Chen v Ghildyal
[2018] ACTCA 52
•26 November 2018
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL
Case Title: | Chen v Ghildyal |
Citation: | [2018] ACTCA 52 |
Hearing Date: | 14 September 2018, 20 November 2018 |
DecisionDate: | 26 November 2018 |
Before: | Loukas-Karlsson J |
Decision: | 1. The application for leave to appeal is dismissed. 2. The applicant is to pay the respondent’s costs of the application. |
Catchwords: | APPEAL – PRACTICE AND PROCEDURE – In General and Right of Appeal – Application for leave to appeal from interlocutory judgment – Costs – Costs of an Injunction – Principle of uberrima fides – Whether adequate weight given to principle of uberrima fides – Whether injunction improperly obtained – No error by primary judge – Appeal dismissed |
Legislation Cited: | Court Procedures Rules 2006 (ACT) rr 1721, 5402 Supreme Court Act 1933 (ACT) ss 37E, 37J |
Cases Cited: | AAMC Warehousing & Transport Pty Ltd v Fairfax Media Publications Pty Ltd [2009] NSWSC 970 House v the King (1936) 55 CLR 499 Walter Rau Neusser Oel Und Fett AG v Cross Pacific Trading Ltd [2005] FCA 955 |
Parties: | Yijuan Chen (Applicant) Amit Ghildyal (1st Respondent) Reena Ghildyal (2nd Respondent) |
Representation: | Counsel Mr B Aulich (Applicant) Mr B Buckland (Respondents) |
| Solicitors Aulich Civil Law (Applicant) McSpedden Harvey (Respondents) | |
File Number: | ACTCA 43 of 2018 |
Decision under appeal: | Court/Tribunal: ACT Supreme Court Before: Murrell CJ Date of Decision: 31 July 2018 Case Title: Ghildyal v Chen Court File Number: SC 151 of 2018 |
Loukas-Karlsson J
Introduction
This matter concerns an application seeking leave to appeal an interlocutory decision of Murrell CJ, the primary judge, given on 31 July 2018. The primary judge on that occasion ordered that the costs of an ex parte injunction obtained by the first and second respondents be paid by the applicant.
Jurisdiction
An appeal from an interlocutory decision may only be brought to the Court of Appeal with the leave of the Court of Appeal: s 37E(4) of the Supreme Court Act 1933 (ACT). The Court of Appeal may be constituted by a single judge for hearing applications for leave to appeal: s 37J(1)(a) of the Supreme Court Act 1933 (ACT).
Leave to Appeal
The applicant filed an application for leave to appeal from an interlocutory judgment dated 7 August 2018. This application was accompanied by an affidavit of Mr Benjamin Joseph Aulich dated 7 August 2018, and a draft notice of appeal also filed by the appellant on 7 August 2018.
In Re an application for leave to appeal by Insurance Australia Ltd [2017] ACTCA 57 at [10], Mossop J summarised that the party seeking leave to appeal must satisfy the Court of Appeal that:
…the decision of the primary judge was attended with sufficient doubt to warrant its being reconsidered and that substantial injustice would result if leave was refused supposing the decision to be wrong: see Capital Property Projects (ACT) Pty Ltd v Australian Capital Territory Planning & Land Authority [2008] ACTCA 9; ACTLR 44 at [30]-[35]; More Than a Morsel Pty Ltd v Dean [2003] ACTCA 9 at [4].
Mossop J went on to state the following at [21]:
In assessing whether there is sufficient doubt to warrant the decision being reconsidered it must be borne in mind that the decision in relation to which leave is sought is a discretionary decision involving a question of practice and procedure. It is therefore a decision of a type in relation to which a tight rein must be kept on appeals and which will only be interfered with if the judge below exercised the discretion on the basis of some wrong principle, error of fact, taking into account an irrelevant consideration, failing to take into account a relevant consideration, or in a manner which was unreasonable or plainly unjust.
The draft notice of appeal identifies the grounds of appeal as follows:
(a)Her Honour erred by not giving adequate weight to the principle of uberrima fides;
(b)Her Honour erred by finding the injunction should have been granted after all of the facts were known to her;
(c)Her Honour erred in giving her finding at (b) higher weight than the principle of uberrima fides;
(d)Her Honour erred in not ordering the Respondents to pay damages to the Appellant due to the injunction granted on 6 April 2018; and
(e)Her Honour erred in not making an order for the Respondents to pay the Appellant’s costs of entire proceedings.
The orders sought from the draft notice of appeal are as follows:
(a)The Respondents pay to the appellant damages in the sum of $885.44;
(b)The Respondents pay the Appellant’s costs on a party/party basis in relation to proceedings SC 151 of 2018;
(c)The Respondents pay the Appellant’s costs of the appeal on a party/party basis; and
(d)Any other orders that the Court considers appropriate.
At the hearing, the applicant abandoned ground of appeal (d), acknowledging that the matter was not before the judge at first instance.
Background
The parties are neighbours in the suburb of Lawson. At the time the proceedings were before the primary judge, the Applicant was building a house on his land. A dispute arose between the parties in March 2018 in relation to the location of the respondents’ fence on the applicant’s land. The applicant commenced proceedings on this matter at the ACT Civil and Administrative Tribunal (ACAT) on 20 March 2018. The primary judge in her reasons notes that at this point in time, the parties’ “relationship was hostile”, and that the following facts need to “be understood in the context of the breakdown of neighbourly trust between the parties”.
On 21 March 2018, the applicant commenced excavation work on his property, which caused part of the respondents’ property to collapse into the applicant’s property on 27 March 2018. The applicant’s builder received a Geotechnical report the next day, which among other things, noted that a “retaining wall must be built and backfilled as soon as possible”. The applicant was at this stage overseas, but was in communication with his builder, and endeavoured to reassure the respondents that he would remediate the situation. The remediation work commenced on 29 March 2018 according to the applicant’s builder’s affidavit.
On 2 April 2018, the applicant met with the respondents to confirm that the recommendations from the Geotechnical report would be undertaken.
On 6 April 2018, the respondents received a report which advised that there was a high risk of localised instability in the unsupported excavation face, particularly if there was a significant rainfall event. The primary judge in her reasons notes that the first obvious sign of remediation was on 5 April 2018, and that it was not until lunch time on 6 April that construction of the required retaining wall commenced.
On the afternoon of 6 April 2018, the respondents sought an ex parte injunction to restrain further trespass to their land, and to require the applicant to take steps to repair the damage caused. The primary judge granted the injunction until 10 April 2018, and listed the matter for 10 April 2018 for further hearing as to whether the injunction should continue. The primary judge noted that there was a “very considerable intrusion”, indicating a “strong prima facie case of trespass”, despite the expert evidence disclosing that “it was only a low risk of damage to the foundations of the [respondents’] double-storey residence”.
On 10 April 2018, the applicant appeared and consented to the continuation of the injunction. The primary judge notes that there was “good progress” made in constructing the retaining wall between 6 April and 10 April.
On 18 April 2018, the matter again appeared before the Court, and the applicant again consented to the continuation of the injunction. It was apparent that the damage had at that point been mostly rectified, but that an injunction was required to continue to enable top soil to be put in place. The parties were also granted leave to approach the duty judge in chambers for the purpose of having the injunction discharged by consent. The respondents sought costs at that time, and the applicant indicated their opposition on the basis that “the injunction had been wholly unnecessary”. A costs hearing was set down for 30 July 2018.
On 2 May 2018, the applicant served the respondents with an engineer’s report confirming completion of the remediation.
On 28 May 2018, the respondents commenced proceedings at ACAT claiming damage for trespass. On 17 July 2018, the respondents withdrew the Supreme Court proceedings, save as to costs.
The primary judge considered the costs application on 30 and 31 July, and provided ex tempore reasons for decision on 31 July. It is the decision in relation to costs for which the applicant seeks leave to appeal.
The Decision Below
In summary, the primary judge made the following preliminary findings:
(a)There appears to have been a significant trespass onto the respondents’ property;
(b)The collapse of part of the respondents’ personal residence, though not a threat to their home, was most distressing, and expert advice called for remediation as soon as possible;
(c)Minimal remediation work had commenced prior to the application for the urgent injunction, and the respondents’ had no trust in the applicant’s assurances;
(d)Remediation work was undertaken promptly after the injunction was granted. The primary judge noted that it was impossible to say whether this work would have proceeded in the absence of the injunction.
(e)The applicant consented to the continuation of the injunction as a matter of convenience, reserving costs, and expressly stating that the injunction was wholly unnecessary on 18 April 2018.
The primary judge concluded that she would have granted the injunction, “even if the defendant had appeared and raised the matters” raised during the costs application.
The primary judge summarised that the respondents sought costs on the basis that the injunction had been properly made, and that costs should follow the event. The primary judge stated:
I do not accept these arguments. It is not necessarily the case that costs will follow the event in relation to the making of an interlocutory injunction.
On the other hand, the applicant sought costs on the basis that there was no urgent need for the application to be made ex parte, and that the injunctions were unnecessary. The primary judge considered that it was a “debateable proposition” that the applicant should have been provided with notice, concluding that the primary judge did “not necessarily find that they should have done so, but it is possible that they could have attempted to notify the defendant”.
The applicant also submitted that the respondents should pay their costs because the “[respondents] did not make full disclosure of all the communications on that occasion”. The primary judge considered that given the urgency of the application, and the accordingly brief supporting material, that “the disclosures that were made were adequate for the occasion”.
Finally, the applicant submitted that there having already been proceedings on foot at the time of the ex parte application, the relief could have been obtained “more efficiently and economically in ACAT”. The primary judge considered that the ACAT proceedings, which related to fence boundaries, “had little bearing on the question of trespass and the need for urgent relief”, and that the argument was “not meritorious”.
In coming to a decision, the primary judge noted the Court’s discretion under rule 1721(1) of the Court Procedures Rules, and considered that:
The only appropriate approach that the Court can take, is to consider whether the [respondents’] action in seeking an urgent ex parte injunction and thereafter seeking to maintain it, was reasonable and whether in that context, justice requires that the plaintiffs recover their costs”.
The primary judge emphasised the context of hostility in coming to a conclusion on the costs application. The primary judge concluded as follows:
I do not think that the [respondents] can be criticised for the action that they took. In these circumstances, it’s my view that justice requires that the defendants pay the [respondents’] costs of the injunction proceedings and I so order.
Submissions
Applicant’s submissions
The applicant submits that the costs of the injunction should be paid by the applicants because the respondents failed in their obligation of uberrima fides. The applicant submits that the primary judge failed to take into account at all, or failed to give sufficient weight to the respondents’ failure to disclose a number of material facts to the primary judge in applying for the urgent injunction. Those material facts are particularised in the applicant’s written submissions as including but not limited to the following:
(a)Within 12 hours of the slippage, the Appellant had notified the respondents via email of the damage and stated he took “full responsibility” and advised he had arranged for an engineer to attend and advise on remediation;
(b)Within 24 hours the Appellant had sent the respondents a further email stating construction on the appellant’s property had stopped and that repair of the slippage “was the priority”.
(c)The Appellant had further email exchanges with the respondents to advise of works to remediate the problem;
(d)On 2 April 2018 the [applicant] met with the respondents to discuss the Engineer’s report and again stated he took full responsibility for the damage and outlined what had been done and will be done to carry out the recommendations of the Engineer’s Report; and
(e)On 3 April 2018 the [applicant] sent an email to the First respondent confirming he would strictly follow the Engineer’s Report to rectify the damage.
The applicant also noted the following inaccuracies in the respondents’ originating application and affidavit in support as informing the failure to accord with their obligation of uberrima fides:
(a)Grounds 3, 4 and 5 inaccurately state the Appellant carried out and/or will continue to carry out works on the First and Second respondents’ property; and
(b)The affidavit of the First Respondent at paragraph 10 deposes “Under direction from WorkSafe ACT, Sellick Constructions were contacted by Mr Chen”.
The applicant relied upon Thomas A Edison Ltd v Bullock (1912) 15 CLR 679 at 682 as authority for the proposition that a “party inducing the court to act in the absence of the other party” would fail their obligation of uberrima fides, as follows:
… unless he supplies the place of the absent party to the extent of bringing forward all the material facts which that party would presumably have brought forward in his defence to that application. Unless that is done, the implied condition upon which the court acts in forming its judgment is unfulfilled and the order so obtained must also invariably fail.
The applicant cited the following further cases in support of this proposition: AAMC Warehousing & Transport Pty Ltd v Fairfax Media Publications Pty Ltd [2009] NSWSC 970; Walter Rau Neusser Oel Und Fett AG v Cross Pacific Trading Ltd [2005] FCA 955; Redwin Industries Pty Ltd v Feetsafe Pty Ltd [2002] VSC 427; Lloyds Bowmaker Ltd v Britannia Arrow Holdings Plc [1988] 1 WLR 1337.
The applicant ultimately submits that it will “suffer substantial injustice in bearing the cost of an application for an injunction that the applicant submits was improperly obtained and in the alternative, unnecessary”.
It is worth noting that the applicant’s submissions relating to uberrima fides and the respondent’s failure to provide “Full and fair disclosure to the Court of all material facts relevant to the Court’s decision” was specifically noted in the applicant’s outline of submissions on costs, filed on 16 July 2018 ahead of the costs hearing before the primary judge.
Respondents’ Submissions
The respondents submitted that leave to appeal should be refused. The respondents submitted that either under rule 1721(1) or 1706, the primary judge “unquestionably had the power to make the costs order”, and that the costs order was made consistent with the terms of both those rules.
The respondents further submitted that the primary judge made “an express finding” that the disclosures made “at the hearing of the ex parte application were adequate”, indicating that the primary judge expressly considered the respondents’ failure to disclose the matters listed above. Further, the respondents note that the applicant does not seek to put fresh evidence before the court, and notes that the same non-disclosures were put before the primary judge. Therefore, the respondents submitted that the primary judge found the necessary material facts were before her when the injunction was granted.
Further, the respondents submitted that in “circumstances where the primary judge drew the inference, which is not appealed from, that these parties were hostile towards one another….the question of whether assurances were material is a very real question”. It was submitted that the primary judge did not misapply the “question of uberrima fides”, but rather drew a “positive finding of fact” that “the disclosures were in fact adequate” in the context, and that the “material facts were before [the primary judge] on the occasion”.
The respondents cited the principles outlined in House v the King (1936) 55 CLR 499 (House) at 504 relating to the strong presumption in favour of the correctness of the decision appealed from in relation to discretionary judgments: see also Mallet v Mallet (1984) 156 CLR 605. The respondents further cite Velissaris v Fitzgerald [2008] VSCA 152 (Velissaris) as authority for the principle that “demonstrating that a judge’s discretion to award costs has miscarried is extraordinarily difficult”.
Consideration
In assessing whether there is sufficient doubt to warrant the decision being reconsidered it must be borne in mind that the decision in relation to which leave is sought is a discretionary decision relating to costs. An appeal from such a discretionary decision relies on error as discussed in House.
The core of the applicant's argument is that the respondent's action in seeking an injunction was unnecessary and therefore unreasonable against the background of the negotiations that were already occurring between the parties, and further that inadequate weight was accorded to the “principle of uberrima fides”.
Relevantly, the primary judge made the following finding:
One, there appears to have been a significant trespass onto the plaintiffs’ property. Two, the plaintiff’s property is their personal residence. Although the excavation posed little threat to the foundations of their home, the significant collapse of their land at a location very close to their home was most distressing, and expert advice called for a mediation as soon as possible. Three, prior to the application for an urgent injunction, minimal remediation work was apparent to the plaintiffs and the relationship between plaintiffs and the defendant were such that the plaintiffs place no trust in the defendant’s assurances that the matter was in hand. Four, immediately after the injunction was granted, remediation work was undertaken very promptly over the next two days which were a weekend. As noted above, one cannot say whether this work would have proceeded in the absence of the injunction or not.
The primary judge continued:
Nevertheless, for the reasons stated above, I consider that I would have granted the injunction even if the defendant had appeared and raised the matters which he now raises. Second, the defendant argues that the plaintiffs should pay his costs because the plaintiffs failed to make full disclosure to the Court of all material facts when the ex parte injunction was sought. It is true that the plaintiffs did not make full disclosure of all the communications on that occasion, however given the urgency of the application, and the fact that the supporting material was necessarily brief, I consider that the disclosures that were made were adequate for the occasion.
The primary judge went on to find that the argument that the argument that the respondent should have sought relief through the ACAT proceedings was not meritorious. The primary judge then went on to state:
In my view, the only appropriate approach that the Court can take, is to consider whether the plaintiff’s action in seeking an urgent ex parte injunction and thereafter seeking to maintain it, was reasonable, and whether in that context, justice requires that the plaintiff’s recover their costs.
The primary judge concluded:
The action needs to be understood in the context as explained above, that although according to the expert evidence, the excavation posed little threat to the foundations of their home. From their perspective, there had been a very significant collapse of their land, which was most distressing, and which occurred immediately adjacent to their residence. It was occasioned by their neighbour with whom they had at that stage, hostile relations. Consequently, I do not think that the plaintiffs can be criticised for the action that they took. In these circumstances, it’s my view that justice requires that the defendants pay the plaintiff’s costs of the injunction proceedings and I so order.
The primary judge correctly held that costs are at the discretion of the Court. The primary judge did not act on a wrong principle, mistake the facts, or fail to take into account a material consideration. There is no House error demonstrated by the applicant for leave. This court would not consider whether it would have exercised the discretion differently unless satisfied that the primary judge’s exercise of discretion was flawed. The submission that the primary judge did not afford sufficient weight to the principle of uberrima fides has not been made out.
The primary judge found that the disclosures made at the hearing of the ex parte application were adequate. The primary judge did not err in the manner propounded by the applicant in “finding the injunction should have been granted after all the facts were known to her”.
It is in the interests of all concerned in the justice system that appellate courts exercise restraint before interfering with the exercise of a costs discretion by a judge at first instance, who is almost always in the best position to assess this question: see Velissaris. There is no misapplication of the principle of uberrima fides as stated above. The primary judge found that the disclosures were adequate. In my view the material facts were before the primary judge. There is no demonstrable basis for the applicant’s proposed grounds of appeal.
Additional Matter
On 20 November 2018, the applicant sought to put on a further application to reopen this application and adduce further evidence. This was on the basis that the ACAT proceedings are now complete and that therefore further relevant evidence is available from the ACAT proceedings. This was opposed by the respondent, I refused that application, as the subsequent finalisation of the ACAT proceedings have no bearing on the question of whether or not the discretion of the primary judge miscarried at the time of the decision as to costs.
Conclusion
In relation to the proposed grounds of appeal, I did not consider that the primary judge’s decision was attended with sufficient doubt to warrant its reconsideration. It was a discretionary decision on costs. Reasonable judges may reach different conclusions. The grounds of appeal do not identify any error of fact, error of principle, any relevant or irrelevant consideration, any unreasonable or unjust outcome which would give rise to sufficient doubt about the decision. The decision on costs does not require reconsideration on appeal.
Orders
The application for leave to appeal is dismissed.
The applicant is to pay the respondent’s costs of the application.
| I certify that the preceding 49 [forty-nine] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Justice Loukas-Karlsson. Associate: Date: 26 November 2018 |
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