was held in trust for the defendant. However, given the uncontested facts and circumstances surrounding the creation of the trust, that presumption (of a trust for the benefit of the defendant) is clearly and obviously rebutted. Those facts and circumstances are set out in paras. 15-32 of these reasons. In short, they demonstrate quite clearly that the plaintiff paid the $9,118.45 out of its own moneys into trust for the purpose of repaying Mitsubishi.
Then, when the defendant and Mitsubishi settled their differences on 26/10/1998 (see paragraph 36), Mitsubishi abandoned any claim to the money held in trust on its behalf.
On that abandonment, the money reverts to the person who created the trust, the true owner of the money, namely the plaintiff. It ceased to be trust money on 26/10/1998.
The defendant has no claim whatsoever to the money.
The shortcomings in the plaintiff’s conduct in the defendant’s affairs (set out in paras. 16, 20, 23-28, 35), all pre-date the creation of the trust for Mitsubishi, and are unconnected with that creation. There is nothing wrong, legally, morally or equitably in the plaintiff’s creation of the trust, or its subsequent dealings with the trust money. Reservations that I may have at one stage expressed due to possible breaches of equitable Rules, such as “coming to equity with clean hands”, are therefore inapplicable.
There is a declaration as follows. “The $9,118.45 held in the plaintiff’s trust account are not trust monies, and have not been trust monies since the 26^th October 1998. The plaintiff is entitled to that sum”.
The defendant is to pay the plaintiff’s costs of the action to be taxed or agreed.
As can be seen Mr Ward ASM considered that the payment by the respondent of the sum of $9118.45 into the trust account in the name of Mr Kowalski was in fact money held by the respondent in trust for Mitsubishi not Mr Kowalski. His Honour found that when the litigation finally settled Mitsubishi abandoned the trust and the money reverted to the respondent.
His Honour did not deal with the second contention of the respondent that the monies were trust monies (in the name of Mr Kowalski) but that the respondent had a claim against the same for the balance of its costs and disbursements to be agreed or taxed.
Law
I deal first with the question of whether Mr Ward ASM had the jurisdiction to make a declaration. That point can be dealt with simply. I do not need to decide whether he could make such a declaration if that were the only matter before him. Once the counterclaim was filed however Mr Ward ASM had jurisdiction to decide the respective rights of the parties and this included the jurisdiction to make a declaration.
I dismiss this ground of appeal.
I turn to the question of the declaration.
Mr Kowalski argued that the monies were trust monies in the trust account in his name.
Mr Kowalski further argued that as the Legal Practitioners Conduct Board had considered the matter and decided that the monies held were trust monies, he argued that I was bound by “issue estoppel” and that I had to find on that basis that the monies were indeed trust monies. I do not need to deal with that argument in any event other than to say that the argument of “issue estoppel” has no basis in law. The real question is simply whether Mr Ward ASM was correct in deciding that a trust was created between the respondent and Mitsubishi.
Before a valid trust is created there must be certainty on three matters:
1.   Certainty that the alleged creator of the trust intended to impose an equitable obligation by way of trust on terms that are certain;
2.   Certainty as to the property that is the subject matter of the trust;
3.   Certainty as to the objects of the trust that is to say the beneficiaries or some appropriate impersonal purpose.
Trusts are interpreted in the same way as a contract namely, objective standards of construction apply. The subjective intention of the settlor is not relevant.[9] When there is no deed evidencing a trust, as in this case, the authorities establish that the search for “intention” is only a search for the intentions revealed in the words the parties used, amplified by the facts known to both parties.[10] The ultimate burden of proving an intention to create a trust is on the person who claims that the trust was created.
[9] Byrnes v Kendle (2011) 243 CLR 253.
[10] Byrnes v Kendle (2011) 243 CLR 253.
An objective intention to create a trust may be vitiated for a number of reasons and then the party’s subjective intentions will become determinative. This is where the trust creating transaction “is open to some challenge or some application for modification”.[11] The outward manifestation of the parties within the totality of the circumstances is the determinant of whether a trust creating intention exists.[12]
[11] Byrnes v Kendle (2011) 243 CLR 253 at [115].
[12] Legal Services Board v Gillespie-Jones (2013) 249 CLR 493.
Thus issues as to whether a trust has been created and on what terms are to be resolved according to the ordinary meanings of the words and actions involved in a disposition.
Discussion
As mentioned I am prepared to decide this matter on the facts and findings as stated in Mr Ward ASM’s decision.
There are two particularly relevant findings of Mr Ward ASM.
The first one is that he was unable to see why the respondent felt obliged to and did pay the sum of $9118.45 into the trust account in the name of Mr Kowalski. The second finding is that it “is plain that the money was held in trust for Mitsubishi”.[13]
[13] Reasons for Decision of Mr Ward ASM 16 July 2007 at [65].
On the facts found by Mr Ward ASM it is clear that the payment into the trust account of $9118.45 on 4 December 1995 related to the original transfers of $19,118.45 made on 31 August 1992 and in September 1992. The objective evidence shows that the payment into the trust account of $9118.45 was simply a reversal in part of the original transfers. It is clear that the firm was simply returning to Mr Kowalski monies that it had previously removed in payment of its costs.
It is clear from the findings of Mr Ward ASM that the firm did not have the authority before the transfers were made to appropriate the monies. It was not suggested that it was an accident that they put the $9118.45 into the trust account ledger in the name of Mr Kowalski. There was no obvious reason why they needed to transfer the money. The firm could easily have paid Mitsubishi out of their general account if and when they decided to make any such payment.
What is clear from the surrounding circumstances is that Mr Kowalski, at the time of the transfer, still had a liability of $9118.45 to Mitsubishi. The overwhelming inference is that the respondent simply returned the sum of $9118.45 to the trust account in the name of Mr Kowalski so that if Mitsubishi demanded the final payment it could be made from the trust account rather than their firm account. A number of factors already mentioned lead to that inference. Further, a letter from the respondent to the solicitors for Mitsubishi advising them that they, the respondent, had appropriated the settlement monies to cover their costs and that they had a responsibility to rectify the position simply confirms that inference. Also a letter from the respondent to Mr Kowalski dated 12 December 1995 enclosing a trust account statement notes that the sum of $9118.45 was held on his behalf.

In my view the facts point not to a trust between Mitsubishi and the firm but a simple refund transaction of money into the trust account of Mr Kowalski from monies appropriated for its costs. Objectively there is no evidence to support an intention to create a trust between the respondent and Mitsubishi.
The monies were held in the trust account in the name of Mr Kowalski and on trust for him to discharge any remaining obligation he had to repay monies to Mitsubishi.
In my view Mr Ward ASM erred in finding that there was a trust created between the respondent and Mitsubishi.
That of course is not the end of this matter.
Extension of time
The respondent argued that Mr Kowalski should not be granted an extension of time. The respondent further argued that even if I granted an extension of time I should strike out the appeal for want of prosecution.
There are two questions that arise. Did Mr Kowalski need an extension of time? If so, should it be granted and if not is the delay in prosecuting the appeal fatal due to the prejudice suffered by it.
I have set out earlier in this judgment the agreed facts in relation to how this appeal was originally instituted.
Whilst it is unclear precisely what happened there is no doubt that Mr Kowalski attempted to file his appeal document within time. There was a technical problem with the document and it was not accepted by the registry. Eventually he lodged a fresh notice of appeal on 21 September 2007. The respondent admits being served with an appeal document on 25 January 2008. It is not clear precisely which version of the document was served, but there were no material differences between the July and September versions of the notice of appeal.
It is common ground that by January 2008 the respondent was aware of the appeal and the grounds.
The Court may make any order it considers necessary for the proper conduct of a proceeding or otherwise in the interests of justice.[14] This includes a power to extend a time limit even though the relevant time limit fixed by the Rules has already expired.
[14] Supreme Court Civil Rules 2006 (SA) r 117.
If it were simply a question of the problems with the initial filing of the notice of appeal, there would be little difficulty in extending the time. However the main submission of the respondent related not so much to the technical problems but rather to the question of delay since January 2008 and the prejudice caused by the delay. This aspect is relevant to both the question of the extension of time and also the application to strike out the notice of appeal due to a want of prosecution.
Delay
Mr Kowalski accepts that he is responsible for the delay in this case. On appeal he candidly admitted that he simply forgot about this particular appeal.
There are references in other judgments in which he was a party that note that he had not appealed this judgment. However when looking at Mr Kowalski’s history he is not a person to abandon a legal right or avenue of appeal. He took the trouble to lodge the appeal and comply or attempt to comply with the requests of the Supreme Court registry. He has had, as Blue J noted, many actions running in various courts and tribunals.
It must be remembered that Mr Kowalski since 2007 has prosecuted a large number of cases in this Court and in other courts and tribunals. Indeed he was declared to be a vexatious litigant in January 2014 by Blue J. His Honour ordered that Mr Kowalski be prohibited from instituting future proceedings without leave of the Court and that existing proceedings other than those not found to be vexatious should be stayed. This action was not stayed.
I accept that if Mr Kowalski had remembered this proceeding he would have prosecuted it with his usual zeal. Given the number of matters he had before the courts it is unsurprising that one may have slipped his notice. I find that there was no intentional or contumelious default by Mr Kowalski. If I were not to extend time or if I were to strike out the appeal for want of prosecution it would cause hardship to Mr Kowalski. However there has been a significant delay. Any hardship to Mr Kowalski must be weighed against the prejudice caused to the respondent by the delay. The respondent submitted that to allow these proceedings to continue would compromise the finality of litigation to which it was entitled.
The relevant principles were discussed by Kourakis J (as he then was) in Beverage Bottlers (SA) Ltd (in Liquidation) & Anor v Abode Enterprises Pty Ltd[15] where his Honour, in following the general approach adopted in Ulowski v Miller[16] stated:[17]
I respectfully share the view expressed by Lander J that whilst the English approach may have been appropriate at the time it was articulated, it is not reasonably adapted to the procedural rules and case management systems currently applied in the courts of this State.[18] As Lander J observed, the current practice requires all parties to act in accordance with time limits prescribed by the rules and orders. A dispensation from those requirements will only be given if the justice of the case requires it; it is not sufficient to show that the defaulting party had not acted intentionally or with contumacy.[19] However, in determining where the “justice of the case” lies, it must be remembered that even though the principles of case flow management are an important foundation of the Court’s procedural rules and practices, ordinarily a party will not be shut out from putting an arguable case.[20]
Lander J explained the interplay between these competing considerations in this way:
However, there must come a time when a party has so conducted the litigation that it would be appropriate to shut that party out of that party’s litigation even if the point is arguable. Justice delayed can be justice denied. Both the plaintiff and the defendant are entitled to justice. If the plaintiff has conducted his or her case so that the defendant has suffered prejudice or will suffer injustice in defending the case then the defendant is entitled to justice, and justice can only be achieved by shutting the plaintiff out of his or her case. However prejudice to the defendant is not a prerequisite to the exercise of the jurisdiction to dismiss for want of prosecution. It is an important factor but not the only factor. In considering whether the position has been reached that a plaintiff’s claim must be dismissed for want of prosecution, it seems to me that the principles in Ulowski v Miller subject to one matter are appropriate principles for consideration of an application of this kind, notwithstanding that the principles were first expoused [sic] in 1968. The further matter to which regard must be had is the concept of case flow management. If the plaintiff’s inaction has caused prejudice to other litigants then that also is a factor to which regard must be had in considering whether the order should be made. It is not only the parties before the Court who are entitled to justice. There will be circumstances when the plaintiff’s inaction requires that in the interests of the administration of justice the action be dismissed: United Motors Retail Ltd v Australian Guarantee Corporation Ltd (1991) 58 SASR 156 per King CJ at 160.[21]
Where the continuation of the proceedings would not be an abuse of process, case management principles become more important. Deterrence of other parties in other actions is an irrelevant consideration,[22] but the considerations identified by Lander J in the above passage are important.
[15] [2009] SASC 272.
[16] [1968] SASR 277.
[17] [2009] SASC 272 at [157]-[159].
[18] BQ & HM Doe Pty Ltd v National Australia Bank [1999] SASC 124 at [98].
[19] BQ & HM Doe Pty Ltd v National Australia Bank [1999] SASC 124 at [101].
[20] BQ & HM Doe Pty Ltd v National Australia Bank [1999] SASC 124 at [102].
[21] BQ & HM Doe Pty Ltd v National Australia Bank [1999] SASC 124 at [103].
[22] Stollznow v Calvert [1980] 2 NSWLR 749 at 755; Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274 at [48] per Heydon JA.
In Smart Company Pty Ltd (in liq) v Clipsal Australia Pty Ltd (No 6)[23] Lander J in relation to an application to strike out proceedings for want of prosecution in the Federal Court restated the general principles:[24]
In determining whether an order should be made for the failure to prosecute a proceeding with due diligence, the court will have regard to the length of the delay, the reasons for the delay, whether the fault lies with the applicant or the applicant’s legal advisors, whether the delay has caused prejudice which is irremediable and whether if properly managed the proceeding could still proceed to trial which is fair in any other relevant circumstance.
[23] [2011] FCA 419.
[24] [2011] FCA 419 at [569].
I will act on the legal principles enunciated above. Case flow management issues are also relevant.
The respondent submitted that Mr Kowalski’s failure to prosecute the matter for some almost seven years has caused it irremediable prejudice. The respondent pointed to the fact that the judgment of Mr Ward ASM has been referred to in five other matters in which Mr Kowalski litigated. It submitted that these judgments in part relied on the existence of the judgment now under appeal. It was said that this would prejudice the rights of the respondent to finality not only in this litigation but in the other pieces of litigation where it has been mentioned.
It was submitted that if the appeal were to be allowed then Mr Kowalski may well consider it to be his right to seek to reopen each of the five matters which have in part of their determination relied on the existence of this judgment. The respondent pointed to the fact that despite the reference to this judgment in those matters Mr Kowalski did not proceed to prosecute the appeal.
The respondent did not concede that he would be so entitled but pointed to the potential for much further litigation.
Before considering the detail of the prejudice asserted by the respondent it is important to note that the respondent itself took no action to terminate the appeal. It could have applied to the Court for dismissal of the appeal for want of prosecution. It may be that it took the view that it should “let sleeping dogs lie”. However, given that the respondent was aware of the existence of the appeal from January 2008, the respondent’s claims of prejudice must be considered in the context that it took no such action.
I have considered the cases referred to by the respondent. Generally the reference to the judgment under appeal was not relevant to the decision in the cases. The exception may be the decision of Judge Dart in Kowalski v R J Cole & Partners where it appears his Honour may have had regard to the fact that the judgment was not appealed. However the issue as to who was the rightful owner of the monies was not before Judge Dart to decide. It could not be said that the judgment under appeal was central to his ultimate conclusion.
I also bear in mind that Mr Kowalski has been declared a vexatious litigant in both the Supreme and Federal Courts. Any further litigation would be subject to obtaining permission.
In considering the relevant factors, there can be no doubt in this case that the failure to prosecute the appeal lies with Mr Kowalski. However, it was not deliberate or intentional delay. While there is still some potential for prejudice being caused to the respondent, the respondent itself took no steps to seek dismissal of the appeal notwithstanding its awareness of the appeal since January 2008. It is unlikely that the potential prejudice will materialise in the circumstances. It must also be remembered that he has been declared to be a vexatious litigant. There is a control mechanism in place regarding the further issuing of proceedings.
In all of the circumstances and as far as necessary I would grant an extension of time for Mr Kowalski to institute the appeal.
In the exercise of my discretion I refuse the application to strike out the notice of appeal for want of prosecution.
I allow the appeal.
I will hear the parties as to the appropriate orders.