Kowalski v R J Cole & Partners - [2014] SASC 137

SUPREME COURT OF SOUTH AUSTRALIA
(Appeals to a Single Judge: Civil)
KOWALSKI v R J COLE & PARTNERS
[2014] SASC 137
Judgment of The Honourable Justice Peek
23 September 2014
PROCEDURE - COSTS - TAXATION
PROCEDURE - COURTS AND JUDGES GENERALLY - COURTS - RULES OF COURT
PROCEDURE - COURTS AND JUDGES GENERALLY - JUDGES - DISQUALIFICATION FOR INTEREST OR BIAS
PROCEDURE - MISCELLANEOUS PROCEDURAL MATTERS - VEXATIOUS LITIGANTS AND PROCEEDINGS
Appeal against orders of a Master.
The appellant is a former client of the respondent firm of solicitors. He disputes the right of the respondent to receive or retain any amount of money for costs or disbursements. After various lengthy litigation, the appellant in 2013 instituted fresh proceedings purporting to apply for a taxation of the bill of costs pursuant to s 42(1) Legal Practitioners Act 1981. The respondent applied for that application to be struck out as an abuse of process and the Master granted that application. The appellant appealed.
Held per Peek J (dismissing the appeal):
1.      The respondent was not precluded from making an abuse of process application on the basis that the appellant’s documents had not been rejected pursuant to Rule 53 of the Supreme Court Rules 2006.
2. Section 42(1) of the Legal Practitioners Act 1981 does not abolish the inherent power of the Court to control its own processes.
3.      There was ample material before the Master justifying his conclusion that the 2013 action was an abuse of process.
4.      None of the 34 grounds of appeal are made out and the appeal is dismissed.
Legal Practitioners Act 1981 s 42(1); Supreme Court Act 1935 (SA); Supreme Court Rules 2006 s 53(2), 116-117, referred to.
Harrison v Tew [1990] 1 All ER 321, distinguished.
Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256; Hamilton v Oades (1989) 166 CLR 486; Moti v The Queen (2011) 245 CLR 456; Walton v Gardiner (1993) 177 CLR 378; Williams v Spautz (1992) 174 CLR 509, discussed.
Kowalski v Sim & Ors [2002] SADC 30, considered.

WORDS AND PHRASES CONSIDERED/DEFINED
"abuse of process", "vexatious litigant", "inherent jurisdiction", "taxation of costs"

KOWALSKI v R J COLE & PARTNERS
[2014] SASC 137
Civil

PEEK J.   Mr Kowalski (to whom I will refer as the appellant) is a former client of the firm of solicitors (to whom I will refer as the respondent) which acted for him in respect of a claim against his former employer (Mitsubishi). Accounts were rendered, amounts of money for costs were received, and litigation between the appellant and the respondent ensued. For present purposes, the relevant litigation may be summarised thus:
·In July 1996, the appellant in Action Number 1563 of 1996 sought taxation of the respondent’s Bill of Costs which had been rendered in 1992 (the 1996 taxation).
·At or about the same time in 1996, the appellant took action against the respondent for negligence in the District Court in Action Number 957 of 1996. In 2002, the trial was held and on 21 March 2002 Judge Anderson dismissed the proceedings.[1] His Honour held that the respondent was entitled to take the monies from the trust account in the manner that they did.[2] There was no appeal by the appellant.
·In 1998, after certain difficulties referred to by Judge Dart, a settlement was reached between the appellant and Mitsubishi.
·On 22 July 2005, the original Bill of Costs in the 1996 taxation, which had been interrupted by various events, was struck out on the application of the appellant himself.
·On 29 June 2006, the respondent brought proceedings in the Magistrates Court of South Australia in Action Number 778 of 2006 against the appellant (and his wife) seeking a declaration as to the balance of $9,018.45 which remained in the respondent’s trust account. The appellant counter-claimed, seeking recovery of that amount and other amounts paid to the respondent. On 16 July 2007, Mr Ward ASM dismissed the counterclaim. There was no appeal by the appellant against that dismissal.
·On 24 July 2007, the appellant applied in Action Number 1563 of 1996 for a refund of $18,634.66 costs paid to the respondent, plus interest. This application was dismissed by Judge Lunn on 15 October 2007.
·On 28 January 2008, the appellant applied in Action Number 1563 of 1996 to set aside the 22 July 2005 order striking out the bill of costs made on his own application. This application was dismissed by Judge Lunn on 31 March 2008.
·On 25 September 2013, the appellant instituted the present proceedings (Action Number 1283 of 2013).
[1]    Kowalski v Sim & Ors [2002] SADC 30.
[2]    Kowalski v Sim & Ors [2002] SADC 30, [89]; Reasons for Decision in SCCIV-13-1283 (29 May 2014) Judge Dart [12].
The interlocutory hearing before Judge Dart
The present proceedings (the primary application) were instituted on 25 September 2013 in a new action (Action Number 1283 of 2013) and purported to be an application seeking a taxation of costs pursuant to s 42(1), Legal Practitioners Act 1981.
The parties brought three interlocutory applications which were heard by Judge Dart. The respondent applied to strike out the primary application on the basis that it was an abuse of the process of the Court. The appellant applied to strike out the interlocutory application just referred to on the basis that it was an abuse of the process of the Court and also applied for Judge Dart to disqualify himself for bias.
Judge Dart delivered judgment on 29 May 2014. His Honour dismissed both of the appellant’s interlocutory applications. His Honour granted the respondent’s interlocutory application and dismissed the primary application.[3] His Honour essentially found, first, that the proper purpose of a taxation of costs is to assess the work done by the solicitors by reference to the appropriate scale and specifically proceeds on the basis that the client is liable for legal costs to the solicitor and quantum only is in issue; second, that throughout these proceedings, the appellant has consistently denied any liability for costs; and third, that it is clear that the predominant purpose of the appellant in instituting and prosecuting these proceedings is to seek a refund of all costs paid.
[3] On 12 June 2014 his Honour varied that order to one of staying rather than dismissing the primary application.
The appellant appeals against all of the decisions and orders made by Judge Dart.
The grounds of appeal
There are some 38 grounds, or purported grounds, of appeal (the grounds). I will proceed by addressing the grounds in the following groups:
1The contention that s 42, Legal Practitioners Act 1981 constitutes a code which provides for an exclusive process for taxation of costs; it excludes the Court’s inherent jurisdiction to decline to proceed with such an application on the ground of an abuse of process; and the Court had a legal obligation to proceed to conduct the taxation of costs (grounds 15, 18 and 19).
2The contention that Judge Lunn had no jurisdiction to make the orders in the original 1996 taxation proceedings (Action Number 1563 of 1996) (grounds 9 to 13, 24 and 25).
3The contention that Judge Dart was biased against the appellant and/or in favour of the respondent and ought to have disqualified himself (grounds 14, 20, 21 and 36-38).
4The contention that the fact that the appellant’s documents had not been rejected pursuant to Rule 53 prevented the respondent making any further specific application based on asserted abuse of process by the appellant (grounds 16, 17, 26, 28 to 35).
5The contention that Judge Dart erred in dismissing the appellant’s application (FDN 8) that the respondent’s application (FDN 5) be dismissed (grounds 22 and 23).
6The contention that Judge Dart erred in finding that the primary application was brought by the appellant for a collateral or ulterior purpose, namely to seek a complete refund of legal costs that had been paid (grounds 27 to 34).
7Grounds which are vague and unparticularised on their face and may be assumed to have as their content, if any, the matters referred to in later grounds of appeal (grounds 1 to 5).
8Grounds which allege matters of fact which are irrelevant and/or not supported by evidence (grounds 6 to 8).
Group 1: The jurisdiction of Judge Dart (grounds 15, 18 and 19)
The appellant, relying upon the decision in Harrison v Tew,[4] put the following argument, as I understood it. First, the Legal Practitioners Act 1981 is a “code” that delineates the power of the Supreme Court to conduct a taxation of costs. Second, any inherent jurisdiction in relation to the topic of taxation of costs is thereby abrogated. Third, it follows that the inherent jurisdiction to control abuse of process in the area of taxation of costs is thereby abrogated. Fourth, that his Honour erred in thinking that the position could be saved by Rules of Court “providing” jurisdiction whereas the correct position is that the source of jurisdiction can only be found in the Supreme Court Act 1935 or the inherent jurisdiction.
[4] [1990] 1 All ER 321.
Judge Dart rejected that argument. His Honour stated:
[25]The position of the applicant is without merit. The Court always retains an ability to control its processes. An application under s 42 of the LPA is itself governed by Supreme Court Rule 272. The Rules of Court apply to the taxation. It would follow that the Court’s powers to deal with an abuse of process is both pursuant to its inherent power and also pursuant to the rules. The applicable rule being Rule 117.
[26]The argument that the provisions of s 42 of the LPA are a code flows from the case of Harrison and others v Tew.[5] In that case the House of Lords held, in circumstances where there was a statutory regime for the taxation of solicitors’ costs, that the court retained no inherent jurisdiction to tax costs outside of the statutory procedure. The situation is no doubt the same in this jurisdiction. Saying that there is no inherent jurisdiction to tax costs is not the same thing as saying there is no inherent jurisdiction or jurisdiction provided by the Rules to control the processes of the Court during the conduct of the taxation. The applicant’s argument is misconceived. (Emphasis added)
[5] [1990] 1 All ER 321.
Judge Dart’s line of reasoning is clearly correct. I need only say that, as to the appellant’s steps one to three, the power of the Court to control its processes is an important inherent power, and the Legal Practitioners Act 1981 in no way evinces an intention to abolish or affect that power. The decision in Harrison v Tew[6] does not support the appellant’s argument. As to the appellant’s step four, the appellant on the hearing of the appeal sought to make much of his Honour’s words italicised in paragraph [26]. I suppose, if one tried hard enough, one might misunderstand those words. It is true that the source of jurisdiction can only be found in the Supreme Court Act 1935 or the inherent jurisdiction and that a Rule of Court cannot per se confer jurisdiction if it does not otherwise exist. However, his Honour, having specifically found that the inherent jurisdiction was not affected by the Legal Practitioners Act 1981, clearly was not relying on a power that purported to be granted by the Rules alone but rather on the inherent power upon which the Rules are based. Thus, the term “provided by the Rules” was here used in the sense of “referred to by the Rules”.[7]
[6] [1990] 1 All ER 321.
[7] Although not determinative for the reason stated, it is correct to say that the rr 116-117, Supreme Court Rules 2006 proceed on the basis that the Court does retain the power to govern its own processes and to strike out or stay proceedings which are an abuse of process.
No error in the reasoning of his Honour or the result at which he arrived is demonstrated. These grounds are rejected.
Group 2: The jurisdiction of Judge Lunn (grounds 9 to 13, 24 and 25)
As noted above, in 2005 the appellant himself made an application to strike out the 1996 taxation proceedings and Judge Lunn granted that application. There was no appeal from that order of Judge Lunn dismissing the taxation.
As I understand it, the appellant puts the argument rejected above as to the first group of grounds and here goes further. He argues that Judge Lunn had no jurisdiction even to grant the appellant’s own application to strike out a taxation because s 42, Legal Practitioners Act 1981 imposes a code which required the Court to continue to conduct that taxation of costs irrespective of such an application; again he submits (wrongly) that the decision in Harrison v Tew[8] supports that proposition.
[8] [1990] 1 All ER 321.
The argument is obviously without merit for much the same reasons as those applicable to group one of the grounds. All of Judge Lunn’s orders were within jurisdiction and valid. These grounds are rejected.
I should add that one of the orders made on 31 March 2008 by Judge Lunn was order 3 as follows:
3.The defendant is not be permitted to file any further interlocutory application in this unless he first pays into Court $1000 on account of the costs of the plaintiff ordered against him on 15 February 2008 and today.
Again, there was no appeal from that order and the appellant never paid into Court the $1,000 referred to. However, in initiating the present proceedings, the appellant has simply filed what is in fact a copy of the Bill of Costs originally filed in the 1996 taxation proceedings by the present respondent in (Action Number 1563 of 1996) together with a copy of his original Notice of Dispute to that Bill of Costs with the action heading changed. It can readily be seen that one aspect of the initiating of the present new proceedings (Action Number 1263 of 2013) is the attempted avoidance of compliance with Judge Lunn’s order 3.[9]
[9] Judge Dart was alive to this matter and appropriately addressed it at paragraph [17] of his reasons.
Group of grounds 3: Disqualification for bias (grounds 14, 20, 21 and 36-38)
There is no evidence of bias (actual or apprehended) against the appellant or in favour of the respondent and Judge Dart correctly refused to disqualify himself. These grounds are rejected.
Group of grounds 4: The fact that the appellant’s documents had not been rejected pursuant to Rule 53 prevented the respondent making any further specific application based on asserted abuse of process by the appellant (grounds 16, 17, 26, 28 to 35)
The appellant’s argument here appears to be that the fact that the appellant’s documents had not been rejected pursuant to r 53(2), Supreme Court Rules 2006 forestalls and prevents any further specific application by a party based on asserted abuse of process being made by the respondent, perhaps in the nature of res judicata.
The stating of the argument appears to be a sufficient demolition of it. Clearly, a party always has a right to complain to a court of an abuse of its process; the procedure under r 53 is only a general filter (“a low hurdle” as Judge Dart put it) and a party in the position of the present respondent is not heard as to the making of decisions under r 53. Parties clearly retain the right to make an application directed to specific matters and in the present case the respondent has done no more than exercise that right.
Any decision under r 53 did not preclude the application of the respondent being made or Judge Dart acceding to it. Judge Dart was correct in finding that the appellant’s argument is misconceived. These grounds are rejected.
Group of grounds 5: Judge Dart erred in dismissing the appellant’s application (FDN 8) that the respondent’s application (FDN 5) be dismissed (grounds 22 and 23)
The appellant’s application to dismiss the respondent’s application was otiose. If the respondent’s application lacked merit, it would be duly dismissed and no application by the appellant was needed to secure that result. Judge Dart’s decision was correct and these grounds are rejected.
Group of grounds 6: Judge Dart erred in finding that the primary application was brought by the appellant for a collateral or ulterior purpose, namely to seek a complete refund of legal costs that had been paid (grounds 27 to 34)
Paragraph 1 of the appellant’s originating process in the present proceedings (Action Number 1283 of 2013) states that the primary relief sought is that the costs of the respondent be adjudicated pursuant to s 42(1), Legal Practitioners Act 1981. The appellant has filed what is in fact a copy of the Bill of Costs originally filed by the present respondent in the 1996 taxation proceedings (Action Number 1563 of 1996) together with a copy of his original Notice of Dispute to that Bill of Costs with the action heading changed.
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;[10] Williams v Spautz;[11] Walton v Gardiner,[12] Batistatos v Roads and Traffic Authority (NSW)[13] and Moti v The Queen.[14] 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.
[10] (1989) 166 CLR 486, 502.
[11] (1992) 174 CLR 509.
[12] (1993) 177 CLR 378, 392-395.
[13] (2006) 226 CLR 256, 265-267.
[14] (2011) 245 CLR 456, 463.
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”[15] 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:[16] “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.)[17]
[15] Fax machine imprint “28 August 2014 8:41PM”.
[16] At page 5 of the same fax, in a paragraph numbered 8 (but which is the second paragraph 8).
[17] See also a fax labelled by the appellant as “Faxed to Justice Parker on 31-8-14 at 5.45pm” (fax machine imprint “31 August 2014 8:01PM”) at pages 1, 2 and 6 and a fax labelled by the appellant as “Faxed to Justice Parker on 31-8-14 at 6.09pm” (fax machine imprint “31 August 2014 8:17PM”) at paragraph 20 at pages 10-14.

The appellant again vigorously put that same position orally on the hearing of the appeal on Monday, 1 September 2014.
These grounds are rejected.
Group of grounds 7: Grounds which are vague and unparticularised on their face and may be assumed to have as their content, if any, the matters referred to in later grounds of appeal (grounds 1 to 5)
Grounds 1 to 5 are vague and unparticularised on their face. No discernible argument was put on the hearing of the appeal with specific reference to any of these numbered grounds. It is assumed that if any of these grounds have content, it is the content shared by later numbered grounds of appeal 6 to 34. These grounds are rejected.
Group of grounds 8: Grounds which allege matters of fact which are irrelevant and/or not supported by evidence (grounds 6 to 8)
Grounds 6 to 8 allege matters of fact which are irrelevant to the decision of Judge Dart and/or not supported by evidence. No discernible argument was put on the hearing of the appeal with specific reference to any of these numbered grounds. These grounds are rejected.
Conclusion
No ground of appeal has been made out. The appeal is dismissed.