FEDERAL COURT OF AUSTRALIA Kowalski v Dolphin [2011] FCA 502 Citation: Kowalski v Dolphin [2011] FCA 502 Parties: KAZIMIR KOWALSKI v STEVEN PETER DOLPHIN, LIESCHKE & WEATHERILL, CERTAIN UNDERWRITERS AT LLOYDS and QBE INSURANCE (AUSTRALIA) LIMITED File number: SAD 12 of 2011 Judge: MANSFIELD J Date of judgment: 20 May 2011 Catchwords: PRACTICE AND PROCEDURE – application pursuant to O 21 r 5 seeking leave to continue proceedings after being declared a vexatious litigant – application refused Legislation: Legal Practitioners Act 1981 (SA) Trade Practices Act 1974 (Cth) Fair Trading Act 1987 (SA) Misrepresentation Act 1972 (SA) Workers Compensation and Rehabilitation Act 1986 (SA) Criminal Law Consolidation Act 1935 (SA) Federal Court Rules Cases cited: Soden v Kowalski [2011] FCA 318 cited Mitsubishi Motors Australia Ltd v Kowalski [2005] SASC 309 cited Horvath v Commonwealth Bank of Australia [1999] FCA 504 considered Date of Hearing: Heard on the papers Date of last submissions: 29 April 2011 Place: Brisbane (via video link to Adelaide) Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 15 Counsel for the Applicant: The applicant appeared in person Solicitor for the Respondents: The respondents did not appear IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 12 of 2011 BETWEEN: KAZIMIR KOWALSKI Applicant AND: STEVEN PETER DOLPHIN First Respondent LIESCHKE & WEATHERILL Second Respondent CERTAIN UNDERWRITERS AT LLOYDS Third Respondent QBE INSURANCE (AUSTRALIA) LIMITED Fourth Respondent JUDGE: MANSFIELD J DATE OF ORDER: 20 MAY 2011 WHERE MADE: bRISBANE (VIA VIDEO LINK to aDELAIDE) THE COURT ORDERS THAT: 1. The application by the applicant for leave to continue with this proceeding, including for summary judgment against the respondents, is refused. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 12 of 2011 BETWEEN: KAZIMIR KOWALSKI Applicant AND: STEVEN PETER DOLPHIN First Respondent LIESCHKE & WEATHERILL Second Respondent CERTAIN UNDERWRITERS AT LLOYDS Third Respondent QBE INSURANCE (AUSTRALIA) LIMITED Fourth Respondent JUDGE: MANSFIELD J DATE: 20 MAY 2011 PLACE: brisbane (via video link to Adelaide) REASONS FOR JUDGMENT 1 The applicant in this matter, by order of the Court made on 7 April 2011, was declared a person who has habitually, persistently and without reasonable grounds instituted vexatious proceedings in this Court: Soden v Kowalski [2011] FCA 318. The Court further ordered, inter alia, that any proceeding instituted by the applicant prior to that order not be continued without the leave of the Court (the stay order). 2 These orders were made pursuant to O 21 r 1, which gives a general power to the Court to restrain a vexatious litigant on the application of any one of a number of persons including the Registrar of the Court. 3 The applicant has now applied for leave to continue with this proceeding, including for an order for summary judgment against each of the respondents, together with costs. The proceeding was commenced on 18 January 2011, so the stay order applied to it. 4 The essence of the applicant's claim, so far as I can discern it, against the first and second respondents is that he has been charged legal fees and that those fees were taken from the second respondent's trust account in contravention of the Legal Practitioners Act 1981 (SA). In those simple terms, it is not clear how the jurisdiction of this Court can properly be invoked. The amended statement of claim, however, proceeds to make a series of extravagantly expressed claims of fraud, breach of fiduciary duty, perjury, and deliberate and conscious breach of provisions of the Trade Practices Act 1974 (Cth), the Fair Trading Act 1987 (SA), the Misrepresentation Act 1972 (SA), the Workers Compensation and Rehabilitation Act 1986 (SA) and the Criminal Law Consolidation Act 1935 (SA). Despite those declamatory allegations, the claim remains in essence a claim that in the circumstances (which are not clearly spelled out) the first and second respondents were not entitled to recover certain legal fees which they claimed from the applicant and were also not entitled to take those fees from monies held in trust by the second respondent on behalf of the applicant. The named third respondent (clearly not itself a legal entity) and the fourth respondent are each said to be the "indemnity insurer" of the first and second respondents. Any claim against the third and fourth respondents cannot rise above the claims against the first and second respondents. 5 In support of the application, the applicant has filed a brief affidavit in which he asserts that the respondents "have deliberately and consciously failed to comply with the Federal Court Rules because they have deliberately and consciously failed to file a defence to the amended statement of claim, which he filed on 9 March 2011. 6 That affidavit alternatively asserts that the applicant does not need the leave of the Court to continue with this proceeding because orders were made on 21 March 2011 granting leave to serve his amended application and amended statement of claim which he had filed on 9 March 2011. Those same orders fixed 18 April 2011 as the date by which the respondents, if served with the proceeding by 25 March 2011, should file and serve their appearances. The Registry was directed to amend the return date on the amended application to accord with that timetable. The applicant asserts that he has served the amended application and the amended statement of claim on 22 March 2011. There has been no appearance. 7 Order 21 r 5 of the Federal Court Rules provides: (1) If the Court has made an order under rule 1 or rule 2 against any person, the person may be given leave to institute or continue a proceeding only if the Court is satisfied that: (a) the proceeding is not an abuse of process; and (b) there is prima facie ground for the proceeding. (2) Unless the Court orders otherwise, an application by a person who is subject to an order under subrule 1(2) or rule 2 may be determined by the Court without an oral hearing. 8 As O 21 r 5(2) contemplates, I will deal with the application on the papers. The applicant has filed his affidavit explaining why he says the leave sought should be given. In Horvath v Commonwealth Bank of Australia [1999] FCA 504, the court ordered that, at least three clear days prior to its filing in the court, any proposed application for leave to institute a proceedings be served upon the applicants (who had succeeded in the vexatious application) thereby enabling them to be heard should they so desire. That direction was given to secure fairness to the putative respondent in further proceedings. In this matter, it is not necessary to give the respondent that opportunity, as I do not propose to grant the leave sought. 9 The applicant's assertion that the stay order did not apply to this proceeding is incorrect. From the time of the stay order, this proceeding was effectively stayed unless an order was made granting leave to the applicant to proceed. As already mentioned, the applicant apparently served the amended application and amended statement of claim on 22 March 2011. The time within which the respondents were to file their appearances, namely 18 April 2011, had not elapsed at the time of the stay order. After 7 April 2011, in the light of the stay order, it cannot be said that the respondents have failed to comply with a direction of the Court to require that they file and serve a defence. That would involve taking a step in an action which had already been stayed. There is no default on their part as the applicant asserts. 10 There is a further reason why I would decline to grant the leave sought. 11 When the application was first issued, it was ordered that it not be served until after the first directions hearing. That was because the original application and the original statement of claim contained a number of defects which might have made it unfair for the respondents to have been required to respond to them. I raised those matters, or some of them, with the applicant at the first directions hearing. I prepared a memorandum for the Registry of 3 March 2011 indicating some of these defects, in part to alert the Registry of my concerns, and also so that the applicant might have some guidance in the preparation of an amended application and amended statement of claim. I append to these reasons for decision a copy of that memorandum. A copy of the memorandum was provided to the applicant from the Registry on 4 March 2011. 12 The applicant then filed an amended application and an amended statement of claim on 9 March 2011, and on 21 March 2011 I gave him leave to serve those documents. My reasons for granting that leave was not because I was satisfied that those documents in their current form appropriately pleaded causes of action available to the applicant in satisfactory terms or identified causes of action justiciable by this Court. I did so because the applicant indicated that he had endeavoured as best he could to have regard to those considerations in drawing the further documents. 13 The amended application and the amended statement of claim contained significantly vitriolic and unnecessary terms referring to fraudulent conduct on the part of some or more of the respondents and extensively invoked a range of statutory provisions including a number of provisions of the Trade Practices Act 1974 (Cth). The range of claims contended by the applicant sourced from various statutory provisions might be a contrivance to enliven the jurisdiction of this Court in circumstances where the applicant has been declared a vexatious litigant in the Courts of South Australia: Mitsubishi Motors Australia Ltd v Kowalski [2005] SASC 154. In my view the amended application and the amended statement of claim do not clearly plead a cause or causes of action on pleaded facts, upon which that cause of action or those causes of action might be made out in a satisfactory manner. It is not necessary to go into further detail on those matters. They leave me with the firm view that the applicant should not be permitted to prosecute his claims, as presently expressed, in this Court. 14 The application for leave to continue with this proceeding is refused. I do not think that any respondent has incurred costs by this motion. 15 I note that the applicant has previously, in other matters and in this matter, asked me to recuse myself. In some instances, I declined to do so. More recently, I have previously decided a number of matters adversely to the applicant referred to in the reasons for decision in Soden v Kowalski [2011] FCA 318. I have indicated to the applicant that I did not propose to hear any more claims in which he is the applicant, save for managing them to the point where any contentious interlocutory issues could be addressed or the matter was ready for trial. I took that course simply because, from the applicant's viewpoint, he may have felt that I was disposed to decide any claim by him adversely to him without regard to the merits. I did not in fact consider that in fact there were proper grounds upon which I should recuse myself from hearing any further claim made by the applicant. I have dealt with this matter, notwithstanding that position, and notwithstanding that I assume the applicant would object to me doing so. I do not consider that any reasonable bystander, properly informed, would consider that I would not bring an impartial mind to its determination according to law. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. Associate: Dated: 20 May 2011 JUSTICE J R MANSFIELD AM FEDERAL COURT OF AUSTRALIA COMMONWEALTH LAW COURTS 3 ANGAS STREET ADELAIDE SA 5000 Telephone: (08) 8219 1085 Facsimile: (08) 8219 1086 MEMORANDUM To: SA Registry From: Mansfield J Date: 3 March 2011 Subject: Kowalski v Dolphin (SAD.12/11) Matters raised with the applicant at the directions hearing on 2 March 2011 regarding the application and statement of claim. 1. The application refers to "judgments" which are sought to be set aside without specifying them. In oral submissions, the applicant said there was only one. 2. The third respondent is inappropriately specified, and as specified will almost certainly be unable to be served. The applicant in a previous proceeding arranged for solicitors for an insurer to identify the relevant underwriter or underwriters, and for them to accept service. It is not clear that will happen in this matter. The applicant referred to s 52 of the Legal Practitioners Act 1981 (SA), but that provision appears to relate to the insured legal practitioner giving notice of a claim, rather than to an external claimant serving a legal document such as an application. 3. There are no allegations in the statement of claim to establish liability directly against the third and fourth respondents, insurers for the alleged conduct of the first or second respondents. The applicant said that he considered that there was sufficient in the statement of claim to entitle him to issue them directly for the alleged conduct of the first and second respondents. 4. It was pointed out to the applicant that he may be vulnerable to a claim that the invocation of the jurisdiction of the Federal Court is contrived, and that the Court may have no jurisdiction to hear and entertain his claim as, in essence, it relates to the conduct of a legal practitioner under the Legal Practitioners Act for the conduct of a claim brought on behalf of the applicant in a State court under State legislation. 5. It was pointed out to the applicant that in some respects his application and his statement of claim do not adequately specify the particular fact or facts which are said to contradict the various statutory contraventions asserted individually. 6. It was pointed out to the applicant that the statement of claim is repetitive, particularly paras 5 and 15. It may be more appropriate to plead the material facts and then, by reference to particular pleaded material facts, identify separately the conclusions asserted from those particular facts which enliven separately the various bases for his claimed causes of action. The applicant indicated that he would consider those matters. MANSFIELD J