FEDERAL COURT OF AUSTRALIA Dudzinski v Kellow [1999] FCA 1264 PRACTICE AND PROCEDURE – pleadings – strike out – stay of proceedings suitable for District Court – application for leave to appeal – interlocutory decision – principles – decision not attended by doubt – application for leave dismissed. Korn v Paisley Robertson Pty Ltd (1995) 59 FCR 251, followed Federal Commissioner of Taxation v Hydrocarbon Products Pty Ltd (1987) 72 ALR 391, cited Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170, cited Niemann v Electronic Industries Ltd [1978] VR 431, cited Dey v Victorian Railways Commissioners (1949) 78 CLR 62, cited WALDEMAR DUDZINSKI v ANSLEY KELLOW, ROY RICKSON, ERROL STOCK, WILLIAM HOGARTH, CORDIA CHU, KEES HULSMAN, LYN HOLMAN, COLIN McANDREW, JOHN SCOTT AND GRIFFITH UNIVERSITY Q 110 OF 1999 FRENCH, WHITLAM & LINDGREN JJ 27 AUGUST 1999 BRISBANE IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY Q 110 OF 1999 BETWEEN: WALDEMAR DUDZINSKI Applicant AND: AYNSLEY KELLOW, ROY RICKSON, ERROL STOCK, BILL HOGARTH, CORDIA CHU, KEES HULSMAN, LYN HOLMAN, COLIN McANDREW, JOHN SCOTT and GRIFFITH UNIVERSITY Respondents JUDGE: FRENCH, WHITLAM & LINDGREN JJ DATE OF ORDER: 27 AUGUST 1999 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The application for leave to appeal is dismissed. 2. The Applicant is to pay the Respondents' costs of the application for leave. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY Q 110 OF 1999 BETWEEN: WALDEMAR DUDZINSKI Applicant AND: AYNSLEY KELLOW, ROY RICKSON, ERROL STOCK, BILL HOGARTH, CORDIA CHU, KEES HULSMAN, LYN HOLMAN, COLIN McANDREW, JOHN SCOTT and GRIFFITH UNIVERSITY Respondents JUDGE: FRENCH, WHITLAM & LINDGREN JJ DATE: 27 AUGUST 1999 PLACE: BRISBANE EX TEMPORE REASONS FOR JUDGMENT French J: 1 This is an application for leave to appeal against the decision of Drummond J in which he struck out substantial parts of a statement of claim in proceedings brought by the applicant against Griffith University and certain of its staff. His Honour also ordered a permanent stay of the proceedings. 2 The applicant instituted proceedings on the 27 October 1997. According to his amended statement of claim, which is the subject of this application for leave, he holds an Associate Diploma in Economics and Organisation of Industrial Enterprises from Poland and a Bachelor of Applied Science in Geology from the Queensland University of Technology. He alleges that in 1993 he enrolled in the program for the degree of Master of Engineering Science in Waste Management at Griffith University and, in 1997, enrolled in the combined Degree Program for the Bachelor of Laws and Bachelor of Science in Environmental Sciences. 3 The applicant's amended statement of claim, which had been amended on a number of occasions, was divided up into eleven parts setting out various classes of cause of action against the University and members of its staff who were named as respondents. In outline, the parts and their headings are: Part 1 Professional Negligence; Part 2 Defamation and Trade Practices Act 1974; Part 3 Injurious Falsehood; Part 4 Defamation and Injurious Falsehood, Professional Negligence, Conspiracy, Trade Practices Act 1974 in s 52(1); Part 5 Negligent misstatement in Relation to Provision of Services and Deceit; Part 6 Defamation and Injurious Falsehood in Relation to the Provision Of Services; Part 7 Trade Practices Act Part IVA, s 51AA, Part V in ss 51, 52, 53, 79, 80, 82, 87(2)(d); Part 8 Assault; Part 9 Racial and Sex Discrimination; Part 10 Contract; Trade Practices Act Part IV s 51AA; and Part 11 Defamation and Intimidation 4 A motion to strike out the statement of claim under O 20 of the Federal Court Rules was heard by his Honour and judgment given on 8 April 1999. This motion was heard prior to, and obviously overtook, the applicant's motion for summary judgment. In his judgment, his Honour struck out part of Part 1 relating to fraud, although he allowed the negligence case against two of the University staff to stand. His Honour struck out the whole of Parts 2, 3, 4, 5, 7, 9, 10 and 11. He allowed Part 8 relating to the assault plea to stand. For the most part his Honour's judgment in relation to the strike out motion was based upon the inadequacy of the pleadings themselves, although there are references in different parts of the judgment to evidence, in some cases material relied upon by the applicant himself and in other cases, material which was undisputed. 5 His Honour found that the applicant had pleaded sufficiently a cause of action in negligence against the respondents, Stock and Hogarth, in Part 1 and a cause of action for assault against the respondent, Stock, in Part 8. The applicant had had extensive opportunities to formulate the proper pleading, and this obviously influenced his Honour's views about whether he should be allowed to re-plead. He said in his judgment: "…I have concluded that the material before me shows, in relation to a number of the causes of action relied on by the applicant, that he will be unable to make out the case if the matter goes to trial while, in relation to a number of the other causes of action, his pleadings are so deficient as to require them to be struck out." His Honour also ordered a permanent stay of the proceedings and, in that respect, he said at p 24 of the judgment in respect of the negligence claim which he allowed to stand: "If his claim in Part 1 is accepted at face value, he claims general damages of $40,000 and $30,000 respectively, against Stock and Hogarth and a further $14,000 special damages from them." His Honour regarded the claim for $20,000 general damages in respect of the assault as extremely optimistic. The probabilities on the material before him were, in his Honour's opinion, that: "…if he can prove his claim, he will recover very much less than that. If he has any entitlement to damages, the amount will also be influenced by any conduct of his own that contributed to such assault as he may be able to prove." 6 He referred to a decision of Beaumont J in Korn v Paisley Robertson Pty Ltd (1995) 59 FCR 251, where it was said at 252: "…as a matter of proper judicial administration, relatively small claims should not be dealt with by this Court unless there is a federal or other special element to warrant a use of this Court's jurisdiction. There are a number of reasons underlining this policy. The primary reason is that, as the Woolf Inquiry in England has recently found, care must be taken to ensure that in the case of relatively small claims, the amount of the claim, or a substantial part of it, is not consumed in costs….In this connection, it must be borne in mind that in the higher courts the expense of litigating tends to be greater than in other courts." Commenting on that passage, his Honour made the point that: "The justification for this approach is not confined to the importance of ensuring that a successful claimant does not find that his or her award is eaten up in legal costs. A respondent is also entitled to consideration and should not exposed to the burden of having to incur costs of litigating claims in a superior court that, even if well-founded, can be much more economically litigated in the lower courts. On any view, the District Court is the proper court in which the applicant's negligent and assault claims should be determined." 7 His Honour had regard to the relevant limitation periods, and the fact that he lacked power to transfer the claims directly to the District Court, but on that basis, and for the reasons expressed, permanently stayed the further prosecution of the proceedings which had survived the strike-out motion. 8 The application that Mr Dudzinski brings before us today is an application for leave to appeal against his Honour's decision. The necessity for such an application arises under s 24 of the Federal Court of Australia Act 1976 (Cth) and in particular subs (1A) which says: "An appeal shall not be brought from a judgment referred to in sub-section (1) that is an interlocutory judgment unless the Court or a Judge gives leave to appeal." The criteria upon which leave to appeal will be granted have been rehearsed in many cases, and have been addressed in the submissions put to us by the applicant in writing. I refer to Federal Commissioner of Taxation v Hydrocarbon Products Pty Ltd (1987) 72 ALR 391, where the Full Court, comprising Woodward, Wilcox and Ryan JJ, said at 406: "The approach to be taken by an appellate court to whether it should grant leave to appeal from an interlocutory order is reasonably well settled. However, various formulations of the appropriate test have been expressed in different authorities. The Court went on to refer to a passage from the joint judgment of Gibbs CJ, and Aicken, Wilson and Brennan JJ in Adam P. Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177 wherein it was said: "Nor is there any serious dispute between the parties that appellate courts exercise particular caution in reviewing decisions pertaining to practice and procedure. Counsel for Brown urged that specific cumulative bars operate to guide appellate courts in the discharge of that task. Not only must there be error of principle, but the decision appealed from must work a substantial injustice to one of the parties. The opposing view is that such criteria are to be expressed disjunctively.… For ourselves, we believe it to be unnecessary and indeed unwise to lay down rigid and exhaustive criteria. The circumstances of different cases are infinitely various. We would merely repeat, with approval, the oft-cited statement of Sir Frederick Jordan in In Re the Will of F.B. Gilbert (dec) [(1946) 46 SR(NSW) 318 at 323]: "…I am of opinion that,… there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice."" Reference was made also to Niemann v Electronic Industries Ltd [1978] VR 431 where Murphy J, with whom McInerney J agreed, suggested that: "…for leave to be granted, the order in respect of which it is sought must be seen clearly to be "attended with sufficient doubt" and, if wrong, to work substantial injustice". 9 It can be accepted, of course, that there is a spectrum of cases within the class of interlocutory judgments requiring leave to appeal ranging from matters of, what might be called, pure practice and procedure, through to decisions which have effectively the result of disposing finally of a claim. In relation to decisions which have that effect, even though in form interlocutory, the Court will look more sympathetically on a grant of leave than in the case which is purely a matter of practice and procedure as, for example, case management directions, or orders for the provision of discovery, interrogatories, the issue of subpoenas and the like. 10 Nevertheless, the general principles outlined, requiring consideration of whether there may be substantial injustice if the decision is left in place and is wrong, whether the decision of the trial judge or the judge at first instance is attended by sufficient doubt, and whether the applicant has demonstrated a basis for the grant of leave, remain in place in respect of all judgments of an interlocutory character. 11 In this case, his Honour applied the correct principles for the determination of a strike-out motion, recognising as he did the heavy onus that rests upon a respondent who seeks to strike out a statement of claim, and the relevant principles enunciated by Dixon J in Dey v Victorian Railway Commissioners (1949) 78 CLR 62 at 91 where it was said a case must be very clear indeed to justify the summary intervention of the Court to prevent a plaintiff submitting his or her case for determination. 12 The fact that a transaction is intricate may not disentitle the Court from examining a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious but once it appears that there is a real question to be determined, whether of fact or law, and that the rights of the parties depend upon it, then it is not competent for the Court to dismiss the action as frivolous and vexatious and an abuse of process. 13 In this case his Honour largely dealt with the motion before him by consideration of the pleadings themselves and the inadequacy of the pleadings, although there was reference to evidence in relation to some parts of the statement of claim. There is no point in now repeating in detail his Honour's findings in relation to the statement of claim and the materials before him. It is apparent from a reading of the reasons for judgment that his Honour undertook a careful analysis of the pleadings and such evidence as he found it necessary to refer to. Having regard to the state of the pleadings it cannot be said that what his Honour concluded in relation to them is attended with sufficient doubt to indicate that there was any error on his part. 14 Mr Dudzinski has given us comprehensive submissions which seek to revisit various of the factual and pleadings issues addressed by his Honour. With due respect to the effort that he has put in to those submissions, and the obvious effort he put into his statement of claim, I am not persuaded that he has effectively rebutted the fundamental difficulties facing those pleadings which were identified by his Honour. Although I have due regard to the fact that there is a degree of finality about his Honour's orders, insofar as they struck out various elements of the pleading and refused leave to replead, nevertheless, there is not only the position of the applicant to be considered in this matter but also the position of the respondent who may be required to turn up in Court to defend what is, on the face of it, a hopeless claim. On the materials considered by his Honour and the reasons he outlined, he was, on the face of it, correct. 15 So far as the stay order is made, this was an exercise of discretion on the part of his Honour. What remained after the statement of claim had in large part been struck out, were two claims which could ordinarily have been brought in the District Court. They are the kinds of claim which would not ordinarily be brought in the Federal Court, in particular, an assault claim and a negligence claim which is minor in terms of the amount of damages alleged. His Honour's discretion was properly exercised in that respect. 16 Applying the principles relevant to the grant of leave to appeal, I am not satisfied that his Honour's decision is attended with any significant doubt. I have regard to the effective finality of that decision in certain respects, but even allowing for that, in my view, his Honour's decision was correct and leave should not be granted. 17 The application for leave to appeal, will be dismissed. The costs will follow the event. The applicant will pay the respondent's costs of the application for leave. Whitlam J: 18 I agree with French J and with the order his Honour proposes. Lindgren J: 19 Likewise, I agree. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices French, Whitlam and Lindgren. Associate: Dated: September 1999 Counsel for the Applicant: The Applicant appeared in person. Counsel for the Respondent: Mr H.B. Fraser QC and Mr S.E. Brown Solicitor for the Respondent: Minter Ellison Date of Hearing: 27 August 1999 Date of Judgment: 27 August 1999